DFI-SL 17.14(5)(a)(a) An association administering a collective investment fund shall at least once during each period of 12 months cause an adequate audit to be made of the collective investment fund by auditors responsible only to the board of directors of the association. In the event the audit is performed by independent public accountants, the reasonable expenses of the audit may be charged to the collective investment fund.
DFI-SL 17.14(5)(b)
(b) An association administering a collective investment fund shall at least once during each period of 12 months prepare a financial report of the fund. This report, based upon the audit required under par.
(a), shall contain a list of investments in the fund showing the cost and current market value of each investment; a statement for the period since the previous report showing purchases, with cost; sales, with profit or loss and any other investment changes; income and disbursements; and an appropriate notation as to any investments in default.
DFI-SL 17.14(5)(c)
(c) The financial report under par.
(b) may include a description of the fund's value on previous dates, as well as its income and disbursements during previous accounting periods. No predictions or representations as to future results may be made. In addition, as to funds described in s.
DFI-SL 17.13 (1) (a) neither the report nor any other publication of the association may make reference to the performance of funds other than those administered by the association.
DFI-SL 17.14(5)(d)
(d) A copy of the financial report required under par.
(b) shall be furnished, or notice shall be given that a copy of the report is available and will be furnished without charge upon request, to each person to whom a regular periodic accounting would ordinarily be rendered with respect to each participating account. A copy of the financial report may be furnished to prospective customers. The cost of printing and distribution of these reports shall be borne by the association. In addition, a copy of the report shall be furnished upon request to any person for a reasonable charge. The fact of the availability of the report for any fund described in s.
DFI-SL 17.13 (1) (a) may be given publicity solely in connection with the promotion of the fiduciary services of the association.
DFI-SL 17.14(5m)
(5m) When participations are withdrawn from a collective investment fund, distributions may be made in cash or ratably in kind, or partly in cash and partly in kind except that all distributions as of any one valuation date shall be made on the same basis.
DFI-SL 17.14(6)
(6) If for any reason an investment is withdrawn in kind from a collective investment fund for the benefit of all participants in the fund at the time of the withdrawal and the investment is not distributed ratably in kind, it shall be segregated and administered or realized upon for the benefit ratably of all participants in the collective investment fund at the time of withdrawal.
DFI-SL 17.14(7)(a)(a) No association may have any interest in a collective investment fund other than in its fiduciary capacity. Except for temporary net cash overdrafts or as otherwise specifically provided under this section, it may not lend money to a fund, sell property to, or purchase property from a fund. No assets of a collective investment fund may be invested in stock or obligations, including time or savings deposits, of the association or any of its affiliates except that deposits may be made of funds awaiting investment or distribution. Subject to this chapter, funds held by an association as fiduciary for its own employees may be invested in a collective investment fund. An association may not make any loan on the security of a participation in a fund. If, because of a creditor relationship or otherwise, the association acquires an interest in a participation in a fund, the participation shall be withdrawn on the first date on which withdrawal can be affected. However, an unsecured advance until the time of the next valuation date to an account holding a participation is not deemed to constitute the acquisition of an interest by the association.
DFI-SL 17.14(7)(b)
(b) Any association administering a collective investment fund may purchase for its own account from the fund any defaulted fixed income investment held by the fund, if in the judgment of the board of directors the cost of segregation of the investment would be greater than the difference between its market value and its principal amount plus interest and penalty charges due. If the association elects to so purchase the investment, it shall do so at its market value or at the sum of cost, accrued unpaid interest, and penalty charges, whichever is greater.
DFI-SL 17.14(8)(a)
(a) No funds or other property may be invested in a participation in a collective investment fund if as a result of the investment the participant would have an interest aggregating in excess of 10 percent of the then market value of the fund except in applying this limitation if two or more accounts are created by the same 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 persons the accounts shall be considered as one.
DFI-SL 17.14(8)(b)
(b) 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 the investment the total amount invested in stocks, bonds or other obligations issued or guaranteed by the person, firm or corporation would aggregate in excess of 10% of the then market value of the fund except this limitation does 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.
DFI-SL 17.14(8)(c)
(c) Any association administering a collective investment fund shall maintain in cash and readily marketable investments a portion of the assets of the fund sufficient to provide adequately for the needs of participants and to prevent inequities between the participants. If, prior to any admissions to or withdrawals from a fund, the association determines that after affecting the admissions and withdrawals which are to be made less than 40% 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 may be permitted as of the valuation date upon which the determination is made except a ratable distribution upon all participants may be made.
DFI-SL 17.14(9)
(9) 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 association administering the fund.
DFI-SL 17.14(10)(a)(a) An association may transfer up to 5% of the net income derived by a collective investment fund from mortgages held by the fund during any regular accounting period to a reserve account. No transfers shall be made which would cause the amount in the account to exceed 1% of the outstanding principal amount of all mortgages held in the fund. The amount of the 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.
DFI-SL 17.14(10)(b)
(b) 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 the reserve account to the extent available and credited to income distributed to participants. If interest payments are subsequently recovered by the fund, the reserve account shall be credited with the amount recovered.
