Stricken language would be deleted from and underlined language would be added to present law.
*ANS180* 03/04/2025 10:11:45 AM ANS180
State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 HOUSE BILL 1659 3
4
By: Representative S. Meeks 5
6
7
For An Act To Be Entitled 8
AN ACT TO AMEND THE UNIFORM COMMERCIAL CODE; TO 9
CLARIFY THE PRIORITY AMONG SECURITY INTERESTS AND 10
ENTITLEMENT HOLDERS UNDER THE UNIFORM COMMERCIAL 11
CODE; AND FOR OTHER PURPOSES. 12
13
14
Subtitle 15
TO AMEND THE UNIFORM COMMERCIAL CODE; 16
AND TO CLARIFY THE PRIORITY AMONG 17
SECURITY INTERESTS AND ENTITLEMENT 18
HOLDERS UNDER THE UNIFORM COMMERCIAL 19
CODE. 20
21
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 22
23
SECTION 1. Arkansas Code § 4 -8-503(a), concerning property interest of 24
entitlement holder in financial asset held by securities intermediary, is 25
amended to read as follows: 26
(a) To the extent necessary for a securities intermediary to satisfy 27
all security entitlements with respect to a particular financial asset, all 28
interests in that financial asset held by the securities intermediary are 29
held by the securities intermediary for the entitlement holders, are not 30
property of the securities intermediary, and are not subject to claims of 31
creditors of the securities intermediary , except as otherwise provided in § 32
4-8-511. 33
34
SECTION 2. Arkansas Code § 4 -8-511 is amended to read as follows: 35
4-8-511. Priority among security interests and entitlement holders. 36 HB1659
2 03/04/2025 10:11:45 AM ANS180
(a)(1) Except as otherwise provided in subsections (b) and (c), if If 1
a securities intermediary does not have sufficient interests in a particular 2
financial asset to satisfy both its obligations to entitlement holders who 3
have security entitlements to that financial asset and its obligation to a 4
creditor of the securities intermediary who has a security interest in that 5
financial asset, the claims of entitlement holders, other than the creditor, 6
have priority over the claim of the creditor. 7
(2) A claim of or a cause of action of an entitlement holder 8
under subdivision (a)(1) of this section shall be litigated in this state. 9
(b) A claim of a creditor of a securities intermediary who has a 10
security interest in a financial asset held by a securities intermediary has 11
priority over claims of the securities intermediary's entitlement holders who 12
have security entitlements with respect to that financial asset if the 13
creditor has control over the financial asset On and after January 1, 2026, a 14
dispute, case, claim, or controversy resulting from a contract or agreement 15
entered into under subsection (a) of this section shall be resolved or 16
litigated in this state . 17
(c) If a clearing corporation does not have sufficient financial 18
assets to satisfy both its obligations to entitlement holders who have 19
security entitlements with respect to a financial asset and its obligation to 20
a creditor of the clearing corporation who has a security interest in that 21
financial asset, the claim of the creditor has priority over the claims of 22
entitlement holders. 23
24
SECTION 3. Arkansas Code § 4 -9-305(a), concerning the law governing 25
perfection and priority of security interests in investment property, is 26
amended to read as follows: 27
(a) Except as otherwise provided in subsection (c), the following 28
rules apply: 29
(1) While a security certificate is located in a jurisdiction, 30
the local law of that jurisdiction governs perfection, the effect of 31
perfection or nonperfection, and the priority of a security interest in the 32
certificated security represented thereby. 33
(2) The local law of the issuer's jurisdiction as specified in § 34
4-8-110(d) governs perfection, the effect of perfection or nonperfection, and 35
the priority of a security interest in an uncertificated security. 36 HB1659
3 03/04/2025 10:11:45 AM ANS180
(3) The local law of the securities intermediary's jurisdiction 1
as specified in § 4-8-110(e) governs perfection, the effect of perfection or 2
nonperfection, and the priority of a security interest in a security 3
entitlement or securities account. 4
(4) The local law of the commodity intermediary's jurisdiction 5
governs perfection, the effect of perfection or nonperfection, and the 6
priority of a security interest in a commodity contract or commodity account. 7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36