With a few exceptions, anyone who can ultimately trace his or her title to an instrument back to an HDC can acquire the rights and privileges of an HDC.

An HDC, or Holder in Due Course, is a party who has acquired a negotiable instrument in good faith and for value, and thus is protected in certain ways under the Uniform Commercial Code (UCC). If a subsequent holder can trace their title back to an HDC, they can also acquire the rights and privileges of an HDC, provided they meet the necessary qualifications (good faith, value, and without notice of any defect). This principle allows for the free and trusted exchange of negotiable instruments in commerce.