DFI-SL 17.14(11)
(11) An association administering a collective investment fund shall exclusively manage the fund. The association may charge a fee for the management of the collective investment fund. The fractional part of the fee proportionate to the interest of each participant shall not, when added to any other compensations charged by an association to a participant, exceed the total amount of compensations which would have been charged to the participant if no assets of the participant had been invested in participations in the fund. The association shall absorb the costs of establishing or reorganizing a collective investment fund.
DFI-SL 17.14(12)
(12) No association administering a collective investment fund may issue any certificate or other document evidencing a direct or indirect interest in the fund in any form.
DFI-SL 17.14(13)
(13) No mistake made in good faith and in the exercise of due care in connection with the administration of a collective investment fund violates this chapter if promptly after the discovery of the mistake the association takes whatever action may be practicable in the circumstances to remedy the mistake.
DFI-SL 17.14 History
History: Cr.
Register, June, 1989, No. 402, eff. 7-1-89; correction made under s. 13.93 (2m) (b) 1.,
Register, September, 1995, No. 477.
DFI-SL 17.15 History
History: Cr.
Register, June, 1989, No. 402, eff. 7-1-89.
DFI-SL 17.16(1)(1)
Any association may surrender its rights to exercise trust powers by filing with the division a certified copy of a resolution of its board of directors.
DFI-SL 17.16(2)
(2) Upon receipt of the resolution under sub.
(1) the division shall make an investigation and if satisfied that the association has been discharged from all fiduciary duties which it has undertaken, the division shall issue a certificate to the association certifying that it is no longer authorized to exercise fiduciary powers.
DFI-SL 17.16(3)
(3) On issuance of a certificate by the division, an association:
DFI-SL 17.16(3)(c)
(c) Shall not exercise any of the powers granted by this chapter without first applying for and obtaining new authorization to exercise trust powers.
DFI-SL 17.16 History
History: Cr.
Register, June, 1989, No. 402, eff. 7-1-89.
DFI-SL 17.17
DFI-SL 17.17
Effect of trust accounts of appointment of conservator or receiver or voluntary dissolution of association. DFI-SL 17.17(1)(1)
Appointment of liquidator, conservator or receiver. Whenever a liquidator, conservator or receiver is appointed for an association, the liquidator, receiver or conservator shall, pursuant to the instructions of the division and the orders of the court having jurisdiction, close such of the association's trust accounts as can be closed promptly and transfer all other trust accounts to substitute fiduciaries.
DFI-SL 17.17(2)
(2) Voluntary dissolution. Whenever an association exercising trust powers is placed in voluntary dissolution, the liquidating agent shall, in accordance with local law, proceed at once to liquidate the affairs of the trust department as follows:
DFI-SL 17.17(2)(a)
(a) All trusts and estates over which a court is exercising jurisdiction shall be closed or disposed of as soon as practicable in accordance with the order or instructions of the court; and
DFI-SL 17.17(2)(b)
(b) All other accounts which can be closed promptly shall be closed as soon as practicable and final accounting made for the closed accounts and all remaining accounts shall be transferred by appropriate legal proceedings to substitute fiduciaries.
DFI-SL 17.17 History
History: Cr.
Register, June, 1989, No. 402, eff. 7-1-89.
DFI-SL 17.18(1)(1)
Notice of intent. In addition to the other sanctions available, if, in the opinion of the division, an association is unlawfully or unsoundly exercising, or has failed for a period of 5 consecutive years to exercise, the powers granted by this chapter or otherwise fails to comply with the requirements of this chapter, the division may issue and serve upon the association a notice of intent to revoke the authority of the association to exercise the powers granted by this chapter. The notice shall contain a statement of the facts constituting the alleged unlawful or unsound exercise of powers, or failure to exercise powers, or failure to comply, and shall fix a time and place at which a hearing will be held to determine whether an order revoking authority to exercise trust powers should be issued against the association.
DFI-SL 17.18(2)
(2) Hearing. A hearing under sub.
(1) shall be conducted as a contested class 2 hearing under ch.
227, Stats.
DFI-SL 17.18(3)
(3) Revocation order. Unless the association served under sub.
(1) appears at the hearing by a duly authorized representative, it is deemed to have consented to the issuance of the revocation order. In the event of consent or if, upon the record made at the hearing, the division finds that any allegation specified in the notice of charges has been established, the division may issue and serve upon the association an order prohibiting it from accepting any new or additional trust accounts and revoking authority to exercise powers granted by this chapter except that the order shall permit the association to continue to service all previously accepted trust accounts pending their expeditious divestiture or termination.
DFI-SL 17.18(4)
(4) Effective period. A revocation order is effective not earlier than the expiration of 30 days after service of the order upon the association, except a consent revocation order which is effective at the time specified in the order, and shall remain effective and enforceable, except to the extent it is stayed, modified, terminated, or set aside by action of the division or a reviewing court.
DFI-SL 17.18 History
History: Cr.
Register, June, 1989, No. 402, eff. 7-1-89.
