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RULE §13.5Reportability of Worthless and Non-freely Transferable Securities

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

  (1) Non-freely transferable security--A security that cannot be delivered to the comptroller by a custodian of securities providing post-trade clearing and settlement services to financial markets, a security that cannot be delivered to the comptroller because there is no agent to effect transfer, or a security that the comptroller may not purchase or hold as an investment under any applicable law. The term includes a worthless security.

  (2) Worthless security--A security with a market value of zero or whose cost of liquidation and delivery to the comptroller would exceed the value of the security on the date a report is due under Property Code, Chapter 74. A worthless security includes a warrant, right or other option whose expiration dates have passed.

(b) A holder shall not report or deliver a worthless or non-freely transferable security to the comptroller as unclaimed property.

(c) The comptroller may provide annual guidance to holders of securities regarding the reportability of non-freely transferable or worthless securities under this section. For the purposes of this section, a holder may rely on the guidance of the comptroller in determining whether a security is reportable under Property Code, Chapter 74.

Source Note: The provisions of this §13.5 adopted to be effective January 27, 2022, 47 TexReg 155

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