(iii) Notwithstanding anything herein contained to the contrary, Mortgage Investment Funds presently being operated pursuant to the provisions of section 17(d) of prior regulations of the Comptroller of the Currency or the Board of Governors of the Federal Reserve System may continue to be operated in accordance with such prior regulations for a reasonable time. However, after April 5, 1963, no such funds shall be established.

(12) A national bank administering a collective investment fund shall have the exclusive management thereof. The bank may charge a fee for the management of the collective investment fund provided that the fractional part of such fee proportionate to the interest of each participant shall not, when added to any other compensations charged by the bank to the participant, exceed the total amount of compensations which would have been charged to said participant if no assets of said participant had been invested in participations in the fund. The bank shall absorb the costs of establishing or reorganizing a collective investment fund.

(13) No bank administering a collective investment fund shall issue any certificate or other document evidencing a direct or indirect interest in such fund in any form.

(14) No mistake made in good faith and in the exercise of due care in connection with the administration of a collective investment fund shall be deemed to be a violation of this part if promptly after the discovery of the mistake the bank takes whatever action may be practicable in the circumstances to remedy the mistake.

(c) In addition to the investments permitted under paragraph (a) of this section, funds or other property received or held by a national bank as fiduciary may be invested collectively, to the extent not prohibited by local law, as follows:

(1) In shares of a mutual trust investment company, organized and operated

pursuant to a statute that specifically authorizes the organization of such companies exclusively for the investment of funds held by corporate fiduciaries, commonly referred to as a "bank fiduciary fund”.

(2) In a single real estate loan or a direct obligation of the United States, or an obligation fully guaranteed by the United States, if the bank owns no participation in the loan or obligation and has no interest therein except in its capacity as fiduciary.

(3) In a common trust fund maintained by the bank for the collective investment of cash balances received or held by a bank in its capacity as trustee, executor, administrator or guardian, which the bank considers to be individually too small to be invested separately to advantage, and the total investment in which on the part of any one account does not exceed $10,000: Provided, That in applying this limitation if two or more accounts are created by the same person or persons and as much as one-half of the income or principal of each account is payable or applicable to the use of the same person or persons, such account shall be considered as one: And provided, That no fund shall be established or operated under this subparagraph for the purpose of avoiding the provisions of paragraph (b) of this section.

(4) In any investment specifically authorized by court order or authorized by the instrument creating the fiduciary relationship: Provided, That such investment is not made under this paragraph for the purpose of avoiding the provisions of paragraph (b) of this section.

(5) In such other manner as shall be approved in writing by the Comptroller of the Currency.

[28 F.R. 3309, Apr. 5, 1963, as amended at 29 F.R. 1719, Feb. 5, 1964]

AUTHORITY: The provisions of this Part 10 issued under R.S. 324 et seq. as amended; 12 U.S.C. 1, et seq., secs. 12(g) and 13 (a) (2), 48 Stat. 892, 894, as amended; 15 U.S.C. 781, 78m.

SOURCE: The provisions of this Part 10 appear at 31 F.R. 6949, May 12, 1966, unless otherwise noted.

§ 10.1 Scope and application.

(a) Every national bank having a class of equity security held of record by 750 or more persons (after May 1, 1967, 500 or more persons) shall mail a written report containing, as a minimum, the financial and other information called for by this part, to each of its stockholders in time to be received by them prior to the bank's annual meeting, but in no event later than 60 days after the close of the fiscal year.

(b) On and after May 1, 1965, compliance with the requirements of § 10.4 shall be deemed a registration under section 12(g) of the Securities and Exchange Act of 1934, as amended, of any class of equity securities heretofore issued by a national bank and held of record by 750 or more persons (after May 1, 1967, 500 or more persons).

(c) Notwithstanding the foregoing, any national bank prior to listing any class of its securities on a national securities exchange shall have filed a registration statement in accordance with the applicable provisions of Part 16 of this chapter, which has been declared effective by the Comptroller of the Currency.

[Instruction: This part applies to issues of equity securities presently outstanding that are now held or may in the future become held of record by 750 or more persons (after May 1, 1967, 500 or more persons). The registration requirements applicable to public offerings made hereafter are found in Part 16 of this chapter.]

§ 10.2 No private right of action hereunder.

The enforcement of Parts 10, 11, 15, and 16 of this chapter shall be a function solely of the Office of the Comptroller of the Currency and no provision of the regulation in these parts (Parts 10, 11, 15, and 16 of this chapter) is intended to confer any private right of action on any stockholder or other person against a national bank.

§ 10.3 Information to be furnished stockholders.

The annual report shall bear the written, printed or facsimile signature of the Chairman of the Board, President or other executive officer of the bank and shall include, as a minimum, the following information:

(a) Comparative balance sheets as of the close of the last fiscal year and as of the close of the preceding fiscal year.

