This section narrows the definition of “affiliate” by excluding several types of entities, including certain registered financial firms and some employee benefit, pension, and similar funds, if the stated control-related conditions are met.
Sec. 11.0042. DEFINITION OF AFFILIATE. (a) The term "person" or "corporation" as used in the definition of "affiliate" provided by Section 11.003(2) does not include: (1) a broker or dealer registered under the Securities Exchange Act of 1934 (15 U.S.C. Section 78a et seq.), as amended; (2) a bank or insurance company as defined under the Securities Exchange Act of 1934 (15 U.S.C. Section 78a et seq.), as amended; (3) an investment adviser registered under state law or the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.); or (4) an investment company registered under the Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.); or (5) an employee benefit plan, pension fund, endowment fund, or other similar entity that may, directly or indirectly, own, hold, or control five percent or more of the voting securities of a public utility or the parent corporation of a public utility if the entity did not acquire the voting securities: (A) for the purpose of or with the effect of changing or influencing the control of the issuer of the securities; or (B) in connection with or as a participant in any transaction that changes or influences the control of the issuer of the securities. (b) For the purpose of determining whether a person is an affiliate under Section 11.006(a)(3), the term "person" does not include an entity that may, directly or indirectly, own, hold, or control the voting securities of a public utility or the parent corporation of a public utility if the entity did not acquire the voting securities: (1) for the purpose of or with the effect of changing or influencing the control of the issuer of the securities; or (2) in connection with or as a participant in any transaction that changes or influences the control of the issuer of the securities. (c) A report filed by an entity described by Subsection (a)(5) or (b) with the Securities and Exchange Commission is conclusive evidence of the entity's intent if the report confirms that the voting securities were not acquired: (1) for the purpose of or with the effect of changing or influencing the control of the issuer of the securities; or (2) in connection with or as a participant in any transaction that changes or influences the control of the issuer of the securities. Added by Acts 2005, 79th Leg., Ch. 413 (S.B. 1668), Sec. 2, eff. June 17, 2005.