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Texas Business & Commerce Code - Section 8.507. Duty Of Securities Intermediary To Comply With Entitlement Order

Legal Research Home > Texas Lawyer > Business & Commerce Code > Texas Business & Commerce Code - Section 8.507. Duty Of Securities Intermediary To Comply With Entitlement Order

§ 8.507. DUTY OF SECURITIES INTERMEDIARY TO COMPLY WITH 
ENTITLEMENT ORDER.  (a) A securities intermediary shall comply 
with an entitlement order if the entitlement order is originated by 
the appropriate person, the securities intermediary has had 
reasonable opportunity to assure itself that the entitlement order 
is genuine and authorized, and the securities intermediary has had 
reasonable opportunity to comply with the entitlement order.  A 
securities intermediary satisfies the duty if:
		(1)  the securities intermediary acts with respect to 
the duty as agreed on by the entitlement holder and the securities 
intermediary;  or
		(2)  in the absence of agreement, the securities 
intermediary exercises due care in accordance with reasonable 
commercial standards to comply with the entitlement order.
	(b)  If a securities intermediary transfers a financial 
asset pursuant to an ineffective entitlement order, the securities 
intermediary shall reestablish a security entitlement in favor of 
the person entitled to it and pay or credit any payments or 
distributions that the person did not receive as a result of the 
wrongful transfer.  If the securities intermediary does not 
reestablish a security entitlement, the securities intermediary is 
liable to the entitlement holder for damages.

Added by Acts 1995, 74th Leg., ch. 962, § 1, eff. Sept. 1, 1995.           

Last modified: August 10, 2007