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 suchstock  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.