N.Y. Uniform Commercial Code Law § 8-504: Duty of Securities Intermediary to Maintain Financial Asset

Section 8--504. Duty of Securities Intermediary to Maintain Financial

Asset.

(a) A securities intermediary shall promptly obtain and thereafter

maintain a financial asset in a quantity corresponding to the aggregate

of all security entitlements it has established in favor of its

entitlement holders with respect to that financial asset. The securities

intermediary may maintain those financial assets directly or through one

or more other securities intermediaries.

(b) Except to the extent otherwise agreed by its entitlement holder, a

securities intermediary may not grant any security interests in a

financial asset 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 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 obtain and maintain the financial asset.

(d) This section does not apply to a clearing corporation that is

itself the obligor of an option or similar obligation to which its

entitlement holders have security entitlements.