Be it enacted by the General Assembly of Virginia:
1. That §§ 6.1-32.11, 6.1-32.14, 6.1-32.14:2, 6.1-32.18, 6.1-32.19, 6.1-32.20, 6.1-32.23, 6.1-32.24, 6.1-32.25, 6.1-32.26, 6.1-32.27 and 6.1-32.28 of the Code of Virginia are amended and reenacted as follows:
§ 6.1-32.11. Definitions.
As used in this article:
"Affiliated trust company" means a trust company
"Broker-dealer" shall have the same meaning assigned to that term in § 13.1-501 of the Virginia Securities Act.
"Commission" means the State Corporation Commission of the Commonwealth of Virginia.
"Fiduciary" means executor, administrator, conservator, guardian, committee, or trustee.
"Investment advisor" shall have the same meaning assigned to that term in § 13.1-501 of the Virginia Securities Act.
"Investment advisor representative" shall have the same meaning assigned to that term in § 13.1-501 of the Virginia Securities Act.
"Investment company" shall have the same meaning assigned to that term in the Investment Company Act of 1940, 15 U.S.C. 80a-1 et seq.
"Operating plan" means a plan
"Person" means any individual, firm, corporation, partnership, association, trust, or legal or commercial entity or group of individuals, however organized.
"Principal" means any person who, directly or indirectly, owns or controls (i) ten percent or more of the outstanding stock of a stock corporation or (ii) a ten percent or greater interest in a nonstock corporation or a limited liability company.
"Trust business" means the holding out by a person or legal entity to the public at large by advertising, solicitation or other means that the person or legal entity is available to act as a fiduciary in the Commonwealth of Virginia or is accepting and undertaking to perform the duties of a fiduciary in the regular course of its business.
"Trust company" means a corporation, including an affiliated trust company, authorized to engage in the trust business under this article with powers expressly restricted to the conduct of general trust business.
"Trust company holding company" means a corporation which owns, directly or
indirectly, five percent or more of any class of capital stock of a
broker-dealer, investment advisor or investment company and which
§ 6.1-32.14. Application for certificate; fee.
A. An application for a certificate shall be in writing, in such form as the Commission prescribes, verified under oath and supported by such information, data and records as the Commission may require. The application shall include an operating plan.
B. Each application for a certificate of authority shall be accompanied by an investigation fee of $10,000, made payable to the Treasurer of the Commonwealth.
§ 6.1-32.14:2. Certain transactions prohibited.
An affiliated trust company shall not, during the underwriting period,
purchase from an affiliated broker-dealer, for any trust account or for its
own account, any security that is being underwritten by that
§ 6.1-32.18. Procedure for granting or denying certificate.
Before any trust company shall begin business, it shall obtain from the Commission a certificate of authority authorizing it to do so. Prior to the issuance of such a certificate to a trust company or affiliated trust company, the Commission shall ascertain that:
1. All of the provisions of law have been complied with;
2. The trust company is formed for no other reason than a legitimate trust business;
3. Financially responsible persons have subscribed for capital stock, surplus and a reserve for operation in an amount deemed by the Commission to be sufficient to warrant successful operation, but the capital stock shall not be less than $500,000. The Commission shall also ascertain that each principal of an applicant has the financial responsibility, character, reputation, and general fitness to warrant belief that the business will be operated efficiently and fairly, in the public interest, and in accordance with law ;
5. The moral fitness, financial responsibility and business qualifications of those named as officers and directors of the proposed trust company are such as to command the confidence of the community in which the trust company is proposed to be located. If the applicant is an affiliated trust company, the Commission shall also determine that the trust company holding company of the applicant is qualified by virtue of its business record, experience, and financial responsibility to control a trust company;
6. In its opinion, the public interest will be served by the formation of a trust company in the community where it is proposed. The addition of such trust company shall be deemed in the public interest if, based on all relevant evidence and information, advantages such as, but not limited to, increased competition, additional convenience, or gains in efficiency outweigh possible adverse effects such as, but not limited to, diminished or unfair competition, undue concentration of resources, conflicts of interests, or unsafe or unsound practices;
7. The operating plan
8. Any other facts deemed pertinent are present.
§ 6.1-32.19. Acquisition of control; application.
A. Except as provided in this section, no person shall acquire directly or indirectly ten percent or more of the voting shares of a trust company unless such person first:
1. Files an application with the Commission in such form as the Commission may prescribe from time to time;
2. Delivers such other information to the Commission as the Commission may
require concerning the financial responsibility, background, experience, and
activities of the applicant, its directors
3. Pays such application fee as the Commission may prescribe.
B. Upon the filing and investigation of an application, the Commission shall
permit the acquisition, subject to § 6.1-32.20, if it finds that the
applicant and its members if applicable, its directors
C. The foregoing provisions of this section shall not apply to a person
§ 6.1-32.20. Restrictions on control, officers and directors.
