N.Y. Uniform Commercial Code Law § 8-507: Duty of Securities Intermediary to comply with Entitlement Order

Section 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 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 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.