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Code may be invested in collective in- ing each period of 12 months prepare a vestment funds established under the financial report of the fund which shall provisions of paragraph (a) (1) or (2) be filed with the Comptroller of the Curof this section, subject to the provisions rency. This report, based upon the above herein contained pertaining to such audit, shall contain a list of investments funds. Assets of retirement, pension, in the fund showing the cost and the profit sharing, stock bonus or other trusts current market value of each investwhich are exempt from Federal income ment; a statement for the perio, since taxation under the Internal Revenue the previous report showing purchases, Code and held by the bank, in whatever with cost; sales, with profit or loss, and capacity, may be invested in collective any other investment changes; income investment funds established under the and disbursements; and an appropriate provisions of paragraph (a) (2) of this notation


to any investments in section.

default. (3) All participations in the collective

(iii) The financial report may include investment fund shall be on the basis

a description of the fund's value on of a proportionate interest in all of the

previous dates as well as its income and assets. In order to determine whether

disbursements during previous accountthe investment of funds received or held

ing periods. The report shall make no by the bank as fiduciary in a participa

reference to the performance of funds tion in a collective investment fund is

other than those administered by the proper, the bank may consider the col

bank, and no predictions or representalective investment fund as a whole and

tions as to future results. shall not, for example, be prohibited from making such investment because (iv) A copy of the financial report any particular asset is non-income shall be furnished, or notice shall be producing

given that a copy of such report is avail(4) Not less frequently than once dur- able and will be furnished without charge ing each period of three months a bank upon request, to each person to whom a administering a collective investment regular periodic accounting would ordifund shall determine the value of the narily be rendered with respect to each assets in the fund as of the dates set for participating account. In addition, a the valuation of assets. No participa- full report shall be furnished upon retion shall be admitted to or withdrawn quest to any person, and the fact of the from the fund except (i) on the basis of availability of such material may be such valuation and (ii) as of such valua- given publicity solely in connection with tion date. No participation shall be the promotion of the fiduciary services admitted to or withdrawn from the fund of the bank. Except as herein provided, unless a written request for or notice of the bank shall not advertise or publicize ir.tention of taking such action shall its collective investment fund(s). The have been entered on or before the val- cost of printing and distribution of the uation date in the fiduciary records of report shall be borne by the bank. the bank and approved in such manner as the board of directors shall prescribe.

(6) When participations are withNo such request or notice may be can

drawn from a collective investment fund, celled or countermanded after the valua

distributions may be made in cash or tion date.

ratably in kind, or partly in cash and (5) (i) A bank administering a collec

partly in kind, provided that all distive investment fund shall at least once

tributions as of any one valuation date

shall be made on the same basis. during each period of 12 months cause an adequate audit to be made of the (7) If for any reason an investment collective investment fund by auditors is withdrawn in kind from a collective responsible only to the board of directors investment fund for the benefit of all of the bank. In the event such audit participants in the fund at the time of is performed by independent public ac- such withdrawal and such investment is countants, the reasonable expenses of not distributed ratably in kind, it shall such audit may be charged to the collec- be segregated and administered or realtive investment fund.

ized upon for the benefit ratably of all (ii) A bank administering a collective participants in the collective investment investment fund shall at least once dur- fund at the time of withdrawal.

(8) (i) A bank administering a collective investment fund shall not (a) have any interest in such fund other than in its fiduciary capacity (funds held by a bank as fiduciary as described under paragraph (a) (1) or (2) of this section for its own employees may be invested in such a fund) or (b) make any loans on the security of a participation in such fund. If because of a creditor relationship or otherwise the bank acquires an interest in a participation in such fund, the participation shall be withdrawn on the first date on which such withdrawal can be effected. However, in no case shall an unsecured advance to an account holding a participation until the time of the next withdrawal be deemed to constitute the acquisition of an interest by the bank.

(ii) The bank may purchase for its own account from a collective investment fund any defaulted mortgage held by such fund, if in the judgment of the board of directors the cost of segregation of such mortgage would be greater than the difference between its market value and its principal amount plus interest and penalty charges due. If the bank elects to so purchase the mortgage it must do so at its market value or at the sum of principal, interest and penalty charges, whichever is greater.

