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Banker Resource Center
As a fiduciary, a bank's primary duty is the management and care of property for others. The Board of Directors and senior management must be able to identify, measure, monitor and control the risks inherent in fiduciary activities, and respond appropriately to changing business conditions. The FDIC examines a bank’s trust operations, and when applicable, Registered Transfer Agent, Government Securities Dealer, and Municipal Securities Dealer activities to determine if policies or account administration procedures could result in a contingent liability or estimated loss that could impact the institution’s earnings performance as well as impair its capital.
Laws and Regulations
Key laws and regulations that pertain to FDIC-supervised institutions; note that other laws and regulations also may apply.
- Trust
- Section 333.3 — Consent Required for Exercise of Trust Powers addresses requirements to obtain prior written consent from the FDIC using the Application for Consent to Exercise Trust Powers
- Section 303.242 — Exercise of Trust Powers outlines procedures to obtain the FDIC’s prior written consent to exercise trust powers and outlines circ*mstances when consent is not required
- Part 344 — Recordkeeping and Confirmation Requirements for Securities Transactions discusses requirements for trust departments to maintain adequate information regarding securities transactions
- The Employee Retirement Income and Security Act (ERISA) sets minimum standards for most voluntarily established pension and health plans in the private industry
- Federal Reserve Board’s Regulation R describes exceptions for banks from being defined as a broker under the Securities Exchange Act of 1934
- Federal Reserve Board's Regulation W addresses requirements for transactions between the trust department and any affiliated entities
- Registered Transfer Agent
- Part 341 — Registration of Securities Transfer Agents discusses requirements for institutions that perform any functions of a transfer agent
- Government Securities Dealer
- Part 368 — Government Securities Sales Practices addresses standards of conduct for those that have filed notice as, or are required to file notice as, government securities brokers or dealers pursuant to section 15C of the Securities and Exchange Act (15 U.S.C. 78o--5) and Department of the Treasury rules under section 15C (17 CFR 400.1(d) and part 401)
- Municipal Securities Dealer
- Section 15B of the Securities Exchange Act of 1934 discusses requirements for municipal advisors to register with the Securities and Exchange Commission
- Municipal Securities Rulemaking Board (MSRB) establishes rules that bank and municipal advisors must follow when engaging in municipal securities transactions
Supervisory Resources
Frequently asked questions, advisories, statements of policy, and other information issued by the FDIC alone, or on an interagency basis, provided to promote safe-and-sound operations.
- Trust
- Trust Examination Manual outlines examination processes, defines rating criteria used for safety and soundness examinations, and serves as a comprehensive reference on trust concepts, principles, common and statutory laws and regulations that govern the behavior of fiduciaries
- Statement of Principles of Trust Department Management outlines sound banking practices in the operation of a trust department
- Section 13 of the Applications Procedures Manual — Consent to Exercise Trust Powers outlines the application and review process when the FDIC’s prior written consent to exercise trust powers is sought
- Joint Interpretations of the Interagency Statement on Retail Sales of Nondeposit Investment Products addresses the financial institution's sale of nondeposit investment products, including mutual funds and annuities as well as stocks and other investment products, to retail customers and the retail sales of investment products on the financial institution's premises
- Securities Lending Supervisory Policy provides a discussion of policies and procedures to be considered and outlines various regulatory concerns for financial institutions that lend customers’ securities held in custody, safekeeping, trust or pension accounts
- Registered Transfer Agent
- Section 11 of the Trust Examination Manual — Registered Transfer Agent outlines examination processes and the rationale for examinations, discusses the role of the transfer agent, and defines rating criteria as well as registration and reporting requirements
- Forms and instructions for registration and amendment updates (Form TA-1 and instructions); for reporting activities of transfer agents (Form TA-2 and instructions); and for withdrawing registration as a transfer agent (Form TA-W Request for Deregistration and instructions)
- Government Securities Dealer
- Section 2.p of the Trust Examination Manual — Compliance with Government Securities Act of 1986 provides background information and discusses regulatory review processes
- Questions and Answers relate to recordkeeping and reporting requirements for entities that control large positions in certain Treasury securities
- Forms and instructions for notification of government securities broker or dealer activities (Form G-FIN and instructions); for termination of activities (Form G-FINW and instructions); for initial disclosure of a person conducting government securities broker or dealer activities (Form G-FIN-4 and instructions); and for termination of an individual’s activities (Form G-FIN-5 and instructions)
- Municipal Securities Dealer
- Municipal Securities Rulemaking Board (MSRB) rule interpretations when advising investors and engaging in municipal securities transactions
- Frequently Asked Questions distributed by the SEC’s Office of Municipal Securities on registration of municipal advisors
- Forms and instructions for registration of a new municipal securities dealer (Form MSD and instructions); for withdrawing registration (Form MSDW and instructions); for registration of a person to conduct municipal securities broker or dealer activities (Form MSD-4); and for termination of an individual’s activities (Form MSD-5)
Other Resources
Supplemental information related to safe-and-sound banking operations.
- ERISa Advisory Opinions from the U.S. Department of Labor and procedures to request interpretations and other ERISa rulings from the Office of Regulations and Interpretations under provisions established by ERISa Procedure 76-1
- The Gramm-Leach-Bliley Act (GLBA) — Safeguards Rule discusses requirements for institutions to have policies and procedures in place for the security and confidentiality of their customers’ information
- The Title 26 of the Internal Revenue Code provides direction on the taxation of fiduciary accounts, as well as defines various transactional activity
- Pension Protection Act of 2006 outlines minimum funding standards for defined benefit pension plans
- Title 12 of the Code of Federal Regulation in Part 9, commonly known as Regulation 9, establishes minimum standards for fiduciary activities
- SEC Interpretation: Commission Guidance on the Scope of Section 28(e) of the Exchange Act discusses the safe harbor for money managers who use the commission dollars of their advised accounts to obtain research and brokerage services
- Shareholder Communications Act of 1985, implemented primarily by SEC Rule 14b-2, outlines certain requirements for business communications between issuers and holders of registered securities
- Signature Guarantees: Preventing the Unauthorized Transfer of Securities provides an outline of Medallion signature guarantee programs to help ensure entities that hold securities in physical certificate form have a guaranteed signature for the certificates or securities powers prior to sale or transfer
- Trust Indenture Act of 1939 Questions and Answers provides SEC interpretations for general applicability of the Act
- The Uniform Law Commission, also known as the National Conference of Commissioners on Uniform State Laws, drafts and promotes enactment of laws that each state may adopt or modify, providing uniformity on a subject among the various jurisdictions. Examples of commonly referred uniform acts include:
- Uniform Custodial Trust Act (UCTA)
- Uniform Directed Trust Act (UDTA)
- Uniform Fiduciary Access to Digital Assets Act (UFADAA)
- Uniform Powers of Appointment Act (UPAA)
- Uniform Prudent Investor Act (UPIA)
- Uniform Principal and Income Act (UPAIA)
- Uniform Probate Code (UPC)
- Uniform Prudent Management of Institutional Funds Act (UPMIFA)
- Uniform Testamentary Additions to Trusts Act (UTATA)
- Uniform Transfers to Minors Act (UTMA)
- Uniform Trust Code (UTC)
