8.8A-504 - A-504. Duty of securities intermediary to maintain financial asset. - Virginia Statutes

§ 8.8A-504. Duty of securities intermediary to maintain financial asset.

(a) A securities intermediary shall promptly obtain and thereafter maintain afinancial asset in a quantity corresponding to the aggregate of all securityentitlements it has established in favor of its entitlement holders withrespect to that financial asset. The securities intermediary may maintainthose financial assets directly or through one or more other securitiesintermediaries.

(b) Except to the extent otherwise agreed by its entitlement holder, asecurities intermediary may not grant any security interests in a financialasset 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 as agreed uponby the entitlement holder and the securities intermediary; or

(2) in the absence of agreement, the securities intermediary exercises duecare in accordance with reasonable commercial standards to obtain andmaintain the financial asset.

(d) This section does not apply to a clearing corporation that is itself theobligor of an option or similar obligation to which its entitlement holdershave security entitlements.

(1996, c. 216.)