§ 25-8-507. Duty of securities intermediary to comply with entitlement order. - North Carolina Statutes

§25‑8‑507.  Duty of securities intermediary to comply withentitlement order.

(a)        A securitiesintermediary shall comply with an entitlement order if the entitlement order isoriginated by the appropriate person, the securities intermediary has hadreasonable opportunity to assure itself that the entitlement order is genuineand authorized, and the securities intermediary has had reasonable opportunityto comply with the entitlement order. A securities intermediary satisfies theduty if:

(1)        The securitiesintermediary acts with respect to the duty as agreed upon by the entitlementholder and the securities intermediary; or

(2)        In the absence ofagreement, the securities intermediary exercises due care in accordance withreasonable commercial standards to comply with the entitlement order.

(b)        If a securitiesintermediary transfers a financial asset pursuant to an ineffective entitlementorder, the securities intermediary shall reestablish a security entitlement infavor of the person entitled to it, and pay or credit any payments ordistributions that the person did not receive as a result of the wrongfultransfer. If the securities intermediary does not reestablish a securityentitlement, the securities intermediary is liable to the entitlement holderfor damages. (1997‑181, s. 1.)