New York Codes, Rules and Regulations
Title 3 - BANKING
Chapter I - GENERAL REGULATIONS OF THE SUPERINTENDENT
Part 22 - Common Trust Funds
Section 22.5 - Method of valuation
Current through Register Vol. 46, No. 12, March 20, 2024
The following method shall be used in the valuation of investments:
(a) Investments shall be valued by reference to appropriate valuations applied by a generally accepted pricing service, or by the methods set forth in this section. All estimates, quotation sheets and valuations used for valuation shall be retained in the records of the common trust fund.
(b)
(c) For the purposes of this section, a business day shall mean a day when the New York Stock Exchange or the American Stock Exchange is open for business.
(d) In the case of investment in any mortgage at least 50 percent of which is guaranteed pursuant to the provisions of the Act of Congress entitled the "Servicemen's Readjustment Act of 1944," as from time to time amended, and in investments in mortgages insured by the Federal Housing Commissioner, the trust investment committee shall obtain from not less than two bankers, brokers, or other persons qualified in the opinion of the trust investment committee to give an opinion as to the value of the investment in question a written estimate of the value of such investment as of the valuation date. The average of such estimates shall be used and each such estimate shall be retained in the records of the common trust fund.
(e) In the case of investments in other mortgages, the trust investment committee shall secure, prior to any valuation date, from not less than two persons qualified in the opinion of the trust investment committee to give an opinion as to the value of the mortgage in question a written estimate of the value of such mortgage. At least one of the persons making such valuation shall not have participated in the making of the last preceding valuation. The average of such estimates shall be used and each such estimate shall be retained in the records of the common trust fund. Notwithstanding the foregoing, in the event that the trust company shall have in its files such a written estimate of value made within one year of the valuation date, such estimate may be used. The real estate securing each such mortgage investment shall be appraised at least once every three years by two persons, one of whom shall not have participated in the last preceding appraisal of such real estate. Such persons shall be appointed by the trust investment committee and shall, in the opinion of such committee, be familiar with real estate values in the vicinity in which such real estate is situated and qualified to make such appraisals. The persons so appointed shall actually inspect such real estate and shall so certify in a written certificate of appraisal, which shall be filed and preserved in the records of the common trust fund. In preparing a written estimate of the value of any mortgage, due consideration shall be given, by the persons making such valuation, to the last written certificate of appraisal of the property covered by such mortgage.
(f) In the case of a stock where a dividend has been declared but has not been paid and the amount of such dividend has been considered as income under the provisions of the plan of operation of the common trust fund, the amount of such dividend shall be deducted from the price of the stock in determining its value unless such price shall be an ex-dividend price.
(g) An investment purchased and awaiting payment against delivery shall be included for valuation purposes as a security held, and the cash account shall be adjusted to reflect the purchase price, including brokers' commissions and other expenses incurred in the purchase thereof but not disbursed as of the valuation date.
(h) An investment sold but not delivered pending receipt of proceeds shall be valued at the net sales price.
(i) For the purpose of valuation of an investment, except an investment sold but not delivered, it shall not be necessary to deduct from the value ascertained as provided above brokers' commissioners or other expenses which would be incurred upon a sale thereof.