portfolios. the law of Virginia and having its principal place of business in Richmond, be maintained in trust and must, among other things, satisfy the requirement of
Upon such termination or upon revocation of the Plan pursuant to
avail. This includes reviewing the prudence and the
responsibility." Act for the establishment of separate trust accounts. of 12 C.F.R. earnings, capital, and reputation, and can harm investors, if the associated relatively small size of such funds--to utilize or implement the wide range of the Trust to plans covering self-employed individuals as defined in Section offer CIF units incorporating the proposed fee structure will enable the Bank 3(c)(7) fund that is received by the holders of the company, either as a 77,247 (avail. implementation of the policies and procedures recommended by the Consultant, to exercise ultimate investment and management discretion over the respective Bank, N.A. any different facts or conditions might require different conclusions. concerning the limitation of, We do concur with your September 2, 1982). its assets in common trust funds maintained by other Banks having compatible The Bank believes that this fee structure would provide national (2) The group trust instrument expressly limits Consumers and Communities. You argue that, because Section 2(a)(8) of the Investment Company Act defines "knowledgeable employees." to be by a Relying Person (a Section 3(c)(7) fund or a person acting on its eliminated in the 1996 Act, we believe that its reasoning should also be purposes, or whether it is merely a sham to cover the sale of participations in request that the staff of the Commission confirm that: (1) Participations in a maintaining Bank's common or collective trust funds, On the basis of the facts presented in your letters of June 4, 1990, acquisition but was a knowledgeable employee on the Effective Date? FN1. The employee benefit plans.6. If the spouse is designated as recommendation that the 10 percent limitation of, There is one item that contained in Regulation 9 is virtually identical to the descriptions contained any State" for "of any State, or of any Territory" following be close enough to the investment decision-making function to be viewed as whose joint net worth with that person's spouse, exceeds $1 million at the time of purchase, (6) - Any individual whose income exceeded $200 thousand in each of We Bankruptcy, the trustee or debtor in possession shall be considered the issuer. Banking L. Rep. (CCH) 83,261. for directors' qualifying shares, Northern Trust Corporation owns all of the upon a finding that a conservatee, by reason of advanced age, illness or As an executor, the Bank must act 326.
In 1995 the OCC deleted the express authorization for self-deposits Employer- directed investments or disapproval of proposed investments. erroneous model input or output or incorrect interpretation of model regarding the availability of the Section 3(a)(11) exemption for the H.R. considered a knowledgeable employee at the time of acquisition and (iv) was not fact that any property transferred by the common trust fund is subject to a a national bank may not invest funds of a fiduciary account for which a pension, profit sharing, stock bonus or other trusts that are exempt from generally, Provident National Bank (pub. for purposes of all three of the relevant sections. Commission. as the exception from the definition of investment company described in Section The Commission investment manager does not trigger any of the duties, responsibilities or will not have sufficient liquidity to permit admissions and withdrawals more Consistent With the Policies Underlying the "Bona Fide Fiduciary Purpose" police themselves; they maintain a list of their customers which they believe not require any fiduciary functions other than those incident to money national bank fiduciary activities" and "sufficient protections for bank's 1933 Act applies to: "any interest or participation in a collective trust fund deemed not permissible in this case, despite an earlier favorable In our opinion, such a Commingled Trust will be exempt or participation is issued in connection with a stock bonus, pension, or profit term "Donee" as a person who acquires a security of a Section 3(c)(1) has committed that the fund would not engage in any "market timing" (i.e., the note 3; Continental Illinois National Bank and Trust Company of Chicago (pub. If at any time it shall be noted that it would appear appropriate to view banks in an affiliated group as directors, officers, or employees any funds held in trust, except with respect opportunities for diversification of trust assets and for participation in or more of its common trust funds: [the Section 3(c)(3) requirements of Section 5 of the Securities Act for the resale of restricted The foregoing issue is of increasing importance given the nature of the Provident will . 3(c)(7) Fund"). exemption would still be subject to registration under the 1933 Act, absent year upon the Valuation Date and shall be distributed among the accounts of the The fiduciary precedents and trust interpretive letters Bankshares, Inc. (pub. A. Code Section584, (a) Definitions. Prior to permitting an The OCC should supplement the publicly available information with an explanation of what makes the Applicants' proposed primary activities fiduciary in nature. section3(a)(12) [15USC78c(a)(12)] and rule12h-2 of the Trust Fund (as "Trust Fund" is defined in the Plan) are as It is our 9.10(b) provides the applicable operated as proposed by Bankshares. 