R331. Financial Institutions, Administration.
R331-21. Rule Governing Establishment of and Participation in Collective Investment Funds by Trust Companies.
R331-21-1. Authority, Scope, and Purpose.
(1) This rule is issued pursuant to Sections 7-1-301 and 7-5-13.
(2) This rule applies to all trust companies conducting a trust business subject to the jurisdiction of the department.
(3) This rule authorizes the establishment of and participation in collective investment funds by trust companies subject to the jurisdiction of the department.
R331-21-2. Definitions for Purposes of this Rule.
(1) "Affiliate" means any company which controls, is controlled by, or is under common control with a trust company, and that is authorized to conduct a trust business by its applicable state or federal regulator.
(2) "Collective investment fund" means a fund established and administered by a trust company or one of its affiliates, into which a trust company and one or more of its affiliates pool trust account funds for common investment.
(3) "Commissioner" means the Commissioner of Financial Institutions.
(4) "Control" means "control" as defined in Section 7-1-103.
(5) "Department" means the Department of Financial Institutions.
(6) "Trust business" means "trust business" as defined in Section 7-5-1(1)(b).
(7) "Trust company" means any company authorized to engage in a trust business in Utah pursuant to Sections 7-5 et seq., or by federal law.
R331-21-3. Establishment of Collective Investment Funds.
(1) Any trust company authorized to engage in the trust business in Utah may:
(a) Establish collective investment funds that authorize participation by fiduciary or trust accounts of the trust company, its affiliates or both; and
(b) Participate in collective investment funds established by an affiliate of the trust company, if:
(i) The affiliate is authorized under the laws of its chartering authority to establish a collective investment fund in which its affiliates may participate; and
(ii) The plan establishing the collective investment funds specifically authorize a participation by the trust company.
(2) The common trust funds held by a trust company or its affiliate must be maintained exclusively for collective investment and reinvestment.
(3) The plan establishing the collective investment fund must be approved by the trust company's board of directors and filed with the commissioner. A copy of the plan shall be available at the principal office of the trust company for public inspection during business hours and upon request a copy of the plan shall be furnished to any person who has a direct or indirect legal interest in such plan.
(4) No trust company shall have any non-fiduciary interest in a collective investment fund. This limitation includes lending money to a fund, selling property to a fund, and purchasing property from a fund.
(5) The trust company shall maintain adequate accounting records of the collective investment fund for periodic review by the department and federal regulatory agencies.
KEY: financial institutions, trusts
Date of Enactment or Last Substantive Amendment: 1995
Notice of Continuation: August 23, 2018
Authorizing, and Implemented or Interpreted Law: 7-1-301; 7-5-13