HRS §490:8-504
Keeping track of the assets behind your securities account
A securities intermediary must promptly get and keep enough of each financial asset to cover all the entitlements it has promised to its account holders. It can hold the assets itself or through other intermediaries. It cannot use those assets as collateral unless the account holder agrees. It meets its duty by following the agreement or, if none, by using reasonable care and standard industry practices.
financial institutions
The statute, as written — Duty of securities intermediary to maintain financial asset
(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 subsection (a). (c) A securities intermediary satisfies the duty in subsection (a) 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. (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.
LawTrove is not legal advice. The summary above is a computer-generated restatement — the authoritative text is the official version linked above.