Rule 80-13-1-.10 - Collective Investment FundsA trust company administering a collective investment fund authorized under O.C.G.A. § 7-1-313 shall comply with the following requirements:
(1) The trust company shall develop, and the Board of Directors must approve, a collective investment fund plan that must contain appropriate provisions, not inconsistent with this part, regarding the manner in which the trust company will operate the fund, including provisions relating to: (a) Investment powers and policies with respect to the fund;(b) Allocation of income, profits, and losses;(c) Fees and expenses that will be charged to the fund and to participating accounts;(d) Terms and conditions governing the admission and withdrawal of participating accounts;(e) Audits of participating accounts;(f) Basis and method of valuing assets in the fund;(g) Expected frequency for income distribution to participating accounts;(h) Minimum frequency for valuation of fund assets;(i) Amount of time following a valuation date during which the valuation must be made;(j) Bases upon which the trust company may terminate the fund; and(k) Any other matters necessary to define clearly the rights of participating accounts.(2) A trust company administering a collective investment fund shall have exclusive management thereof, except as a prudent person might delegate responsibilities to others.(2.1) Each participating account in a collective investment fund must have a proportionate interest in all the fund's assets.(3)(a) A trust company administering a collective investment fund shall determine the value of the fund's readily marketable assets at least once every three months. A trust company shall determine the value of the fund's assets that are not readily marketable at least once a year.(b) Except for short-term investment funds ("STIFs"), a trust company shall value each fund asset at mark-to-market value as of the date set for valuation, unless the trust company cannot readily ascertain mark-to-market value, in which case the trust company shall use a fair value determined in good faith. STIFs shall be valued as set forth in 12 C.F.R. § 9.18.(4)(a) At least once during each 12-month period, a trust company administering a collective investment fund shall arrange for an audit of the collective investment fund by auditors responsible to both the audit committee and the Board of Directors of the trust company.(b) At least once during each 12-month period, a trust company administering a collective investment fund shall prepare a financial report of the fund based on the audit required by paragraph (4)(a) of this section. The report must disclose the fund's fees and expenses in a manner consistent with applicable law in the state in which the trust company maintains the fund. This report must contain a list of investments in the fund showing the cost and current market value of each investment, and a statement covering the period after the previous report showing the following (organized by type of investment):1. A summary of purchases (with costs);2. A summary of sales (with profit or loss and any other investment changes);3. Income and disbursements; and4. An appropriate notation of any investments in default.(c) A trust company may include in the financial report a description of the fund's value on previous dates, as well as its income and disbursements during previous accounting periods. A trust company may not publish in the financial report any predictions or representations as to future performance.(d) A trust company administering a collective investment fund shall provide a copy of the financial report, or shall provide notice that a copy of the report is available upon request without charge, to each person who ordinarily would receive a regular periodic accounting with respect to each participating account. The trust company may provide a copy of the financial report to prospective customers. In addition, the trust company may provide a copy of the report upon request to any person for a reasonable charge.(5) A trust company administering a collective investment fund may charge a reasonable fund management fee only if: (a) The fee is permitted under applicable law (and complies with fee disclosure requirements, if any); and(b) The amount of the fee does not exceed an amount commensurate with the value of legitimate services of tangible benefit to the participating fiduciary accounts that would not have been provided to the accounts were they not invested in the fund.(6) A trust company administering a collective investment fund may charge reasonable expenses incurred in operating the collective investment fund, to the extent not prohibited by applicable law in the state in which the trust company maintains the fund. However, a trust company shall absorb the expenses of establishing or reorganizing a collective investment fund.(7) The Department will not deem a trust company's mistake made in good faith and in the exercise of due care in connection with the administration of a collective investment fund to be a violation of this rule if, promptly after the discovery of the mistake, the trust company takes whatever action is practicable under the circumstances to remedy the mistake.Ga. Comp. R. & Regs. R. 80-13-1-.10
O.C.G.A. §§ 7-1-61, 7-1-313.
Original Rule entitled "Collective Investment Funds" adopted. F. June 29, 2017; eff. July 19, 2017.Amended: F. July 7, 2023; eff. July 27, 2023.