(b) Comparative statements disclosing net operating income after applicable federal income taxes, net operating income per share, and cash dividends paid per share for the fiscal year and preceding fiscal year.

(c) A comparative reconciliation of capital accounts which summarizes the changes in the capital accounts for the last fiscal year and the preceding fiscal year.

§ 10.4 Filing of report.

Two copies of the annual report shall be filed with the Comptroller of the Currency, Washington, D.C.; one copy with the appropriate Regional Administrator of National Banks; and one copy maintained at the office of the bank. Such reports will be available for public inspection upon request, at the principal office of the reporting bank and at the Office of the Comptroller of the Currency, Washington, D.C., during normal business hours.

(a) The term "principal officer" as used in this part means Chairman of the Board, Vice Chairman of the Board, President, Senior Vice President, Cashier, Chairman of the Executive Committee, and any other person who performs functions corresponding to those performed by the foregoing officers.

(b) (1) The terms "solicit" and "solicitation" include:

(i) Any request for a proxy whether or not accompanied by or included in a form of proxy;

(ii) Any request to execute or not to execute, or to revoke, a proxy; or

(iii) The furnishing of a form of proxy or other communication to security holders under circumstances reasonably calculated to result in the procurement, withholding, or revocation of a proxy.

(2) The terms do not include:

(i) Any solicitation by a person in respect of stock of which he is the beneficial owner;

(ii) The action of a broker or other person in respect to stock carried in his name or in the name of his nominee, in forwarding to the beneficial owner of

such stock, soliciting material received from the bank, or impartially instructing such beneficial owner to forward a proxy to the person, if any, to whom the beneficial owner desires to give a proxy, or impartially requesting from the beneficial owner instructions as to the authority to be conferred by the proxy and stating that a proxy will be given if the instructions are received by a certain date.

(c) The term "person" as used in this part is not limited to natural persons, but also includes corporations, partnerships, pension funds, profit-sharing funds, and any other organized group of persons of whatever nature.

(a) No solicitation subject to this part shall be made by or on behalf of a national bank unless each person solicited is concurrently furnished or has previously been furnished with a written proxy statement containing the applicable information specified in Schedules A and B.

(b) The form of proxy shall afford the person solicited an opportunity to specify his choice between approval or disapproval of each matter or group of related matters referred to therein as intended to be acted upon. The proxy may provide that if the signer does not indicate a choice, the shares represented thereby will be voted in favor of the matters set forth therein.

(c) A proxy may confer discretionary authority with respect to matters which may come before the meeting other than those matters listed in the notice of meeting and proxy statement, provided that the persons on whose behalf the solicitation is made are not aware a reasonable time prior to the time the solicitation is made, that any such other matters are to be presented by or on behalf of the bank or its management for action at the meeting, and provided further that a specific statement to that effect shall be made in the proxy statement or in the form of proxy.

(d) No proxy shall confer authority (1) to vote for the election to any position for which a proposed nominee is not named in the proxy statement, or (2) to vote at any meeting other than the next meeting (or any adjournment thereof) to be held after the date on

which the proxy statement and form of proxy are first sent or given to stockholders.

(e) Any person or group of persons, including directors or attorneys for the bank may be designated to act as proxy but not officers, clerks, tellers or bookkeepers of the bank.

§ 11.4 Material to be filed with Comptroller.

(a) Three preliminary copies of the proxy statement and form of proxy and any other soliciting material to be furnished to security holders concurrently therewith shall be filed with the Comptroller at least 10 days prior to the date definitive copies of such material are proposed to be sent or given to security holders, or such shorter period prior to that date as the Comptroller may authorize upon a showing of good cause therefor. Where preliminary copies of material are filed with the Comptroller pursuant to this rule, the distribution to security holders should be deferred until the comments of the Comptroller's staff have been received and complied with. Three copies of the final material shall be mailed to the Comptroller, concurrently with mailing to security holders.

(b) Three preliminary copies of any additional soliciting material, relating to the same meeting or subject matter, furnished to security holders subsequent to the proxy statement shall be filed with the Comptroller at least 2 days (exclusive of Saturdays, Sundays, or holidays) prior to the date copies of such material are first sent or given to security holders, or such shorter period prior to such date as the Comptroller may authorize upon a showing of good cause therefor.

§ 11.5 Special provisions applicable to election contests.

(a) Solicitation to which this section applies: This section applies to any solicitation subject to this part by any person for the purpose of opposing a solicitation subject to this part by any other person with respect to the election of directors at any annual or special meeting of security holders.

