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New Law Allows Arkansas to Liquidate Unclaimed Securities Upon Receipt

POSTED ON Mar. 21, 2019
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Arkansas will now be able to sell unclaimed securities immediately upon receipt from the holder, rather than be required to hold the securities for three years.

H.B. 1427, signed by Gov. Asa Hutchinson (R) on March 15, was introduced by Rep. Les Eaves (R) at the request of Arkansas State Auditor Andrea Lea (R). The legislation contains an emergency clause and immediately took effect upon the governor’s signature.

Hutchinson did not respond to a request for comment by press time. 

The emergency clause declares that liquidating securities upon receipt would save the state money and allow it to invest the proceeds for a greater financial return to the state. Previously, the state was required to hold unclaimed securities for three years before liquidating them.

The measure stipulates that “securities listed on an established stock exchange shall be sold at prices prevailing at the time of sale or by a reasonable method selected by the administrator.”

Other securities can be sold over the counter at the prevailing price or “by a reasonable method selected by the administrator,” according to the bill. The owner of the property is entitled to the securities if they are still being held by the state, or to the sale proceeds minus fees and expenses incurred in the sale.

The legislation also includes a provision preventing a person from taking legal action to recover the value of the appreciation or depreciation of the unclaimed property.

Lea has said that H.B. 1427 "will allow the state to use its superior resources to locate owners or heirs. Should we be unable to locate the consumer, we will be able to liquidate a security for purposes of preserving any remaining value. These funds will remain available to claim forever, until claimed by the owner or heirs."