Bill > HB05849

This bill modifies existing law regarding the priority of claims to financial assets held by securities intermediaries. Specifically, the bill eliminates a provision that previously gave creditors with a security interest in a financial asset priority over the claims of entitlement holders (individuals or entities with a right to the asset) if the creditor had control over the asset. Under the revised law, when a securities intermediary does not have sufficient interests in a financial asset to satisfy both its obligations to entitlement holders and a creditor, the claims of entitlement holders will generally take priority over the creditor's claim. The bill maintains an exception for clearing corporations, where a creditor's claim can still take priority over entitlement holders' claims if the clearing corporation lacks sufficient financial assets to meet both obligations. This change aims to provide clearer guidelines for resolving competing claims to financial assets in situations where there are insufficient resources to satisfy all parties. The bill is set to take effect on October 1, 2025, and will amend section 42a-8-511 of the general statutes.

Business and Industry

Banking Committee (J)

https://www.cga.ct.gov/asp/cgabillstatus/cgabillstatus.asp?selBillType=Bill&bill_num=HB05849&which_year=2025