Vermont § 2409 - Financial transactions

§ 2409. Financial transactions

• (a) No assets held in a fiduciary capacity shall be mingled with the investments of the
  independent trust company or be liable for the debts or obligations of the independent
  trust company. Independent trust companies shall keep all monies, property, or securities
  held separate and apart from the assets of the company and all assets held by the
  independent trust company as a fiduciary shall be designated in a manner that the
  owner, trust, or estate to which such assets belong may be clearly identified. (b) Consistent with its fiduciary obligations, every independent trust company holding
  funds awaiting investment or distribution may deposit or leave on deposit such funds
  with a federally insured state or national bank. The funds shall not be deposited
  or left with the same corporation or association depositing or leaving on deposit
  such funds, nor with a corporation or association holding or owning a majority of
  the capital stock of or other voting interest in the independent trust company making
  or leaving the deposit, unless the corporation or association shall first pledge,
  as security for the deposit, securities eligible for investment by state banks that
  have a market value equal to that of the deposited funds. No security shall be required
  with respect to any portion of such deposits which are insured under the provisions
  of any law of the United States. (c) An independent trust company acting in any capacity under a trust, unless the instrument
  creating the trust provides otherwise, may cause any securities or other property
  held by it in its representative capacity to be registered in the name of a nominee
  or nominees of the independent trust company. (d) An independent trust company when acting as depositary or custodian for the personal
  representative of a trust, unless the instrument creating the trust provides otherwise,
  may with the consent of the personal representative of the trust, cause any securities
  or other property held by it to be registered in the name of a nominee or nominees
  of the independent trust company. (e) An independent trust company shall be liable for any loss occasioned by the acts of
  any of its nominees with respect to securities or other property registered under
  subsections (c) and (d) of this section. (f) No corporation or the registrar or transfer agent thereof shall be liable for registering
  or causing to be registered upon the books of the corporation any securities in the
  name of any nominee of an independent trust company or for transferring or causing
  to be transferred upon the books of the corporation any securities theretofore registered
  by the corporation in the name of any nominee of an independent trust company, as
  provided in this section, when the transfer is made on the authorization of the nominee. (g) In its discretion, and subject to provisions of subsection (h) of this section, an
  independent trust company may associate together for common investment the funds of
  individual trusts held by it whether created by order of court or otherwise, if the
  terms of the trust do not require a separate investment. Without limiting the generality
  of the foregoing, an independent trust company may collectively invest funds received
  or held as fiduciary as follows: (1) in a common trust fund maintained by the independent trust company exclusively for
  the collective investment and reinvestment of monies contributed thereto by the independent
  trust company in its capacity as executor, administrator, guardian, or trustee under
  a will or deed; (2) in a fund consisting solely of assets of retirement, pension, profit sharing, stock
  bonus, or other trusts which are exempt from federal income taxation under the Internal
  Revenue Code; or (3) in a common trust fund, maintained by the independent trust company exclusively for
  the collective investment and reinvestment of monies contributed thereto by the independent
  trust company in its capacity as managing agent. (h) An independent trust company may create a trust investment account to which may be
  entrusted for investment the whole or any part of the funds of trust permissible to
  be associated as provided in subsection (g) of this section. Where an independent
  trust company which has established an associated trust investment account is the
  cotrustee of a trust permissible to be associated as provided in subsection (g) of
  this section, the whole or any part of the funds of the trust may be entrusted to
  that account for investment if all cotrustees of the trust consent thereto. An individual
  trust whose funds are thus associated shall at all times be the equitable owner of
  its pro rata share of the funds of the associated trust investment account and shall
  share pro rata the net income of that account and the net increase or decrease of
  its principal for any reason during the time its funds are a part of the associated
  trust investment account. The net income shall be distributed pro rata to the individual
  trust accounts at reasonable intervals. Funds of individual trusts transferred to
  that account or withdrawn therefrom shall be on the basis of the market value of the
  total funds of the account at the time being. (i) The board or similarly functioning unit of a limited liability company of an independent
  trust company is responsible for the proper exercise of fiduciary powers by the independent
  trust company and each matter pertinent to the exercise of fiduciary powers. The board
  shall adopt and follow written policies and procedures adequate to maintain its fiduciary
  activities in compliance with applicable law. The policies and procedures shall include,
  for the company and its directors, officers, managers, members, employees, and agents,
  methods for preventing conflicts of interest, self-dealing, and the improper use of
  material inside information in connection with any decision or recommendation made
  as a fiduciary. The written policies and procedures shall also prescribe the investment
  and disposition of property held in a fiduciary capacity. (Added 1997, No. 98 (Adj. Sess.), § 8b.)