Compilation of Rules and Regulations of the State of Georgia
Department 80 - RULES OF DEPARTMENT OF BANKING AND FINANCE
Chapter 80-13 - TRUST COMPANIES
Subject 80-13-1 - TRUST COMPANIES
Rule 80-13-1-.12 - Self-dealing and Conflicts of Interest

Universal Citation: GA Rules and Regs r 80-13-1-.12

Current through Rules and Regulations filed through September 23, 2024

(1) Unless authorized by applicable law, a trust company may not invest funds of a fiduciary account for which a trust company has investment discretion in the stock or obligations of, or in assets acquired from: the trust company or any of its directors, officers, or employees; affiliates of the trust company or any of their directors, officers, or employees; or individuals or organizations with whom there exists an interest that might affect the exercise of the best judgment of the trust company. Notwithstanding the above, a trust company may invest such stock or obligations as part of an index pursuant to an index or model portfolio strategy unless the index was formed or otherwise created or is managed by the trust company.

(2)

(a) A trust company may not lend, sell, or otherwise transfer assets of a fiduciary account for which a trust company has investment discretion to the trust company or any of its directors, officers, or employees, or to affiliates of the trust company or any of their directors, officers, or employees, or to individuals or organizations with whom there exists an interest that might affect the exercise of the best judgment of the trust company, unless:
1. The transaction is authorized by applicable law;

2. Legal counsel advises the trust company in writing that the trust company has incurred, in its fiduciary capacity, a contingent or potential liability, in which case the trust company, upon the sale or transfer of assets, shall reimburse the fiduciary account in cash at the greater of book or market value of the assets;

3. As provided in 12 CFR § 9.18(b)(8)(iii) for defaulted investments; or

4. Required in writing by the Department.

(b) Notwithstanding the above provisions of this section, a trust company may not lend to any of its directors, officers, or employees any funds held in trust, except with respect to employee benefit plans in accordance with the exemptions found in section 408 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. § 1108).

(3) A trust company may make a loan to a fiduciary account and may hold a security interest in assets of the account if the transaction is fair to the account and is not prohibited by applicable law.

(4) A trust company may sell assets between any of its fiduciary accounts if the transaction is fair to both accounts and is not prohibited by applicable law.

(5) A trust company may make a loan between any of its fiduciary accounts if the transaction is fair to both accounts and is not prohibited by applicable law.

O.C.G.A. § 7-1-61.

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