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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
HOUSE BILL 1741 By: Moore
AS INTRODUCED
An Act relating to the Uniform Commercial Code;
amending 12A O.S. 2021, Sections 8 -110, as amended by
Section 40, Chapter 13, O.S.L. 2024, 8-503, 8-511 and
Section 1-9-305, as amended by Section 55, Chapter
13, O.S.L. 2024 (12A O.S. Supp. 2024, Sections 8 -110
and 1-9-305), which relate to securities and certain
intermediaries; modifying provisions related to
applicable law to certain transa ctions; modifying
provisions related to property interest of securities
intermediary; modifying provisions related to
security interests; and providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 12 A O.S. 2021, Section 8 -110, as
amended by Section 40, Chapter 13, O.S.L. 2024 (12 A O.S. Supp. 2024,
Section 8-110), is amended to read as follows:
Section 8-110.
Applicability; Choice of Law.
(a) The local law of the issue r's jurisdiction, as specified in
subsection (d) of this section, governs:
(1) the validity of a security;
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(2) the rights and duties of the issuer with respect to
registration of transfer;
(3) the effectiveness of registration of transfer by the
issuer;
(4) whether the issuer owes any duties to an adverse
claimant to a security; and
(5) whether an adverse claim can be asserted against a
person to whom transfer of a certificated or
uncertificated security is registered or a person who
obtains control of an u ncertificated security.
(b) The local law of the securities intermediary 's entitlement
holder's jurisdiction, as specified in subsection (e) of this
section, governs:
(1) acquisition of a security entitlement from the
securities intermediary;
(2) the rights and duties of the securities intermediary
and entitlement holder arising out of a security
entitlement;
(3) whether the securities intermediary owes any duties to
an adverse claimant to a security entitlement; and
(4) whether an adverse claim can be ass erted against a
person who acquires a security entitlement from the
securities intermediary or a person who purchases a
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security entitlement or interest therein from an
entitlement holder.
(c) The local law of the jurisdiction in which a security
certificate is located at the time of delivery governs whether an
adverse claim can be asserted against a person to whom the security
certificate is delivered.
(d) "Issuer's jurisdiction" means the jurisdiction under which
the issuer of the security is organized or, if permitted by the law
of that jurisdiction, the law of another jurisdict ion specified by
the issuer. An issuer organized under the law of this state may
specify the law of another jurisdiction as the law governing the
matters specified in paragraphs (2) through (5) of subsection (a) of
this section.
(e) The following rules determine a "securities intermediary 's
jurisdiction" for purposes of this section:
(1) If an agreement between the securities intermediary
and its entitlement holder governing the securities
account expressly provides that a particular
jurisdiction is the s ecurities intermediary 's
jurisdiction for purposes of this part, this article,
or this title, that jurisdiction is the securities
intermediary's jurisdiction;
(2) If paragraph (1) does not apply and an agreement
between the securities intermediary and its
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entitlement holder governing the securities account
expressly provides that the agreement is governed by
the law of a particular jurisdiction, that
jurisdiction is the securities intermediary's
jurisdiction.
(3) If neither paragraph (1) nor paragraph (2) o f this
subsection applies and an agreement between the
securities intermediary and its entitlement holder
governing the securities account expressly provides
that the securities account is maintained at an office
in a particular jurisdiction, that jurisdiction is the
securities intermediary 's jurisdiction;
(4) If none of the preceding paragraphs of this subsection
applies, the securities intermediary 's jurisdiction is
the jurisdiction in which the office identified in an
account statement as the office serv ing the
entitlement holder's account is located; and
(5) If none of the preceding paragraphs of this subsection
applies, the securities intermediary 's jurisdiction is
the jurisdiction in which the chief executive office
of the securities intermediary is located.
(f) A securities intermediary 's jurisdiction is not determined
by the physical location of certificates representing financial
assets, or by the jurisdiction in which is organized the issuer of
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the financial asset with respect to which an entitleme nt holder has
a security entitlement, or by the location of facilities for data
processing or other recordkeeping concerning the account.
(g) The local law of the issuer 's jurisdiction or the
securities intermediary 's jurisdiction governs a matter or
transaction specified in subsection (a) or (b) of this section even
if the matter or transaction does not bear any relation to the
jurisdiction.
SECTION 2. AMENDATORY 12A O.S. 2021, Section 8 -503, is
amended to read as follows:
Section 8-503.
Property Interest of Entitlement Holder in Financial Asset Held
by Securities Intermediary.
(a) To the extent necessary for a securities intermediary to
satisfy all security entitlements with respect to a particular
financial asset, all interests in that financial asset held by the
securities intermediary are held by the securities intermediary for
the entitlement holders, are not property of the securities
intermediary, and are not subject to claims of creditors of the
securities intermediary , except as otherwise provided in Section 8 -
511 of this title.
(b) An entitlement holder 's property interest with respect to a
particular financial asset under subsection (a) of thi s section is a
pro rata property interest in all interests in that financial asset
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held by the securities intermediary, without regard to the time the
entitlement holder acquired the security entitlement or the time the
securities intermediary acquired the interest in that financial
asset.
