57A-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.
Source: SL 1998, ch 284, ยง1.
Structure South Dakota Codified Laws
Title 57A - Uniform Commercial Code
Chapter 08 - Investment Securities
Section 57A-8-101 - Short title.
Section 57A-8-102 - Definitions.
Section 57A-8-104 - Acquisition of security or financial asset or interest therein.
Section 57A-8-105 - Notice of adverse claim.
Section 57A-8-107 - Whether endorsement, instruction, or entitlement order is effective.
Section 57A-8-108 - Warranties in direct holding.
Section 57A-8-109 - Warranties in indirect holding.
Section 57A-8-110 - Applicability--Choice of law.
Section 57A-8-111 - Clearing corporation rules.
Section 57A-8-112 - Creditor's legal process.
Section 57A-8-113 - Statute of frauds inapplicable.
Section 57A-8-114 - Evidentiary rules concerning certificated securities.
Section 57A-8-115 - Securities intermediary and others not liable to adverse claimant.
Section 57A-8-116 - Securities intermediary as purchaser for value.
Section 57A-8-202 - Issuer's responsibility and defenses; notice of defect or defense.
Section 57A-8-203 - Staleness as notice of defect or defense.
Section 57A-8-204 - Effect of issuer's restriction on transfer.
Section 57A-8-205 - Effect of unauthorized signature on security certificate.
Section 57A-8-206 - Completion or alteration of security certificate.
Section 57A-8-207 - Rights and duties of issuer with respect to registered owners.
Section 57A-8-208 - Effect of signature of authenticating trustee, registrar, or transfer agent.
Section 57A-8-209 - Issuer's lien.
Section 57A-8-210 - Overissue.
Section 57A-8-302 - Rights of purchaser.
Section 57A-8-303 - Protected purchaser.
Section 57A-8-304 - Indorsement.
Section 57A-8-305 - Instruction.
Section 57A-8-306 - Effect of guaranteeing signature, indorsement, or instruction.
Section 57A-8-307 - Purchaser's right to requisites for registration of transfer.
Section 57A-8-401 - Duty of issuer to register transfer.
Section 57A-8-402 - Assurance that indorsement or instruction is effective.
Section 57A-8-403 - Demand that issuer not register transfer.
Section 57A-8-404 - Wrongful registration.
Section 57A-8-405 - Replacement of lost, destroyed, or wrongfully taken security certificate.
Section 57A-8-407 - Authenticating trustee, transfer agent, and registrar.
Section 57A-8-502 - Assertion of adverse claim against entitlement holder.
Section 57A-8-504 - Duty of securities intermediary to maintain financial asset.
Section 57A-8-505 - Duty of securities intermediary with respect to payments and distributions.
Section 57A-8-507 - Duty of securities intermediary to comply with entitlement order.
Section 57A-8-510 - Rights of purchaser of security entitlement from entitlement holder.
Section 57A-8-511 - Priority among security interests and entitlement holders.