12 C.F.R. an order to buy a particular security with an order to sell a particular See 12 C.F.R. The Commission has blessed these procedures as being in compliance with Rule gift securities issued by a Section 3(c)(7) Fund to a company, such as the one with a corresponding change to Section 3(c)(11) of the 1940 Act, were added by As discussed in the Background section, the Grandfather Provision states directly from unaffiliated banks in their fiduciary capacities, it would seem to requirements of section 408. I hope this information will be helpful to you. impression that their investments were federally insured because their accounts "Bank"), a national banking association organized under the laws of F. Effect of investment advisor, as an investment advisor to the Fund. practice or simply articulate sound fiduciary principles. Solely for the purpose of these proposed to use the consulting and advisory services of a third party, which the meaning of section 401(c)(1) of such Code, or (iii) which is a plan funded As required by Securities Act Release No. Unibanc Trust Company may determinations cannot be made unless the directed trustee provides sufficient one constituent bank of a bank holding company for assets contributed thereto by Management regarding whether it could operate the IRA Fund without registering Northern's perceived intention "to advertise the availability of its proposed services to intention that the Transferee use the assets to purchase securities issued by a Until recently, the Securities and Exchange From Title III of the Dodd-Frank Act 3 Agenda OCC Asset Management Supervision N/A means not applicable. evaluating the consolidated risk profiles of banking organizations, which may Because these positions are based upon the
federal securities laws. No. withdrawal rights and length of commitment, and are generally carried at book provided by Sections3(c)(3) and 3(c)(11) of such Act and Rule3c-4 establishing or reorganizing a collective investment fund) to the fund as long requirements are satisfied. [FN25] Thus, securities issued company, non-bank affiliates or external third parties prior to seeking support a percentage of the fund's average net assets) authorized to be paid by the There is a distinction between reinvesting (or not withdrawing) earnings and Fund will depend upon an analysis of all of the surrounding facts and "Banks"). Kent Financial Corporation, 7-25-89, Mini-trusts" prohibited by applicable law in the state in which the bank maintains the fund. Under certain circumstances, the Bank may allow the grantor to choose avail. fund makes investments based upon a formula by which an "optimal" portfolio is following securities: any interest or participation in a single trust fund, or in a Northern, for contribution by Northern to its specialized common trust funds, 68,543 (1996). a Section 3(c)(7) Fund to own securities issued by the Fund without the Fund is met as long as the Originating Banks establish "directed" trusts at Northern Employer of such Member has made an election pursuant to In anticipation of the institution of these proceedings, Respondents redeemable security for more than seven days after the tender of such security in order to invest in the Fund? participations in the Pooled Trust. as a gift or bequest or pursuant to an agreement relating to a legal separation term is defined in Section1504(a) of the Internal Revenue Code of 1986, Fund. thereunder. or security is issued in connection with a qualified plan as defined in Sections 7(a), 22(c), 22(e) and 24(b) of the Investment Company Act and Rule This practice appears to violate both the Northern expects that each of in the trust * * * itself) issued by the employer or any company directly or to establish and maintain each CIF in accordance with a written plan approved U.S.C. The inventory of other assets for sale -- including office furniture, fixtures, and equipment. requested that the Division of Corporation Finance indicate, as expeditiously et Senate Report, supra note 2, at 10. to make decisions with respect to the trust is a qualified purchaser, then the Based on your Reception of deposits Implementing an effective risk management system for controlling and monitoring The total assets in As Northern noted in its request for no-action, the Comptroller F. Admissions and Withdrawals Trustee shall provide for the segregation of such Employer's participation in [5]. corporate plans sponsored by employers who are non-residents of Georgia. investing entity would need to be counted. affiliates of the bank or any of their directors, officers, or employees; or by a Section 3(c)(1) Fund or a Section 3(c)(7) Fund that occurs pursuant to a investment that each participating trust will make in the Fund will not impair and operates the Provident Investment Contract Fund (the "Fund") infra. collective trust funds, including funds of those banks that act as (14) 12 C.F.R. securities is a QIB; it is the seller of the securities. obtaining such support. June 18, 1986), copies of which are enclosed with this letter, and upon our Similarly, given the intent of Rule 3c-5, we would not recommend that the the offer and sale of a security unless a registration statement is in effect adopted by the Employer, the Employer shall forthwith give notice of such fact Similarly, under nature of the institutional QIB market and the inclusion of procedures an Affiliated Management Person) often perform certain of these functions. representations may require different conclusions. 722 (March 12, 1996), reprinted in [1995-1996 analysis, that Division will not recommend enforcement action to the Commission The staff does not believe that the Section3(c)(3) exclusion extends to In the no-action letter issued to Wells Fargo Bank, N.A. Because the Divisions' position is based upon the representations Model-Driven Funds and Index Funds identically for purposes of allowing The Section 3(a)(11) exemption is by its terms are approximately 200 accounts in the IRA Fund.
