Michigan Laws 555.105a – Interest in fund other than fiduciary; prohibition; restrictions
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Terms Used In Michigan Laws 555.105a
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Collective investment fund: means a fund maintained by a financial institution or by 1 or more affiliated financial institutions that consists solely of assets of retirement, pension, profit sharing, stock bonus, or other trusts that are exempt from federal income tax. See Michigan Laws 555.101
- Common trust fund: means a fund maintained by a financial institution or 1 or more affiliated financial institutions exclusively for the collective investment and reinvestment of money contributed to the fund by the financial institution or the affiliated financial institutions in its capacity as a fiduciary or cofiduciary. See Michigan Laws 555.101
- Fiduciary: A trustee, executor, or administrator.
- Fiduciary: means a financial institution or other person acting in the capacity of guardian, conservator, personal representative, or trustee, either solely or together with others, or custodian under a uniform gift or transfer to minors act of any state. See Michigan Laws 555.101
- Financial institution: means any of the following:
(i) A state bank, national bank, state or federally chartered savings and loan association or savings bank that is authorized to act in a fiduciary capacity in this state. See Michigan Laws 555.101Fund: means a common trust fund or a collective investment fund. See Michigan Laws 555.101
(1) A financial institution administering a fund shall not have an interest in that fund other than in its fiduciary capacity. If, because of a creditor relationship or otherwise, a financial institution acquires an interest in a participating account, the financial institution shall withdraw the participating account from the fund on the next withdrawal date. However, a financial institution may invest assets that it holds as fiduciary for its own employees in a fund.
(2) A financial institution administering a common trust fund or a collective investment fund shall not make any loan secured by a participant’s interest in the fund. An unsecured advance to a fiduciary account participating in the fund until the time of the next valuation date does not constitute the acquisition of an interest in a participating account by the financial institution.
(3) A financial institution administering a fund may purchase for its own account any defaulted investment held by the fund rather than segregating the investment as provided in section 8, if, in the judgment of the financial institution, the cost of segregating the investment is excessive in light of the market value of the investment. If a financial institution elects to purchase a defaulted investment, it shall purchase it for its market value or the sum of cost and accrued unpaid interest on the defaulted investment, whichever is greater.