0506007 Informal Interpretation

us-ftc-hsr-informal-interpretations-318d6f2aa3a58f90be11a5084e5de4600506007 Informal InterpretationGuidance

Open source
Date
Rule
801.1(b), 801(c)
Staff
Michael Verne
Response/Comments
These trust are all trust except business trusts. The distinction is that business trusts issue units that entitle the holder to economic interest in the trust. The trusts in 801.1(c)(3) (5) hold assets for the eventual benefit of beneficiaries. Business trusts are governed by the rules covering non-corporate interests. The 801.1(c)(3) (5) trusts are not.

Question

From: (redacted)
Sent: Friday, June 24, 2005 1:32 PM
To: Verne, B. Michael
Subject: HSR Compliance Question

Mike,

Ihave a compliance question regarding amended 16 C.F.R. Section 801.1(b)(2). Itprovides that control means "Having the contractual power presently todesignate 50 percent or more of the directors of a for-profit or not-for-profitcorporation, or in the case of trusts described in paragraphs (c) (3) through(5) of this section, the trustees of such a trust." (Italics are foremphasis.)

I'msomewhat unclear regarding the types of trusts brought into the purview of thisrule by virtue of the reference to paragraphs (c)(3) through (5) of 16 C.F.R.Section 801.1. Those sections variously refer to collective investment funds,revocable trusts, irrevocable trusts in which the settlor has a reversionaryinterests, and other trusts, i.e., essentially all trusts. Are all such trustsdeemed to be controlled by another entity under 16 C.F.R. Section 801.1(b)(2)if that entity has the present right to appoint 50% of more of its trustees?Thank you for any clarification that you can provide.


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