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The Vermont Statutes Online



Title

09A

:
Uniform Commercial Code






Chapter

008

:
Investment Securities











 

§

8-507. Duty of securities intermediary to comply with entitlement order

(a) A securities

intermediary shall comply with an entitlement order if the entitlement order is

originated by the appropriate person, the securities intermediary has had reasonable

opportunity to assure itself that the entitlement order is genuine and

authorized, and the securities intermediary has had reasonable opportunity to

comply with the entitlement order. A securities intermediary satisfies the duty

if:

(1) the

securities intermediary acts with respect to the duty as agreed upon by the

entitlement holder and the securities intermediary; or

(2) in the

absence of agreement, the securities intermediary exercises due care in

accordance with reasonable commercial standards to comply with the entitlement

order.

(b) If a

securities intermediary transfers a financial asset pursuant to an ineffective

entitlement order, the securities intermediary shall reestablish a security

entitlement in favor of the person entitled to it, and pay or credit any

payments or distributions that the person did not receive as a result of the

wrongful transfer. If the securities intermediary does not reestablish a

security entitlement, the securities intermediary is liable to the entitlement

holder for damages. (Added 1995, No. 92 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)