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28	28	STATE OF OKLAHOMA
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30	30	1st Session of the 60th Legislature (2025)
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32	32	HOUSE BILL 1741 By: Moore
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38	38	AS INTRODUCED
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40	40	An Act relating to the Uniform Commercial Code;
41	41	amending 12A O.S. 2021, Sections 8 -110, as amended by
42	42	Section 40, Chapter 13, O.S.L. 2024, 8-503, 8-511 and
43	43	Section 1-9-305, as amended by Section 55, Chapter
44	44	13, O.S.L. 2024 (12A O.S. Supp. 2024, Sections 8 -110
45	45	and 1-9-305), which relate to securities and certain
46	46	intermediaries; modifying provisions related to
47	47	applicable law to certain transa ctions; modifying
48	48	provisions related to property interest of securities
49	49	intermediary; modifying provisions related to
50	50	security interests; and providing an effective date.
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58	58	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
59	59	SECTION 1. AMENDATORY 12 A O.S. 2021, Section 8 -110, as
60	60	amended by Section 40, Chapter 13, O.S.L. 2024 (12 A O.S. Supp. 2024,
61	61	Section 8-110), is amended to read as follows:
62	62	Section 8-110.
63	63	Applicability; Choice of Law.
64	64	(a) The local law of the issue r's jurisdiction, as specified in
65	65	subsection (d) of this section, governs:
66	66	(1) the validity of a security;
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93	93	(2) the rights and duties of the issuer with respect to
94	94	registration of transfer;
95	95	(3) the effectiveness of registration of transfer by the
96	96	issuer;
97	97	(4) whether the issuer owes any duties to an adverse
98	98	claimant to a security; and
99	99	(5) whether an adverse claim can be asserted against a
100	100	person to whom transfer of a certificated or
101	101	uncertificated security is registered or a person who
102	102	obtains control of an u ncertificated security.
103	103	(b) The local law of the securities intermediary 's entitlement
104	104	holder's jurisdiction, as specified in subsection (e) of this
105	105	section, governs:
106	106	(1) acquisition of a security entitlement from the
107	107	securities intermediary;
108	108	(2) the rights and duties of the securities intermediary
109	109	and entitlement holder arising out of a security
110	110	entitlement;
111	111	(3) whether the securities intermediary owes any duties to
112	112	an adverse claimant to a security entitlement; and
113	113	(4) whether an adverse claim can be ass erted against a
114	114	person who acquires a security entitlement from the
115	115	securities intermediary or a person who purchases a
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142	142	security entitlement or interest therein from an
143	143	entitlement holder.
144	144	(c) The local law of the jurisdiction in which a security
145	145	certificate is located at the time of delivery governs whether an
146	146	adverse claim can be asserted against a person to whom the security
147	147	certificate is delivered.
148	148	(d) "Issuer's jurisdiction" means the jurisdiction under which
149	149	the issuer of the security is organized or, if permitted by the law
150	150	of that jurisdiction, the law of another jurisdict ion specified by
151	151	the issuer. An issuer organized under the law of this state may
152	152	specify the law of another jurisdiction as the law governing the
153	153	matters specified in paragraphs (2) through (5) of subsection (a) of
154	154	this section.
155	155	(e) The following rules determine a "securities intermediary 's
156	156	jurisdiction" for purposes of this section:
157	157	(1) If an agreement between the securities intermediary
158	158	and its entitlement holder governing the securities
159	159	account expressly provides that a particular
160	160	jurisdiction is the s ecurities intermediary 's
161	161	jurisdiction for purposes of this part, this article,
162	162	or this title, that jurisdiction is the securities
163	163	intermediary's jurisdiction;
164	164	(2) If paragraph (1) does not apply and an agreement
165	165	between the securities intermediary and its
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192	192	entitlement holder governing the securities account
193	193	expressly provides that the agreement is governed by
194	194	the law of a particular jurisdiction, that
195	195	jurisdiction is the securities intermediary's
196	196	jurisdiction.
197	197	(3) If neither paragraph (1) nor paragraph (2) o f this
198	198	subsection applies and an agreement between the
199	199	securities intermediary and its entitlement holder
200	200	governing the securities account expressly provides
201	201	that the securities account is maintained at an office
202	202	in a particular jurisdiction, that jurisdiction is the
203	203	securities intermediary 's jurisdiction;
204	204	(4) If none of the preceding paragraphs of this subsection
205	205	applies, the securities intermediary 's jurisdiction is
206	206	the jurisdiction in which the office identified in an
207	207	account statement as the office serv ing the
208	208	entitlement holder's account is located; and
209	209	(5) If none of the preceding paragraphs of this subsection
210	210	applies, the securities intermediary 's jurisdiction is
211	211	the jurisdiction in which the chief executive office
212	212	of the securities intermediary is located.
