California Commercial Code 8507 – (a) A securities intermediary shall comply with an entitlement …
(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 it does either of the following:
(1) The securities intermediary acts with respect to the duty as agreed upon by the entitlement holder and the securities intermediary.
Terms Used In California Commercial Code 8507
- agreement: means the total legal obligation that results from the parties' agreement as determined by this code and as supplemented by any other applicable laws. See California Commercial Code 1201
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
- Genuine: means free of forgery or counterfeiting. See California Commercial Code 1201
- Holder: means :
California Commercial Code 1201
- Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See California Commercial Code 1201
(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 Stats. 1996, Ch. 497, Sec. 9. Effective January 1, 1997.)