The proposed bill, General Assembly Committee Bill No. 5849, aims to amend Section 42a-8-511 of the general statutes regarding the priority of claims to financial assets held by securities intermediaries. The bill repeals the existing language that grants priority to creditors of a securities intermediary who have a security interest in a financial asset, provided the creditor has control over that asset. Instead, the new language establishes that entitlement holders, who have security entitlements to a financial asset, will have priority over the claims of creditors when the securities intermediary lacks sufficient interests in that asset.

Additionally, the bill modifies the provisions related to clearing corporations, stating that if a clearing corporation does not have enough financial assets to meet its obligations to entitlement holders and its creditors, the claims of the creditors will take precedence. This change is intended to clarify the hierarchy of claims and ensure that entitlement holders are prioritized in situations where financial assets are insufficient to cover all obligations. The bill is set to take effect on October 1, 2025.

Statutes affected:
Committee Bill: 8-511