Com. Code, § 8504 · Chapter 5. Security Entitlements
Com. Code, § 8504
Text — As published in the Legislative Counsel's database, tables dated October 18, 2026 (pubinfo_2025.zip)
(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 subdivision (a).
(c) A securities intermediary satisfies the duty in subdivision (a) if it does either of the following:
(1) The securities intermediary acts with respect to the duty as agreed upon by the entitlement holder and the securities intermediary.
(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.
Notes and commentary — not statutory text
History
Added by Stats. 1996, Ch. 497, Sec. 9. Effective January 1, 1997.
Source of truth
- Edition
- As published in the Legislative Counsel's database, tables dated October 18, 2026 (pubinfo_2025.zip)
- Official file
- https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=COM§ionNum=8504.
- Text hash
- sha256 5c04ecb5641ac9dcab50d34dc275816d3d48a5b57dadb0debbba4dd35cd3ee41
- Composed by
- compose_ca.py 2026-10-22: the Legislative Counsel's CAML content files read by a tokenizer (caml_readers.reader_a); an independent xml.etree reading (caml_readers.reader_b) agrees on every section
Cited by 2 provisions
Provisions in this library whose text cites Com. Code, § 8504. Each shows the citation as that text prints it.
Procedural information only. Not legal advice and not a substitute for the advice of an attorney. Confirm the current text with the official publisher before relying on it.