Skip to main content
Date
Rule
801.1
Staff
Michael Verne
Response/Comments
When looking at US "trusts" to determine if they should be treated as non-corporate entities, the key is whether the trust has units that entitle the holder to a right to profits of the trust or a share of its assets upon dissolution. If this is the case, the trust should be treated as a non-corporate entity (these are generally considered business trusts). By contrast, a true trust (for HSR purposes) does not have units that confer economic benefits, but rather has a beneficiary that is entitled to the corpus of the trust at the time of some triggering event. I think the same analysis would apply to foreign trusts.

Question

From:(redacted)

Sent:Sunday, May 06, 2007 10:10 PM

To:Verne, B. Michael

Subject:*please disregard my 2 emails sent Friday afternoon*

Dear Mike,

Withmy apologies, please ignore the two emails I sent last Friday as I am stillgetting to the bottom of some complicated facts, and don't want to pose myquestions until I'm as sure as possible of the exact situation.

At the moment, I have only the following question:

Isan Australian unit trust considered a trust for HSR purposes? Recently youadvised me that an Australian stapled unit trust listed on the Australian stockexchange would be considered a non-corporate entity for HSR purposes, but I amnot sure if the same answer applies here. I am told the following (by anAustralian lawyer) about Australian unit trusts as applied to the entity I'mlooking at, which is an investment vehicle with a trustee, "unitholders"(investors) and an investment advisor/manager:

AnAustralian unit trust is not an entity for Australian legal purposes. Thetrustee of the trust is the person, who under Australian law, is bound byrelevant legal obligations etc and hold the legal powers with regard to theassets of the trust (eg the power to dispose of the assets, exercise any votingrights attached to the assets etc). I would expect in your case that you wouldlook to the trustee of the trust.

Theinvestment manager will be a person who advises that trustee. Often aninvestment manager will have the power to advise the trustee as to disposalsand voting of assets but it is the trustee who then implements the decision ofthe investment manager.

Seemsto me that would be a trust for HSR purposes, please let me know if you agree.As always, thanks so much for your advice.

About Informal Interpretations

Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

Learn more about Informal Interpretations.

Return to top