Section 19-4A-1
Section 19-4A-1
Idle funds defined.
Idle funds are defined as collected income and principal cash balances received by a fiduciary and held awaiting investment in or distribution from a fiduciary account. As used in this chapter, the term "fiduciary account" shall mean any account for which the bank or trust company has investment responsibility.
(Acts 1991, No. 91-129, p. 163, §1(a).)Section 19-4A-2
Section 19-4A-2
Investment in accordance with terms of governing document.
A bank or trust company duly authorized to exercise fiduciary powers through the operation of a trust department shall invest idle funds in each fiduciary account in accordance with the specific terms of the governing document.
(Acts 1991, No. 91-129, p. 163, §1(b).)Section 19-4A-3
Section 19-4A-3
Short-term investment vehicle.
In the absence of specific instructions in the governing document, the fiduciary shall invest idle funds in each fiduciary account in a short-term investment vehicle, which may include a deposit in an interest-bearing account, a money market mutual fund, or any other generally accepted investment vehicle for the investment of idle funds. Such deposit in an interest-bearing account may be in the fiduciary's own commercial bank or any affiliate thereof. Such investment in a money market mutual fund or any other generally accepted investment vehicle may include: (1) a mutual fund or investment vehicle provided by a third party vendor, even if the bank or trust company or any affiliate thereof receives separate compensation from the vendor, or (2) a mutual fund or investment vehicle provided by the bank or trust company or any affiliate thereof for which the bank or trust company or any affiliate thereof may receive compensation as the mutual fund or investment vehicle's investment advisor, administrator, trustee, transfer agent, or other similar capacity.
(Acts 1991, No. 91-129, p. 163, §1(c).)Section 19-4A-4
Section 19-4A-4
Reasonable rate of return; considerations.
In the absence of specific instructions in the governing document, the fiduciary shall select an investment vehicle for idle funds in each fiduciary account which should provide a reasonable rate of return, taking into consideration the income needs of the current income beneficiary, the quality of the investment, the liquidity needs of the fiduciary account and the expense of making the funds productive of income.
(Acts 1991, No. 91-129, p. 163, §1(d).)Section 19-4A-5
Section 19-4A-5
Investment in timely manner; no obligation to invest funds less than $1,000.
In the absence of specific instructions in the governing document, the fiduciary shall invest idle funds in each fiduciary account in a timely manner consistent with the technology employed by the fiduciary but not to exceed 10 business days after the receipt of collected funds; provided, however, that there shall be no obligation or requirement to invest idle funds in an amount less than $1,000.00 per each fiduciary account.
(Acts 1991, No. 91-129, p. 163, §1(e).)Section 19-4A-6
Section 19-4A-6
Compensation.
In the absence of specific instructions in the governing document, the fiduciary may receive compensation for the investment of idle funds by netting said compensation from the yield of the investment; provided, however, that disclosure of the compensation (expressed as a percentage of asset value or otherwise) is made to the current income beneficiary by mailing separate notice (by prospectus, statement, letter or otherwise) to the current income beneficiary's last known address.
(Acts 1991, No. 91-129, p. 163, §1(f).)Section 19-4A-7
Section 19-4A-7
Applicability.
The provisions of this chapter shall apply to all fiduciary accounts now existing or hereafter created, but only to the bank or trust company's actions or inactions occurring after May 28, 1991.
(Acts 1991, No. 91-129, p. 163, §1(g).)
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