Virginia Code 6.2-1086: Association’s operation and supervision of trust department.
A. The board of directors of an association is responsible for the proper exercise of fiduciary powers by the association. All matters pertinent thereto, including the determination of policies, the investment and disposition of property held in a fiduciary capacity, and the direction and review of the actions of all officers, employees, and committees utilized by the association in the exercise of its fiduciary powers, are the responsibility of the board. In discharging this responsibility, the board of directors may assign, by action duly entered in the minutes, the administration of such of the association’s trust powers as it may consider proper to assign to such directors, officers, employees, or committees as it may designate.
Terms Used In Virginia Code 6.2-1086
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Association: has the meaning assigned to it in § Virginia Code 6.2-1081
- Fiduciary: A trustee, executor, or administrator.
- Fiduciary: means the status resulting from an association's undertaking to act alone, through an affiliate, or jointly with others, primarily for the benefit of another, and includes an association's acting as trustee, executor, administrator, committee, guardian, conservator, receiver, managing agent, registrar of stocks and bonds, escrow, transfer, or paying agent, trustee of employee pension, welfare and profit sharing trusts, and in any other similar capacity. See Virginia Code 6.2-1081
- Governing instrument: means the written document or documents pursuant to which an association undertakes to act in a fiduciary capacity, and includes a will, codicil, deed of trust, trust deed, and other similar instruments. See Virginia Code 6.2-1081
- Investment authority: means the responsibility conferred by action of law or a provision of a governing instrument to make, select, or change investments, review investment decisions made by others, or to provide investment advice or counsel to others. See Virginia Code 6.2-1081
- Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
- Trust account: means the account established pursuant to a trust, estate, or other fiduciary relationship that has been established with an association. See Virginia Code 6.2-1081
- Trust department: means that group or groups of officers and employees of an association, or of an affiliate of an association, to whom are assigned the performance of fiduciary services by the association. See Virginia Code 6.2-1081
- United States: includes the 50 states, the District of Columbia the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands and the United States Virgin Islands. See Virginia Code 1-255
B. No fiduciary account shall be accepted without the approval of the directors, officers, or committees to whom the board may have assigned the performance of that responsibility. A written record shall be made of such acceptances and of the relinquishment or closing out of all fiduciary accounts.
C. Upon the establishment of a trust account for which the association has investment authority, a prompt review of the assets of such account shall be made. The board of directors shall also ensure that at least once during every calendar year thereafter, and within 15 months of the last review, all the assets held in or held for each trust account for which the association has investment authority are reviewed to determine the advisability of retaining or disposing of such assets. The board of directors shall act to ensure that all investments have been made in accordance with the terms and purposes of the governing instrument and in accordance with applicable law.
D. The trust department may utilize personnel and facilities of other departments of the association, and other departments of the association may utilize personnel and facilities of the trust department to the extent not otherwise prohibited by the law.
E. Every association exercising trust powers shall adopt written policies and procedures to ensure that the securities laws of the United States and the Commonwealth are complied with in connection with any decision or recommendation to purchase or sell any security. Such policies and procedures, in particular, shall ensure that the association’s trust department shall not use material inside information in connection with any decision or recommendation to purchase or sell any security.
F. Every association exercising fiduciary powers shall designate, employ, or retain legal counsel who shall be readily available to pass upon fiduciary matters and to advise the association and its trust department.
1984, c. 303, § 6.1-195.83; 2010, c. 794.