2005 Nevada Revised Statutes - Chapter 669 — Trust Companies
GENERAL PROVISIONS
NRS 669.010 Declarationof legislative intent.
NRS 669.020 Definitions.
NRS 669.029 Businessof a trust company and trust company business defined.
NRS 669.040 Courttrust defined.
NRS 669.045 Fiduciarydefined.
NRS 669.050 Privatetrust defined.
NRS 669.070 Trustcompany defined.
NRS 669.080 Applicabilityof chapter.
ORGANIZATION AND LICENSING
NRS 669.090 Unlawfulto engage in business of trust company without license.
NRS 669.095 Unlawfulto use or advertise word trust as part of name; exceptions.
NRS 669.100 Minimumstockholders equity required for organization and operation.
NRS 669.110 Certainorganizational structure required for domestic trust company; authority to dobusiness in this State required for foreign trust company.
NRS 669.120 Certainprovisions required in articles of incorporation or organization of domestictrust company; limitations on use of certain names by foreign trust company.
NRS 669.130 Unlawfulfor trust company to commence business without authorization of Commissioner.
NRS 669.150 Applicationfor license: Contents; fees; regulations; withdrawal of application.
NRS 669.160 Investigationof applicant; rights of applicant upon denial of license; entry of final order;judicial review.
NRS 669.190 Paymentof license fees; regulations; deposit in State Treasury.
NRS 669.200 Cancellationof license if trust company fails to open for business.
POWERS AND MISCELLANEOUS PROVISIONS
NRS 669.210 Powersof licensed trust companies; banking business prohibited.
NRS 669.220 Investments:General requirements.
NRS 669.225 Investments:Trust company may invest in securities of and provide services to investmenttrust or investment company; trust company may deposit money held in trust withaffiliate.
NRS 669.230 Discontinuingbusiness.
NRS 669.240 Fidelitybonds; insurance.
EXAMINATION; REGULATION
NRS 669.250 Feesfor examination; frequency of examination.
NRS 669.260 Applicabilityof other provisions of title.
NRS 669.270 Regulationsof Commissioner.
DISCIPLINARY ACTION AND REMEDIAL ACTION
NRS 669.280 Authorityof Commissioner to take disciplinary action and to close and liquidatebusiness.
NRS 669.282 Authorityof Commissioner to seize property, business and assets; duties of Commissionerupon seizure.
NRS 669.284 Personsentitled to remedy conditions leading to seizure; effect of failure to remedy;receivership and liquidation of assets.
UNLAWFUL ACTS; PENALTIES
NRS 669.286 Failureto submit required report; fees; regulations.
NRS 669.290 Willfulneglect to perform duties imposed by law or failure to conform to materiallawful requirement made by Commissioner unlawful; penalty.
NRS 669.295 Administrativefines.
NRS 669.300 Violationof chapter constitutes gross misdemeanor unless otherwise specified.
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GENERAL PROVISIONS
NRS
1. There exists in this state a need, for theprotection of the public interest, to regulate companies which are engaged inthe trust company business.
2. Such trust companies should be licensed andregulated in such manner as to promote the public advantage and convenience.
3. It is the purpose of this chapter to bring underpublic supervision those persons who are engaged in or who desire to engage inthe business of a trust company, not in connection with banking business, andto insure that there is established in this state an adequate, efficient andcompetitive trust company service.
