ICI Urges States to Stop Treating Long-Term Investors' Accounts as Abandoned

The Investment Company Institute ("ICI") urged states to stop treating long-term investors as having abandoned their accounts under unclaimed-property laws.

In an article published on its website, the ICI explained escheatment, the process by which a state takes custody of property it deems abandoned, saying that it is meant for truly lost assets but that some states now apply it to investment accounts through an "inactivity standard." The inactivity standard allows a state to declare an account abandoned, seize it, and sell the investments if the owner has not logged in, traded, or contacted the provider for a few years, even when the owner is reachable and holding for the long term.

The ICI said the loss in potential gains for investors can be large. The ICI pointed to Florida, where more than $1 billion in assets were prematurely seized. The ICI noted that Governor Ron DeSantis signed a fix in June 2026 of a 2024 law that incorporated the inactivity standard. According to the article, the newly signed legislation instead incorporates a "returned communication standard" that strengthens protections for investors who are still reachable, "even when they have not actively engaged with their account for some time." The new law also requires a 10-year period of no activity before a seizure.

The ICI urged California to follow Florida's path by passing AB 2031, arguing that California's current law is vague and could allow securities to be seized when a provider has lost contact, even if statements still reach the investor. The ICI called on other states to follow Florida's path as well.