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355.8-507 Duty of securities intermediary to comply with entitlement order.
(1) A securities intermediary shall comply with an entitlement order if the entitlement
order is originated by the appropriate person, the securities intermediary has had <br>reasonable opportunity to assure itself that the entitlement order is genuine and <br>authorized, and the securities intermediary has had reasonable opportunity to <br>comply with the entitlement order. A securities intermediary satisfies the duty if: <br>(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 comply with the <br>entitlement order.
(2) If a securities intermediary transfers a financial asset pursuant to an ineffective
entitlement order, the securities intermediary shall reestablish a security entitlement <br>in favor of the person entitled to it, and pay or credit any payments or distributions <br>that the person did not receive as a result of the wrongful transfer. If the securities <br>intermediary does not reestablish a security entitlement, the securities intermediary <br>is liable to the entitlement holder for damages.
Effective: January 1, 1997 <br>History: Created 1996 Ky. Acts ch. 130, sec. 160, effective January 1, 1997.
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