NY Banking L § 100-C (2021)
2021 New York Laws BNK - Banking Article 3 - Banks and Trust Companies 100-C - Common Trust Funds.

§ 100-c.  Common  trust  funds.  1.  For the purpose of investment and reinvestment of moneys  received  and  held  by  any  trust  company  as executor,  administrator,  guardian,  trustee,  donee  of  power  during minority to manage property vested in an  infant,  custodian  under  any Uniform  Gifts to Minors Act, any Uniform Transfers to Minors Act or The New York Uniform Transfers to Minors Act, conservator or committee, such trust company may establish and maintain common trust  funds  and  short term  investment common trust funds. In any case where the instrument or the order, decree or judgment under which such moneys are held does  not forbid,  such  trust company, either alone or in conjunction with one or more other persons acting with it in any fiduciary capacity, may  invest and  reinvest  such moneys or any part thereof by adding the same to any such common trust funds and short term investment  common  trust  funds. Such  trust  company  shall  have  the same power to invest common trust funds in  securities  of  any  management  type  investment  company  or investment  trust, registered pursuant to the federal investment company act of nineteen hundred forty, as is set forth in, and  subject  to  the provisions  of,  sections  11-2.2  and 11-2.3 of the estates, powers and trusts law.   2. Notwithstanding any other provision of law,  a  trust  company  may deposit  securities  investments  of a common trust fund, or arrange for the deposit of such investments  through  a  subcustodian,  (a)  with  a clearing corporation pursuant to EPTL 11-1.9, (b) with a federal reserve bank  pursuant  to  EPTL  11-1.8,  or  (c) with a securities depository, clearing agency, or bank, whether or  not  subject  to  the  laws  of  a jurisdiction  other  than  the United States of America, or any state or subdivision thereof, for the account  of  the  trust  company  and  such investments  shall  be  deemed for the purposes of this section to be in the custody of such trust company.   3. A common trust fund shall not be deemed a separate  trust  fund  on which  commissions  or  other  compensation  is  allowable  and no trust company maintaining such a fund shall make any charge against such  fund for  the  management thereof. Provided, however, that in those instances where a trust company invests common trust funds in  securities  of  any management  type  investment company or investment trust pursuant to the provisions of subdivision one of this section, such  trust  company  may charge  the  common  trust  fund  for  the  fees  and  expenses  of such securities pursuant to and consistent with the  provisions  of  sections 11-2.2 and 11-2.3 of the estates, powers and trusts law.   4.  If money of an estate, trust or fund or any part thereof held by a trust company in conjunction with one  or  more  other  persons  in  any fiduciary capacity is invested in a common trust fund, the participating interest  therein  so  acquired  shall  be  withdrawn therefrom upon the written request of any  such  other  person  acting  in  such  fiduciary capacity with such trust company.   5.  If  any  investment  held in a common trust fund shall cease to be eligible as a new investment  of  such  common  trust  fund,  the  trust company  maintaining  the  common  trust  fund,  prior  to  any  further additions to or withdrawals from  such  fund,  either  shall  sell  such investment  or shall set the same apart in a liquidating account for the benefit ratably of each participant then interested in such common trust fund.   6. At least once every ten years, each  trust  company  maintaining  a common  trust  fund  shall file an account of its proceedings in respect thereof either in the office of the clerk of the supreme court or in the office of the surrogate in  any  county  in  which  such  trust  company maintains an office.    Upon  the  filing  of the petition for the settlement of such account, the court shall assign a time and place for a hearing on the  settlement of  such  account  and  order notice thereof by: (a) one publication not less than twenty days prior to the date of such hearing, of a notice  in a  newspaper to be designated by the court, and (b) mailing on or before the day of publication a copy of the notice to all persons  whose  names and addresses appear, at the close of the period accounted for, upon the records  maintained  by the trust company pertaining to the common trust fund as well as to any estate, trust or fund, any part  of  which  shall have  been invested in the common trust fund and who at the close of the period accounted for were known by such trust company to be or to  claim to be included in any of the following classes of persons: (i) those who at  any  time  during the period accounted for were entitled to share in the income of any estate, trust or fund invested  in  the  common  trust fund  at any time during the period accounted for; (ii) those who became entitled to share in the principal of any estate, trust or fund invested in the common trust fund which became distributable in whole or in  part during  the  period  accounted  for; (iii) those who at the close of the period accounted for would have been entitled to share in the  principal of  any  estate,  trust or fund invested in the common trust fund if the event upon which such estate, trust or fund would  become  distributable in  whole  or  in part had occurred at the close of the period accounted for, provided, however, that in the case of a trust which at  the  close of  the  period accounted for can be revoked in its entirety in favor of and by the grantor, donor, trustor or creator, it shall not be necessary for such trust company to include the names and addresses of any persons interested in the principal of such trust other than the grantor, donor, trustor, or creator; (iv) those  living  at  the  close  of  the  period accounted  for who had any interest in the income or principal, or both, of any estate, trust or fund invested in the common trust fund, and  who prior  to  the close of the period accounted for shall have notified the trust company in writing to send a copy of the notice or citation of any proceeding for the settlement of any account  or  the  trustee  of  such common  trust  fund  to such person at an address furnished to the trust company by such person; (v) those who at  any  time  during  the  period accounted for were acting with the trust company in a fiduciary capacity with respect to any such estate, trust or fund; (vi) the guardian of any infant,  the  committee  of  any  incompetent and the conservator of any conservatee included among the persons hereinbefore described; (vii) the personal representative  of  any  deceased  person  included  among  the persons hereinbefore described in class (i), (ii), (iii), or (v).   