(c) An entitlement holder 's property interest with respect to a
particular financial asset under subsection (a) of this section may
be enforced against the securities intermediary only by exercise of
the entitlement hold er's rights under Sections 8 -505 through 8-508
of this title.
(d) An entitlement holder 's property interest with respect to a
particular financial asset under subsection (a) of this section may
be enforced against a purchaser of the financial asset or int erest
therein only if:
(1) insolvency proceedings have been initiated by or
against the securities intermediary;
(2) the securities intermediary does not have sufficient
interests in the financial asset to satisfy the
security entitlements of all of its en titlement
holders to that financial asset;
(3) the securities intermediary violated its obligations
under Section 8-504 of this title by transferring the
financial asset or interest therein to the purchaser;
and
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(4) the purchaser is not protected under sub section (e) of
this section.
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
therein, 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 entitlemen t holder's property
interest with respect to a particular financial asset unde r
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 fina ncial asset or
interest therein who gives value, obtains control, and does not act
in collusion with the securities intermediary in violating the
securities intermediary 's obligations under Section 8 -504 of this
title.
SECTION 3. AMENDATORY 12A O.S. 2021, Section 8 -511, is
amended to read as follows:
Section 8-511.
Priority Among Security Interests and Entitlement Holders.
(a) Except as otherwise provided in subsections (b) and (c) of
this section, if If a securities intermediary does not have
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sufficient interests in a particular financial asset to satisfy both
its obligations to entitlement holders who have security
entitlements to that financial asset and its obligation to a
creditor of the securities intermediary who has a secur ity interest
in that financial asset, the claims of entitlement holders, other
than the creditor, have priority over the claim of the creditor.
(b) A claim of a creditor of a securities intermediary who has
a security interest in a financial asset held by a securities
intermediary has priority over claims of the securities
intermediary's entitlement holders who have security entitlements
with respect to that financial asset if the creditor has control
over the financial asset.
(c) If a clearing corporatio n does not have sufficient
financial assets to satisfy both its obligations to entitlement
holders who have security entitlements with respect to a financial
asset and its obligation to a creditor of the clearing corporation
who has a security interest in that financial asset, the claim of
the creditor has priority over the claims of entitlement holders.
SECTION 4. AMENDATORY 12 A O.S. 2021, Section 1 -9-305, as
amended by Section 55, Chapter 13, O.S.L. 2024 (12 A O.S. Supp. 2024,
Section 1-9-305), is amended to read as follows:
Section 1-9-305.
LAW GOVERNING PERFECTION AND PRIORITY
OF SECURITY INTERESTS IN INVESTMENT PROPERTY
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(a) Except as otherwise provided in subsection (c) of this
section, the following rules apply:
(1) While a security certificate is located in a jurisdiction,
the local law of that jurisdiction governs perfection, the effect of
perfection or nonperfection, and the priority of a security interest
in the certificated security represented thereby.
(2) The local law of the issuer's jurisdiction as specified in
subsection (d) of Section 8 -110 of this title governs perfection,
the effect of perfection or nonperfection, and the priority of a
security interest in an uncertificated security.
(3) The local law of the secu rities intermediary's jurisdiction
as specified in subsection (e) of Section 8 -110 of this title
governs perfection, the effect of perfection or nonperfection, and
the priority of a security interest in a security entitlement or
securities account.
(4) The local law of the commodity intermediary 's jurisdiction
governs perfection, t he effect of perfection or nonperfection, and
the priority of a security interest in a commodity contract or
commodity account.
(5) Paragraphs (2), (3), and (4) of this subsecti on apply even
if the transaction does not bear any relation to the jurisdiction.
(b) The following rules determine a commodity intermediary 's
jurisdiction for purposes of this part:
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(1) If an agreement between the commodity intermediary and
commodity customer governing the commodity account expressly
provides that a particular jur isdiction is the commodity
intermediary's jurisdiction for purposes of this part, this article,
or this title, that jurisdiction is the commodity intermediary 's
jurisdiction.
(2) If paragraph (1) of this subsection does not apply and an
agreement between the commodity intermediary and commodity customer
governing the commodity account expressly provides that the
agreement is governed by the law of a particular jurisdiction, that
jurisdiction is the commodity intermediary 's jurisdiction.
(3) If neither paragraph (1) nor paragraph (2) of this
subsection applies and an agreement between the commodity
intermediary and commodity customer governing the commodity account
expressly provides that the commodity account is maintained at an
office in a particular jurisdiction, that jurisdiction is the
commodity intermediary 's jurisdiction.
(4) If none of the preceding paragraphs of this section
applies, the commodity intermediary 's jurisdiction is the
jurisdiction in which the office identified in an account statement
as the office serving the commodity customer 's account is located.
(5) If none of the preceding paragraphs of this section
applies, the commodity intermediary 's jurisdiction is the
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jurisdiction in which the chief executive office of the commodity
intermediary is located.
(c) The local law of the jurisdiction in which the debtor is
located governs:
(1) perfection of a security interest in investment property by
filing;
(2) automatic perfection of a security interest in investment
property created by a b roker or securities intermediary; and
(3) automatic perfection of a security interest in a commodity
contract or commodity account created by a commodity intermediary.
SECTION 5. This act shall become effective November 1, 2025.
60-1-10396 MAH 01/14/25