213	213	(f) A securities intermediary 's jurisdiction is not determined
214	214	by the physical location of certificates representing financial
215	215	assets, or by the jurisdiction in which is organized the issuer of
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242	242	the financial asset with respect to which an entitleme nt holder has
243	243	a security entitlement, or by the location of facilities for data
244	244	processing or other recordkeeping concerning the account.
245	245	(g) The local law of the issuer 's jurisdiction or the
246	246	securities intermediary 's jurisdiction governs a matter or
247	247	transaction specified in subsection (a) or (b) of this section even
248	248	if the matter or transaction does not bear any relation to the
249	249	jurisdiction.
250	250	SECTION 2. AMENDATORY 12A O.S. 2021, Section 8 -503, is
251	251	amended to read as follows:
252	252	Section 8-503.
253	253	Property Interest of Entitlement Holder in Financial Asset Held
254	254	by Securities Intermediary.
255	255	(a) To the extent necessary for a securities intermediary to
256	256	satisfy all security entitlements with respect to a particular
257	257	financial asset, all interests in that financial asset held by the
258	258	securities intermediary are held by the securities intermediary for
259	259	the entitlement holders, are not property of the securities
260	260	intermediary, and are not subject to claims of creditors of the
261	261	securities intermediary , except as otherwise provided in Section 8 -
262	262	511 of this title.
263	263	(b) An entitlement holder 's property interest with respect to a
264	264	particular financial asset under subsection (a) of thi s section is a
265	265	pro rata property interest in all interests in that financial asset
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292	292	held by the securities intermediary, without regard to the time the
293	293	entitlement holder acquired the security entitlement or the time the
294	294	securities intermediary acquired the interest in that financial
295	295	asset.
296	296	(c) An entitlement holder 's property interest with respect to a
297	297	particular financial asset under subsection (a) of this section may
298	298	be enforced against the securities intermediary only by exercise of
299	299	the entitlement hold er's rights under Sections 8 -505 through 8-508
300	300	of this title.
301	301	(d) An entitlement holder 's property interest with respect to a
302	302	particular financial asset under subsection (a) of this section may
303	303	be enforced against a purchaser of the financial asset or int erest
304	304	therein only if:
305	305	(1) insolvency proceedings have been initiated by or
306	306	against the securities intermediary;
307	307	(2) the securities intermediary does not have sufficient
308	308	interests in the financial asset to satisfy the
309	309	security entitlements of all of its en titlement
310	310	holders to that financial asset;
311	311	(3) the securities intermediary violated its obligations
312	312	under Section 8-504 of this title by transferring the
313	313	financial asset or interest therein to the purchaser;
314	314	and
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341	341	(4) the purchaser is not protected under sub section (e) of
342	342	this section.
343	343	The trustee or other liquidator, acting on behalf of all entitlement
344	344	holders having security entitlements with respect to a particular
345	345	financial asset, may recover the financial asset, or interest
346	346	therein, from the purchaser. If the trustee or other liquidator
347	347	elects not to pursue that right, an entitlement holder whose
348	348	security entitlement remains unsatisfied has the right to recover
349	349	its interest in the financial asset from the purchaser.
350	350	(e) An action based on the entitlemen t holder's property
351	351	interest with respect to a particular financial asset unde r
352	352	subsection (a) of this section, whether framed in conversion,
353	353	replevin, constructive trust, equitable lien, or other theory, may
354	354	not be asserted against any purchaser of a fina ncial asset or
355	355	interest therein who gives value, obtains control, and does not act
356	356	in collusion with the securities intermediary in violating the
357	357	securities intermediary 's obligations under Section 8 -504 of this
358	358	title.
359	359	SECTION 3. AMENDATORY 12A O.S. 2021, Section 8 -511, is
360	360	amended to read as follows:
361	361	Section 8-511.
362	362	Priority Among Security Interests and Entitlement Holders.
363	363	(a) Except as otherwise provided in subsections (b) and (c) of
364	364	this section, if If a securities intermediary does not have
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391	391	sufficient interests in a particular financial asset to satisfy both
392	392	its obligations to entitlement holders who have security
393	393	entitlements to that financial asset and its obligation to a
394	394	creditor of the securities intermediary who has a secur ity interest
395	395	in that financial asset, the claims of entitlement holders, other
396	396	than the creditor, have priority over the claim of the creditor.
