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Legislative Updates 2021_900x330

Legislative Updates Impacting Spring 2018

Monday, April 2, 2018

By Melissa McCarthy, VP of Product Development, EQ

The Pennsylvania and Illinois changes that were passed a few months in advance of the Spring filing deadlines are recent examples of how the states are making it increasingly difficult to comply with requirements in realistic timeframes.  As your service provider, we will continue to lobby for our customers and make the necessary changes to ensure compliance through all reporting cycles.

Pennsylvania passed S 1058 and introduced a New Presumption of Abandonment for Property Held or Owing by a Business Association

Our highlights and Impacts to reporting

In the past, the provision only looked at inactivity as a trigger for escheatment.  Under the new guidance, there is now a dual trigger, whereby, an account must have been coded for returned mail and has had inactivity with the shareholder for a period of three years.  There is also a requirement for additional reach out on accounts coded for electronic distribution and identified as “lost”.

The Details

The Pennsylvania Treasury recently posted new policy guidance with respect to securities properties. The Treasury now requires business associations to satisfy the following “double threshold” before securities will be presumed abandoned. 

Under the current law, a business association is defined as “any corporation (other than public corporation), joint stock company, business trust, partnership or any association of two (2) or more individuals for business purposes, as organized or operated under State or Federal law.” 

Contact is defined as:

  • an increase or decrease in the principal;
  • accepted payment of principal or income; or
  • any other indication of interest  in the property or in other property of the owner in the possession, custody, or control of the holder.

The criteria used to determine the date an account is determined “lost” is:

  • the date a second consecutive communication sent by the holder by first class United States mail to the owner is returned to the holder undelivered by the United States Postal Service; or
  • if the second communication is made later than thirty days after the first communication is returned, the date the first communication is returned undelivered to the holder by the United States Postal Service. 

In addition, for securities owners that do not receive communications from the holder by U.S. mail, the holder must attempt to confirm the owner’s interest in the property by sending an email to the owner no later than two years from the date of the last indication of interest.  If the owner does not respond within thirty days, the holder must send a notification by first class mail.  If the mail is returned undeliverable, the holder is deemed to have lost contact with the owner on the date of the owner’s last indication of interest in the property. 

To access the new policy in its entirety, visit


Illinois Proposes Amendments to the Revised Uniform Unclaimed Property Act – SB 2901

Our highlights and Impacts to Reporting:

The regulation proposed has a confusing standard to trigger escheatment. It is either 3 years after an account has RPO status, or 5 years after inactivity or 2 years after the investor’s death, making this difficult to comply with. This was effective in January and applies retroactively.  Several bills have been filed to repeal it but have not succeeded and likely will not get the traction needed. Both the Shareholder Securities Association (SSA) and the Securities Transfer Association (STA) sent letters of concern in support of a repeal.  The Holders Coalition and SIFMA will continue to lobby to amend this provision.  

Although this regulation  been passed, industry bodies have reached out to the State for a specific timeframe in which holders will be need to comply by as additional time is needed to update systems appropriately.

The Details

On February 14, 2018, Illinois proposed SB 2901, which would amend the recently passed Illinois Revised Uniform Unclaimed Property Act and retroactively be effective on January 1, 2018.  As it relates to securities, part of the amendment was to revise dormancy periods as stated below:

A security is presumed abandoned upon the earlier of the following: Three (3) years after the date a communication sent by the holder by first class U.S. mail to the apparent owner is returned to the holder undelivered by the U.S. Postal Service; however, if such returned communication is re-sent within one month to the apparent owner, the 3-year period does not begin to run until the day the resent  item is returned as undeliverable; or Five (5) years after the date of the apparent owner’s last indication of interest in the security. 

**Special outreach provision if the owner does not communicate with holder via U.S. mail but does so via electronic mail

Also, a provision for when an owner is deceased - reportable two (2) years after date of death (15-208)