2023 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.