400.8-504. Duty of securities intermediary to maintain financial asset. - Missouri Statutes

Duty of securities intermediary to maintain financial asset.

400.8-504. (a) A securities intermediary shall promptly obtain andthereafter maintain a financial asset in a quantity corresponding to theaggregate of all security entitlements it has established in favor of itsentitlement holders with respect to that financial asset. The securitiesintermediary may maintain those financial assets directly or through one ormore other securities intermediaries.

(b) Except to the extent otherwise agreed by its entitlement holder,a securities intermediary may not grant any security interests in afinancial asset it is obligated to maintain pursuant to subsection (a).

(c) A securities intermediary satisfies the duty in subsection (a)if:

(1) The securities intermediary acts with respect to the duty asagreed 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 toobtain and maintain the financial asset.

(d) This section does not apply to a clearing corporation that isitself the obligor of an option or similar obligation to which itsentitlement holders have security entitlements.

(L. 1997 S.B. 6)