New York Codes, Rules and Regulations
Title 23 - FINANCIAL SERVICES
Chapter I - Regulations of the Superintendent of Financial Services
Part 200 - VIRTUAL CURRENCIES
Section 200.11 - Change of control; mergers and acquisitions
Universal Citation: 23 NY Comp Codes Rules and Regs § 200.11
Current through Register Vol. 46, No. 52, December 24, 2024
(a) Change of Control. No action shall be taken, except with the prior written approval of the superintendent, that may result in a change of control of a Licensee.
(1) Prior to any change of control, the
Person seeking to acquire control of a Licensee shall submit a written
application to the superintendent in a form and substance acceptable to the
superintendent, including but not limited to detailed information about the
applicant and all directors, Principal Officers, Principal Stockholders, and
Principal Beneficiaries of the applicant, as applicable.
(2) For purposes of this Section, the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Licensee whether
through the ownership of stock of such Licensee, the stock of any Person that
possesses such power, or otherwise. Control shall be presumed to exist if a
Person, directly or indirectly, owns, controls, or holds with power to vote ten
percent or more of the voting stock of a Licensee or of any Person that owns,
controls, or holds with power to vote ten percent or more of the voting stock
of such Licensee. No Person shall be deemed to control another Person solely by
reason of his being an officer or director of such other Person.
(3) The superintendent may determine upon
application that any Person does not or will not upon the taking of some
proposed action control another Person. Such determination shall be made within
30 days or such further period as the superintendent may prescribe. The filing
of an application pursuant to this Subsection in good faith by any Person shall
relieve the applicant from any obligation or liability imposed by this Section
with respect to the subject of the application until the superintendent has
acted upon the application. The superintendent may revoke or modify his or her
determination, after notice and opportunity to be heard, whenever in his or her
judgment revocation or modification is consistent with this Part. The
superintendent may consider the following factors in making such a
determination:
i) whether such Person's
purchase of common stock is made solely for investment purposes and not to
acquire control over the Licensee;
ii) whether such Person could direct, or
cause the direction of, the management or policies of the Licensee;
iii) whether such Person could propose
directors in opposition to nominees proposed by the management or board of
directors of the Licensee;
iv)
whether such Person could seek or accept representation on the board of
directors of the Licensee;
v)
whether such Person could solicit or participate in soliciting proxy votes with
respect to any matter presented to the shareholders of the Licensee; or
vi) any other factor that indicates
such Person would or would not exercise control of the
Licensee.
(4) The
superintendent shall approve or deny every application for a change of control
of a Licensee hereunder within 120 days from the filing of an application
deemed by the superintendent to be complete. Such period of 120 days may be
extended by the superintendent, for good cause shown, for such additional
reasonable period of time as may be required to enable compliance with the
requirements and conditions of this Part.
(5) In determining whether to approve a
proposed change of control, the superintendent shall, among other factors, take
into consideration the public interest and the needs and convenience of the
public.
(b) Mergers and Acquisitions. No action shall be taken, except with the prior written approval of the superintendent, that may result in a merger or acquisition of all or a substantial part of the assets of a Licensee.
(1) Prior to any such merger or acquisition,
an application containing a written plan of merger or acquisition shall be
submitted to the superintendent by the entities that are to merge or by the
acquiring entity, as applicable. Such plan shall be in form and substance
satisfactory to the superintendent, and shall specify each entity to be merged,
the surviving entity, or the entity acquiring all or substantially all of the
assets of the Licensee, as applicable, and shall describe the terms and
conditions of the merger or acquisition and the mode of carrying it into
effect.
(2) The superintendent
shall approve or deny a proposed merger or a proposed acquisition of all or a
substantial part of the assets of a Licensee within 120 days after the filing
of an application that contains a written plan of merger or acquisition and is
deemed by the superintendent to be complete. Such period of 120 days may be
extended by the superintendent, for good cause shown, for such additional
reasonable period of time as may be required to enable compliance with the
requirements and conditions of this Part.
(3) In determining whether to so approve a
proposed merger or acquisition, the superintendent shall, among other factors,
take into consideration the public interest and the needs and convenience of
the public.
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