The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 204 : Powers of Financial Institutions

Subchapter 004 : Trust Powers

• § 14407. Collective investment funds

  (a) A Vermont financial institution may invest assets that it holds as a fiduciary in the following collective investment funds:

  (1) a fund maintained by the financial institution, or by one or more affiliated financial institutions, exclusively for the collective investment and reinvestment of money contributed to the fund by the financial institution, or by one or more affiliated financial institutions, in its capacity as trustee, executor, administrator, guardian, or custodian under the Uniform Transfers to Minors Act;

  (2) a fund consisting solely of assets of retirement, pension, profit sharing, stock bonus, or other trusts that are exempt from federal income taxation under the Internal Revenue Code; and

  (3) a fund consisting of any other assets held as a fiduciary, to the extent not prohibited by applicable law.

  (b) In addition to any other rules that the Commissioner finds necessary or desirable for the administration of this section, the Commissioner may adopt rules on the following:

  (1) the requirements for a written plan for the establishment, maintenance, and operation of collective investment funds;

  (2) the method and frequency of valuation of such fund’s assets;

  (3) the admission and withdrawal of accounts;

  (4) standards on self-dealing and conflicts of interest;

  (5) permissible management fees;

  (6) the requirements for audits and financial reports of collective investment funds; and

  (7) the requirements for the establishment, maintenance, and operation of other investments permitted by subdivision (a)(3) of this section, including the treatment of exemptions from the provisions of this section.

  (c) A Vermont financial institution administering a collective investment fund shall have exclusive management thereof, except as a prudent person might delegate responsibilities to others.

  (d) Each participating account in a collective investment fund shall have a proportionate interest in all the fund’s assets.

  (e) A Vermont financial institution administering a collective investment fund may charge reasonable expenses incurred in operating the fund, but not expenses associated with establishing or reorganizing a collective investment fund.

  (f) A Vermont financial institution may not advertise any collective investment fund except in connection with the advertisement of the general fiduciary services of the institution.

  (g) A Vermont financial institution shall not issue any certificate representing an interest in a collective investment fund, except to provide a withdrawing account with an interest in a segregated investment. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2015, No. 23, § 87.)