(Added to NRS by 1969, 1184)
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(Added to NRS by 1969, 1184; A
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(Added to NRS by
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(Added to NRS by 1969, 1184; A
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(Added to NRS by
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(Added to NRS by 1969, 1184; A
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(Added to NRS by 1969, 1184; A
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1. This chapter does not apply to a person who:
(a) Does business under the laws of this state, theUnited States or another state relating to banks, savings banks, savings andloan associations or thrift companies, but if the business conducted in thisstate is not subject to supervision by a regulatory authority of anotherjurisdiction, the person must be licensed pursuant to this chapter;
(b) Is appointed as a fiduciary pursuant to
(c) Is acting in the performance of his duties as anattorney at law;
(d) Acts as a trustee under a deed of trust;
(e) Acts as a resident agent for a domestic or foreigncorporation, limited-liability company, limited partnership orlimited-liability partnership;
(f) Acts as a trustee of a trust holding real propertyfor the primary purpose of facilitating any transaction with respect to realestate if he is not regularly engaged in the business of acting as a trusteefor such trusts;
(g) Engages in the business of a collection agencypursuant to chapter 649 of NRS;
(h) Engages in the business of an escrow agency, escrowagent or escrow officer pursuant to the provisions of
(i) Acts as a trustee of a trust created for charitableor nonprofit purposes if he is not regularly engaged in the business of actingas trustee for such trusts;
(j) Receives money or other property as a real estatebroker licensed under chapter 645 of NRS onbehalf of a principal;
(k) Engages in transactions as a broker-dealer or salesrepresentative pursuant to chapter 90 of NRS;
(l) Acts as a fiduciary under a court trust;
(m) Does business as an insurer authorized to issuepolicies of life insurance and annuities or endowment contracts in this stateand is subject to regulation and control of the Commissioner of Insurance; or
(n) Acts as a fiduciary if:
(1) The fiduciary relationship is not one of hisprincipal occupations; or
(2) He serves as a fiduciary for a relative byblood or marriage.
2. A bank, savings bank, savings and loan associationor thrift company claiming an exemption from this chapter pursuant to paragraph(a) of subsection 1 must notify the Commissioner of Financial Institutions ofits intention to engage in the business of a trust company in this state andpresent proof satisfactory to the Commissioner of Financial Institutions thatits fiduciary activities in this state will be subject to regulation by anotherjurisdiction.
(Added to NRS by 1969, 1184; A 1981, 339;
ORGANIZATION AND LICENSING
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(Added to NRS by 1969, 1184; A 1983, 1758; 1987,1942)
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1. Except as otherwise provided in subsection 2, noperson or organization formed and doing business under the laws of this stateor any other state may:
(a) Use the word trust or any direct derivative ofthat word as a part of its name.
(b) Advertise or use any sign with the word trustused as a part of its name.
2. The provisions of subsection 1 do not apply to aperson or organization which:
(a) Is supervised by the Commissioner of FinancialInstitutions pursuant to this chapter or chapters657 to 668, inclusive,
(b) Is doing business under the laws of the UnitedStates or another state relating to banks, savings banks, savings and loanassociations or thrift companies;
(c) Is acting under an appointment pursuant to
(d) Is supervised by the Commissioner of Insurance.
(Added to NRS by 1983, 466; A 1985, 357; 1987, 1942;
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(Added to NRS by 1969, 1185; A 1983, 1758; 1987,1943; 1997, 1007)
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(Added to NRS by 1969, 1185; A
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1. If a corporation or limited-liability company thatis engaged in trust company business is organized under the laws of this state,the articles of incorporation or articles of organization must contain:
(a) The name adopted by the trust company, which mustbe such as to distinguish it from any other trust company formed or incorporatedin this state, or engaged in the business of a trust company in this state; and
(b) The purpose for which it is formed.
2. The provisions of subsection 1 do not apply to acorporation or limited-liability company engaged in trust company business thatis organized under the laws of another state, but it must use a name thatdistinguishes it from any other trust company organized as or conducting thebusiness of a trust company in this state.
(Added to NRS by 1969, 1185; A 1983, 1759; 1987, 774,1943; 1997, 1007; 1999,844)
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(Added to NRS by 1969, 1185; A 1983, 1759; 1987,1944; 1997, 1007; 1999,845)
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1. An applicant must file an application for a licenseto transact trust company business with the Commissioner on forms prescribed bythe Commissioner, which must contain or be accompanied by such information asthe Commissioner requires.
