Book-Entry Securities. Securities which are deposited with the Bermuda Securities Depository (“BSD System”) are treated as fungible and can thus be transferred or pledged by electronic book-keeping entry without any requirement for physical delivery of any instrument of title to the same securities. Securities in the BSD system can be transferred from account to account by book entry movement. Such transfers may arise from trades on the BSX, voluntary conveyances or changes in the relationship between an investor and the participant. In addition, securities can be ‘frozen’ as a result of a pledge instruction. In this case the securities will not be released until the BSD receives a release request from the pledgee. Securities within the system can also be borrowed and returned by an automated book entry transfer procedure. The Custodian shall monitor and promptly notify the Client of any changes in case the securities the Client holds with the Custodian will no longer be able to be considered fungible therefore they will not be able to be transferred or pledged by bookkeeping entry without physical delivery of the securities.
Appears in 3 contracts
Sources: Custodian Agreement (State Funds), Custodian Agreement (State Funds), Custodian Agreement (State Trust)