HB 338 — AN ACT TO AMEND TITLE 12 OF THE DELAWARE CODE RELATING TO THE CREATION, REGULATION, OPERATION, AND DISSOLUTION OF DOMESTIC STATUTORY TRUSTS.

Summary

This Act continues the practice of amending periodically the Delaware Statutory Trust Act (“the Statutory Trust Act”) to keep it current and to maintain its national preeminence. The following is a section-by-section review of proposed amendments to the Statutory Trust Act: Section 1 amends § 3801(e) of the Statutory Trust Act to confirm that any series of a statutory trust is bound by the governing instrument of such statutory trust regardless of whether the series executed the governing instrument. This amendment is not intended to imply that other references to “statutory trust” in the Statutory Trust Act do not include series thereof to the extent required by the context. Section 2 amends § 3806(b)(9) of the Statutory Trust Act to confirm that the governing instrument of a statutory trust may be amended as permitted by § 3825(f). Section 3 amends § 3806(l) of the Statutory Trust Act to conform the reference to the Investment Company Act of 1940 in this section to other references to the Investment Company Act of 1940 in the Statutory Trust Act. Section 4 adds a new § 3806(p) to the Statutory Trust Act to confirm that the trustees of a statutory trust may authorize the beneficial owners to direct the voting of securities held by the statutory trust. Many registered investment companies have implemented, or are considering implementing, forms of pass-through voting. Section 5 amends § 3811(c) of the Statutory Trust Act to conform the language to the analogous provision in the Delaware Limited Liability Company Act. Section 6 amends § 3815(b)(4) of the Statutory Trust Act to change a reference from “person” to “entity”. Section 7 amends § 3815(f) of the Statutory Trust Act to confirm that an amendment to a governing instrument or the adoption of a new governing instrument effected pursuant to § 3815(f) of the Statutory Trust Act may be effected only with respect to the governing instrument of the surviving or resulting statutory trust and not with respect to the governing instrument of a constituent statutory trust that is not the surviving or resulting statutory trust. Section 8 amends § 3820(g) of the Statutory Trust Act to provide that the approval of a conversion to a statutory trust, and the approval of the governing instrument of the statutory trust, are required to occur prior to the time a certificate of conversion to statutory trust becomes effective rather than prior to filing of the certificate of conversion to a statutory trust. Section 9 amends § 3822(g) of the Statutory Trust Act to provide that the approval of a domestication as a statutory trust, and the approval of the governing instrument of the statutory trust, are required to occur prior to the time a certificate of statutory trust domestication becomes effective rather than prior to filing of the certificate of statutory trust domestication. Sections 10, 11, and 12 amend §§ 3827, 3828, and 3829 of the Statutory Trust Act to clarify that §§ 3827, 3828, and 3829 apply to all of Chapter 38 of Title 12 of the Delaware Code rather than to only Subchapter I of Chapter 38. Section 13 provides that the amendments to the Statutory Trust Act take effect on August 1, 2024.

Bill Text

• Bill Text View text Current pdf

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

This bill amends various sections of Title 12 of the Delaware Code to clarify definitions, management provisions, and rules regarding statutory trusts.

• § 3801

  A statutory trust trust, including any series thereof, is not required to execute its governing instrument. → A statutory trust, including any series thereof, is not required to execute its governing instrument.

  Clarifies the language by removing duplicate wording regarding statutory trusts and execution of governing instruments.

• § 3806

  a statutory trust that is registered as an investment company or regulated as a business development company under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.) 1940, as amended (15 U.S.C. § 80a-1 et seq.), shall have the same fiduciary duties as directors of private corporations for profit organized under the general corporation law of the State. → trustees of a statutory trust that is registered as an investment company or regulated as a business development company under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.), shall have the same fiduciary duties as directors of private corporations for profit organized under the general corporation law of the State.

  Clarifies language to streamline the reference to the Investment Company Act, ensuring accurate alignment in fiduciary duties.

• § 3811

  the facts stated therein are in the certificate shall be true at the time such the certificate becomes effective as provided in this subchapter. → the facts stated therein are true at the time the certificate becomes effective as provided in this subchapter.

  Simplifies language regarding the accuracy of the facts stated in the certificate.

• § 3815

  entity, such amendments, if any, to the certificate of trust of the surviving statutory trust to change its name, registered office or registered agent as are desired to be effected by the merger; → entity, such amendments, if any, to the certificate of trust of the surviving statutory trust to change its name, registered office, or registered agent as are desired to be effected by the merger.

  Corrects punctuation for clarity in listing the amendments related to the merger.

• § 3820

  Prior to filing the time a certificate of conversion to statutory trust with the Office of the Secretary of State, becomes effective as provided in this chapter, → Prior to filing a certificate of conversion to statutory trust with the Office of the Secretary of State, which becomes effective as provided in this chapter,

  Clarifies the sequence of actions regarding the filing of the certificate of conversion.

• § 3822

  Prior to filing the time a certificate of statutory trust domestication with the Office of the Secretary of State, becomes effective as provided in this chapter, → Prior to filing a certificate of statutory trust domestication with the Office of the Secretary of State, which becomes effective as provided in this chapter,

  Improves the clarity of the process for filing the domestication certificate.

• § 3827

  Unless expressly stated to the contrary in this chapter, all amendments of this chapter shall apply to statutory trusts, trustees, beneficial owners and other persons whether or not existing as such at the time of the enactment of any such amendment. → Unless expressly stated to the contrary in this chapter, all amendments of this chapter shall apply to statutory trusts, trustees, beneficial owners, and other persons whether or not existing at the time of the enactment of any such amendment.

  Refines the language for grammatical accuracy regarding the application of amendments.

• § 3828

  chapter. → chapter shall have no application to this subchapter.

  Clarifies that common law rules do not apply in this context.

Action History

1. May 30, 2024

   Signed by Governor

2. May 16, 2024

   Passed By Senate. Votes: 20 YES 1 ABSENT

3. May 08, 2024

   Reported Out of Committee (Judiciary) in Senate with 5 On Its Merits

4. April 23, 2024

   Assigned to Judiciary Committee in Senate

5. April 23, 2024

   Passed By House. Votes: 38 YES 3 ABSENT

6. March 27, 2024

   Reported Out of Committee (Judiciary) in House with 8 On Its Merits

7. March 07, 2024

   Introduced and Assigned to Judiciary Committee in House

Sponsors

• John "Jack" Walsh · Primary
• David P. Sokola · Primary
• Brian Pettyjohn · Primary
• Franklin D. Cooke · Primary
• William Bush · Primary
• Darius J. Brown · Primary
• Bryan Townsend · Primary
• Kendra Johnson · Primary
• Krista Griffith · Primary
• Sherry Dorsey Walker · Primary
• Sean Matthews · Primary
• Peter C. Schwartzkopf · Primary
• Sarah McBride · Primary

Votes

Subjects