Section 203.131. Bona fide pledgee

The phrase ‘‘bona fide pledgee’’ as used in subsection (m) of section 203 (70 P. S. § 1-203(m)) shall include a secured party who takes securities in pledge to secure a bona fide debt. Such phrase shall not include a secured party who takes securities in pledge either:

(1) Without any intention or expectation that they will be redeemed but merely as a step in the distribution thereof to the public.

(2) Without having secured knowledge, in the exercise of reasonable diligence, prior to the consummation of the pledge that the securities taken in pledge are lawfully owned by the party making the pledge.

The provisions of this § 203.131 adopted June 14, 1974, effective June 15, 1974, 4 Pa.B. 1227; transferred and renumbered from 64 Pa. Code § 203.131, December 14, 2012, effective December 15, 2012, 42 Pa.B. 7533. Immediately preceding text appears at serial page (324411).