N.Y. BNK Law § 100-C — New York Code / Act BNK / Article 3 / Section 100-C
Common trust funds
Status: in_force

§ 100-c. Common trust funds. 1. For the purpose of investment and\nreinvestment of moneys received and held by any trust company as\nexecutor, administrator, guardian, trustee, donee of power during\nminority to manage property vested in an infant, custodian under any\nUniform Gifts to Minors Act, any Uniform Transfers to Minors Act or The\nNew York Uniform Transfers to Minors Act, conservator or committee, such\ntrust company may establish and maintain common trust funds and short\nterm investment common trust funds. In any case where the instrument or\nthe order, decree or judgment under which such moneys are held does not\nforbid, such trust company, either alone or in conjunction with one or\nmore other persons acting with it in any fiduciary capacity, may invest\nand reinvest such moneys or any part thereof by adding the same to any\nsuch common trust funds and short term investment common trust funds.\nSuch trust company shall have the same power to invest common trust\nfunds in securities of any management type investment company or\ninvestment trust, registered pursuant to the federal investment company\nact of nineteen hundred forty, as is set forth in, and subject to the\nprovisions of, sections 11-2.2 and 11-2.3 of the estates, powers and\ntrusts law.\n  2. Notwithstanding any other provision of law, a trust company may\ndeposit securities investments of a common trust fund, or arrange for\nthe deposit of such investments through a subcustodian, (a) with a\nclearing corporation pursuant to EPTL 11-1.9, (b) with a federal reserve\nbank pursuant to EPTL 11-1.8, or (c) with a securities depository,\nclearing agency, or bank, whether or not subject to the laws of a\njurisdiction other than the United States of America, or any state or\nsubdivision thereof, for the account of the trust company and such\ninvestments shall be deemed for the purposes of this section to be in\nthe custody of such trust company.\n  3. A common trust fund shall not be deemed a separate trust fund on\nwhich commissions or other compensation is allowable and no trust\ncompany maintaining such a fund shall make any charge against such fund\nfor the management thereof. Provided, however, that in those instances\nwhere a trust company invests common trust funds in securities of any\nmanagement type investment company or investment trust pursuant to the\nprovisions of subdivision one of this section, such trust company may\ncharge the common trust fund for the fees and expenses of such\nsecurities pursuant to and consistent with the provisions of sections\n11-2.2 and 11-2.3 of the estates, powers and trusts law.\n  4. If money of an estate, trust or fund or any part thereof held by a\ntrust company in conjunction with one or more other persons in any\nfiduciary capacity is invested in a common trust fund, the participating\ninterest therein so acquired shall be withdrawn therefrom upon the\nwritten request of any such other person acting in such fiduciary\ncapacity with such trust company.\n  5. If any investment held in a common trust fund shall cease to be\neligible as a new investment of such common trust fund, the trust\ncompany maintaining the common trust fund, prior to any further\nadditions to or withdrawals from such fund, either shall sell such\ninvestment or shall set the same apart in a liquidating account for the\nbenefit ratably of each participant then interested in such common trust\nfund.\n  6. At least once every ten years, each trust company maintaining a\ncommon trust fund shall file an account of its proceedings in respect\nthereof either in the office of the clerk of the supreme court or in the\noffice of the surrogate in any county in which such trust company\nmaintains an office.\n  Upon the filing of the petition for the settlement of such account,\nthe court shall assign a time and place for a hearing on the settlement\nof such account and order notice thereof by: (a) one publication not\nless than twenty days prior to the date of such hearing, of a notice in\na newspaper to be designated by the court, and (b) mailing on or before\nthe day of publication a copy of the notice to all persons whose names\nand addresses appear, at the close of the period accounted for, upon the\nrecords maintained by the trust company pertaining to the common trust\nfund as well as to any estate, trust or fund, any part of which shall\nhave been invested in the common trust fund and who at the close of the\nperiod accounted for were known by such trust company to be or to claim\nto be included in any of the following classes of persons: (i) those who\nat any time during the period accounted for were entitled to share in\nthe income of any estate, trust or fund invested in the common trust\nfund at any time during the period accounted for; (ii) those who became\nentitled to share in the principal of any estate, trust or fund invested\nin the common trust fund which became distributable in whole or in part\nduring the period accounted for; (iii) those who at the close of the\nperiod accounted for would have been entitled to share in the principal\nof any estate, trust or fund invested in the common trust fund if the\nevent upon which such estate, trust or fund would become distributable\nin whole or in part had occurred at the close of the period accounted\nfor, provided, however, that in the case of a trust which at the close\nof the period accounted for can be revoked in its entirety in favor of\nand by the grantor, donor, trustor or creator, it shall not be necessary\nfor such trust company to include the names and addresses of any persons\ninterested in the principal of such trust other than the grantor, donor,\ntrustor, or creator; (iv) those living at the close of the period\naccounted for who had any interest in the income or principal, or both,\nof any estate, trust or fund invested in the common trust fund, and who\nprior to the close of the period accounted for shall have notified the\ntrust company in writing to send a copy of the notice or citation of any\nproceeding for the settlement of any account or the trustee of such\ncommon trust fund to such person at an address furnished to the trust\ncompany by such person; (v) those who at any time during the period\naccounted for were acting with the trust company in a fiduciary capacity\nwith respect to any such estate, trust or fund; (vi) the guardian of any\ninfant, the committee of any incompetent and the conservator of any\nconservatee included among the persons hereinbefore described; (vii) the\npersonal representative of any deceased person included among the\npersons hereinbefore described in class (i), (ii), (iii), or (v).