(9) Except in the case of collective investment funds described in paragraph (a) (2) of this section:

(i) No funds or other property shall be invested in a participation in a collective investment fund if as a result of such investment the participant would have an interest aggregating in excess of ten per cent of the then market value of the fund: 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 accounts shall be considered as one;

(ii) No investment for a collective investment fund shall be made in stocks, bonds or other obligations of any one person, firm or corporation if as a result of such investment the total amount invested in stocks, bonds or other obligations issued or guaranteed by such person, firm or corporation would aggregate in excess of ten percent of the then market value of the fund: Provided,

That this limitation shall not apply to investments in direct obligations of the United States or other obligations fully guaranteed by the United States as to principal and interest;

(iii) Any bank administering a collective investment fund shall have the responsibility of maintaining in cash and readily marketable investments such part of the assets of the fund as shall be deemed to be necessary to provide adequately for the needs of participants and to prevent inequities between such participants, and if prior to any admissions to or withdrawals from a fund the bank shall determine that after effecting the admissions and withdrawals which are to be made less than 40 percent of the value of the remaining assets of the collective investment fund would be composed of cash and readily marketable investments, no admissions to or withdrawals from the fund shall be permitted as of the valuation date upon which such determination is made: Provided, That ratable distribution upon all participations shall not be so prohibited in any case.

(10) The reasonable expenses incurred in servicing mortgages held by a collective investment fund may be charged against the income account of the fund and paid to servicing agents, including the bank administering the fund.

(11) (i) A bank may (but shall not be required to) transfer up to five percent of the net income derived by a collective investment fund from mortgages held by such fund during any regular accounting period to a reserve account: Provided, That no such transfers shall be made which would cause the amount in such account to exceed one percent of the outstanding principal amount of all mortgages held in the fund. The amount of such reserve account, if established, shall be deducted from the assets of the fund in determining the fair market value of the fund for the purposes of admissions and withdrawals.

(ii) At the end of each accounting period, all interest payments which are due but unpaid with respect to mortgages in the fund shall be charged against such reserve account to the extent available and credited to income distributed to participants. In the event of subsequent recovery of such interest payments by the fund, the reserve account shall be credited with that amount so recovered.

(12) A national bank administering a (2) In a single real estate loan or a collective investment fund shall have direct obligation of the United States, the exclusive management thereof. or an obligation fully guaranteed by the The bank may charge a fee for the man- United States, if the bank owns no paragement of the collective investment ticipation in the loan or obligation and fund provided that the fractional part has no interest therein except in its of such fee proportionate to the interest capacity as fiduciary. of each participant shall not, when (3) In a common trust fund mainadded to any other compensations tained by the bank for the collective charged by the bank to the participant, investment of cash balances received or exceed the total amount of compensa- held by a bank in its capacity as trustee, tions which would have been charged executor, administrator or guardian, to said participant if no assets of said which the bank considers to be indiparticipant had been invested in partici- vidually too small to be invested seppations in the fund. The bank shall arately to advantage, and the total inabsorb the costs of establishing or re- vestment in which on the part of any organizing a collective investment fund. one account does not exceed $10,000: (13) No bank administering a collec

Provided, That in applying this limitative investment fund shall issue any

tion if two or more accounts are created certificate or other document evidencing

by the same person or persons and as a direct or indirect interest in such fund

much as one-half of the income or prinin any form.

cipal of each account is payable or ap(14) No mistake made in good faith

plicable to the use of the same person and in the exercise of due care in con

or persons, such account shall be connection with the administration of a

sidered as one: And provided, That no collective investment fund shall be

fund shall be established or operated deemed to be a violation of this part if

under this subparagraph for the purpose promptly after the discovery of the mis

of avoiding the provisions of paragraph take the bank takes whatever action may

(b) of this section. be practicable in the circumstances to

(4) In any investment specifically auremedy the mistake.

thorized by court order or authorized by

the instrument creating the fiduciary (c) In addition to the investments relationship: Provided, That such inpermitted under paragraph (a) of this vestment is not made under this parasection, funds or other property received graph for the purpose of avoiding the or held by a national bank as fiduciary provisions of paragraph (b) of this may be invested collectively, to the ex- section. tent not prohibited by local law, as (5) In such other manner as shall be follows:

approved in writing by the Comptroller

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

[28 F.R. 3309, Apr. 5, 1963, as amended at

29 F.R. 1719, Feb. 5, 1964; 33 F.R. 9649, July pursuant to a statute that specifically

3, 1968) authorizes the organization of such companies exclusively for the invest- $ 9.19

Forms. ment of funds held by corporate fiduci- All forms referred to in this part and aries, commonly referred to as a “bank all such forms as amended from time fiduciary fund”.

to time shall be a part of this part.


