An action based on an adverse claim to a financial asset, whether framed in conversion, replevin, constructive trust, equitable lien, or other theory, may not be asserted against a person who acquires a security entitlement under section 336.8-501 for value and without notice of the adverse claim. History: 1995 c 194 art 1 s 42

This legal document, part of the Minnesota Statutes under the Uniform Commercial Code, governs the property interest of entitlement holders in financial assets held by securities intermediaries. It states that all interests in a financial asset held by a securities intermediary are held for the entitlement holders and are not the property of the securities intermediary. These interests are not subject to claims of creditors of the securities intermediary, except as provided in section 336.

This legal document, part of the Minnesota Statutes under the Uniform Commercial Code, governs the duty of securities intermediaries to promptly obtain and maintain a financial asset corresponding to the aggregate of all security entitlements established in favor of its entitlement holders. Securities intermediaries are allowed to maintain these financial assets directly or through other intermediaries. However, they are prohibited from granting any security interests in the financial asset they are obligated to maintain, unless otherwise agreed upon by the entitlement holder.

(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.

A securities intermediary shall exercise rights with respect to a financial asset if directed to do so by an entitlement holder. 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 either places the entitlement holder in a position to exercise the rights directly or exercises due care in accordance with reasonable commercial standards to follow the direction of the entitlement holder.

This legal document, part of the Minnesota Statutes under the Uniform Commercial Code, governs the duty of securities intermediaries to comply with entitlement orders. It requires securities intermediaries to comply with an entitlement order if it is originated by the appropriate person, genuine, and authorized. The securities intermediary must act as agreed upon by the entitlement holder and themselves or exercise due care in accordance with reasonable commercial standards. If a securities intermediary transfers a financial asset based on an ineffective entitlement order, they must reestablish a security entitlement in favor of the entitled person and compensate for any payments or distributions not received due to the wrongful transfer.

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: (1) the securities intermediary acts 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 follow the direction of the entitlement holder.

This legal document, specified under the Minnesota Statutes, TRADE REGULATIONS, CONSUMER PROTECTION, UNIFORM COMMERCIAL CODE, outlines the duties of a securities intermediary and the exercise of rights of an entitlement holder. It states that if a duty imposed on a securities intermediary is covered by another statute, regulation, or rule, compliance with that statute, regulation, or rule satisfies the duty. In cases where specific standards for performance or exercise of rights are not specified elsewhere, the securities intermediary and entitlement holder must act in a commercially reasonable manner.

This provision, found in the Minnesota Statutes under the Uniform Commercial Code, governs the priority of claims among securities intermediaries, entitlement holders, and creditors. Generally, if a securities intermediary does not have sufficient interests in a financial asset to satisfy both its obligations to entitlement holders and its obligation to a creditor with a security interest in that asset, the claims of entitlement holders take priority over the claim of the creditor.

Laws 1995, chapter 194, takes effect January 1, 1996. History: 1995 c 194 art 1 s 52