us-ftc-hsr-informal-interpretations-750ab32b5175c5d26d18a1e4743db1d5•2504007 Informal Interpretation
2504007 Informal Interpretation
us-ftc-hsr-informal-interpretations-750ab32b5175c5d26d18a1e4743db1d52504007 Informal InterpretationGuidance
The power to vote shares, without more, does not confer beneficial ownership. Based on the facts presented, the UPE of the trust will hold the shares post-transfer, not Client A. We note that the transfer of the shares may be a reportable transaction if the jurisdictional thresholds are met and no exemption applies.
Question
Client A, an individual, is transferring voting securities to a trust that he doesn’t control for HSR purposes. However, he is retaining a proxy to vote the shares. He doesn’t benefit from a gain in value of the shares, has no risk of loss, nor will he have the ability to sell or move the shares. So the only indicia of beneficial ownership he will have is the voting power. Do I need to aggregate the value of those shares with his current holdings or should they be attributed to the trust? The example in the PNPM unfortunately does not cover this specific fact pattern. Happy to answer any questions.
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