Okla. Stat. tit. 12A § 8-509

Current through Laws 2024, c. 453.

Section 8-509 - Specification of Duties of Securities Intermediary by Other Statute or Regulation; Manner of Performance of Duties of Securities Intermediary and Exercise of Rights of Entitlement Holder

(a) If the substance of a duty imposed upon a securities intermediary by Sections 8-504 through 8-508 of this title is the subject of other statute, regulation, or rule, compliance with that statute, regulation, or rule satisfies the duty.

(b) To the extent that specific standards for the performance of the duties of a securities intermediary or the exercise of the rights of an entitlement holder are not specified by other statute, regulation, or rule or by agreement between the securities intermediary and entitlement holder, the securities intermediary shall perform its duties and the entitlement holder shall exercise its rights in a commercially reasonable manner.

(c) The obligation of a securities intermediary to perform the duties imposed by Sections 8-504 through 8-508 of this title is subject to:

(1) rights of the securities intermediary arising out of a security interest under a security agreement with the entitlement holder or otherwise; and

(2) rights of the securities intermediary under other law, regulation, rule, or agreement to withhold performance of its duties as a result of unfulfilled obligations of the entitlement holder to the securities intermediary.

(d) Sections 8-504 through 8-508 of this title do not require a securities intermediary to take any action that is prohibited by other statute, regulation, or rule.

Okla. Stat. tit. 12A, § 8-509

Added by Laws 1995, SB 522, c. 242, § 49, eff. 2/1/1996.

Oklahoma Code Comment

Most of the law governing the relationship between broker-dealers or other securities intermediaries and their customers is the common law of contract and agency, supplemented or supplanted by regulatory law. The purpose of specifying the duties required by Sections 8-504 through 8-508 is to identify what it means to have a security entitlement, not to specify the details of performance of those duties. To avoid conflict with other law, this Section provides that compliance with other applicable statute, regulation or rule constitutes compliance with the duties specified in Article 8, Part 5.

In general, brokers and dealers are required to register with the federal Securities and Exchange Commission (the "SEC") under Sec. 15 of the Securities Exchange Act of 1934 (the "1934 Act"), 15 U.S.C. § 78o . Under sub section 15(b)(8) of the 1934 Act, each registered broker and dealer must be a member of a national securities association registered under Section 15A of the 1934 Act, or a member of a national securities exchange registered under Section 6 of the 1934 Act. At present, the National Association of Securities Dealers (the "NASD") is the only registered national securities association, and there are ten registered national securities exchanges. The SEC has adopted detailed rules of conduct for brokers and dealers and has statutory authority to levy sanctions for non-compliance. For example, broker-dealers registered under the federal law are subject to detailed regulation concerning the safeguarding of customer securities. See 17 C.F.R. § 240.15 c 3 - 3(1995) . In addition, the NASD and the stock exchanges have detailed rules of conduct for member brokers and dealers. For example, the NASD requires members to have "reasonable grounds for believing" that a recommended security is "suitable" for a customer. See NASD Rules of Fair Practice, art. III, sec. 2, NASD Manual (CCH) ¶ 2152. For the New York Stock Exchange's Rules, for example, see generally the New York Stock Exchange Guide (CCH).

Section 28 of the 1934 Act, 15 U.S.C. § 78bb , specifically provides that the Act does not affect the jurisdiction of any state securities commission to enforce non-conflicting state law. In Oklahoma, brokers and dealers are subject to the registration requirements and the rules of conduct of the Oklahoma Securities Act, 71 Okla. Stat. §§ 1-17, 101-103, 201-204, 301-307, 401-413, 501, 701-703 (1994), and the Rules of the Oklahoma Securities Commission, Okla. Admin. Code tit. 660, ch. 10, subch. 5.

Prior Statutory Provisions:

None.