70A-8-507 - Duty of securities intermediary to comply with entitlement order.
70A-8-507. Duty of securities intermediary to comply with entitlement order.
(1) A securities intermediary shall comply with an entitlement order if the entitlementorder is originated by the appropriate person, the securities intermediary has had reasonableopportunity to assure itself that the entitlement order is genuine and authorized, and the securitiesintermediary has had reasonable opportunity to comply with the entitlement order. A securitiesintermediary satisfies the duty if:
(a) the securities intermediary acts with respect to the duty as agreed upon by theentitlement holder and the securities intermediary; or
(b) in the absence of agreement, the securities intermediary exercises due care inaccordance with reasonable commercial standards to comply with the entitlement order.
(2) If a securities intermediary transfers a financial asset pursuant to an ineffectiveentitlement order, the securities intermediary shall reestablish a security entitlement in favor of theperson entitled to it, and pay or credit any payments or distributions that the person did notreceive as a result of the wrongful transfer. If the securities intermediary does not reestablish asecurity entitlement, the securities intermediary is liable to the entitlement holder for damages.
Enacted by Chapter 204, 1996 General Session