Ga. Comp. R. & Regs. R. 80-1-12-.02 - Intercompany Dealings, Management Fees
(1) No bank or trust company shall purchase,
lease, or sell any asset or service from or to any affiliate upon terms which
are detrimental to the bank or trust company or any minority shareholders of
the bank or trust company. Methods for determining propriety of a transaction
shall be subject to Departmental oversight and review.
(2) Tax payments by a bank or trust company
to a bank holding company shall generally be consistent with the payment of tax
liabilities which would have been made had it filed tax returns as a separate
entity, eliminating any benefit arising from surtax exemptions. Timing of such
payments should generally be in concert with tax payment dates prescribed by
tax regulations for estimated tax payments and the rendering of final
returns.
(3) Management fees and
other charges:
(a) Management fees and other
charges, other than specific charges for reimbursement of tax payments or for
the purchase or lease of assets or services, payable to a bank holding company
or an affiliate of a bank holding company may be paid by the banking or trust
subsidiary provided such fees and charges do not exceed the subsidiary's pro
rata share of the administrative overhead of the bank holding company plus any
direct expenses attributable to the subsidiary and it is clearly demonstrated
that the subsidiary has received direct benefit from its relationship with the
holding company. Such pro rata share shall be determined through an equitable
proration of such administrative overhead among all holding company
subsidiaries and activities. The proration may be based on any reasonable
formula provided such formula is justified by appropriate memorandum in the
files of the bank or trust company and approved by the Board of Directors of
the bank or trust company. Such formula shall be subject to Departmental
oversight and review.
(b)
Administrative overhead shall include only those expenses incurred in general
support of all holding company activities and not specifically allocable to a
particular subsidiary or activity.
(c) Administrative overhead shall not include
net losses incurred in any holding company activity, subsidiary, or investment;
nor shall the term include any closing costs, interest, service charge or other
expense incurred in connection with any debt owed by the holding company.
Administrative overhead shall also not include any salary or other compensation
of officers, directors or shareholders which is not commensurate with duties
and responsibilities performed in some official capacity with the holding
company. Time devoted to performance of duties and fulfilling responsibilities
at the holding company level and compensation in connection with such action
shall be considered in establishing reasonable levels of compensation from the
bank or trust company for persons who are employed by both entities. Each
entity shall pay only that portion of the total compensation as is commensurate
with the duties performed on behalf of that entity.
(4) Fees and charges contemplated under this
Rule may be paid after the liability therefor is incurred. Administrative
overhead may be accrued or paid monthly based upon a reasonable projection of
actual charges, provided such accrual or payment is adjusted to actual expenses
at least annually. No such fee or charge may be paid in advance. Appropriate
documentation and justification must be maintained in the bank for any
disbursement governed by this Rule.
Notes
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