Senate Bill No. 465–Committee on Commerce and Labor

March 17, 1999

____________

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes to provisions governing trust companies. (BDR 55-1495)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: Yes.

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

 

AN ACT relating to financial institutions; authorizing banks to maintain trust offices in various locations under certain circumstances; authorizing the commissioner of financial institutions to collect fees for trust offices; clarifying the circumstances under which a foreign trust company or bank may be appointed to act as fiduciary in this state; amending the requirements for the articles of incorporation and organization of a trust company; amending certain requirements of an application for a license as a trust company; providing for the qualifications of the directors and officers of a trust company; revising the investment powers of a trust company; authorizing the commissioner of financial institutions to impose administrative penalties for violations of certain provisions governing trust companies; providing a penalty; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. NRS 658.096 is hereby amended to read as follows:

1-2 658.096 1. The commissioner shall charge and collect the following

1-3 fees in connection with his official duties:

1-4 (a) For licensing of state banks:

1-5 (1) A fee of $200 for each parent bank, payable on June 30 of each

1-6 year.

1-7 (2) A fee of $100 for each branch bank [,] or trust office, payable on

1-8 June 30 of each year.

1-9 The fees must accompany the application for renewal of the license. A

1-10 penalty of 10 percent of the fee must be charged for each month or part of a

1-11 month that the fees are not paid after June 30 of each year.

2-1 (b) For applications for new branch banks [,] or trust offices, a

2-2 nonrefundable fee of $200 for the application and survey , to be paid by the

2-3 applicant at the time of making the application. The applicant [shall] must

2-4 also pay such additional expenses incurred in the process of investigation

2-5 as the commissioner deems necessary. All money received by the

2-6 commissioner pursuant to this paragraph must be placed in the investigative

2-7 account created by NRS 232.545.

2-8 (c) For examinations and the examination of trust departments of state

2-9 banks [,] or trust offices, a fee for conducting the examination and [in] for

2-10 preparing and typing the report of the examination at the rate established

2-11 pursuant to NRS 658.101.

2-12 2. Except as otherwise provided in paragraph (b) of subsection 1, all

2-13 money collected pursuant this section must be paid into the state general

2-14 fund.

2-15 3. As used in this section, "trust office" has the meaning ascribed to

2-16 it in subsection 4 of section 4 of this act.

2-17 Sec. 2. Chapter 662 of NRS is hereby amended by adding thereto the

2-18 provisions set forth as sections 3 and 4 of this act.

2-19 Sec. 3. As used in NRS 662.235 and 662.245 and section 4 of this

2-20 act, "business of a trust company" or "trust company business" has the

2-21 meaning ascribed to it in section 7 of this act.

2-22 Sec. 4. 1. A bank organized under this Title may maintain trust

2-23 offices in this or other states with the written consent of the

2-24 commissioner.

2-25 2. Any action taken by the commissioner pursuant to subsection 1 is

2-26 subject to review in the manner provided in NRS 659.055.

2-27 3. The commissioner may adopt regulations establishing reasonable

2-28 conditions and requirements for the approval and maintenance of trust

2-29 offices.

2-30 4. As used in this section, "trust office" means an office, other than

2-31 the principal office, at which a bank organized under this Title is

2-32 authorized by the commissioner to conduct the business of a trust

2-33 company.

2-34 Sec. 5. NRS 662.245 is hereby amended to read as follows:

2-35 662.245 1. [Except as otherwise specifically provided by statute, no

2-36 bank or other organization, and no officer, employee or agent of such an

2-37 organization, acting on its behalf,] An organization that does not maintain

2-38 an office in this state to conduct the business of a trust company may be

2-39 appointed to act as fiduciary by any court or by authority of any law of this

2-40 state [unless,] if, in addition to any other requirements of law, the [bank or

2-41 other organization:

3-1 (a) Is organized under the laws of and has its principal place of business

3-2 in this state or is a depository institution authorized by the commissioner to

3-3 operate a branch or agency in this state;

