Tennessee House Bill 2806 / Senate Bill 2640
Tennessee House Bill 2806 / Senate Bill 2640
Tennessee House Bill 2806 / Senate Bill 2640 amends the Uniform Commercial Code to:
- Move the jurisdiction for security entitlements to Tennessee
- Give entitlement holders priority over secured creditors of intermediaries
The civil justice subcommittee hearing features testimony from:
- David Webb –– author of The Great Taking
- Don Grande –– private practice attorney
- Andy Guggenheim –– Securities Industry and Financial Markets Association
- Tim Amos –– uniform law commissioner
Andy Guggenheim: "While holding securities in street name is the most common choice for investors, they do have alternatives for holding securities in other ways if they prefer including physical form via stock certificate when that is available by the issuing company." (He won't say the word DRS!)
David Webb: "DTCC itself is planning to start up and pre-fund a new central clearing counterparty when one of the existing ones fails. The industry is talking about the very real possibility that major central counterparties will fail."
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I am really interested to see where this goes. I'm not aware of any other states having modifications to the UCC, are you?
In any case, I am still a bit skeptical that this will fully protect investors, since there is very little to prevent an underwater intermediary from letting their friends know to pull assets out (or become entitlement holders themselves) before the shit hits the fan at the intermediary