How is control established for certificated investment property?

Control of certificated investment property is established through endorsement or transfer of the certificate. This mechanism is crucial for secured transactions involving investment property because it allows the secured party to take steps to perfect a security interest in that property.

When an investment property is represented by a certificate, the act of endorsing the certificate signifies that the holder is transferring their rights in that investment property. In this way, the secured party can demonstrate their priority over any claims against that property. Essentially, endorsement makes it clear who has control of the investment property and establishes a tangible link between the secured party and the asset.

Other methods mentioned, such as transferring cash to the creditor, would not establish control over an investment property that is certificated. Verbal agreements lack the necessary formalism to create control, and obtaining a court order, while it may grant rights or establish claims, is typically not a method recognized for establishing control over certificated investment property under the Uniform Commercial Code.