41.474 Maintenance of list of all financial companies engaged in energy company
1,246 words·~6 min read·
/ky/41-474A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
boycotts -- Communication with financial company regarding divestment or
sale of publicly traded securities -- Divestment delay -- Exemptions.
(a)The Treasurer shall prepare and maintain, and provide to each state
governmental entity through publication on the Treasurer's official Web site, a
list of all financial companies that, to the Treasurer's knowledge, have
engaged in energy company boycotts. In maintaining the list, the Treasurer
may:
1. Review and rely, as appropriate in the Treasurer’s judgment, on all
available information regarding financial companies, including
information provided by the Commonwealth, nonprofit organizations,
research firms, international organizations, governmental entities, or
other organizations in the business of providing information relevant for
investments; and
2. Request written verification from a financial company that it does not
engage in energy company boycotts and rely on, as appropriate in the
Treasurer’s judgment and without conducting further investigation,
research, or inquiry, a financial company’s written response to the
request.
(b)A financial company that fails to provide to the Treasurer a written
verification under paragraph (a)2. of this subsection within sixty
(60)days of
receiving the request from the Treasurer is presumed to be engaging in energy
company boycotts.
(c)The Treasurer shall update the list required in paragraph
(a)of this subsection
annually or more often as the Treasurer considers necessary based on
information from, among other sources, those listed in paragraph
(a)of this
subsection.
(d)Within thirty
(30)days of the date the list of financial companies that engage
in energy company boycotts is first provided or updated, the Treasurer shall
file the list with the Legislative Research Commission and the Attorney
General and post the list on a publicly available Internet Web site.
(2)Within thirty
(30)days of a state governmental entity receiving the list provided
under subsection (1)(a) of this section, the state governmental entity shall notify the
Treasurer of the listed financial companies in which the state governmental entity
owns direct or indirect holdings. Receipt of the list by the state governmental entity
shall be presumed upon the publication of the list on the Treasurer's official Web
site.
(a)For each listed financial company identified under subsection
(2)of this
section, the state governmental entity shall send a written notice:
1. Informing the financial company of its status as a listed financial
company;
2. Warning the financial company that it may become subject to
divestment by state governmental entities after the expiration of the
period described by paragraph
(b)of this subsection; and
3. Offering the financial company the opportunity to clarify its activities
related to companies that are engaged in energy company boycotts.
(b)Within ninety
(90)days of the financial company receiving notice under
paragraph
(a)of this subsection, the financial company must cease engaging in
energy company boycotts in order to avoid becoming subject to divestment by
state governmental entities.
(c)If, during the time provided by paragraph
(b)of this subsection, the financial
company ceases engaging in energy company boycotts, and the Treasurer is
made aware of the cessation, the Treasurer shall remove the financial
company from the list maintained under subsection (1)(a) of this subsection,
and this section and KRS 41.472 and 41.476 shall no longer apply to the
financial company unless it resumes engaging in energy company boycotts.
(d)If, after the time provided by paragraph
(b)of this subsection expires, the
financial company continues to engage in energy company boycotts, the state
governmental entity shall sell, redeem, divest, or withdraw all publicly traded
securities of the financial company, except securities described in subsection
(5)of this section, according to the schedule provided in subsection
(4)of this
section.
(a)A state governmental entity shall sell, redeem, divest, or withdraw all publicly
traded securities of a listed financial company within one
(1)year of the
expiration of the time period provided in subsection (3)(b) of this section.
(b)If a financial company that ceased engaging in energy company boycotts after
receiving notice under subsection
(3)of this section resumes its boycott, the
state governmental entity shall send a written notice to the financial company
informing it that the state governmental entity will sell, redeem, divest, or
withdraw all publicly traded securities of the financial company according to
the schedule in paragraph
(a)of this subsection.
(c)A state governmental entity may delay the schedule for divestment under
paragraph
(a)of this subsection only to the extent that the state governmental
entity determines, in the state governmental entity’s good-faith judgment, and
consistent with the entity’s fiduciary duty, that divestment from listed
financial companies will likely result in a loss in value or a benchmark
deviation described in subsection
(6)of this section.
(d)If a state governmental entity delays the schedule for divestment under
paragraph
(c)of this subsection, the state governmental entity shall submit a
report within thirty
(30)days of the decision to the Treasurer, the Legislative
Research Commission, and the Attorney General stating the reasons and
justification for the state governmental entity’s delay in divestment from listed
financial companies. The report shall include documentation, including
objective numerical estimates, supporting its determination that the
divestment would result in a loss in value or a benchmark deviation described
by subsection
(6)of this section.
(5)A state governmental entity shall not be required to divest from any indirect
holdings in actively or passively managed investment funds or private equity funds.
The state governmental entity shall submit the list of all financial companies that
have engaged in energy company boycotts to each investment fund manager and
request that if any of those companies are present within their funds, they remove
those financial companies from the fund or create a similar actively or passively
managed fund with indirect holdings devoid of listed financial companies. If a
manager creates a similar fund with substantially the same management fees and
same level of investment risk and anticipated return, the state governmental entity
may replace all applicable investments with investments in the similar fund in a
time frame consistent with prudent fiduciary standards but not later than the four
hundred fifty
(450)days after the date the fund is created.
(a)A state governmental entity may cease divesting from one
(1)or more listed
financial companies only if reasonable evidence shows that:
1. The state governmental entity has suffered or will suffer a material
financial loss as a result of having to divest from listed financial
companies under this section; or
2. An individual portfolio that uses a benchmark-aware strategy would be
subject to an aggregate expected deviation from its benchmark as a
result of having to divest from listed financial companies under this
section.
(b)A state governmental entity may cease divesting from a listed financial
company as provided by this section only to the extent necessary to ensure that
the state governmental entity does not suffer a loss in value or deviate from its
benchmark as described by paragraph
(a)of this subsection.
(c)Before a state governmental entity may cease divesting from a listed financial
company under this section, the state governmental entity shall provide a
written report to the Treasurer, the Legislative Research Commission, and the
Attorney General setting forth the reason and justification, supported by
reasonable evidence, for deciding to cease divestment or to remain invested in
a listed financial company.
(d)This section shall not apply to reinvestment in a financial company that is no
longer a listed financial company under subsection
(1)of this section.