3-4 (b) Is a national banking association which has its principal place of

3-5 business in this state;

3-6 (c)] organization:

3-7 (a) Associates as cofiduciary a bank [whose principal place of business

3-8 is] authorized to do business in this state [; or

3-9 (d) Is a national bank, banking corporation,] or a trust company

3-10 licensed pursuant to chapter 669 of NRS; or

3-11 (b) Is a trust corporation or trust company which:

3-12 (1) Is organized under the laws of and has its principal place of

3-13 business in another state which allows [banks,] trust corporations or trust

3-14 companies [organized under the laws of this state] licensed pursuant to

3-15 chapter 669 of NRS to act as fiduciary [;] in that state;

3-16 (2) Is authorized by its charter to act as fiduciary; and

3-17 (3) Before the appointment as fiduciary, files with the secretary of

3-18 state a document, acknowledged before a notarial officer, which:

3-19 (I) Appoints the secretary of state as its agent upon whom all

3-20 process in any action or proceeding against it may be served;

3-21 (II) Contains its agreement that the appointment continues in force

3-22 as long as any liability remains outstanding against it in this state, and that

3-23 any process against it which is served on the secretary of state is of the

3-24 same legal validity as if served on it personally;

3-25 (III) Contains an address to which the secretary of state may mail

3-26 the process when received; and

3-27 (IV) Is accompanied by a fee of $10.

3-28 A copy of the document required by this subparagraph, certified by the

3-29 secretary of state, is sufficient evidence of the appointment and agreement.

3-30 2. A court [with] which has jurisdiction over the accounts of a

3-31 fiduciary that is a [national bank, banking corporation,] trust corporation or

3-32 trust company described in paragraph [(d)] (b) of subsection 1 [,] may

3-33 require [such a] the fiduciary to provide a bond to ensure the performance

3-34 of its duties as fiduciary, in the same manner and to the same extent as the

3-35 court may require such a bond from a fiduciary that is a [banking or other

3-36 corporation] bank or trust company described in paragraph (a) [or (b)] of

3-37 subsection 1.

3-38 3. Service of process authorized by subparagraph (3) of paragraph [(d)]

3-39 (b) of subsection 1 must be made by filing with the secretary of state:

3-40 (a) Two copies of the legal process. The copies must include a specific

3-41 citation to the provisions of this section. The secretary of state may refuse

3-42 to accept such service if the proper citation is not included in each copy.

4-1 (b) A fee of $10.

4-2 The secretary of state shall forthwith forward one copy of the legal process

4-3 to the [bank or other] organization, by registered or certified mail prepaid

4-4 to the address provided in the document filed pursuant to subparagraph (3)

4-5 of paragraph [(d)] (b) of subsection 1.

4-6 4. As used in this section:

4-7 (a) "Fiduciary" means an executor, commissioner, guardian of minors or

4-8 estates, receiver, depositary or trustee.

4-9 (b) "Notarial officer" has the meaning ascribed to it in NRS 240.005.

4-10 (c) "State" means any state or territory of the United States, or the

4-11 District of Columbia.

4-12 Sec. 6. Chapter 669 of NRS is hereby amended by adding thereto the

4-13 provisions set forth as sections 7 to 10, inclusive, of this act.

4-14 Sec. 7. "Business of a trust company" or "trust company business"

4-15 means the holding out by a person, by advertising, solicitation or other

4-16 means, that it is available to act as a fiduciary in this state and

4-17 undertaking to act as a fiduciary in the regular course of its business.

4-18 Sec. 8. "Fiduciary" means a trustee, executor, administrator,

4-19 guardian of an estate, conservator, assignee for the benefit of creditors,

4-20 receiver, depositary or person that receives on deposit money or property

4-21 from a public administrator under any provision of this chapter or from

4-22 another fiduciary.