(b) For the purpose of this section, the term "participant" includes nominees for whose election proxies are solicited, and any other person, acting alone or in conjunction with one or more other persons, in organizing, directing or financing the solicitation, provided how

ever that such term does not include (1) any person or organization retained or employed by a participant to solicit security holders, or any person who merely transmits proxy soliciting material or performs ministerial or clerical duties; (2) any person employed by a participant in the capacity of attorney, accountant, or advertising, public relations or financial adviser, and whose activities are limited to the performance of his duties in the course of such employment; (3) any person regularly employed as an officer or employee of the issuer or any of its subsidiaries who is not otherwise a participant; or (4) any officer or director of, or any person regularly employed by, any other participant, if such officer, director, or employee is not otherwise a participant.

(c) Filing of information required by Schedule C: (1) No solicitation subject to this section shall be made by any person other than the management of a national bank unless at least 5 business days prior thereto, or such shorter period as the Comptroller may authorize, there has been filed with the Comptroller by or on behalf of each participant in such solicitation, a statement in triplicate containing the information specified by Schedule C and a copy of any material proposed to be distributed to stockholders in furtherance of such solicitation. (See paragraph (d) of this section for description of material required to be furnished security holders by nonmanagement solicitors.) Simultaneously with the filing of such material with the Comptroller, one copy of all such material shall be sent by first class, registered or certified mail to the attention of the President or Senior Vice President of the bank at its main office. Where preliminary copies of material are filed with the Comptroller pursuant to this rule, distribution to stockholders should be deferred until the comments of the Comptroller's staff have been received and complied with.

(2) Within 5 business days after a solicitation subject to this section is made by the management of a national bank, or such longer period as the Comptroller may authorize, there shall be filed with the Comptroller by or on behalf of each management nominee for director a statement in triplicate containing the information specified by Schedule C.

(3) If, subsequent to the filing of the statements required by subparagraph (1)

of this paragraph, additional persons become participants in a solicitation subject to subparagraph (1) of this paragraph, there shall be filed, with the Comptroller, by or on behalf of each such person a statement in triplicate containing the information specified by Schedule C, within three business days after such person becomes a participant, or such longer period as the Comptroller may authorize.

(4) If any material change occurs in the facts reported in any statement filed by or on behalf of any participant, an appropriate amendment to such statement shall be filed promptly with the Comptroller.

(5) Each statement and amendment thereto filed pursuant to this paragraph (c) shall be part of the public files of the Office of the Comptroller of the Currency. Simultaneously with the filing of such material with the Comptroller, one copy of all such material shall be sent by first class, registered or certified mail to the attention of the President or Senior Vice President of the bank at its main office.

(d) Furnishing to security holders of information required by Schedule C: No solicitation subject to this section shall be made by any person other than the management of a national bank unless each person solicited is furnished with a proxy statement containing the information required by Schedule C as to each participant in the solicitation, and also containing such information called for by Schedules A and B as is applicable to the agenda items for which the proxy is solicited, so far as such information is known or is available to the solicitor. Responsibility for the accuracy of information contained in nonmanagement solicitations shall be on the solicitors and not on the bank.

SCHEDULE A

Item 1. Amount of outstanding stock and principal holders thereof. (a) State the total number of shares of each class outstanding and the number of shares of each class entitled to vote.

(b) State the date as of which the list of stockholders entitled to vote at the meeting will be determined. If the right to vote is not limited to stockholders of record on that date, indicate the conditions under which other stockholders may be entitled to vote.

Item 2. Nominees for directors. (a) If action is to be taken with respect to the election of directors, the following information, to the extent practicable, shall be furnished with respect to each person nominated for election as a director; such person's name, age, present principal occupation or employment and the principal office, if any, with the bank presently held by him.

(b) If the Articles of Association permit the board of directors to increase the number of directors between stockholder's meetings and fill vacancies created thereby, state the number of vacancies which may be so filled. Item 3. Remuneration of management. If directors are to be elected at the meeting in question, furnish the following information as to all direct remuneration paid by the bank during the last calendar year to the following persons for services in all capacities:

(a) The direct aggregate remuneration paid to all principal officers of the bank as a group, without naming them.

(b) The amount set aside or accrued during the last calendar year for all pension or retirement benefits to be paid under an existing plan in the event of retirement with respect to all principal officers as a group, without naming them, except where the amount so set aside or accrued is computed on an actuarial basis under any plan which provides for fixed benefits in the event of retirement at a specified age or after a specified number of years of service.

SCHEDULE B

Item 4. Bonus, profit sharing, and other remuneration plans. If action is to be taken with respect to any bonus, profit sharing, or other remuneration plan, furnish the following information:

(a) A brief description of the material features of the plan, each class of persons who will participate therein, the approximate number of persons in each such class, and the basis of such participation.

(b) The amounts which would have been distributable under the plan during the last