397	397	(b) A claim of a creditor of a securities intermediary who has
398	398	a security interest in a financial asset held by a securities
399	399	intermediary has priority over claims of the securities
400	400	intermediary's entitlement holders who have security entitlements
401	401	with respect to that financial asset if the creditor has control
402	402	over the financial asset.
403	403	(c) If a clearing corporatio n does not have sufficient
404	404	financial assets to satisfy both its obligations to entitlement
405	405	holders who have security entitlements with respect to a financial
406	406	asset and its obligation to a creditor of the clearing corporation
407	407	who has a security interest in that financial asset, the claim of
408	408	the creditor has priority over the claims of entitlement holders.
409	409	SECTION 4. AMENDATORY 12 A O.S. 2021, Section 1 -9-305, as
410	410	amended by Section 55, Chapter 13, O.S.L. 2024 (12 A O.S. Supp. 2024,
411	411	Section 1-9-305), is amended to read as follows:
412	412	Section 1-9-305.
413	413	LAW GOVERNING PERFECTION AND PRIORITY
414	414	OF SECURITY INTERESTS IN INVESTMENT PROPERTY
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441	441	(a) Except as otherwise provided in subsection (c) of this
442	442	section, the following rules apply:
443	443	(1) While a security certificate is located in a jurisdiction,
444	444	the local law of that jurisdiction governs perfection, the effect of
445	445	perfection or nonperfection, and the priority of a security interest
446	446	in the certificated security represented thereby.
447	447	(2) The local law of the issuer's jurisdiction as specified in
448	448	subsection (d) of Section 8 -110 of this title governs perfection,
449	449	the effect of perfection or nonperfection, and the priority of a
450	450	security interest in an uncertificated security.
451	451	(3) The local law of the secu rities intermediary's jurisdiction
452	452	as specified in subsection (e) of Section 8 -110 of this title
453	453	governs perfection, the effect of perfection or nonperfection, and
454	454	the priority of a security interest in a security entitlement or
455	455	securities account.
456	456	(4) The local law of the commodity intermediary 's jurisdiction
457	457	governs perfection, t he effect of perfection or nonperfection, and
458	458	the priority of a security interest in a commodity contract or
459	459	commodity account.
460	460	(5) Paragraphs (2), (3), and (4) of this subsecti on apply even
461	461	if the transaction does not bear any relation to the jurisdiction.
462	462	(b) The following rules determine a commodity intermediary 's
463	463	jurisdiction for purposes of this part:
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490	490	(1) If an agreement between the commodity intermediary and
491	491	commodity customer governing the commodity account expressly
492	492	provides that a particular jur isdiction is the commodity
493	493	intermediary's jurisdiction for purposes of this part, this article,
494	494	or this title, that jurisdiction is the commodity intermediary 's
495	495	jurisdiction.
496	496	(2) If paragraph (1) of this subsection does not apply and an
497	497	agreement between the commodity intermediary and commodity customer
498	498	governing the commodity account expressly provides that the
499	499	agreement is governed by the law of a particular jurisdiction, that
500	500	jurisdiction is the commodity intermediary 's jurisdiction.
501	501	(3) If neither paragraph (1) nor paragraph (2) of this
502	502	subsection applies and an agreement between the commodity
503	503	intermediary and commodity customer governing the commodity account
504	504	expressly provides that the commodity account is maintained at an
505	505	office in a particular jurisdiction, that jurisdiction is the
506	506	commodity intermediary 's jurisdiction.
507	507	(4) If none of the preceding paragraphs of this section
508	508	applies, the commodity intermediary 's jurisdiction is the
509	509	jurisdiction in which the office identified in an account statement
510	510	as the office serving the commodity customer 's account is located.
511	511	(5) If none of the preceding paragraphs of this section
512	512	applies, the commodity intermediary 's jurisdiction is the
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539	539	jurisdiction in which the chief executive office of the commodity
540	540	intermediary is located.
541	541	(c) The local law of the jurisdiction in which the debtor is
542	542	located governs:
543	543	(1) perfection of a security interest in investment property by
544	544	filing;
545	545	(2) automatic perfection of a security interest in investment
546	546	property created by a b roker or securities intermediary; and
547	547	(3) automatic perfection of a security interest in a commodity
548	548	contract or commodity account created by a commodity intermediary.
549	549	SECTION 5. This act shall become effective November 1, 2025.
550	550
551	551	60-1-10396 MAH 01/14/25

Oklahoma 2025 Regular Session

Oklahoma House Bill HB1741 Compare Versions