\n  Upon the filing of such petition, the court shall appoint a person to\nappear as guardian ad litem for each person who has or who may\nthereafter have any interest in the income of such common trust fund and\na person to appear as guardian ad litem for each person who has or who\nmay thereafter have any interest in the principal of such common trust\nfund. Each such interested person may appear in such accounting\nproceeding and on his failure to appear shall be deemed to be\nrepresented in such proceeding by the person designated respectively as\nsuch guardian ad litem.\n  Except as otherwise herein provided, such proceeding shall be\nconducted in the same manner as any other proceeding for the voluntary\njudicial settlement of the account of a testamentary trustee. The decree\nin such proceeding shall be thereafter binding and conclusive in respect\nof any matter embraced in the account or in such decree upon all persons\nhaving or who may thereafter have any interest in such common trust fund\nor in any participating estate, trust or fund.\n  7. As used in this section, subject to subdivision eight of this\nsection the term "trust company" shall mean any trust company, any bank\nduly authorized to exercise fiduciary powers and any national bank\nhaving a principal, branch or trust office in this state and duly\nauthorized to exercise fiduciary powers; the term "estate" shall mean\nthe assets held by an executor or an administrator, with or without the\nwill annexed, of the goods, chattels and credits of a decedent, but not\na temporary administrator; the term "trust" shall mean the assets of any\ntrust however created held by the trustee thereof, including, but\nwithout limitation, any assets held by a fiduciary as donee of a power\nduring minority to manage property vested in an infant; the term "fund"\nshall include the assets of an infant held by the guardian thereof, the\nassets of an incompetent person held by the committee thereof, and the\nassets of a conservatee held by the conservator thereof. The term "donee\nof a power during minority to manage property vested in an infant" shall\nfor the purposes of this section include only a fiduciary who has power\nduring a period measured by a minority to hold and invest moneys under\nthe terms of an instrument under which the fiduciary had theretofore\nheld such moneys as executor or as personal or testamentary trustee.\n  8. (a) A trust company, at least ninety per centum of the capital\nstock of which is directly or indirectly, or through a subsidiary or\nsubsidiaries, owned, controlled or held with power to vote by a bank\nholding company may establish and maintain one or more common trust\nfunds and short term investment common trust funds, or may utilize one\nor more common trust funds and short term investment common trust funds\npreviously established by it, for funds held in any of the fiduciary\ncapacities mentioned in subdivision one of this section, by itself and\nby other trust companies at least ninety per centum of the capital stock\nof each of which is directly or indirectly, or through a subsidiary or\nsubsidiaries, owned, controlled or held with power to vote by such bank\nholding company. Each trust company, the capital stock of which is so\nowned, controlled or held, may invest and reinvest in one or more of\nsuch common trust funds and short term investment common trust funds\nmoneys held in any of the fiduciary capacities mentioned in subdivision\none of this section. The trust company establishing, maintaining, or so\nutilizing any such common trust funds and short term investment common\ntrust funds shall comply with, and be subject to, all of the provisions\nof this section as though such trust company and the other trust\ncompanies participating in such fund were one and the same corporate\nentity.\n  (b) For the purpose of this subdivision, (i) the term "bank holding\ncompany" shall be given the same meaning as is contained in the\ndefinition of such term in section one hundred forty-one of this\nchapter, and (ii) the term "trust company" shall be given the same\nmeaning as is contained in the definition of such term in subdivision\nseven of this section, except that such term shall be deemed to include,\nin addition to the entities listed in such subdivision, any banking,\ntrust or financial company, corporation or association, organized under\nthe laws of the United States, whether or not having its principal\noffice outside this state, or of any state of the United States, which\nis duly authorized to exercise fiduciary powers.\n  9. (a) As used in this subdivision, unless the context otherwise\nrequired:\n  (i) "Short term investment common trust fund" means a common trust\nfund maintained and administered by a trust company exclusively for the\ncollective investment and reinvestment of moneys contributed thereto\nwhich are invested and reinvested in any short term investment by a\ntrust company, in its capacity as a fiduciary or co-fiduciary.\n  (ii) "Short term investment" means bonds, notes or other evidences of\nindebtedness which are payable upon demand (including variable amount\nnotes) or which have a maturity date of one year or less from the date\nof purchase, or which may be prescribed, from time to time, by rules or\nregulations promulgated by the superintendent of financial services, and\nwhich are acquired or held by a trust company in a short term investment\ncommon trust fund.\n  (iii) "Participant" means any estate, trust, donee of a power during\nminority, guardianship, committeeship, conservatorship, or custodian\nunder any Uniform Transfers to Minors Act administered by a trust\ncompany, as fiduciary or co-fiduciary, having a participation.\n  (iv) "Participation" means the interest of a participant in a short\nterm investment common trust fund.\n  (b) Any trust company may administer one or more short term investment\ncommon trust funds.\n  (c) Any trust company shall, at least once each year, cause an audit\nof each short term investment common trust fund administered by the\ntrust company to be made by auditors who are independent certified\npublic accountants. A copy of such audit shall be available at the\noffice of the trust company maintained for the transaction of trust\nbusiness, during all regular business hours, for inspection by any\nperson having an interest in any participant, and upon request a copy of\nany such audit shall be furnished without any cost to such person. The\nreasonable expenses of any such audit made by independent certified\npublic accounts or of any examination by the superintendent may be\ncharged to the income of the short term investment common trust fund.\n  (d) A trust company administering a short term investment common trust\nfund shall not be required to render a court accounting with regard to\nsuch fund.\n  10. The superintendent of financial services shall promulgate such\nregulations and rules as he or she considers appropriate to govern the\nadministration of common trust funds and short term investment common\ntrust funds.\n