Posted on Wednesday, 4th January 2012 by Keane Unclaimed Property Team
On January 1, 2012, Delaware published two proposed unclaimed property regulations numbered 959 and 965. The first details new due diligence requirements, the second sets forth, in detail, audit appeals procedures.
Regulation 965 is titled, “Regulation on Practice and Procedure for Establishing Running of the Full Period of Dormancy for Certain Securities and Related Property.” While the title purports to address the abandonment of securities property, the regulation, in fact, seeks to create a brand new obligation to perform due diligence in Delaware with respect only to “Securities and Related Property.”
“Securities and Related Property” is defined to mean Property that consists of:
- Intangible ownership interests in corporations, whether or not represented by a stock certificate, bonds and other securities
- Dividends, cash, stock and other distributions made (or attempted to be made) by issuers of securities in respect of the securities issued
- Certificates of membership in a corporation or association
- Funds deposited by a Holder with fiscal agents or fiduciaries for payment to Owners of dividends, coupon interest and liquidation value of stocks and bonds
- Funds to redeem stocks and bonds
The new due diligence obligation does not include non-securities related properties or general ledger items. As such, it appears that this is an effort on the part of Delaware regulators to respond to the backlash caused by the wave of Kelmar (Delaware initiated) audits across the securities arena over the past 18 months.
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