Ariz. Admin. Code § R20-4-810 - Funds Awaiting Investment or Distribution

A. Trust funds held by a trust department or trust company awaiting investment or distribution shall not remain uninvested or undistributed any longer than is reasonable for the account's proper management.

B. A trust department or trust company may keep trust funds in deposit accounts maintained by the trust department or trust company unless prohibited by law or by the governing instrument. The trust department or trust company shall set aside collateral security for all deposited trust funds under a third party's control. The collateral shall be the following types of securities, in any combination:

1. Direct obligations of the United States or any agency, department, division, or administration of the federal government;

2. Any other obligations fully guaranteed by the United States government as to principal and interest;

3. Obligations of a Federal Reserve Bank;

4. Obligations of any state, political subdivision of a state, or public authority organized under the laws of a state; or

5. Readily marketable securities that either:

a. Qualify as investment securities under the Investment Securities regulations of the Comptroller of the Currency, 12 CFR, Chapter 1, Part 1 ; or

b. Satisfy state pledging requirements under A.R.S. § 6-245(C).

C. The securities set aside under subsection (B) shall, at all times, have a market value no less than the amount of trust funds deposited. No collateral security is required to the extent the Federal Deposit Insurance Corporation, or its successor, insures the deposited trust funds.

Notes

Ariz. Admin. Code § R20-4-810

Adopted effective June 30, 1977 (Supp. 77-3). R20-4-810 recodified from R4-4-810 (Supp. 95-1). Amended by final rulemaking at 6 A.A.R. 2471, effective June 8, 2000 (Supp. 00-2). Amended by final rulemaking at 8 A.A.R. 2718, effective June 6, 2002 (Supp. 02-2). Amended by final rulemaking at 29 A.A.R. 1952, effective 10/8/2023.