(414) Derivatives and options
N.D. Cent. Code § 59-04.2-22
in effect59-04.2-22. (414) Derivatives and options
1. In this section, "derivative" means a contract or financial instrument or a combination
of contracts and financial instruments which gives a trust the right or obligation to
participate in some or all changes in the price of a tangible or intangible asset or group
of assets, or changes in a rate, an index of prices or rates, or other market indicator for
an asset or a group of assets.
2. To the extent that a trustee does not account under section 59-04.2-11 for transactions
in derivatives, the trustee shall allocate to principal receipts from and disbursements
made in connection with those transactions.
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 an asset owned by the trust, and the trustee or other owner of the
asset is required to deliver the asset if the option is exercised, an amount received for
granting the option must be allocated to principal. An amount paid to acquire the option
must be paid from principal. A gain or loss realized upon the exercise of an option,
including an option granted to a settlor of the trust for services rendered, must be
allocated to principal.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://ndlegis.gov/cencode/t59c04-2.pdf#nameddest=59-04p2-22Fetched: 10/16/2026