§ 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.)