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A registered bond with "Happy Birthday" scrawled across the face of the certificate is delivered to a broker/ dealer in satisfaction of sale by another member firm. Assuming it is accompanied by an authentic assignment, power of substitution form, and tax stamps (if appropriate), this is good delivery only if:
A. the marking did not cover the name of the registered owner or the principal amount of the bond
B. the certificate is validated by the registered owner
C. the certificate is validated by the transfer agent
D. this is not a good delivery under any circumstances
Answer: C
Explanation: the certificate is validated by the transfer agent. A mutilated bond must be validated before it can be a good delivery. The validation can be made by the issuer or the transfer agent.

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