Summary
The Technology-enabled Fiduciary Financial Institutions (TEFFI) Act was enacted in 2021 Senate Sub. for HB 2074 and can be found in KSA 9-2301 through 9-2327.
The bill required the State Bank Commissioner to issue a charter to The Beneficient Company (Ben) and establish a fiduciary financial (fidfin) institution pilot program with an economic growth zone designated in Harvey County. The chartered TEFFI is known as Beneficent Fiduciary Financial (BFF), LLC. As of November 2024, BFF is believed to be the only TEFFI in the United States.
TEFFIs manage alternative assets, defined as professionally managed investment assets that are not publicly traded, including, but not limited to:
- private equity;
- venture capital;
- leveraged buyouts;
- special situations;
- structured credit;
- private debt;
- private real estate funds; and
- natural resources, including any economic or beneficial interest therein.
Economic Growth Trust
When alternative assets are placed into new Kansas trusts with Ben, 2.5 percent of the total amount of financing provided is funneled into the Kansas TEFFI Economic Growth Trust, which then distributes funding to the following:
- Kansas Department of Commerce TEFFI Development and Expansion Fund, for
the- Strategic Economic Expansion & Development (SEED) Program; and
- Promotion of growth and development of the TEFFI industry; and
- Beneficient Heartland Foundation.
Timeline
| July 1, 2021 | Senate Sub. for HB 2074 established the TEFFI Act, which directed the State Bank Commissioner to issue a conditional charter to Ben and establish a fidfin institution pilot program, among other things. |
| December 7, 2021 | Joint Committee on Fiduciary Financial Institutions Oversight held first meeting and recommended permanent TEFFI charter be issued. |
| March 10, 2022 | SB 337 converted the conditional charter to a permanent charter, retroactive to December 31, 2021. |
| July 1, 2022 | HB 2489 amended the TEFFI Act, pertaining to an updated definition, fingerprinting requirement, existing application fee, governing documents, evaluation and examination, customer disclosure, and services and authorized activities. HB 2547 authorized TEFFI insurance companies to operate as captive insurance companies. |
| December 1, 2022 | Joint Committee on Fiduciary Financial Institutions Oversight met and recommended amendments to the TEFFI Act regarding background checks and the definition of charitable beneficiaries. |
| April 20, 2023 | SB 44 established the Kansas Financial Institutions Information Security Act and included TEFFIs as covered entities. |
| November 7, 2023 | Joint Committee on Fiduciary Financial Institutions Oversight met and recommended the creation of an advisory council. |
| November 21, 2024 | Joint Committee on Fiduciary Financial Institutions Oversight met and made various recommendations, including changes regarding TEFFI reporting, digital assets, the definition of charitable beneficiaries, the safety and soundness examination, and liquidation processes. |