Current through Register 2024 Notice Reg. No. 52, December 27, 2024
(a) General. Funds held in a fiduciary
capacity by an association awaiting investment or distribution shall not be
held uninvested or undistributed any longer than is reasonable for the proper
management of the account.
(b) Use
by association in regular business.
(1) Funds
held in trust by an association, including managing agency accounts, awaiting
investment or distribution may, unless prohibited by the instrument creating
the trust or by local law, be deposited in other departments of the
association, provided that the association shall first set aside under control
of the trust department as collateral security:
(A) Direct obligations of the United States,
or other obligations fully guaranteed by the United States as to principal and
interest;
(B) Readily marketable
securities of the classes in which state-chartered corporate fiduciaries are
authorized or permitted to invest trust funds under the laws of this state,
or
(C) Other readily marketable
securities as the commissioner may determine.
(2) Collateral securities or securities
substituted therefor as collateral shall at all times be at least equal in face
value to the amount of trust funds so deposited, but such security shall not be
required to the extent that the funds so deposited are insured by the Federal
Savings and Loan Insurance Corporation. The requirements of this subdivision
are met when qualifying assets of the association are pledged to secure a
deposit in compliance with local law, and no duplicate pledge shall be required
in such case.
(3) Any funds held by
an association as fiduciary awaiting investment or distribution and deposited
in other departments of the association shall be made
productive.
1. Change
without regulatory effect renumbering former Section 245.8 to Section 104.507
(Register 87, No. 14). For prior history, see Register 81, No.
25.
Note: Authority cited: Section 5500.5, Financial Code.
Reference: Title 10, Calif. Adm. Code, Chapter 2, Subchapter 3, Article 5
(Section 103.500) and Subchapter 4, Article
5 (Section
104.500 et seq.); and Sections
5003 and
5501.5,
Financial Code.
