The bill, known as General Assembly Committee Bill No. 5849, aims to amend the priority of claims to financial assets held by securities intermediaries. Specifically, it repeals the existing provision in Section 42a-8-511 that grants priority to creditors of a securities intermediary over entitlement holders if the creditor has control over the financial asset. The new language establishes that, in cases where a securities intermediary lacks sufficient interests in a financial asset to meet obligations to both entitlement holders and creditors, the claims of entitlement holders will take precedence over those of the creditor.

Additionally, the bill modifies the provisions related to clearing corporations, stating that if a clearing corporation also lacks sufficient financial assets to satisfy both entitlement holders and creditors, the creditor's claim will have priority. 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