4-23 Sec. 9. 1. If the commissioner ascertains by examination or

4-24 otherwise that the capital or assets of a trust company are impaired or

4-25 that the affairs of a trust company are in an unsafe condition which may

4-26 result in danger to the public, he may immediately take possession of all

4-27 the property, business and assets of the company which are located in

4-28 this state and retain possession of them pending further proceedings as

4-29 provided in this chapter.

4-30 2. If the directors or officers of a corporation or the managers or

4-31 members acting in a managerial capacity of a limited-liability company

4-32 refuse to allow the commissioner to take possession of the property of the

4-33 company, the commissioner shall communicate that fact to the attorney

4-34 general. Upon notification from the commissioner, the attorney general

4-35 shall immediately institute such proceedings as may be necessary to place

4-36 the commissioner in immediate possession of the property of the

4-37 company. Upon possession of the property, the commissioner shall make

4-38 or have made an inventory of the assets and known liabilities of the

4-39 company.

4-40 3. The commissioner shall file one copy of the inventory in his office

4-41 and one copy in the office of the clerk of the district court of the county

4-42 in which the principal office of the trust company is located and shall

5-1 mail one copy to each director or officer of the corporation, or the

5-2 manager or member acting in a managerial capacity of the limited-

5-3 liability company, at his last known address.

5-4 4. The clerk of the court with which the copy of the inventory is filed

5-5 shall file it as any other case or proceeding pending in the court and

5-6 shall give it a docket number.

5-7 Sec. 10. 1. The directors or officers of a corporation or the

5-8 managers or members acting in a managerial capacity of a limited-

5-9 liability company licensed as a trust company may, within 60 days after

5-10 the date the commissioner takes possession of the property, business and

5-11 assets of the corporation or limited-liability company licensed as a trust

5-12 company, make good any deficit that exists or remedy the unsafe

5-13 condition of the affairs of the corporation or limited-liability company

5-14 licensed as a trust company.

5-15 2. At the expiration of the 60-day period set forth in subsection 1, if

5-16 the deficiency in assets or capital has not been made good or the unsafe

5-17 condition remedied, the commissioner may apply to the court to be

5-18 appointed receiver and proceed to liquidate the assets of the company

5-19 that are located in this state in the same manner as now provided by law

5-20 for liquidation of a private corporation in receivership.

5-21 3. Another person may not be appointed receiver by any court unless

5-22 he first gives the commissioner ample notice of his application.

5-23 4. The inventory made by the commissioner pursuant to section 9 of

5-24 this act and all claims filed by creditors are open at all reasonable times

5-25 for inspection, and any action taken by the receiver upon any of the

5-26 claims is subject to the approval of the court before which the cause is

5-27 pending.

5-28 5. The expenses of the receiver and compensation of counsel, as well

5-29 as all expenditures required in the liquidation proceedings, must be fixed

5-30 by the commissioner subject to the approval of the court and, upon

5-31 certification of the commissioner, must be paid out of the money in his

5-32 hands as the receiver.

5-33 Sec. 11. NRS 669.020 is hereby amended to read as follows:

5-34 669.020 As used in this chapter, unless the context otherwise requires,

5-35 the words and terms defined in NRS [669.030] 669.040 to 669.070,

5-36 inclusive, and sections 7 and 8 of this act have the meanings ascribed to

5-37 them in [such] those sections.

5-38 Sec. 12. NRS 669.040 is hereby amended to read as follows:

5-39 669.040 "Court trust" means [the action of a trust company acting

5-40 under] a fiduciary relationship created by an appointment, order or decree

5-41 [of any court as executor, administrator, guardian, conservator, assignee,

5-42 receiver, depositary or trustee, or receiving on deposit money or property

6-1 from a public administrator under any provision of this chapter or from any

6-2 executor, administrator, guardian, conservator, assignee, receiver,

6-3 depositary or trustee under any order or decree] of any court.

6-4 Sec. 13. NRS 669.050 is hereby amended to read as follows:

6-5 669.050 "Private trust" means [every other trust, agency,] a fiduciary

6-6 relationship [or representative capacity] other than a court trust.

