HB 427 amends New Hampshire’s version of the Uniform Commercial Code, focused on investment securities and secured transactions. The bill updates choice-of-law rules so that New Hampshire law governs certain securities and investment-property transactions, and it clarifies which jurisdiction’s law applies to matters involving issuers, securities intermediaries, and commodity intermediaries. It also revises definitions and priority rules within Article 8 and Article 9 of the UCC.
More specifically, the bill changes how claims are treated when a securities intermediary does not hold enough of a financial asset to satisfy both entitlement holders and a creditor with a security interest. Under the bill, entitlement holders generally have priority over the creditor, except where the creditor is itself an entitlement holder. The bill also revises the definition of “deposit account” to exclude investment property, programmable mediums of exchange, and accounts evidenced by an instrument, and it updates perfection and priority rules for certificated and uncertificated securities and commodity accounts. The act would take effect 60 days after passage.
Impact
HB 427 would amend several provisions of RSA 382-A, New Hampshire’s enactment of the Uniform Commercial Code, especially Articles 8 and 9. The bill would affect the governing law for securities and secured transactions, the treatment of security entitlements, and the priority of competing claims involving securities intermediaries, entitlement holders, and secured creditors. Financial institutions, broker-dealers, investors, and parties using securities or commodity interests as collateral would be directly affected by the revised rules.
Sentiment
Based on the available record, the bill appears to be a technical commercial-law update rather than a highly controversial measure. The committee information provided does not include transcripts or recorded votes, so there is no documented debate to indicate strong support or opposition. The bill’s subject matter suggests a generally business- and finance-oriented purpose aimed at clarifying legal rules and aligning priority and choice-of-law provisions.
Contention
The main potential point of contention is the reallocation of priority between entitlement holders and creditors of a securities intermediary, which can affect recovery in insolvency or collateral disputes. Another possible issue is the bill’s decision to specify New Hampshire law or the issuer’s/commodity intermediary’s jurisdiction as controlling even when a transaction has little or no relation to that jurisdiction. These changes may matter most to secured lenders, securities intermediaries, and market participants who prefer predictable but sometimes different default rules.
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