The bill amends the Business & Commerce Code to clarify the choice of law and the assignment or acquisition of claims related to certificated and uncertificated securities. 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 various claims against issuers and other parties involved, and establishes that issuers cannot assert defenses against these claims based on the purchaser's intent to enforce their rights.

Furthermore, the bill stipulates that unless otherwise agreed, the governing law specified in the terms of a security applies retroactively to all related issues. It also allows for modifications to the terms of a security with less than unanimous consent, including the choice of a different governing law, 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)