6-7 Sec. 14. NRS 669.070 is hereby amended to read as follows:

6-8 669.070 "Trust company" means a corporation [organized and] or

6-9 limited-liability company licensed as provided in this chapter and engaged

6-10 in a trust company business.

6-11 Sec. 15. NRS 669.080 is hereby amended to read as follows:

6-12 669.080 1. This chapter does not apply to [:

6-13 1. Banks or banking institutions regulated under the provisions of

6-14 chapters 657 to 668, inclusive, of NRS;

6-15 2. Savings and loan institutions regulated under chapter 673 of NRS;

6-16 3. Title insurers but only respecting escrows;

6-17 4. Nonprofit, charitable trusts or trust associations; or

6-18 5. Any person, if:

6-19 (a) ] a person who:

6-20 (a) Does business under the laws of this state, the United States or

6-21 another state relating to banks, savings banks, savings and loan

6-22 associations or thrift companies, but if the business conducted in this

6-23 state is not subject to supervision by a regulatory authority of another

6-24 jurisdiction, the person must be licensed pursuant to this chapter;

6-25 (b) Is appointed as a fiduciary pursuant to NRS 662.245;

6-26 (c) Is in the performance of his duties as an attorney at law;

6-27 (d) Acts as a trustee under a deed of trust;

6-28 (e) Acts as a resident agent for a domestic or foreign corporation,

6-29 limited-liability company, limited partnership or limited-liability

6-30 partnership;

6-31 (f) Acts as a trustee of a trust holding real property for the primary

6-32 purpose of facilitating any transaction with respect to real estate if he is

6-33 not regularly engaged in the business of acting as a trustee for such

6-34 trusts;

6-35 (g) Engages in the business of a collection agency pursuant to chapter

6-36 649 of NRS;

6-37 (h) Engages in the business of an escrow agency, escrow agent or

6-38 escrow officer pursuant to the provisions of chapter 645A or 692A of

6-39 NRS;

6-40 (i) Acts as a trustee of a trust created for charitable or nonprofit

6-41 purposes if he is not regularly engaged in the business of acting as

6-42 trustee for such trusts;

7-1 (j) Receives money or other property as a real estate broker licensed

7-2 under chapter 645 of NRS on behalf of a principal;

7-3 (k) Engages in transactions as a broker-dealer or sales representative

7-4 pursuant to chapter 90 of NRS;

7-5 (l) Acts as a fiduciary under a court trust;

7-6 (m) Does business as an insurer authorized to issue policies of life

7-7 insurance and annuities or endowment contracts in this state and subject

7-8 to regulation and control of the commissioner of insurance; or

7-9 (n) Acts as a fiduciary if:

7-10 (1) The fiduciary relationship is not one of his principal occupations;

7-11 or

7-12 [(b)] (2) He serves as [trustee] a fiduciary for a relative by blood or

7-13 marriage.

7-14 2. A bank, savings bank, savings and loan association or thrift

7-15 company claiming an exemption from this chapter pursuant to

7-16 paragraph (a) of subsection 1 must notify the commissioner of financial

7-17 institutions of its intention to engage in the business of a trust company

7-18 in this state and present proof satisfactory to the commissioner of

7-19 financial institutions that its fiduciary activities in this state will be

7-20 subject to regulation by another jurisdiction.

7-21 Sec. 16. NRS 669.095 is hereby amended to read as follows:

7-22 669.095 1. Except as otherwise provided in subsection 2, no person

7-23 [, partnership, firm, association, corporation or other business] or

7-24 organization formed and doing business under the laws of this state or any

7-25 other state may:

7-26 (a) Use the word "trust" or any direct derivative of that word as a part of

7-27 its name.

7-28 (b) Advertise or use any sign with the word "trust" used as a part of its

7-29 name.

