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EXPLANATION-Matter enclosed in bold-faced brackets [thus] in this bill is not enacted
and is intended to be omitted in the law.
SECOND REGULAR SESSION
SENATE BILL NO. 1256
103RD GENERAL ASSEMBLY
INTRODUCED BY SENATOR NICOLA.
3830S.01I KRISTINA MARTIN, Secretary
AN ACT
To repeal sections 400.8 -110, 400.8-503, 400.8-511, and 400.9-305, RSMo, and to enact in lieu
thereof four new sections relating to the uniform commercial code.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Sections 400.8-110, 400.8-503, 400.8-511, and 1
400.9-305, RSMo, are repealed and four new sections enacted in 2
lieu thereof, to be known as sections 400.8 -110, 400.8-503, 3
400.8-511, and 400.9-305, to read as follows:4
400.8-110. (a) The local law of the issuer's 1
jurisdiction, as specified in subsection (d), governs: 2
(1) The validity of a security; 3
(2) The rights and duties of the issuer with respect 4
to registration of transfer; 5
(3) The effectiveness of registration of transfer by 6
the issuer; 7
(4) Whether the issuer owes any duties to an adverse 8
claimant to a security; and 9
(5) Whether an adverse claim can be asserted against a 10
person to whom transfer of a certificated or uncertificated 11
security is registered or a person who obtains control of an 12
uncertificated security. 13
(b) The [local] law of [the securities intermediary's 14
jurisdiction, as specified in subsection (e)] this state, 15
governs: 16
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(1) Acquisition of a security entitlement from the 17
securities intermediary; 18
(2) The rights and duties of the securities 19
intermediary and entitlement holder arising out of a 20
security entitlement; 21
(3) Whether the securities intermediary owes any 22
duties to an adverse claimant to a security entitlement; and 23
(4) Whether an adverse claim can be asserted against a 24
person who acquires a security entitlement from the 25
securities intermediary or a person who purchases a security 26
entitlement or interest therein from an entitlement holder. 27
(c) The local law of the jurisdiction in which a 28
security certificate is located at the time of delivery 29
governs whether an adverse claim can be asserted against a 30
person to whom the security certificate is delivered. 31
(d) "Issuer's jurisdiction" means the jurisdiction 32
under which the issuer of the security is organized or, if 33
permitted by the law of that jurisdiction, the law of 34
another jurisdiction specified by the issuer. An issuer 35
organized under the law of this state may specify the law of 36
another jurisdiction as the law governing the matters 37
specified in subsection (a)(2) through (5). 38
[(e) The following rules determine a "securities 39
intermediary's jurisdiction" for purposes of this section: 40
(1) If an agreement between the securities 41
intermediary and its entitlement holder governing the 42
securities account expressly provides that a particular 43
jurisdiction is the securities intermediary's jurisdiction 44
for purposes of this part, this article, or chapter 400, 45
that jurisdiction is the securities intermediary's 46
jurisdiction; 47
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(2) If paragraph (1) does not apply and an agreement 48
between the securities intermediary and its entitlement 49
holder governing the securities account expressly provides 50
that the agreement is governed by the law of a particular 51
jurisdiction, that jurisdiction is the securities 52
intermediary's jurisdiction. 53
(3) If neither paragraph (1) nor paragraph (2) 54
applies, and an agreement between the securities 55
intermediary and its entitlement holder governing the 56
securities account expressly provides that the securities 57
account is maintained at an office in a particular 58
jurisdiction, that jurisdiction is the securities 59
intermediary's jurisdiction; 60
(4) If none of the preceding paragraphs apply, the 61
securities intermediary's jurisdiction is the jurisdiction 62
in which the office identified in an account statement as 63
the office serving the entitlement holder's account is 64
located. 65
(5) If none of the preceding paragraphs apply, the 66
securities intermediary's jurisdiction is the jurisdiction 67
in which the chief executive office of the securities 68
intermediary is located. 69
(f) A securities intermediary's jurisdiction is not 70
determined by the physical location of certificates 71
representing financial assets, or by the jurisdiction in 72
which is organized the issuer of the financial asset with 73
respect to which an entitlement holder has a security 74
entitlement, or by the location of facilities for data 75
processing or other record keeping concerning the account.] 76
400.8-503. (a) To the extent necessary for a 1
securities intermediary to satisfy all security entitlements 2
with respect to a particular financial asset, all interests 3
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in that financial asset held by the securities intermediary 4
are held by the securities intermediary for the entitlement 5
holders, are not property of the securities intermediary, 6
and are not subject to claims of creditors of the securities 7
intermediary[, except as otherwise provided in section 400.8- 8
511]. 9
(b) An entitlement holder's property interest with 10
respect to a particular financial asset under subsection (a) 11
is a pro rata property interest in all interests in that 12
financial asset held by the securities intermediary, without 13
regard to the time the entitlement holder acquired the 14
security entitlement or the time the securities intermediary 15
acquired the interest in that financial asset. 16
(c) An entitlement holder's property interest with 17
respect to a particular financial asset under subsection (a) 18
may be enforced against the securities intermediary only by 19
exercise of the entitlement holder's rights under sections 20
400.8-505 through 400.8-508. 21
(d) An entitlement holder's property interest with 22
respect to a particular financial asset under subsection (a) 23
may be enforced against a purchaser of the financial asset 24