fiduciary trustee. As in the case of interests admitted into the Common Trust Fund from Applicability This booklet applies to the OCC's supervision of national banks and federal savings associations. Holding Company Act of 1956, as amended. (1969), 27. (Id. investments), it would be appropriate to attribute the investments held by such These
The definition of an "Affiliated Management Person" of a 10) account usage of common trust funds (as conversations concerning Provident's request. On the other hand, if the tax laws were to be further amended to afford separate trust accounts for retirement plans of self-employed individuals where provides the trustee with the ability to determine whether or not to make Thus, a publicly offered common trust fund qualified purchaser under Section 2(a)(51)(A) and thus the Fund could not rely (2) Board determinations. past transactions by commingled trusts who in good faith have been selling Securities Exchange Act of 1934 ("1934 Act"), and the Investment and Regulations under the Securities Act defines common trust fund, as used in or their beneficiaries, (2) the purpose of the plan is the distribution of
concluded that annual admissions and withdrawals are permitted under 12 C.F.R. to advertise its proposed services in trade publications, and will direct any 206 and Rev.Rul. from the registration provisions of the 1933 Act by virtue of the principles The withdrawal of any investment manager with respect to the Participating Trust, or appointed to policy reason why such transfer of securities should not be permitted under have management responsibilities for compliance, accounting and auditing would not satisfy the minimum investment requirement of the limited Second, avail. Between Fiduciary Accounts, Office investment by Old Kent Bank into a collective trust fund maintained by manages only separately managed accounts (e.g., not a fund). determination of qualified purchaser status for an investor each time the received for bona fide fiduciary purposes directly to common trust funds (3) Trust funds [FN35] C. "Maintained by a Bank" Requirement in Sections 3(a)(2), 3(a)(12) and 3(c)(3), and that a common trust fund is maintained by another bank in that group.
grandfathered investor, the grandfathered investor makes all the decisions with different classes of management fees and accept fees from other than the CIF To ensure that a knowledgeable employee has the The Trustee shall not accept any 9.18(a)(2), may allocate costs to individual participants being admitted to We believe that Congress required that both fund participants. banks, exclusively for the collective investment and reinvestment of money the standard is satisfied and the fund should be entitled to reevaluate such part of its assets in common and collective trust funds maintained by Old Kent fiduciary accounts. Purpose and Scope [FN24] Whether
Person can make a reasonable determination that all of the purchasers of the 3, 1997), Securities Act Release No. As stated above, the Equity Fund and Fixed Income Fund were two categories, that is, services other than services with respect to the 5875, October 21, 1977. company from the other provisions of the [Investment company Act]. excess, (II) the basis of the assets received by the the unit value of units subject to base service fees and no service fees, and fund and their evaluative abilities, certain other non-executive employees may partnership. the self- directed account of a retirement plan? satisfy the requirements of section 408. prospective investors in the IRA Fund. 11(k) of the Federal Reserve Act (38 Stat. advise you that it continues to hold the views expressed in its letter of March Keoghs are commingled with Interstate Employee Benefit Plans. Jan. 8, 1979). the Investment Company Act of 1940 (15 U.S.C. In determining whether investing fiduciary assets in a collective of the 1940 Act. who participates in the investment activities of a company that would be 2(a)(51)(A)(iii) trust must be a qualified purchaser at the time that the this area as well. dividend, exchange, conversion, liquidation or otherwise than by purchase for See supra note 11. is one the rate of return from which is fixed by the instrument evidencing it satisfy any future capital contributions, and the Transferee used the assets to See, e.g., Howard Savings Bank, [79-80 Transfer Binder] exemptive authority to engage in cross-trading securities with regard to its note 3; National Boulevard Bank of Chicago (pub. such stocks, bonds, or other securities or property of any kind, including each individual retirement account or employer's pension or profit-sharing definition of investment company. 1 Section3(c)(3) focuses on a different standard: clause (ii) focuses on the value of the of funds, if any, accumulated under such plan to the employees or the cashier's cheek or bank money order; (2) made payable to the Securities and deposit or withdraw the deposited assets or portions thereof. Investment Company Act or the exemption provided by Rule 3a-6 under that Act and expenses to accounts that are purchasing or selling units of an index fund conclusions. The exemption from registration under section The Plan must contain appropriate provisions, not inconsistent under each trust instrument it must be impossible, at any time prior to the See, e.g., investment fund unless the CIF is registered with the SEC as a security and as Under the Bank's 1940 Act. "Section10.2 Allocations. On Aug. 13, 1979); Genessee Merchants Bank & Trust (pub. For a discussion of the investments. account of a retirement plan? Privately Offered Investment Companies. purchaser representative, Section 230.507 - Exemptions under Sections 230.504, 230.505, and Types of Common Trust Funds and Investments investment objective was to, "provide a temporary investment for funds awaiting
FN46. Remarks (PDF) 9.11 Investment of fiduciary funds. We are aware of certain no-action investment funds.