7-30 2. The provisions of subsection 1 do not apply to a person or [business]

7-31 organization which:

7-32 (a) Is supervised by the commissioner of financial institutions pursuant

7-33 to this chapter or chapters 657 to 668, inclusive, or 673 of NRS; [or]

7-34 (b) Is doing business under the laws of the United States or another

7-35 state relating to banks, savings banks, savings and loan associations or

7-36 thrift companies;

7-37 (c) Is acting under an appointment pursuant to NRS 662.245; or

7-38 (d) Is supervised by the commissioner of insurance.

7-39 Sec. 17. NRS 669.110 is hereby amended to read as follows:

7-40 669.110 [Any three or more persons, a majority of whom shall be

7-41 residents of this state, may execute articles of incorporation and be

7-42 incorporated as a trust company in the manner prescribed in this chapter.]

7-43 An applicant for a license to conduct the business of a trust company

8-1 under this chapter must be organized as a corporation or limited-liability

8-2 company under the laws of this state or authorized to do business in this

8-3 state as a foreign corporation or foreign limited-liability company.

8-4 Sec. 18. NRS 669.120 is hereby amended to read as follows:

8-5 669.120 1. [The] If a corporation or limited-liability company that

8-6 is engaged in trust company business is organized under the laws of this

8-7 state, the articles of incorporation must contain:

8-8 (a) The [corporate] name adopted by the [corporation,] trust company,

8-9 which must be such as to distinguish it from any other trust company

8-10 formed or incorporated in this state, or engaged in the [trust] business of a

8-11 trust company in this state [.

8-12 (b) The place where its business is to be conducted.

8-13 (c) ] ; and

8-14 (b) The purpose for which it is formed.

8-15 [(d) The amount of its stock, which must be divided into shares of the

8-16 par value of not less than $1 each.

8-17 (e) The name and place of residence of, and the number of shares

8-18 subscribed by, each stockholder.

8-19 (f) The number of directors, which must not be less than five, and the

8-20 names of the stockholders selected to act as the first board of directors,

8-21 each of whom must be a bona fide subscriber for at least $1,000 of the

8-22 stock of the bank, fully paid and not hypothecated.

8-23 (g) The location of all branch offices as approved by the commissioner.

8-24 (h) Such other matters, not inconsistent with law, as the incorporators

8-25 deem appropriate.

8-26 2. The articles of incorporation may also provide for:

8-27 (a) The issuance and sale of preferred stock in such amount as is fixed

8-28 by the articles or by amendments thereto;

8-29 (b) The amount and number of shares of preferred stock; and

8-30 (c) The terms and conditions of the issuance and sale, which must not be

8-31 inconsistent with the provisions of this chapter.]

8-32 2. The provisions of subsection 1 do not apply to a corporation or

8-33 limited-liability company engaged in trust company business that is

8-34 organized under the laws of another state, but it must use a name that

8-35 distinguishes it from any other trust company organized as or conducting

8-36 the business of a trust company in this state.

8-37 Sec. 19. NRS 669.130 is hereby amended to read as follows:

8-38 669.130 [1. The secretary of state shall issue a certificate in the form

8-39 provided by law for other corporations, and the existence of the trust

8-40 company as a corporation begins upon the issuance of the certificate by the

8-41 secretary of state, from which time it has and may exercise the powers

8-42 conferred by law upon corporations generally, except as those powers are

8-43 limited or modified by this chapter.

9-1 2. The] A trust company shall not transact business, except [the

9-2 election of officers and the taking and approving of their official bonds, the

9-3 receipt of payments on account of the subscriptions of the stock and such

9-4 other business as is] business that is incidental to its organization, until it is

9-5 authorized by the commissioner to commence the [trust company] business

9-6 of a trust company as provided in this chapter.

9-7 Sec. 20. NRS 669.150 is hereby amended to read as follows:

9-8 669.150 1. [The corporate trust company shall] An applicant must

9-9 file an application for a license to transact trust company business with the

9-10 commissioner on forms prescribed by the commissioner, which must

9-11 contain or be accompanied by such information as the commissioner

9-12 requires.

