Sec. 45a-542v. Derivatives and options.
Sec. 45a-542v. Derivatives and options. (a) In this section, "derivative" means a
contract or financial instrument or a combination of contracts and financial instruments
which gives a trust the right or obligation to participate in some or all changes in the
price of a tangible or intangible asset or group of assets, or changes in a rate, an index
of prices or rates or other market indicator for an asset or a group of assets.
(b) To the extent that a trustee does not account under section 45a-542k for transactions in derivatives, the trustee shall allocate to principal receipts from and disbursements
made in connection with those transactions.
(c) If a trustee grants an option to buy property from the trust, whether or not the
trust owns the property when the option is granted, grants an option that permits another
person to sell property to the trust, or acquires an option to buy property for the trust or
an option to sell an asset owned by the trust, and the trustee or other owner of the asset
is required to deliver the asset if the option is exercised, an amount received for granting
the option must be allocated to principal. An amount paid to acquire the option must be
paid from principal. A gain or loss realized upon the exercise of an option, including
an option granted to a settlor of the trust for services rendered, must be allocated to
principal.
(P.A. 99-164, S. 23, 36.)
History: P.A. 99-164 effective January 1, 2000.