2. A nonrefundable fee of not more than $2,000 mustaccompany the application. The applicant must also pay such reasonableadditional expenses incurred in the process of investigation as theCommissioner deems necessary. In addition, a fee of not less than $200 or morethan $500, prorated on the basis of the licensing year as provided by theCommissioner, must be paid at the time of making the application.
3. A trust company may maintain offices in this and otherstates. For every branch location of a trust company organized under the lawsof this State, and every branch location in this State of a foreign trustcompany authorized to do business in this State, a request for approval andlicensing must be filed with the Commissioner on such forms as he prescribes. Anonrefundable fee of not more than $500 must accompany each request. Inaddition, a fee of not more than $200, prorated on the basis of the licensingyear as provided by the Commissioner, must be paid at the time of making therequest.
4. The Commissioner shall adopt regulationsestablishing the amount of the fees required pursuant to this section. Allmoney received by the Commissioner pursuant to this section must be placed inthe Investigative Account created by NRS232.545.
5. The Commissioner shall consider an application tobe withdrawn if the Commissioner has not received all information and feesrequired to complete the application within 12 months after the date theapplication is first submitted to the Commissioner or within such later periodas the Commissioner determines in accordance with any existing policies ofjoint regulatory partners. If an application is deemed to be withdrawn pursuantto this subsection or if an applicant otherwise withdraws an application, theCommissioner may not issue a license to the applicant unless the applicantsubmits a new application and pays any required fees.
(Added to NRS by 1969, 1186; A 1983, 1317, 1760;1987, 1944; 1991, 1809; 1999,845; 2005, 1849)
NRS
1. Within 60 days after the application for a licenseis filed, the Commissioner shall investigate the facts of the application andthe other requirements of this chapter to determine:
(a) That the persons who will serve as directors orofficers of the corporation, or the managers or members acting in a managerialcapacity of the limited-liability company, as applicable:
(1) Have a good reputation for honesty,trustworthiness and integrity and display competence to transact the businessof a trust company in a manner which safeguards the interests of the generalpublic. The applicant must submit satisfactory proof of these qualifications tothe Commissioner.
(2) Have not been convicted of, or entered aplea of nolo contendere to, a felony or any crime involving fraud,misrepresentation or moral turpitude.
(3) Have not made a false statement of materialfact on the application.
(4) Have not had a license that was issuedpursuant to the provisions of this chapter suspended or revoked within the 10years immediately preceding the date of the application.
(5) Have not had a license as a trust companywhich was issued in any other state, district or territory of the United Statesor any foreign country suspended or revoked within the 10 years immediatelypreceding the date of the application.
(6) Have not violated any of the provisions ofthis chapter or any regulation adopted pursuant to the provisions of this chapter.
(b) That the financial status of the directors andofficers of the corporation or the managers or members acting in a managerialcapacity of the limited-liability company is consistent with theirresponsibilities and duties.
(c) That the name of the proposed company complies withthe provisions of NRS 657.200.
(d) That the initial stockholders equity is not lessthan the required minimum.
2. Notice of the entry of an order refusing a licenseto a trust company must be given in writing, served personally or sent bycertified mail or by telegram to the company affected. The company, uponapplication, is entitled to a hearing before a hearing officer appointed by theDirector of the Department of Business and Industry, but if no such applicationis made within 30 days after the entry of an order refusing a license to anycompany, the Commissioner shall enter a final order.
3. If the hearing officer affirms the order of theCommissioner refusing the license, the applicant may file a petition forjudicial review pursuant to NRS 233B.130.
(Added to NRS by 1969, 1186; A 1983, 1760; 1987,1945; 1997, 1008; 1999,846; 2003, 985;2005, 1850)
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1. The initial fee to be paid for a trust companylicense must be in proportion to the initial stockholders equity of the trustcompany as follows:
(a) A trust company with an initial stockholdersequity of not less than $300,000 but not more than $500,000 must pay a licensefee of not more than $1,000.