9-13 2. A nonrefundable fee of $1,000 [for the application and survey] must

9-14 accompany the application. The applicant [shall] must also pay such

9-15 reasonable additional expenses incurred in the process of investigation as

9-16 the commissioner deems necessary. In addition, a fee of not less than $100

9-17 nor more than $250, prorated on the basis of the licensing year as provided

9-18 by the commissioner, must be paid at the time of making the application.

9-19 3. [Any] A trust company may maintain offices in this and other

9-20 states. For every branch location of a trust company organized under the

9-21 laws of this state, and every branch location in this state of a foreign trust

9-22 company authorized to do business in this state, a request for approval

9-23 and licensing [of a branch location for a trust company] must be filed with

9-24 the commissioner on such forms as he prescribes. A nonrefundable fee of

9-25 $250 [for the application and survey] must accompany each request. In

9-26 addition, a fee of not more than $100, prorated on the basis of the licensing

9-27 year as provided by the commissioner, must be paid at the time of making

9-28 the request.

9-29 4. All money received by the commissioner pursuant to this section

9-30 must be placed in the investigative account created by NRS 232.545.

9-31 Sec. 21. NRS 669.160 is hereby amended to read as follows:

9-32 669.160 1. Within 60 days after the application for a license is filed,

9-33 the commissioner shall investigate the facts of the application and the other

9-34 requirements of this chapter to determine:

9-35 (a) That the persons who will serve as directors or officers [are qualified

9-36 by character and experience.] of the corporation, or the managers or

9-37 members acting in a managerial capacity of the limited-liability

9-38 company, as applicable:

9-39 (1) Have a good reputation for honesty, trustworthiness and

9-40 integrity and display competence to transact the business of a trust

9-41 company in a manner which safeguards the interests of the general

9-42 public. The applicant must submit satisfactory proof of these

9-43 qualifications to the commissioner.

10-1 (2) Have not been convicted of, or entered a plea of nolo contendere

10-2 to, a felony or any crime involving fraud, misrepresentation or moral

10-3 turpitude.

10-4 (3) Have not made a false statement of material fact on the

10-5 application.

10-6 (4) Have not had a license that was issued pursuant to the

10-7 provisions of this chapter suspended or revoked within the 10 years

10-8 immediately preceding the date of the application.

10-9 (5) Have not had a license as a trust company which was issued in

10-10 any other state, district or territory of the United States or any foreign

10-11 country suspended or revoked within the 10 years immediately preceding

10-12 the date of the application.

10-13 (6) Have not violated any of the provisions of this chapter or any

10-14 regulation adopted pursuant to the provisions of this chapter.

10-15 (b) That the financial status of the [stockholders,] directors and officers

10-16 of the corporation or the managers or members acting in a managerial

10-17 capacity of the limited-liability company is consistent with their

10-18 responsibilities and duties.

10-19 (c) That the name of the proposed company is not deceptively similar to

10-20 the name of another trust company licensed in this state or is not otherwise

10-21 misleading.

10-22 (d) That the initial stockholders’ equity is not less than the required

10-23 minimum.

10-24 [(e) The need for trust facilities or additional trust facilities in the

10-25 community where the proposed trust company is to be located.

10-26 (f) Such other matters concerning the proposed trust company in relation

10-27 to its location as the commissioner may deem relevant.

10-28 2. Within 90 days after the application is filed, the commissioner shall

10-29 conduct a public hearing to consider the application. At least 30 days

10-30 before the hearing, the commissioner shall give written notice of the

10-31 hearing to all persons doing a trust business in the community in which the

10-32 proposed trust company is to be located and to such other persons,

10-33 institutions or organizations as he deems appropriate.]

10-34 2. Notice of the entry of an order refusing a license to a trust

10-35 company must be given in writing, served personally or sent by certified

10-36 mail or by telegraph to the company affected. The company, upon

10-37 application, is entitled to a hearing before a hearing officer appointed by

10-38 the director of the department of business and industry, but if no such

10-39 application is made within 30 days after the entry of an order refusing a

10-40 license to any company, the commissioner shall enter a final order.

