Duty of securities intermediary to change entitlement holder's position to other form of security holding

84-8-508. Duty of securities intermediary to change entitlement holder's position to other form of security holding. A securities intermediary shall act at the direction of an entitlement holder to change a security entitlement into another available form of holding for which the entitlement holder is eligible, or to cause the financial asset to be transferred to a securities account of the entitlement holder with another securities intermediary. A securities intermediary satisfies the duty if: (a) The securities intermediary acts as agreed upon by the entitlement holder and the securities intermediary; or (b) in the absence of agreement, the securities intermediary exercises due care in accordance with reasonable commercial standards to follow the direction of the entitlement holder. History: L. 1996, ch. 202, § 75; July 1. KANSAS COMMENT, 1996 This section is new and is identical to the 1995 Official Text. The section requires the intermediary to follow the holder's directions regarding the form of the security entitlement among the forms for which the holder is eligible. The section will be important for such instances as where the holder desires to change the form of the financial asset from a securities entitlement to being the registered owner of the security. The intermediary can meet the obligation imposed by this section in accordance with an agreement with the entitlement holder, if there is an agreement, or, if there is not, in accordance with reasonable commercial standards. The intermediary's compliance with governing statutes, regulations or rules satisfies the duty under 84-8-509(a).