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A BILL TO BE ENTITLED
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AN ACT
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relating to choice of law and assignment or acquisition of claims |
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and demands in connection with certificated and uncertificated |
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securities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 8.110, Business & Commerce Code, is |
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amended by adding Subsection (g) to read as follows: |
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(g) If a security is determined not to be valid under the |
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local law of the issuer's jurisdiction, the law of the jurisdiction |
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agreed by the issuer of the security to govern the construction or |
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interpretation of documents evidencing or containing the terms of |
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the security and matters arising out of or relating to the security |
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and documents, including the enforceability of the security and the |
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rights and remedies available to a purchaser of such a security, |
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governs the consequences to the issuer and the purchaser of the |
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invalidity. |
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SECTION 2. Section 8.302, Business & Commerce Code, is |
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amended by adding Subsections (d) and (e) to read as follows: |
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(d) The rights acquired by a purchaser of a certificated or |
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uncertificated security, unless otherwise agreed in writing, |
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include, without limitation, all of the following claims and |
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demands of the transferor, regardless of whether the claims and |
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demands are known to exist: |
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(1) a claim or demand for damages or rescission |
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against the issuer or other party to the security; |
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(2) a claim or demand for damages against the trustee, |
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depositary, or other party under any indenture under which the |
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security was issued or is outstanding; |
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(3) a claim or demand for damages against any issuer, |
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underwriter, trustee, depositary, guarantor, or other party to the |
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obligations of the issuer; and |
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(4) a claim or demand to enforce any rights of a |
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securityholder under the terms of the security, including rights |
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arising prior to the date of the transfer. |
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(e) Except as specifically provided by statute with respect |
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to assignments of the claims and demands of a transferor to the |
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purchaser of a certificated or uncertificated security, no issuer |
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or other party subject to any obligation, or to any claim or demand |
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for damages, with respect to any such security may assert a defense |
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to such an obligation, claim, or demand, or assert a claim against |
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the purchaser, based on the intent of the purchaser, or an assignor |
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or assignee of the purchaser, to assert or pursue through |
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litigation or other lawful means the enforcement of the purchaser's |
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rights thereto. |
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SECTION 3. Section 271.005, Business & Commerce Code, is |
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amended by adding Subsections (a-1) and (c) to read as follows: |
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(a-1) Unless otherwise agreed in writing, the choice of |
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governing law specified in the terms applicable to a certificated |
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or uncertificated security issued in a qualified transaction, |
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including any change in that governing law, applies retroactively |
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to all issues relating to the security. |
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(c) A security issued in a qualified transaction may be |
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modified or amended, in accordance with the security's terms, to |
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permit amendment of the terms of the security by less than unanimous |
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consent, and to choose the law of a different jurisdiction to govern |
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the security. An amendment described by this subsection applies |
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retroactively unless otherwise agreed by the parties in writing. |
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SECTION 4. This Act takes effect September 1, 2025. |