(b) A trust company with an initial stockholdersequity of more than $500,000 but not more than $1,000,000 must pay a licensefee of not more than not more than $1,500.
(c) A trust company with an initial stockholdersequity of more than $1,000,000 must pay a license fee of not more than $2,000.
2. In addition, every trust company must pay aninitial license fee of not more than $200 for each branch office that isauthorized by the Commissioner.
3. Thereafter, every trust company must pay annuallyon or before April 1 of each year a license fee which must be in proportion toits existing stockholders equity as follows:
(a) A trust company with an existing stockholdersequity of not less than $300,000 but not more than $500,000 must pay a licensefee of not more than $1,000.
(b) A trust company with an existing stockholdersequity of more than $500,000 but not more than $1,000,000 must pay a licensefee of not more than $1,500.
(c) A trust company with an existing stockholdersequity of more than $1,000,000 must pay a license fee of not more than $2,000.
4. The Commissioner shall adopt regulationsestablishing the amount of the fees required pursuant to this section. Allmoney collected under the provisions of this section must be deposited in theState Treasury pursuant to the provisions of NRS658.091.
(Added to NRS by 1969, 1187; A 1983, 1317, 1761;1987, 1945; 1997, 1008;
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(Added to NRS by 1969, 1187; A 1983, 1761; 1987,1946)
POWERS AND MISCELLANEOUS PROVISIONS
NRS
1. Each licensed trust company may:
(a) Act as trustee under any mortgage or bond of anyperson or of any municipality or body politic.
(b) Accept and execute any municipal or corporate orindividual trust not inconsistent with the laws of this State.
(c) Act under the order or appointment of any court asguardian, administrator, receiver or trustee.
(d) Act as executor or trustee under any will.
(e) Act as fiscal or transfer agent of any state,municipality, body politic or corporation, and in such capacity receive anddisburse money and register, transfer and countersign certificates of stock,bonds and other evidences of indebtedness.
(f) Act as local or resident agent of foreign corporations.
(g) Accept and execute any trust business permitted byany law.
(h) Acquire the fiduciary rights, powers, duties andliabilities of a bank, savings and loan association, thrift company, trustcompany or credit union licensed pursuant to titles 55 and 56 of NRS, and uponthe effective date of such an acquisition, the fiduciary rights, powers, dutiesand liabilities of the bank, savings and loan association, thrift company,trust company or credit union vest in and must be performed by the acquiring trustcompany.
(i) Do and perform all acts necessary to exercise thepowers enumerated in this subsection and authorized by this chapter and anyother applicable laws of this State.
2. A trust company may not engage in any bankingbusiness by accepting deposits or making loans.
(Added to NRS by 1969, 1187; A 1989, 2033)
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1. A trust company:
(a) Shall keep all trust funds and investments separatefrom the assets of the trust company, and all investments made by the trust companyas a fiduciary must be designated so that the trust or estate to which theinvestments belong may be clearly identified.
(b) When it holds trust funds awaiting investment ordistribution, may deposit or leave those funds on deposit with a state or nationalbank or credit union. The funds must not be deposited or left with the samecorporation depositing them or leaving them on deposit, or with a corporationor association holding or owning a majority of the stock of the trust companymaking or leaving the deposit, unless that corporation or association firstpledges, as security for the deposit, securities eligible for investment bystate banks or credit unions which have a market value equal to that of thedeposited funds. No security is required with respect to any portion of thedeposits that is insured under the provisions of
(c) When it acts in any capacity under a court trust orprivate trust, unless the instrument creating the trust provides otherwise, maycause any securities held by it in its representative capacity to be registeredin the name of a nominee or nominees of the trust company.
(d) When acting as depositary or custodian for thepersonal representative of a court trust or private trust, unless theinstrument creating the trust provides otherwise, may with the consent of thepersonal representative of the trust, cause any securities held by it to beregistered in the name of a nominee or nominees of the trust company.
