Provides relative to certificate of stocks and uncertificated shares of a financial institution. (8/1/26)

Senate Bill 279 amends Louisiana's banking and financial institution statutes to expand the methods by which shares can be held and documented. The bill modifies R.S. 6:255 to allow boards of directors of financial institutions to authorize the issuance of uncertificated shares through book entry or other electronic methods of documenting shareholder ownership, and adds a new mechanism permitting the conversion of existing stock certificates to uncertificated shares by majority board vote. The legislation also applies these provisions to state-chartered banks, bank holding companies, capital stock associations, capital stock association holding companies, state-chartered savings banks, and state-chartered savings bank holding companies. Additionally, the bill amends the Business Corporation Act's provisions on share certificates in R.S. 12:1-625(A) to reference the financial institution exceptions established in R.S. 6:255, ensuring alignment between the two regulatory frameworks.

The practical effect of this legislation is to modernize share ownership documentation at financial institutions by allowing them to transition away from physical stock certificates to electronic or book-entry systems without needing to participate in the Depository Trust and Clearing Corporation's Direct Registration System. Financial institutions may now issue new shares directly in uncertificated form, and existing shareholders holding physical certificates can convert them to uncertificated status through a board-approved process. This change benefits both financial institutions seeking to reduce administrative costs and compliance burdens associated with physical certificate maintenance and shareholders who may prefer digital documentation of their ownership interests.

The bill operates within Louisiana's existing regulatory structure governing financial institutions contained in Title 6 of the Louisiana Revised Statutes and the state's Business Corporation Act in Title 12. The legislation creates an exception to the general requirement that shares be represented by physical certificates, a rule that previously applied to all Louisiana corporations unless they participated in the Depository Trust and Clearing Corporation's system. By carving out specific provisions for state-chartered financial institutions and their holding companies, the statute allows these entities greater flexibility than other corporations while maintaining the foundational principle that shareholder rights and obligations remain identical regardless of the form in which shares are documented. The effective date of August 1, 2026, provides financial institutions with a defined timeline for implementing new share documentation procedures.