A. None of the following individuals or entities shall be or become a control person of any trust company:
1. An agent;
2. A broker-dealer;
3. An investment advisor;
4. An investment advisor representative;
5. An investment company; or
6. Any corporation, limited liability company, partnership, business trust, association, or similar organization.
B. For the purposes of this provision, a "control person" means any
individual or entity
C. Nothing in this section shall prohibit (i) a trust company holding
company from owning, directly or indirectly,
§ 6.1-32.23. Reports.
Each trust company and each trust company holding company shall file
statements of condition and other reports with the Commission in accordance
§ 6.1-32.24. Investigations; examinations.
The Commission may, by its designated officers and employees, as often as it deems necessary, investigate and examine the affairs, business, premises and records of any trust company and of any trust company holding company. Examinations of such trust companies shall be conducted at least twice in each three-year period. In the course of such investigations and examination, the principals, officers, directors, and employees of such trust company or trust company holding company being investigated or examined shall, upon demand of the person making such investigation or examination, afford full access to all premises, books, records and information which the person making such investigation or examination deems necessary. For the foregoing purposes, the person making such investigation or examination shall have authority to administer oaths, examine under oath all the aforementioned persons, and compel the production of papers and objects of all kinds.
§ 6.1-32.25. Fees.
In order to defray the costs of their examination, supervision and regulation, every trust company shall pay a fee in the same amount as that prescribed for the supervision and regulation of trust departments by § 6.1-94. Each trust company and each trust company holding company shall also pay such additional or special costs as the Commission may incur in connection with its examination.
For investigating an application for authority to establish a branch office pursuant to § 6.1-32.21, the Commission shall charge a fee of $1,800.
For investigating an application to change the location of a principal office or branch office, the Commission shall charge a fee of $1,000.
For investigating an application made pursuant to § 6.1-32.19, the Commission shall charge a fee of $7,000.
§ 6.1-32.26. Regulations.
The Commission may promulgate such regulations as it deems appropriate to effect the purposes of this article. Before promulgating any such regulation, the Commission shall give reasonable notice of its content and shall afford interested parties an opportunity to be heard. In promulgating regulations applicable to affiliated trust companies, the Commission shall be guided, where appropriate, by those standards and requirements concerning self-dealing and conflicts of interests that apply to banks, bank holding companies, and their subsidiaries when engaged in both trust and securities activities.
§ 6.1-32.27. Audits.
The Commission may require
§ 6.1-32.28. Commission's remedial powers.
A. If the Commission finds that a trust company (i) has failed to fully
observe the laws of this Commonwealth, (ii) is being operated in an unsafe or
unsound manner, (iii) has failed to comply with any Commission order or
regulation, (iv) is engaging in any irregular practices, or (v) is, or
is about to become, insolvent or its capital has been, or is in danger of
1. Close the company for a period not exceeding sixty days, which period may be further extended for a like period or periods as the Commission deems necessary;
2. Require that all orders and regulations of the Commission be complied with;
3. Require that the company make reports daily or at such other times as may be required as to the results achieved in carrying out the Commission's orders;
4. Require that any irregularities be promptly corrected;
5. Require that any impairment of capital be made good; or
6. Temporarily suspend the right of the company to receive any further property in a fiduciary capacity.
B. If the Commission determines that a receiver should be appointed for a trust company, the Commission may close the company; take charge of the books, assets and affairs of the company; and apply to any circuit court in the Commonwealth for the appointment of a receiver to take charge of the company's business, assets and affairs. Proceedings for appointment of a receiver for a trust company shall not be entertained by any court except on application of the Commission.
C. 1. The Commissioner of Financial Institutions may issue and serve upon a
trust company a cease and desist order if, in the opinion of the
Commissioner, the company is engaging, has engaged, or, there is reasonable
cause to believe, is about to engage in an unsafe or unsound practice,
irregularity, or any violation of law, rule or regulation applicable to the
conduct of its business, or any Commission order
2. When the practice or violation specified in the order, or any continuation thereof, is likely to prejudice the company's stockholders, or persons having an interest in property held by the company in a fiduciary capacity, the Commissioner may make the order effective immediately. An order shall remain in effect until withdrawn by the Commissioner or terminated by the Commission after a hearing. A request for a hearing shall be given expeditious treatment on the Commission's docket, and the Commission need not allow ten days' notice to the company.
2. That § 6.1-32.14:1 of the Code of Virginia is repealed.
3. That an emergency exists and the provisions of this act shall become effective on April 1, 1995.