17:9A-40 - Participations;  valuation;  general provisions

17:9A-40.  Participations;  valuation;  general provisions    A.  If so provided in the plan pursuant to which a common trust fund is established and maintained, the bank may divide the common trust fund into as many units as it may deem advisable, and it may increase or decrease the number  of such units from time to time.  Each unit shall at all times have the same  value as every other unit of the same common trust fund.  Such plan may also  provide that a participation shall consist of a whole unit or a number of whole  units, and may provide that withdrawals be made only of a whole unit or a  number of whole units.

    B.  In determining the value of the property and investments of a common trust fund,

     (1) an investment which is listed upon a stock, securities or investment exchange, shall be valued at the last recorded sales price in the ten-day period next preceding the date as of which the valuation is made, unless, within the said ten-day period, and subsequent to the date of the last recorded  sales price, there have been recorded bid and asked prices, in which case the  mean of the latest of such bid and asked prices shall be taken to be the value  of such investment.  An investment which is not listed upon a stock, securities  or investment exchange, but which has an over-the-counter market, shall be  valued at the mean of the last recorded bid and asked prices in the ten-day  period next preceding the date as of which such valuation is made.  If within  the said ten-day period, there have been no recorded sales and no recorded bid  and asked prices, the investment shall be valued at the mean of the last bid  and asked prices as of a date not earlier than thirty days prior to the date as  of which such valuation is made, as supplied by two stock or securities brokers  deemed by the bank to be reliable.  For the purposes of this paragraph,  recorded sales prices, and recorded bid and asked prices shall be those which  appear in a newspaper of general circulation, or in a financial, statistical, investment, rating or other publication or service, published for the use of and accepted as reliable by investors in like investments, or in the records of  a stock, securities, or investment exchange;

     (2) obligations of the United States which are not transferable or negotiable shall be valued at the issue price thereof;

     (3) an investment about to be made, and an investment made and awaiting delivery against payment, shall be valued at the cost of acquisition thereof, and the cash account of the common trust fund shall be adjusted to reflect such  cost of acquisition;

     (4) an investment sold but not delivered pending receipt of the proceeds of  sale shall be valued at the net sale price thereof;

     (5) uninvested funds of a common trust fund shall be included in the aggregate value of all the property of a common trust fund to the extent that such funds constitute principal.

    C.  No person having an interest in a trust estate which has been invested in whole or in part in a common trust fund shall have any ownership in any asset included in such common trust fund.  The bank shall have exclusive control of every common trust fund established and maintained by it.

    D.  The bank shall not amortize premiums paid upon the purchase of an investment for a common trust fund, nor shall it accumulate discount in respect  of investments purchased at less than face or par value, notwithstanding that  the trust instrument may require amortization of premiums or accumulation of  discount.

    E.  Money or other property paid by the bank as income from a common trust fund to itself in its capacity as the fiduciary administering and managing a trust estate shall, for the purpose of apportioning such income among the beneficiaries of the trust estate, be deemed to be income to the trust estate as of the date of such payment, regardless of the time when such income may have accrued, been earned, or accumulated.

    F.  For the purposes of this article, an investment made pursuant to a commitment therefor shall be deemed to be made on the date when the commitment was made.

     L.1948, c. 67, p. 228, s. 40.  Amended by L.1951, c. 46, p. 167, s. 4; L.1975, c. 338, s. 4, eff. March 3, 1976.