N.J.S.A. 12A:8-504 — Duty of Securities Intermediary to Maintain Financial Asset.

12A: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. 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. L.1997,c.252,s.1. 12A: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. L.1997,c.252,s.1.

This is the verbatim text of N.J.S.A. 12A:8-504, retrieved from the New Jersey Legislature's public statute corpus. Statutes are amended periodically — for the most current version, check the external source link above. Kyzer is not a law firm and this page is not legal advice.