§ 4-8-504 — Duty of securities intermediary to maintain financial asset

Colorado § 4-8-504

• Jurisdiction: Colorado
• Title 04: Uniform
• Art.: Investment Securities

Text

(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) of this section.

(c) A securities intermediary satisfies the duty in subsection (a) of this
section 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.

Legislative History

Source: L. 96: Entire article R&RE, p. 229, � 2, effective July 1.