Connecticut General Statutes 36a-276 – Investments in equity securities and equity mutual funds
(a) As used in this section: (1) “Equity security” means any stock or similar security, certificate of interest or participation in any profit-sharing agreement, preorganization certificate or subscription, transferable share, voting trust certificate or certificate of deposit for an equity security, limited partnership interest, interest in a joint venture or certificate of interest in a business trust; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right; or any put, call, straddle or other option or privilege of buying such a security from or selling such a security to another without being bound to do so, but excludes a debt mutual fund, as defined in section 36a-275, and an equity mutual fund; and (2) “equity mutual fund” means a partnership interest in, shares of stock of, units of beneficial interest in or other ownership interest in any one investment company which is registered under the Investment Company Act of 1940, as from time to time amended, commonly described as mutual funds, money market funds, investment trusts or business trusts, but excludes a debt mutual fund, as defined in section 36a-275.
Terms Used In Connecticut General Statutes 36a-276
- another: may extend and be applied to communities, companies, corporations, public or private, limited liability companies, societies and associations. See Connecticut General Statutes 1-1
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Bank: means a Connecticut bank or a federal bank. See Connecticut General Statutes 36a-2
- Commissioner: means the Banking Commissioner and, with respect to any function of the commissioner, includes any person authorized or designated by the commissioner to carry out that function. See Connecticut General Statutes 36a-2
- Company: means any corporation, joint stock company, trust, association, partnership, limited partnership, unincorporated organization, limited liability company or similar organization, but does not include (A) any corporation the majority of the shares of which are owned by the United States or by any state, or (B) any trust which by its terms shall terminate within twenty-five years or not later than twenty-one years and ten months after the death of beneficiaries living on the effective date of the trust. See Connecticut General Statutes 36a-2
- Connecticut bank: means a bank and trust company, savings bank or savings and loan association chartered or organized under the laws of this state. See Connecticut General Statutes 36a-2
- Control: has the meaning given to that term in 12 USC Section 1841(a), as amended from time to time. See Connecticut General Statutes 36a-2
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Deposit: means funds deposited with a depository. See Connecticut General Statutes 36a-2
- Equity capital: means the excess of a Connecticut bank's total assets over its total liabilities, as defined in the instructions of the federal Financial Institutions Examination Council for consolidated reports of condition and income. See Connecticut General Statutes 36a-2
- Holding company: means a bank holding company or a savings and loan holding company, except, as used in sections 36a-180 to 36a-191, inclusive, "holding company" means a company that controls a bank. See Connecticut General Statutes 36a-2
- Mutual: when used in conjunction with any institution that is a bank or out-of-state bank means any such institution without capital stock. See Connecticut General Statutes 36a-2
- Out-of-state: includes any state other than Connecticut and any foreign country. See Connecticut General Statutes 36a-2
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
(b) In addition to other investments authorized by sections 36a-275 to 36a-277, inclusive, and 36a-280, any Connecticut bank may purchase or hold for its own account equity securities and equity mutual funds, without regard to any other liability to the Connecticut bank of the issuer of such equity securities and equity mutual funds, provided: (1) The total amount of equity securities and equity mutual funds of any one issuer purchased or held by a Connecticut bank or for a Connecticut bank’s account, except as otherwise provided in subsection (f) of this section, may not exceed, at any time, twenty-five per cent of its capital and surplus; and (2) the total amount of any equity securities and equity mutual funds purchased or held by a Connecticut bank or for a Connecticut bank’s account pursuant to this subsection may not exceed, at any time, twenty-five per cent of its assets.
(c) In addition to other investments authorized by sections 36a-275 to 36a-277, inclusive, and 36a-280, any Connecticut bank may purchase or hold for its own account, without regard to any other liability to the Connecticut bank of the issuer, ten per cent or more of the equity securities, including convertible securities, of a bank, out-of-state bank or holding company in accordance with law.
(d) In addition to other investments authorized by sections 36a-275 to 36a-277, inclusive, and 36a-280, any Connecticut bank, with the approval of the commissioner, may purchase or hold for its own account, without regard to any other liability to the Connecticut bank of the issuer, a controlling interest in a corporation or other entity, the functions of which are limited to one or more of the functions which the bank may carry on directly in the exercise of its express or incidental powers. For purposes of this subsection and subsection (e) of this section, a “controlling interest” means at least fifty-one per cent of the equity securities issued by the corporation or other entity, unless the commissioner determines that under the circumstances, a lesser percentage constitutes effective working control of the corporation or other entity.
(e) The bank shall notify the commissioner, in writing, twenty-four hours prior to making any investment under subsections (b) and (c) of this section which would result in such bank having invested in the aggregate in twenty-five per cent or more of the equity securities of a corporation. Notwithstanding the provisions of this subsection, any investment in a controlling interest in a corporation or other entity, the functions of which are limited to one or more of the functions that the bank may carry on directly in the exercise of its express or incidental powers, shall be made in accordance with subsection (d) of this section.
(f) (1) Not later than January 1, 2024, a Connecticut bank may, provided the Connecticut bank notifies the commissioner of such election, in writing, not later than said date, elect to use equity capital and adjusted allowances for credit losses, instead of capital and surplus, for the purpose of calculating the limitation established in subsection (b) of this section on the total amount of equity securities and equity mutual funds of any one issuer purchased or held by a Connecticut bank or for a Connecticut bank’s account.
(2) Any Connecticut bank that makes the election as provided in subdivision (1) of this subsection may subsequently elect, provided such Connecticut bank notifies the commissioner, in writing, that such Connecticut bank has made such subsequent election, to use capital and surplus, instead of equity capital and adjusted allowances for credit losses, for the purpose of calculating the limitation established in subsection (b) of this section on the total amount of equity securities and equity mutual funds of any one issuer purchased or held by a Connecticut bank or for a Connecticut bank’s account.