KRS 355.8-507: Duty of securities intermediary to comply with entitlement order.

(1) 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:

(a) The securities intermediary acts with respect to the duty as agreed upon by the

entitlement holder and the securities intermediary; or

(b) In the absence of agreement, the securities intermediary exercises due care in

accordance with reasonable commercial standards to comply with the

entitlement order.

(2) If a securities intermediary transfers a fina ncial 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 resul t 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.