This bill amends the Uniform Commercial Code (UCC) to clarify the priority among security interests and entitlement holders. Specifically, it revises Arkansas Code 4-8-503(a) to state that interests in a financial asset held by a securities intermediary are for the entitlement holders and are not subject to the intermediary's creditors, with the exception of provisions in 4-8-511. The bill also modifies Arkansas Code 4-8-511 to establish that if a securities intermediary lacks sufficient interests in a financial asset to satisfy both entitlement holders and creditors, the entitlement holders' claims take precedence. Additionally, it introduces a requirement that any disputes arising from these claims must be litigated in Arkansas.

Furthermore, the bill amends Arkansas Code 4-9-305(a) to clarify the governing laws for perfection and priority of security interests in investment property. It removes the reference to the securities intermediary's jurisdiction in the context of perfection and priority, thereby streamlining the legal framework governing these interests. Overall, the bill aims to enhance the clarity and efficiency of the UCC as it pertains to security interests and entitlement holders in Arkansas.

Statutes affected:
HB 1659: 4-8-503(a), 4-8-511, 4-9-305(a)