Upon  the filing of such petition, the court shall appoint a person to appear as guardian  ad  litem  for  each  person  who  has  or  who  may thereafter have any interest in the income of such common trust fund and a  person  to appear as guardian ad litem for each person who has or who may thereafter have any interest in the principal of such  common  trust fund.  Each  such  interested  person  may  appear  in  such  accounting proceeding  and  on  his  failure  to  appear  shall  be  deemed  to  be represented  in such proceeding by the person designated respectively as such guardian ad litem.   Except  as  otherwise  herein  provided,  such  proceeding  shall   be conducted  in  the same manner as any other proceeding for the voluntary judicial settlement of the account of a testamentary trustee. The decree in such proceeding shall be thereafter binding and conclusive in respect of any matter embraced in the account or in such decree upon all persons having or who may thereafter have any interest in such common trust fund or in any participating estate, trust or fund.    7. As used in this section,  subject  to  subdivision  eight  of  this section  the term "trust company" shall mean any trust company, any bank duly authorized to exercise  fiduciary  powers  and  any  national  bank having  a  principal,  branch  or  trust  office  in this state and duly authorized  to  exercise  fiduciary powers; the term "estate" shall mean the assets held by an executor or an administrator, with or without  the will  annexed, of the goods, chattels and credits of a decedent, but not a temporary administrator; the term "trust" shall mean the assets of any trust however created  held  by  the  trustee  thereof,  including,  but without  limitation,  any assets held by a fiduciary as donee of a power during minority to manage property vested in an infant; the term  "fund" shall  include the assets of an infant held by the guardian thereof, the assets of an incompetent person held by the committee thereof,  and  the assets of a conservatee held by the conservator thereof. The term "donee of a power during minority to manage property vested in an infant" shall for  the purposes of this section include only a fiduciary who has power during a period measured by a minority to hold and invest  moneys  under the  terms  of  an  instrument under which the fiduciary had theretofore held such moneys as executor or as personal or testamentary trustee.   8. (a) A trust company, at least ninety  per  centum  of  the  capital stock  of  which  is  directly or indirectly, or through a subsidiary or subsidiaries, owned, controlled or held with power to  vote  by  a  bank holding  company  may  establish  and  maintain one or more common trust funds and short term investment common trust funds, or may  utilize  one or  more common trust funds and short term investment common trust funds previously established by it, for funds held in  any  of  the  fiduciary capacities  mentioned  in subdivision one of this section, by itself and by other trust companies at least ninety per centum of the capital stock of each of which is directly or indirectly, or through a  subsidiary  or subsidiaries,  owned, controlled or held with power to vote by such bank holding company. Each trust company, the capital stock of  which  is  so owned,  controlled  or  held,  may invest and reinvest in one or more of such common trust funds and short term  investment  common  trust  funds moneys  held in any of the fiduciary capacities mentioned in subdivision one of this section. The trust company establishing, maintaining, or  so utilizing  any  such common trust funds and short term investment common trust funds shall comply with, and be subject to, all of the  provisions of  this  section  as  though  such  trust  company  and the other trust companies participating in such fund were one  and  the  same  corporate entity.  (b)  For  the  purpose of this subdivision, (i) the term "bank holding company" shall be  given  the  same  meaning  as  is  contained  in  the definition  of  such  term  in  section  one  hundred  forty-one of this chapter, and (ii) the term "trust  company"  shall  be  given  the  same meaning  as  is  contained in the definition of such term in subdivision seven of this section, except that such term shall be deemed to include, in addition to the entities listed in  such  subdivision,  any  banking, trust  or financial company, corporation or association, organized under the laws of the United States,  whether  or  not  having  its  principal office  outside  this state, or of any state of the United States, which is duly authorized to exercise fiduciary powers.   9. (a) As used in  this  subdivision,  unless  the  context  otherwise required:  (i)  "Short  term  investment  common trust fund" means a common trust fund maintained and administered by a trust company exclusively for  the collective  investment  and  reinvestment  of moneys contributed thereto which are invested and reinvested in any  short  term  investment  by  a trust company, in its capacity as a fiduciary or co-fiduciary.  (ii)  "Short term investment" means bonds, notes or other evidences of indebtedness which are payable upon demand  (including  variable  amount notes)  or  which have a maturity date of one year or less from the date of purchase, or which may be prescribed, from time to time, by rules  or regulations promulgated by the superintendent of financial services, and which are acquired or held by a trust company in a short term investment common trust fund.  (iii)  "Participant"  means any estate, trust, donee of a power during minority, guardianship,  committeeship,  conservatorship,  or  custodian under  any  Uniform  Transfers  to  Minors  Act  administered by a trust company, as fiduciary or co-fiduciary, having a participation.  (iv) "Participation" means the interest of a participant  in  a  short term investment common trust fund.  (b) Any trust company may administer one or more short term investment common trust funds.  (c)  Any  trust company shall, at least once each year, cause an audit of each short term investment common  trust  fund  administered  by  the trust  company  to  be  made  by  auditors who are independent certified public accountants. A copy of such  audit  shall  be  available  at  the office  of  the  trust  company  maintained for the transaction of trust business, during all regular  business  hours,  for  inspection  by  any person having an interest in any participant, and upon request a copy of any  such  audit shall be furnished without any cost to such person. The reasonable expenses of any such  audit  made  by  independent  certified public  accounts  or  of  any  examination  by the superintendent may be charged to the income of the short term investment common trust fund.  (d) A trust company administering a short term investment common trust fund shall not be required to render a court accounting with  regard  to such fund.   10.  The  superintendent  of  financial services shall promulgate such regulations and rules as he or she considers appropriate to  govern  the administration  of  common  trust funds and short term investment common trust funds.