Printable Format84-8-505. Duty of securities intermediary with respect to payments and distributions. (a) A securities intermediary shall take action to obtain a payment or distribution made by the issuer of a financial asset. A securities intermediary satisfies the duty if:
(1) The securities intermediary acts with respect to the duty as agreed upon 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 attempt to obtain the payment or distribution.
(b) A securities intermediary is obligated to its entitlement holder for a payment or distribution made by the issuer of a financial asset if the payment or distribution is received by the securities intermediary.
History: L. 1996, ch. 202, ยง 72; July 1.
KANSAS COMMENT, 1996
This section is new and is identical to the 1995 Official Text. It obligates the securities intermediary to obtain payments or distributions made by the issuer of the asset for the entitlement holder. Under subsection (b), upon receipt of the payment or distribution, the intermediary is obligated to the holder. The intermediary can meet the obligation imposed by this section in accordance with an agreement with the entitlement holder, if there is an agreement, or, if there is not, in accordance with reasonable commercial standards. A securities intermediary's compliance with governing statutes, regulations or rules satisfies the duty under 84-8-509(a).