2023 New York Laws › BNK - Banking › Article 12 › 519 - Acquisition of Control of Investment Companies.

§ 519.  Acquisition  of control of investment companies. 1. Subject to
  such regulations as the  superintendent  may  prescribe,  prior  to  the
  acquisition  of  control  of  an  investment  company  by  means  of the
  acquisition of the capital stock or equity interests in such  investment
  company  or  in  any  company which directly or indirectly controls such
  investment company, the acquiring company shall make written application
  to the superintendent for  permission  to  acquire  such  control.  Such
  application  shall be in such form and shall contain such information as
  the superintendent may require and such applicant, at the time of making
  such application, shall pay to the superintendent an  investigation  fee
  as prescribed pursuant to section eighteen-a of this chapter.
The  superintendent  shall disapprove the proposed exercise of control
  of an investment company if, after notice to and an  opportunity  to  be
  heard  by  the  applicant  and  such  investment  company,  he finds the
  acquisition of control  therein  contrary  to  law  or  determines  that
  disapproval  is  reasonably  necessary  to  protect the interests of the
  people of this state. In making such determination,  the  superintendent
  shall  only  consider  (a)  whether  the  character,  responsibility and
  general fitness of the company which seeks to  control  such  investment
  company  are  such  as to command confidence and warrant belief that the
  business of such investment company will  be  honestly  and  efficiently
  conducted in a manner consistent with the public interest, the interests
  of  depositors and creditors of such investment company, and (b) whether
  the exercise of control may impair the safe and  sound  conduct  of  the
  business  of  such investment company, the conservation of its assets or
  public confidence in its business. Unless the superintendent shall  have
  denied  such  application  in  writing  within ninety days of the filing
  thereof, or shall have advised  the  applicant  in  writing  before  the
  expiration  of ninety days of his determination to extend such period an
  additional sixty days, such application shall be deemed approved.
As used  in  this  subdivision  one,  the  term  "control"  means  the
  possession,  directly or indirectly, of the power to direct or cause the
  direction of the management and policies of a person, whether  by  means
  of  the ownership of the voting stock or equity interests of such person
  or of one or more  persons  controlling  such  person,  by  means  of  a
  contractual  arrangement,  or  otherwise.  Control  shall be presumed to
  exist if any company, directly or indirectly, owns,  controls  or  holds
  with the power to vote ten per centum or more of the voting stock of any
  investment  company or of any company which owns, controls or holds with
  power to vote ten per centum  or  more  of  the  voting  stock  of  such
  investment  company,  but  no  person  shall  be  deemed  to  control an
  investment company solely by reason of his being an officer or  director
  of  such  investment  company. The superintendent may in his discretion,
  upon the application of an investment  company  or  any  company  which,
  directly  or  indirectly,  owns, controls or holds with power to vote or
  seeks to own, control or hold with power to vote  any  voting  stock  of
  such investment company, determine whether or not the ownership, control
  or  holding of such voting stock constitutes or would constitute control
  of such investment company for purposes of this section.
The provisions of this subdivision shall not apply to  (1)  a  company
  which has submitted a plan of acquisition to the superintendent pursuant
  to  subdivision  two of this section or (2) any action taken pursuant to
  article thirteen of this chapter.
2. Any company, whether or not it is in control of the business of  an
  investment company as provided in subdivision one of this section, which
  desires  to acquire all, or substantially all of the capital stock of an
  investment company shall, together with such investment company,  submit
  in duplicate to the superintendent a written plan of acquisition of such

  stock  together  with  such  other information as the superintendent may
  determine.  Such  plan  shall   be   in   form   satisfactory   to   the
  superintendent, shall specify each investment company the stock of which
  is  to  be  acquired  by  the  company and shall prescribe the terms and
  conditions of the acquisition and the mode of carrying it  into  effect,
  including  the manner of exchanging the shares of the investment company
  for shares or other securities or cash of the company. Any such plan may
  provide for the payment of cash in lieu of the  issuance  of  fractional
  shares of the company.
At the time of submission to the superintendent of the written plan of
  acquisition  of  stock,  an  investigation fee as prescribed pursuant to
  section eighteen-a of this chapter shall be paid to the superintendent.
There shall be submitted, in duplicate, to the superintendent with the
  plan of  acquisition  of  stock,  a  certificate  of  the  president  or
  secretary of the company, certifying that such plan has been approved by
  the  board  of  directors  or  other  governing body of his company by a
  majority vote of all the members  thereof,  and  a  certificate  of  the
  president,   secretary   or  cashier  of  the  investment  company,  the
  acquisition  of  all  the  capital  stock  of  which  is  provided  for,
  certifying that such plan has been approved by the board of directors of
  his  corporation by a majority vote of all the members thereof, and that
  such  plan  was  thereafter  submitted  to  the  stockholders  of   such
  corporation  at  a  meeting thereof held upon notice of at least fifteen
  days, specifying  the  time,  place  and  object  of  such  meeting  and
  addressed to each stockholder at the address appearing upon the books of
  the  corporation  and  published at least once a week for two successive
  weeks in one newspaper in the county in which such corporation  has  its
  principal place of business and that such plan has been approved at such
  meeting  by  the  vote of the stockholders owning at least two-thirds in
  amount of the stock of such corporation.
The superintendent shall approve or disapprove of a proposed  plan  of
  acquisition  within one hundred twenty days after the submission of such
  plan of acquisition to him, and in determining whether or not to approve
  any such plan the  superintendent  shall  take  into  consideration  the
  declaration  of  policy contained in section ten of this chapter. If the
  superintendent   shall   approve   such   plan   of   acquisition,   the
  superintendent  shall file the plan, together with such certificates and
  the original of the approval of the superintendent, in the office of the
  superintendent. Upon such filing in the office of the superintendent the
  plan, and the acquisitions provided for therein, shall become effective,
  unless a later date is specified in the plan, in which  event  the  plan
  and such acquisitions shall become effective upon such later date.
Any stockholder of any such corporation, entitled to vote on such plan
  of  acquisition,  who  does  not assent thereto shall, subject to and by
  complying with section six thousand twenty-two of this chapter, have the
  right to receive payment of the fair value of his shares and  the  other
  rights and benefits provided by such section.
The provisions of this subdivision shall not apply to any action taken
  pursuant to article thirteen of this chapter.
3.  For  a period of six months from the date of qualification thereof
  and for such  additional  period  of  time  as  the  superintendent  may
  prescribe  in writing, the provisions of this section shall not apply to
  a transfer of control by operation of law to the  legal  representative,
  as hereinafter defined, of one who has control of an investment company.
  Thereafter,  such  legal representative shall comply with the provisions
  of subdivision one of this section. The provisions of subdivision one of
  this section shall be applicable  to  an  application  made  under  such
  section by a legal representative.
The  term  "legal  representative,"  for the purposes of this section,
  shall mean one duly appointed by a court of  competent  jurisdiction  to
  act  as  executor,  administrator,  trustee,  committee,  conservator or
  receiver, including one who succeeds  a  legal  representative  and  one
  acting   in  an  ancillary  capacity  thereto  in  accordance  with  the
  provisions of such court appointment.
4. For purposes of this section the term "company" shall be given  the
  same  meaning  as  is contained in its definition in section one hundred
  forty-one of this chapter.
5. Notwithstanding the provisions  of  subdivision  three  of  section
  two-a  of  this chapter, when applying this section to limited liability
  investment companies, the term "capital stock"  shall  mean  the  equity
  interest  of  a  member  as  set  forth  in  the  company's  articles of
  organization or, in the absence of such a provision, the equity interest
  represented by a member's right to a proportionate share of the  profits
  of the company.