HB 5849 Connecticut House · 2025 Regular Session

AN ACT CONCERNING THE PRIORITY OF CLAIMS TO FINANCIAL ASSETS OF SECURITIES INTERMEDIARIES.

HB 5849 amends Connecticut law to change which parties receive payment first when a securities intermediary (like a brokerage) cannot cover all claims on financial assets. It repeals a provision that previously gave priority to creditors with control over financial assets, instead establishing that entitlement holders (such as investors holding securities through intermediaries) always have priority over creditors. This change directly affects investors, brokers, and financial institutions by clarifying payment order during intermediary insolvency. The bill takes effect October 1, 2025, and aligns Connecticut law with standard securities priority rules.

Bill status in committee 1 of 4 stages cleared

Introduction

Jan 2025

Committee Review

Floor Vote

Governor

Introduced Jan 22, 2025 Last action Feb 20, 2025

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What changed between versions

Proposed Bill → Committee Bill · 6 edits

MODERATE

The bill was renamed from a proposed bill to a committee bill, with the bill number changed from 5849 to 4542. The title was updated to reflect priority of claims to financial assets of securities intermediaries rather than investment securities under the Uniform Commercial Code. The core content was restructured to repeal and replace section 42a-8-511 of the general statutes, establishing new priority rules for when a securities intermediary lacks sufficient assets to satisfy both entitlement holders and creditors. An effective date of October 1, 2025 was added, and the statement of purpose was revised to clarify that the act eliminates a previous provision that gave creditors priority when they had control over financial assets.

Scope change

The bill's scope shifted from amending existing provisions to repeal and replace a specific section of the general statutes with new priority rules for financial assets held by securities intermediaries and clearing corporations.

SCOPE

Bill title changed from 'Article 8 of the Uniform Commercial Code Regarding Investment Securities' to 'Priority of Claims to Financial Assets of Securities Intermediaries'

TIMELINE

Added effective date of October 1, 2025 for the new statutory provisions

REQUIREMENT

Removed language to repeal changes made by public act 98-93 and adopt provisions from public act 97-182

Added new priority rule stating entitlement holders have priority over creditors when a securities intermediary lacks sufficient financial assets

Restructured section 42a-8-511 to repeal and substitute new text rather than amend existing provisions

Added specific provision for clearing corporations regarding priority of creditor claims over entitlement holders

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Feb 19, 2025

Committee

REF. TO JOINT COMM. ON Banking

lower

Feb 18, 2025

Lower · Passed

DRAFTED BY COMMITTEE

lower

Jan 22, 2025

Committee

REF. TO JOINT COMM. ON Banking

lower

2 primary · 0 co-sponsors