or interest therein only if: 25
(1) Insolvency proceedings have been initiated by or 26
against the securities intermediary; 27
(2) The securities intermediary does not have 28
sufficient interests in the financial asset to satisfy the 29
security entitlements of all of its entitlement holders to 30
that financial asset; 31
(3) The securities intermediary violated its 32
obligations under section 400.8-504 by transferring the 33
financial asset or interest therein to the purchaser; and 34
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(4) The purchaser is not protected under subsection 35
(e). The trustee or other liquidator, acting on behalf of 36
all entitlement holders having security entitlements with 37
respect to a particular financial asset, may recover the 38
financial asset, or interest therein, from the purchaser. 39
If the trustee or other liquidator elects not to pursue that 40
right, an entitlement holder whose security entitlement 41
remains unsatisfied has the right to recover its interest in 42
the financial asset from the purchaser. 43
(e) An action based on the entitlement holder's 44
property interest with respect to a particular financial 45
asset under subsection (a), whether framed in conversion, 46
replevin, constructive trust, equitable lien or other 47
theory, may not be asserted against any purchaser of a 48
financial asset or interest therein who gives value, obtains 49
control, and does not act in collusion with the securities 50
intermediary in violating the securities intermediary's 51
obligations under section 400.8-504. 52
400.8-511. [(a) Except as otherwise provided in 1
subsections (b) and (c),] If a securities intermediary does 2
not have sufficient interests in a particular financial 3
asset to satisfy both its obligations to entitlement holders 4
who have security entitlements to that financial asset and 5
its obligation to a creditor of the securities intermediary 6
who has a security interest in that financial asset, the 7
claims of entitlement holders, other than the creditor, have 8
priority over the claim of the creditor. 9
[(b) A claim of a creditor of a securities 10
intermediary who has a security interest in a financial 11
asset held by a securities intermediary has priority over 12
claims of the securities intermediary's entitlement holders 13
who have security entitlements with respect to that 14
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financial asset if the creditor has control over the 15
financial asset. 16
(c) If a clearing corporation does not have sufficient 17
financial assets to satisfy both its obligations to 18
entitlement holders who have security entitlements with 19
respect to a financial asset and its obligation to a 20
creditor of the clearing corporation who has a security 21
interest in that financial asset, the claim of the creditor 22
has priority over the claims of entitlement holders.] 23
400.9-305. (a) Except as otherwise provided in 1
subsection (c), the following rules apply: 2
(1) While a security certificate is located in a 3
jurisdiction, the local law of that jurisdiction governs 4
perfection, the effect of perfection or nonperfection, and 5
the priority of a security interest in the certificated 6
security represented thereby; 7
(2) The local law of the issuer's jurisdiction as 8
specified in section 400.8-110(d) governs perfection, the 9
effect of perfection or nonperfection, and the priority of a 10
security interest in an uncertificated security; 11
(3) The [local] law of [the securities intermediary's 12
jurisdiction as specified in section 400.8-110(e)] this 13
state governs perfection, the effect of perfection or 14
nonperfection, and the priority of a security interest in a 15
security entitlement or securities account; 16
(4) The local law of the commodity intermediary's 17
jurisdiction governs perfection, the effect of perfection or 18
nonperfection, and the priority of a security interest in a 19
commodity contract or commodity account. 20
(b) The following rules determine a commodity 21
intermediary's jurisdiction for purposes of this part: 22
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(1) If an agreement between the commodity intermediary 23
and commodity customer governing the commodity account 24
expressly provides that a particular jurisdiction is the 25
commodity intermediary's jurisdiction for purposes of this 26
part, this article, or this chapter, that jurisdiction is 27
the commodity intermediary's jurisdiction; 28
(2) If paragraph (1) does not apply and an agreement 29
between the commodity intermediary and commodity customer 30
governing the commodity account expressly provides that the 31
agreement is governed by the law of a particular 32
jurisdiction, that jurisdiction is the commodity 33
intermediary's jurisdiction; 34
(3) If neither paragraph (1) nor paragraph (2) applies 35
and an agreement between the commodity intermediary and 36
commodity customer governing the commodity account expressly 37
provides that the commodity account is maintained at an 38
office in a particular jurisdiction, that jurisdiction is 39
the commodity intermediary's jurisdiction; 40
(4) If none of the preceding paragraphs applies, the 41
commodity intermediary's jurisdiction is the jurisdiction in 42
which the office identified in an account statement as the 43
office serving the commodity customer's account is located; 44
(5) If none of the preceding paragraphs applies, the 45
commodity intermediary's jurisdiction is the jurisdiction in 46
which the chief executive office of the commodity 47
intermediary is located. 48
(c) The local law of the jurisdiction in which the 49
debtor is located governs: 50
(1) Perfection of a security interest in investment 51
property by filing; 52
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(2) Automatic perfection of a security interest in 53
investment property created by a broker or securities 54
intermediary; and 55
(3) Automatic perfection of a security interest in a 56
commodity contract or commodity account created by a 57
commodity intermediary. 58
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