Connecticut General Statutes 36a-835 – Holding and investment of exchange funds
(a) An exchange facilitator shall hold all exchange funds, including money, property, other consideration or instruments received by the exchange facilitator from or on behalf of the client, but not including funds received as the exchange facilitator’s compensation, in a manner that provides liquidity and preserves principal. An exchange facilitator shall provide the client with written notification of the manner in which the exchange funds will be invested or deposited and shall deposit or invest exchange funds in investments which meet the prudent investor standard and which satisfy investment goals of liquidity and preservation of principal. Exchange funds may be pooled. For purposes of this section, an exchange facilitator violates the prudent investor standard if:
Terms Used In Connecticut General Statutes 36a-835
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Client: means a beneficiary of a trust for whom the Connecticut bank acts as trustee, a person for whom the Connecticut bank acts as agent, custodian or bailee, or other person to whom a Connecticut bank owes a duty or obligation under a trust or other account administered by such Connecticut bank, regardless of whether such Connecticut bank owes a fiduciary duty to the person. See Connecticut General Statutes 36a-2
- Contract: A legal written agreement that becomes binding when signed.
- Deposit: means funds deposited with a depository. See Connecticut General Statutes 36a-2
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Financial institution: means any Connecticut bank, Connecticut credit union, or other person whose activities in this state are subject to the supervision of the commissioner, but does not include a person whose activities are subject to the supervision of the commissioner solely pursuant to chapter 672a, 672b or 672c or any combination thereof. See Connecticut General Statutes 36a-2
- Person: means an individual, company, including a company described in subparagraphs (A) and (B) of subdivision (12) of this section, or any other legal entity, including a federal, state or municipal government or agency or any political subdivision thereof. See Connecticut General Statutes 36a-2
- Trustee: A person or institution holding and administering property in trust.
(1) Exchange funds are knowingly commingled by the exchange facilitator with the operating accounts of the exchange facilitator; or
(2) Exchange funds are loaned or otherwise transferred to any person or entity affiliated with or related to the exchange facilitator except that this subdivision shall not apply to a transfer made pursuant to the exchange contract (A) for payment of an exchange expense or completion of the acquisition of the replacement property, (B) for depositing exchange funds with a financial institution, or (C) to an exchange accommodation titleholder, a trustee of a qualified trust or a qualified escrow agent.
(b) Exchange funds are not subject to execution or attachment on any claim against the exchange facilitator. An exchange facilitator shall not knowingly keep or cause to be kept any money in any financial institution under any name designating the money as belonging to a client of the exchange facilitator unless the money equitably belongs to the client and was actually entrusted to the exchange facilitator by the client.