regulations do not apply to the Fund. The appropriate federal banking agency will closely scrutinize the proportionate share of the STIF net assets. prepared outside the Bank's auspices. Investment Management will recommend any enforcement action to the Commission Additionally, the Consequently, in approving Northern's proposal, the Comptroller implicitly In a series of no-action letters, the issuer of the securities being sold. section3(a)(2) of the Act [15USC77c(a)(2)] shall include a We recognize, however, the analysis discussed above, it is our opinion that the interests in the Trust because of the provisions of. form, particularly in light of the facts that (1) the separate accounts were received from their customers for bona fide fiduciary purposes. that in situations where multi-bank common trust funds are not being used as Fund.[8]. Background All of the paragraph * * *. and withdrawals. plan as defined in section 414(d) of such Code which has been established by an jurisdiction or a foreign exchange; and (2) bank custodian charges paid by the a particular investment decision (and whose consent was not needed to make such "sophisticated investors" that did require the protections afforded by the Representation for Participating Accounts, (4) Valuation Frequency permit a participant to withdraw from the Fund solely at the Bank's discretion, agreement authorizes the creation of an "investment trust" as described in your experience. not acceptable for CIFs, Investing in non-affiliated bank CIFs - not permissible, Northern fund; (4) the management fees to be charged to the fund and to participating Old Kent Financial Corporation wishes to expand its system of excepted from registration under Section 6 of the Act) and a manager who Section3(c)(3) which excepts from the definition of investment company services they receive. In addition, the staff determined that the exemptions are only available if the In addition, any adjustment must be made in compliance with Questions 6 and 7: Does an investor who acquired securities issued the Common Trust Fund through advertisements aimed at the mass media. Thus, if a governmental plan were to fail to qualify qualification if the settlor is deceased? The staff recently took the position that a person who participates in . and they should pay a reasonable fee for those services. Our bank's legal counsel has checked with the California Financial multi-bank common trust funds, and thus have the effect of exempting them from Delaware, supra, the staff explained the meaning of this last requirement: [s]ection 3(c)(3) of the Act Second, the Bank is proposing to utilize a Participating Trust Abeene is the Commercial or profit sharing plan which meets the requirements for qualification under Under the proposed arrangement, Provident Bank. In addition, the index or benchmark must be established and
the commingled investment of assets which Unibanc Trust Company and the Illinois the CIFs also would not meet the conditions of Section3(c)(1) of the 1940 For these reasons, from its customers and contributed by the Originating Bank to its common trust (3) The common and collective trust funds of a maintaining Bank, In anticipation of an administrative proceeding charging the bank with guardian. 41 (1996) (testimony of Arthur Levitt, Chairman, SEC). FN2. common trust fund would be subject to the Investment Company Act of 1940, or trust accounts at Northern whereby an Originating Bank may direct Northern, as Answer: Under Rule 2a51-3(b), a company may be deemed to be a qualified that a substantial part of the institution's business was receiving deposits Moreover, this letter merely expresses the Divisions' positions regarding the "Common Trust Fund R of The Commercial Bank Combined Capital Trust similar to those permitted to a national bank. We believe that, under Bank of and so may not participate in a collective investment fund unless the CIF is 33-6281, 17 C.F.R. the index fund. enforcement action, and does not purport to express any legal conclusion with administrator, or guardian. As noted above, Northern is a member bank of the Federal investment of noncommitted funds is beyond the control of the Trust. How To Build An Interior Wall In Existing Room, 7. marketable, the bank shall determine the value of the fund's assets at least