Relating to choice of law and assignment or acquisition of claims and demands in connection with certificated and uncertificated securities.
The amendments proposed in HB 3929 are designed to enhance the rights of purchasers regarding claims and demands associated with securities. It articulates that unless otherwise agreed, these rights inherently include various possible claims against issuers and other associated parties. This framework potentially reduces the risk and simplifies recourse for securities purchasers, ensuring they have enforceable rights regardless of the issuer's local legal status or subsequent claims of invalidity.
House Bill 3929 introduces amendments to the Business and Commerce Code concerning choice of law and the assignment or acquisition of claims related to securities. The bill aims to clarify the legal landscape surrounding certificated and uncertificated securities by detailing the governing law applicable to these transactions. Specifically, it addresses how the validity of securities is assessed according to the issuer's local law while allowing for the governing law specified by the issuer to dictate the implications of any invalid securities.
One point of contention relates to the retrospective application of governing law specified in transactions involving securities. The bill proposes that changes in the governing law apply retroactively, potentially affecting existing agreements and posing legal challenges regarding fairness and predictability for parties involved in securities transactions. This aspect could lead to disputes, particularly if the new provisions contradict prior expectations established under previous legal frameworks.