Senate Bill 123 proposes significant amendments to the Uniform Commercial Code (UCC) as it pertains to investment securities in Wisconsin. The bill aims to enhance the rights of entitlement holders by eliminating certain provisions that previously allowed creditors of securities intermediaries to have priority over entitlement holders in claims to securities. Specifically, it repeals sections that governed jurisdictional rules and the priority of claims, thereby establishing that the law of the entitlement holder's jurisdiction will govern these matters. This change is intended to provide greater protection for entitlement holders, ensuring their claims to securities take precedence even if they have purchased securities on margin and granted a security interest to the securities intermediary.

Additionally, the bill renumbers and amends existing statutes to clarify the rights and obligations of securities intermediaries and entitlement holders. It removes provisions that allowed securities intermediaries to assert claims over entitlement holders in certain circumstances, thereby reinforcing the principle that entitlement holders' interests are not subject to the claims of the securities intermediary's creditors. The bill also specifies that all interests in a financial asset held by a securities intermediary are for the benefit of entitlement holders and are not considered the property of the intermediary. Overall, these changes aim to strengthen the legal framework surrounding investment securities and enhance the protections afforded to investors in Wisconsin.

Statutes affected:
Bill Text: 408.503(1), 408.503, 409.305(1)(c), 409.305