Collective investments of funds or other property held by such
qualified fiduciary (and referred to in this paragraph as "collective
investment funds") shall be administered as follows:
(1) Each collective investment fund shall be
established and maintained in accordance with a written plan (referred to
herein as the plan) which shall be approved by a resolution of the trust
company's board of directors or by a committee authorized by the board and
filed with the director of the department of financial institutions. The plan
shall contain appropriate provisions not inconsistent with the rules and
regulations of the director of the department of financial institutions as to
the manner in which the fund is to be operated, including provisions relating
to the investment powers and a general statement of the investment policy of
the trust company with respect to the fund; the allocation of income, profits
and losses; the terms and conditions governing the admission or withdrawal of
participations in the fund; the auditing of accounts of the bank with respect
to the fund; the basis and method of valuing assets in the fund, setting forth
specific criteria for each type of asset; the minimum frequency for valuation
of assets of the fund; the period following each such valuation date during
which the valuation may be made (which period in usual circumstances should not
exceed 10 business days); the basis upon which the fund may be terminated; and
such other matters as may be necessary to define clearly the rights of
participants in the fund. A copy of the plan shall be available at the
principal office of the trust company for inspection during all banking hours,
and upon request a copy of the plan shall be furnished to any person.
(2) Property held by a bank in its capacity
as trustee of retirement, pension, profit sharing, stock bonus, or other trusts
which are exempt from federal income taxation under any provisions of the
Internal Revenue Code may be invested in collective investment funds
established under the provisions of subparagraph (a) or (b) of WAC
208-536-040, subject to the
provisions herein contained pertaining to such funds, and may qualify for tax
exemption pursuant to section 584 of the Internal Revenue Code. Assets of
retirement, pension, profit sharing, stock bonus, or other trusts which are
exempt from federal income taxation by reason of being described in section 401
of the code may be invested in collective investment funds established under
the provisions of subparagraph (b) of WAC
208-536-040, if the fund
qualifies for tax exemption under Revenue Ruling 56-267 and following
rulings.
(3) All participants in
the collective investment fund shall be on the basis of a proportionate
interest in all of the assets. In order to determine whether the investment of
funds received or held by a trust company as fiduciary in a participation in a
collective investment fund is proper, the trust company may consider the
collective investment fund as a whole and shall not, for example, be prohibited
from making such investment because any particular asset is nonincome
producing.
