355.8-504 Duties of securities intermediary to maintain financial asset.
(1)
(2)
(3)
(4)
A securities intermediary shall promptly obtain and thereafter maintain a financial
asset in a quantity corresponding to the aggregate of all security entitlements it has
established in favor of its entitlement holders with respect to that financial asset.
The securities intermediary may maintain those financial assets directly or through
one or more other securities intermediaries.
Except to the extent otherwise agreed by its entitlement holder, a securities
intermediary may not grant any security interests in a financial asset it is obligated
to maintain pursuant to subsection (1) of this section.
A securities intermediary satisfies the duty in subsection (1) of this section if:
(a) The securities intermediary acts with respect to the duty as agreed upon by the
entitlement holder and the securities intermediary; or
(b) In the absence of agreement, the securities intermediary exercises due care in
accordance with reasonable commercial standards to obtain and maintain the
financial asset.
This section does not apply to a clearing corporation that is itself the obligor of an
option or similar obligation to which its entitlement holders have security
entitlements.
Effective: January 1, 1997
History: Created 1996 Ky. Acts ch. 130, sec. 157, effective January 1, 1997.
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