10-41 3. If the hearing officer affirms the order of the commissioner

10-42 refusing the license, the applicant may file a petition for judicial review

10-43 pursuant to NRS 233B.130.

11-1 Sec. 22. NRS 669.220 is hereby amended to read as follows:

11-2 669.220 1. [Every] A trust company:

11-3 (a) Shall keep all trust funds and investments separate from the assets of

11-4 the trust company, and all investments made by the trust company as a

11-5 fiduciary must be designated so that the trust or estate to which the

11-6 investments belong may be clearly identified.

11-7 (b) [Holding] When it holds trust funds awaiting investment or

11-8 distribution , may deposit or leave those funds on deposit with a state or

11-9 national bank. The funds must not be deposited or left with the same

11-10 corporation depositing them or leaving them on deposit, or with a

11-11 corporation or association holding or owning a majority of the stock of the

11-12 trust company making or leaving the deposit, unless that corporation or

11-13 association first pledges, as security for the deposit, securities eligible for

11-14 investment by state banks which have a market value equal to that of the

11-15 deposited funds. No security is required with respect to any portion of the

11-16 deposits that is insured under the provisions of any law of the United

11-17 States.

11-18 (c) [Acting] When it acts in any capacity under a court trust or private

11-19 trust, unless the instrument creating the trust provides otherwise, may cause

11-20 any securities held by it in its representative capacity to be registered in the

11-21 name of a nominee or nominees of the trust company.

11-22 (d) When acting as depositary or custodian for the personal

11-23 representative of a court trust or private trust, unless the instrument creating

11-24 the trust provides otherwise, may with the consent of the personal

11-25 representative of the trust, cause any securities held by it to be registered in

11-26 the name of a nominee or nominees of the trust company.

11-27 2. [Every] A trust company is liable for any loss occasioned by the acts

11-28 of its nominees with respect to securities registered under this section.

11-29 3. No corporation or the registrar or transfer agent of the corporation is

11-30 liable for registering or causing to be registered on the books of the

11-31 corporation any securities in the name of any nominee of a trust company

11-32 or for transferring or causing to be transferred on the books of the

11-33 corporation any securities registered by the corporation in the name of any

11-34 nominee of a trust company when the transfer is made on the authorization

11-35 of the nominee.

11-36 4. Except as otherwise provided in subsection 5, [a trust company’s

11-37 investments] the assets forming the capital of a trust company must:

11-38 (a) Be governmental obligations or insured deposits [.

11-39 (b) Mature] that mature within 3 years after acquisition.

11-40 [The]

11-41 (b) Have an aggregate market value [of all investments must equal or

11-42 exceed] that equals or exceeds 60 percent of the company’s current

12-1 stockholders’ equity or 60 percent of the company’s initial stockholders’

12-2 equity, whichever is greater.

12-3 5. A trust company may purchase or rent land and equipment for use in

12-4 the daily activities of the trust company.

12-5 Sec. 23. NRS 669.225 is hereby amended to read as follows:

12-6 669.225 1. [A] In addition to the powers of investment granted to

12-7 the trust company by the instrument creating the relationship of fiduciary

12-8 or agent, a trust company which is acting as a fiduciary or agent may, in its

12-9 discretion or at the direction of another person who is authorized to direct

12-10 the investment of money held by the trust company as a fiduciary or agent,

12-11 invest in the securities of [a management] an investment trust or

12-12 [management] investment company if:

12-13 (a) The investment trust or investment company is registered pursuant to

12-14 the Investment Company Act of 1940 as amended , [(] 15 U.S.C. §§ 80a-1

12-15 et seq. [)] ; and

12-16 (b) The portfolio of the investment trust or investment company consists

12-17 substantially of investments which are not prohibited by the instrument

12-18 creating the fiduciary or agency relationship.

