Committee releases statutory trust amendments addressing control‑share rules and technical fixes

The Insurance and Commerce Committee released House Bill 298, an amendment package to the Statutory Trust Act, after a detailed presentation by Lou Herring, who was invited to the lectern by Chair Busch.

Herring said the amendments fall into two groups: conforming and cleanup changes, and a set of clarifications related to "control share" provisions that apply primarily to closed‑end funds. He explained those control‑share provisions prevent certain shares from voting when they meet thresholds unless approved, and said the bill clarifies how issuers can determine whether beneficial interests reach those thresholds and how exemptions should be applied.

Herring illustrated practical implementation issues, noting that issuers often cannot identify underlying beneficial owners because shares are held through brokerage firms that submit a single ballot. "This gives them some additional tools to figure out if somebody owns more than 10% or more than 15% or more than 20%," he said. He also noted the amendments remove a technical 90‑day grouping requirement and clarify how reductions in outstanding beneficial interest can change control status.

Herring said the provisions aimed at control shares were adopted after public comment and bar process review and that there was no opposition during the drafting process. Following the presentation and the absence of public comment, a motion to release HB298 was made and seconded; the committee held a roll‑call vote and the chair announced the bill had been released from committee.