§ 6A-8-507 - Duty of securities intermediary to comply with entitlement order.
SECTION 6A-8-507
§ 6A-8-507 Duty of securities intermediaryto comply with entitlement order. – (a) A securities intermediary shall comply with an entitlement order if theentitlement order is originated by the appropriate person, the securitiesintermediary has had reasonable opportunity to assure itself that theentitlement order is genuine and authorized, and the securities intermediaryhas had reasonable opportunity to comply with the entitlement order. Asecurities intermediary satisfies the duty if:
(1) the securities intermediary acts with respect to the dutyas agreed upon by the entitlement holder and the securities intermediary; or
(2) in the absence of agreement, the securities intermediaryexercises due care in accordance with reasonable commercial standards to complywith the entitlement order.
(b) If a securities intermediary transfers a financial assetpursuant to an ineffective entitlement order, the securities intermediary shallreestablish a security entitlement in favor of the person entitled to it, andpay or credit any payments or distributions that the person did not receive asa result of the wrongful transfer. If the securities intermediary does notreestablish a security entitlement, the securities intermediary is liable tothe entitlement holder for damages.