Question

Regulation 12 CFR 9.12 of the Comptroller of the Currency prohibits a national bank from holding its own stock in trust accounts for which it exercises investment discretion unless?

1) the stock was received in kind as a trust asset and the governing instrument contains general authority to retain inventoried assets.
2) the trustor, in writing, specifically authorizes the purchase and retention of own bank stock.
3) local law contains a general power of retention for inventoried assets.

Answer 1

Regulation 12 CFR 9.12 of the Comptroller of the Currency prohibits a national bank from holding its own stock in trust accounts for which it exercises investment discretion unless certain conditions are met.

Step-by-step explanation:

Regulation 12 CFR 9.12 of the Comptroller of the Currency prohibits a national bank from holding its own stock in trust accounts for which it exercises investment discretion unless:

1. the stock was received in kind as a trust asset and the governing instrument contains general authority to retain inventoried assets.
2. the trustor, in writing, specifically authorizes the purchase and retention of own bank stock.
3. local law contains a general power of retention for inventoried assets.

These conditions need to be met in order for a national bank to hold its own stock in trust accounts for which it exercises investment discretion.