N.Y. Banking Law § 519 Acquisition of Control of Investment Companies

• Library: New York Statutes
• Edition: 2023
• Currency: Current through 2023 NY Law Chapter 777
• Year: 2023
• Citation: N.Y. Banking Law § 519

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.