Senators debate UCC changes for securities; bill fails after concerns from legal experts

Senate File 189, which would amend state Uniform Commercial Code provisions governing investment securities and priority of interests, drew sustained floor opposition and failed on final passage.

Senator Case read a letter from members of the Uniform Law Commission and a retired Wyoming Supreme Court justice warning that the bill would delete protections in current statute (WS 34‑1‑8511) that grant priority to entitlement holders (customers) and that removing parts B and C could disrupt margin trading, clearinghouse priorities and ordinary securities settlement. Case said deleting those exceptions could make creditors effectively unsecured and impair market functioning for Wyoming residents who use margin or clearing services.

Several senators urged the bill be sent to interim study rather than enacted immediately. Senator Crum said the risks to the state’s economy and citizens outweighed potential benefits of the proposed changes. Senator Beitman and other supporters argued the issue requires discussion and that fixing perceived vulnerabilities to a systemic financial failure is reasonable, but many senators sided with the Uniform Law Commission’s recommendation.

Final action: chief clerk recorded the vote as 10 ayes, 20 noes, 1 excused; the bill failed to pass the Senate. Supporters said the topic merits further study; opponents cited potential harm to ordinary securities holders and to commerce if uniform rules are changed without national alignment.