469.447. Transactions in derivatives allocated to principal--options to sell or buy property allocated to principal. - Missouri Statutes

Transactions in derivatives allocated to principal--options to sellor buy property allocated to principal.

469.447. 1. As used in this section, the term "derivative" means acontract or financial instrument or a combination of contracts andfinancial instruments which gives a trust the right or obligation toparticipate in some or all changes in the price of a tangible or intangibleasset or group of assets, or changes in a rate, an index of prices orrates, or other market indicator for an asset or a group of assets.

2. To the extent that a trustee does not account pursuant to section469.427 for transactions in derivatives, the trustee shall allocate toprincipal receipts from and disbursements made in connection with thosetransactions.

3. If a trustee grants an option to buy property from the trust,whether or not the trust owns the property when the option is granted,grants an option that permits another person to sell property to the trust,or acquires an option to buy property for the trust or an option to sell anasset owned by the trust, and the trustee or other owner of the asset isrequired to deliver the asset if the option is exercised, an amountreceived for granting the option shall be allocated to principal. Anamount paid to acquire the option shall be paid from principal. A gain orloss realized upon the exercise of an option, including an option grantedto a settlor of the trust for services rendered, shall be allocated toprincipal.

(L. 2001 H.B. 241)