PARRIS N. GLENDENING, Governor                               Ch. 92

(III) THE SECURITIES INTERMEDIARY VIOLATED ITS OBLIGATIONS
UNDER § 8-504 OF THIS SUBTITLE BY TRANSFERRING THE FINANCIAL ASSET OR
INTEREST IN THE FINANCIAL ASSET TO THE PURCHASER; AND

(IV) THE PURCHASER IS NOT PROTECTED UNDER SUBSECTION (E)
OF THIS SECTION.

(2) THE TRUSTEE OR OTHER LIQUIDATOR, ACTING ON BEHALF OF ALL
ENTITLEMENT HOLDERS HAVING SECURITY ENTITLEMENTS WITH RESPECT TO A
PARTICULAR FINANCIAL ASSET, MAY RECOVER THE FINANCIAL ASSET, OR
INTEREST IN THE FINANCIAL ASSET, FROM THE PURCHASER. IF THE TRUSTEE OR
OTHER LIQUIDATOR ELECTS NOT TO PURSUE THAT RIGHT, AN ENTITLEMENT
HOLDER WHOSE SECURITY ENTITLEMENT REMAINS UNSATISFIED HAS THE RIGHT
TO RECOVER ITS INTEREST IN THE FINANCIAL ASSET FROM THE PURCHASER.

(E) AN ACTION BASED ON THE ENTITLEMENT HOLDER'S PROPERTY
INTEREST WITH RESPECT TO A PARTICULAR FINANCIAL ASSET UNDER SUBSECTION
(A) OF THIS SECTION, WHETHER FRAMED IN CONVERSION, REPLEVIN,
CONSTRUCTIVE TRUST, EQUITABLE LIEN, OR OTHER THEORY, MAY NOT BE
ASSERTED AGAINST ANY PURCHASER OF A FINANCIAL ASSET OR INTEREST IN A
FINANCIAL ASSET WHO GIVES VALUE, OBTAINS CONTROL, AND DOES NOT ACT IN
COLLUSION WITH THE SECURITIES INTERMEDIARY IN VIOLATING THE SECURITIES
INTERMEDIARY'S OBLIGATIONS UNDER § 8-504 OF THIS SUBTITLE

8-504.

(A)    A SECURITIES INTERMEDIARY SHALL PROMPTLY OBTAIN AND
THEREAFTER MAINTAIN A FINANCIAL ASSET IN A QUANTITY CORRESPONDING TO
THE AGGREGATE OF ALL SECURITY ENTITLEMENTS THE SECURITIES
INTERMEDIARY 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 IN ACCORDANCE
WITH 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.

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