                                 CODE OF VIRGINIA

DERIVATIVE OR OPTION (§ 64.2-1061)

A. As used in this section, &#8220;derivative&#8221; means a contract,
instrument, other arrangement, or combination of contracts, instruments, or
other arrangements, the value, rights, and obligations of which are, in whole or
in part, dependent on or derived from an underlying tangible or intangible
asset, group of tangible or intangible assets, index, or occurrence of an event.
&#8220;Derivative&#8221; includes stocks, fixed income securities, and financial
instruments and arrangements based on indices, commodities, interest rates,
weather-related events, and credit-default events.

B. To the extent a fiduciary does not account for a transaction in derivatives
as a business under &#xA7; 64.2-1050, the fiduciary shall allocate 10 percent of
receipts from the transaction and 10 percent of disbursements made in connection
with the transaction to income and the balance to principal.

C. Subsection D applies if:

   1. A fiduciary:
   				a. Grants an option to buy property from a trust, whether or not the trust
   owns the property when the option is granted;
   				b. Grants an option that permits another person to sell property to the
   trust; or
   				c. Acquires an option to buy property for the trust or an option to sell
   an asset owned by the trust; and

   2. The fiduciary or other owner of the asset is required to deliver the asset
   if the option is exercised.

D. If this subsection applies, the fiduciary shall allocate 10 percent to income
and the balance to principal of the following amounts:

   1. An amount received for granting the option;

   2. An amount paid to acquire the option; and

   3. Gain or loss realized on the exercise, exchange, settlement, offset,
   closing, or expiration of the option.

HISTORY: 2022, c. 354.