400.8-507. Duty of securities intermediary to comply with entitlement order. - Missouri Statutes

Duty of securities intermediary to comply with entitlement order.

400.8-507. (a) A securities intermediary shall comply with anentitlement order if the entitlement order is originated by the appropriateperson, the securities intermediary has had reasonable opportunity toassure itself that the entitlement order is genuine and authorized, and thesecurities intermediary has had reasonable opportunity to comply with theentitlement order. A securities intermediary satisfies the duty 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 tocomply with the entitlement order.

(b) If a securities intermediary transfers a financial asset pursuantto an ineffective entitlement order, the securities intermediary shallreestablish a security entitlement in favor of the person entitled to it,and pay or credit any payments or distributions that the person did notreceive as a result of the wrongful transfer. If the securitiesintermediary does not reestablish a security entitlement, the securitiesintermediary is liable to the entitlement holder for damages.

(L. 1997 S.B. 6)