The bill, S.B. No. 1239, amends various sections of the Business & Commerce Code to clarify the choice of law and the assignment or acquisition of claims related to certificated and uncertificated securities. Notably, it introduces new provisions that specify that if a security is deemed invalid under the issuer's local law, the governing law agreed upon by the issuer will dictate the consequences of that invalidity. Additionally, it outlines the rights acquired by purchasers of securities, which include claims for damages against various parties involved with the security, and establishes that issuers cannot assert defenses against purchasers based on the intent to enforce rights through litigation.

Furthermore, the bill allows for the retroactive application of the governing law specified in the terms of a security issued in a qualified transaction, including any changes to that law. It also permits modifications to the terms of a security with less than unanimous consent, including the choice of a different jurisdiction's law to govern the security, with such amendments applying retroactively unless otherwise agreed. The provisions are set to take effect on September 1, 2025.

Statutes affected:
Introduced: Commerce Code 8.110, Commerce Code 8.302, Commerce Code 271.005 (Commerce Code 8, Commerce Code 271)