STOCKHOLDERS Sec. 10.1 Scope and application. 10.2 No private right of action hereunder. 10.3 Information to be furnished stock

holders. 10.4 Filing of report.

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

SOURCE: The provisions of this Part 10 appear at 32 F.R. 7070, May 10, 1967, unless otherwise noted.

§ 10.1 Scope and application.

(a) Every bank subject to the jurisdiction of the Comptroller of the Currency 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 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: Sections 10.1 (b) and (c) apply to issues of equity securities 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 here

under. 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 schedules and related information required by, and prepared in accordance with, Part 18 of this chapter. § 10.4

Filing of report. Every bank registered under the Securities Exchange Act, pursuant to this part, shall file two copies of the annual report with the Comptroller of the Currency, Washington, D.C.; one copy with the appropriate Regional Administrator of National Banks; and maintain one copy 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.


proxy or other communication to security

holders under circumstances reasonably SECTION 14 OF THE SECURITIES

calculated to result in the procurement, EXCHANGE ACT 1

withholding, or revocation of a proxy. Sec.

(2) The terms do not include: 11.1 Scope and application.

(i) Any solicitation by a person in 11.2 Definitions.

respect of stock of which he is the bene11.3 Information to be furnished stock- ficial owner; holders.

(ii) The action of a broker or other 11.3a Tender offers for stock of national

person in respect to stock carried in his banks. 11.4 Material to be filed with Comptroller.

name or in the name of his nominee, 11.4a Filing of Schedule D by persons mak

in forwarding to the beneficial owner of ing a tender offer.

such stock, soliciting material received 11.4b Recommendations as to tender offers. from the bank, or impartially instructing 11.4c Purchase of securities by nominee of such beneficial owner to forward a proxy bank or by controlling persons.

to the person, if any, to whom the bene11.4d Change in majority of directors.

ficial owner desires to give a proxy, or 11.5 Special provisions applicable to election contests.

impartially requesting from the benefi11.6 Special circumstances.

cial owner instructions as to the author

ity to be conferred by the proxy and statSchedule A.

ing that a proxy will be given if the inSchedule B.

structions are received by a certain date. Schedule C. Schedule D-Information to be included

(c) The term “person" as used in this in statements.

part is not limited to natural persons, but Schedule E_Statement to be filed pur

also includes corporations, partnerships, suant to $ 11.4b.

pension funds, profit-sharing funds, and AUTHORITY: The provisions of this part

any other organized group of persons 11 issued under R.S. 324 et seq., as amended;

of whatever nature. secs. 12, 14, 48 Stat. 892, 895, as amended; [31 F.R. 6950, May 12, 1966) 12 U.S.C. 1 et seq., 15 U.S.C. 781, 78n.


$ 11.3 Information be furnished § 11.1 Scope and application.

stockholders. This part shall apply to every solicita

(a) No solicitation subject to this part tion of a proxy and to any tender offers

shall be made by or on behalf of a with respect to stock of a national bank

national bank unless each having a class of equity securities held of

person record by 500 or more persons.

solicited is concurrently furnished or has

previously been furnished with a written (33 F.R. 11587, Aug. 15, 1968]

proxy statement containing the applica

ble information specified in Schedules 8 11.2 Definitions.

A and B. (a) The term “principal officer" as (b) The form of proxy shall afford the used in this part means Chairman of the person solicited an opportunity to specBoard, Vice Chairman of the Board, ify his choice between approval or disPresident, Senior Vice President, Cashier, approval of each matter or group of Chairman of the Executive Committee, related matters referred to therein as and any other person who performs func- intended to be acted upon. The proxy tions corresponding to those performed may provide that if the signer does not by the foregoing officers.

indicate a choice, the proxy confers (b) (1) The terms "solicit” and “solici- authority to vote the shares represented tation" include:

thereby in favor of, or against, matters (i) Any request for a proxy whether set forth therein. or not accompanied by or included in a (c) A proxy may confer discretionary form of proxy;

authority with respect to matters which (ii) Any request to execute or not to may come before the meeting other than execute, or to revoke, a proxy; or

those matters listed in the notice of meeting and proxy statement: Provided, That, except in the case of a proposal

omitted from the proxy statement, notice 133 F.R. 11587, Aug. 15, 1968.

of meeting and form of proxy pursuant

99-127 0-69-8

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