12-19 2. A trust company or an affiliate of the trust company may provide

12-20 services to the investment trust or investment company, including, without

12-21 limitation, acting as an investment adviser, custodian, transfer agent,

12-22 registrar, sponsor, distributor or manager and may receive reasonable

12-23 compensation for the services. The manner in which the compensation is

12-24 calculated must be disclosed to the person who is currently receiving the

12-25 benefits of the relationship of a fiduciary or [agency relationship] agent

12-26 with the trust company. The disclosure may be made by a prospectus, a

12-27 statement of account or otherwise.

12-28 3. A trust company may deposit money held by the trust company as a

12-29 fiduciary or agent with an affiliate before investing or making other

12-30 disposition of the money.

12-31 Sec. 24. NRS 669.240 is hereby amended to read as follows:

12-32 669.240 1. The directors or managers of a trust company shall

12-33 require good and sufficient fidelity bonds in the amount of $25,000 or more

12-34 on all active officers , managers, members acting in a managerial

12-35 capacity and employees, whether or not they receive a salary or other

12-36 compensation from the trust company, to indemnify the trust company

12-37 against loss because of any dishonest, fraudulent or criminal act or

12-38 omission by any [officer or employee] of the persons bonded acting alone

12-39 or in combination with any other person. The bonds may be in any form

12-40 and may be paid for by the trust company.

13-1 2. The [directors] trust company shall obtain suitable insurance [for

13-2 their company] against burglary, robbery, theft and other hazards to which

13-3 it may be exposed in the operation of its business.

13-4 3. The [directors] trust company shall at least annually prescribe the

13-5 amount or penal sum of the bonds or policies and designate the sureties and

13-6 underwriters thereof, after giving due and careful consideration to all

13-7 known elements and factors constituting a risk or hazard. The [directors’]

13-8 action must be recorded in the minutes of the [board of directors] trust

13-9 company and reported to the commissioner.

13-10 Sec. 25. NRS 669.280 is hereby amended to read as follows:

13-11 669.280 1. The violation of any of the provisions of this chapter by

13-12 the officers or directors , or the managers or members acting in a

13-13 managerial capacity, of any trust company [authorized to do business

13-14 under the provisions of this chapter] is sufficient cause for the

13-15 commissioner to close the trust company, liquidate its business and revoke

13-16 its license.

13-17 2. If [any officer or director of] a trust company or any person

13-18 authorized to act on the behalf of the trust company refuses to allow the

13-19 commissioner or his deputies to inspect all books, records, papers and

13-20 effects of [its business,] the business of the trust company, the

13-21 commissioner may revoke its license and proceed to wind up [its affairs.]

13-22 the affairs of the trust company.

13-23 Sec. 26. NRS 669.290 is hereby amended to read as follows:

13-24 669.290 Each officer, [employer,] director , manager, member,

13-25 employee or agent of a trust company who knowingly or willfully neglects

13-26 to perform any duty required by this chapter or other applicable law, or

13-27 who knowingly or willfully fails to conform to any material lawful

13-28 requirement made by the commissioner, is subject to removal upon order of

13-29 the commissioner, and is guilty of a category D felony and shall be

13-30 punished as provided in NRS 193.130.

13-31 Sec. 27. NRS 159.017 is hereby amended to read as follows:

13-32 159.017 "Guardian" means any person appointed under this chapter as

13-33 guardian of the person, of the estate, or of the person and estate for any

13-34 other person, and includes [a bank] an organization under NRS 662.245

13-35 and joint appointees. The term includes a special guardian.

13-36 Sec. 28. The amendatory provisions of this act do not apply to

13-37 offenses that were committed before October 1, 1999.

13-38 Sec. 29. NRS 669.030, 669.140, 669.170 and 669.180 are hereby

13-39 repealed.

 

14-1 LEADLINES OF REPEALED SECTIONS

 

14-2 669.030 "Community" defined.

14-3 669.140 Subscription, acknowledgment and filing of articles of

14-4 incorporation; filing of copies.

14-5 669.170 Applicant’s burden of proof at hearing.

14-6 669.180 Issuance or denial of license.

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