Flashcards in trust Deck (13):
1
Major functions of a trust department….
1. trust administration 2. asset management (investment mgmt) 3. operations 4. internal controls & audits 5. compliance
2
Governing document explicity stating the trustee's duties and responsibilities
Trust Agreement
3
These assets must be segregated from the bank's assets?
Trust Assets
4
Trust Departments use this accounting method?
Single entry accounting
5
Trust Departments losses are charged directly against?
Earnings
6
Banks with fiduciary powers are required to file what call report schedule?
RC-T Quarterly, if bank has fiduciary assets of $250MM or gross fiduciary income of 10% of revenue All other banks with fiduciary powers, annually.
7
Trust Rating System (MOECA)
Management; Operations, Internal Controls, Auditing; Earnings, Compliance, Asset Management
8
Fiduciary Duties
1. Duty of undivided loyalty to beneficiaries of the acct. 2. Duty to comply w/governing document/trust agreement 3. Duty to keep and render accountings 4. Duty of prudence 5. Duty to deal impartially with the beneficiaries.
9
One of the primary business risks associated with a bank providing fiduciary services
reputational
10
Prudent investor rule - (aka Modern Portfolio Theory")
A trustee must first determine the needs and investment objectives of the beneficiaries. Recognizes diversification and places less emphasis on individual asset performance. Accepts risk as unavoidable.
11
The most fundamental duty of a trustee
undivided loyalty to trust beneficiaries
12
Subsidiaries permitted to underwrite and deal in limited amounts of corporate and other securities not eligible for banks?
Section 20 Subsidiaries
13