2. A trust company is liable for any loss occasionedby the acts of its nominees with respect to securities registered under thissection.
3. No corporation or the registrar or transfer agentof the corporation is liable for registering or causing to be registered on thebooks of the corporation any securities in the name of any nominee of a trustcompany or for transferring or causing to be transferred on the books of thecorporation any securities registered by the corporation in the name of anynominee of a trust company when the transfer is made on the authorization ofthe nominee.
4. Except as otherwise provided in subsection 5, theassets forming the capital of a trust company must:
(a) Be governmental obligations or insured depositsthat mature within 3 years after acquisition.
(b) Have an aggregate market value that equals orexceeds 60 percent of the companys current stockholders equity or 60 percentof the companys initial stockholders equity, whichever is greater.
5. A trust company may purchase or rent land andequipment for use in the daily activities of the trust company.
(Added to NRS by 1969, 1187; A 1983, 299; 1997, 1009;1999, 847,
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1. In addition to the powers of investment granted tothe trust company by the instrument creating the relationship of fiduciary oragent, a trust company which is acting as a fiduciary or agent may, in itsdiscretion or at the direction of another person who is authorized to directthe investment of money held by the trust company as a fiduciary or agent,invest in the securities of an investment trust or investment company if:
(a) The investment trust or investment company isregistered pursuant to the Investment Company Act of 1940, as amended, 15U.S.C. 80a-1 et seq.; and
(b) The portfolio of the investment trust or investmentcompany consists substantially of investments which are not prohibited by theinstrument creating the fiduciary or agency relationship.
2. A trust company or an affiliate of the trustcompany may provide services to the investment trust or investment company,including, without limitation, acting as an investment adviser, custodian,transfer agent, registrar, sponsor, distributor or manager and may receivereasonable compensation for the services. The manner in which the compensationis calculated must be disclosed to the person who is currently receiving thebenefits of the relationship of a fiduciary or agent with the trust company.The disclosure may be made by a prospectus, a statement of account orotherwise.
3. A trust company may deposit money held by the trustcompany as a fiduciary or agent with an affiliate before investing or makingother disposition of the money.
(Added to NRS by 1991, 822; A
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(Added to NRS by 1969, 1188; A 1983, 1761; 1987,1946)
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1. The directors or managers of a trust company shallrequire good and sufficient fidelity bonds in the amount of $25,000 or more onall active officers, managers, members acting in a managerial capacity andemployees, whether or not they receive a salary or other compensation from thetrust company, to indemnify the trust company against loss because of any dishonest,fraudulent or criminal act or omission by any of the persons bonded actingalone or in combination with any other person. The bonds may be in any form andmay be paid for by the trust company.
2. The trust company shall obtain suitable insurance againstburglary, robbery, theft and other hazards to which it may be exposed in theoperation of its business.
3. The trust company shall at least annually prescribethe amount or penal sum of the bonds or policies and designate the sureties andunderwriters thereof, after giving due and careful consideration to all knownelements and factors constituting a risk or hazard. The action must be recordedin the minutes of the trust company and reported to the Commissioner.
(Added to NRS by 1969, 1188; A 1983, 300, 1762; 1987,1946; 1999, 848)
EXAMINATION; REGULATION
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1. For each examination of a trust companys books andrecords required or authorized under this chapter, the Commissioner shallcharge and collect from the trust company a fee for conducting the examinationand in preparing and typing the report of the examination at the rateestablished pursuant to NRS 658.101.
2. All money collected under this section must bedeposited in the State Treasury pursuant to the provisions of
3. The Commissioner shall examine a licensee as oftenas he deems necessary.
(Added to NRS by 1969, 1188; A 1983, 1318, 1762;1987, 1946, 2223; 2003,3228)
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(Added to NRS by 1969, 1189; A 1983, 1762; 1987,1947)
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(Added to NRS by 1969, 1189; A 1983, 1762; 1987,1947)
DISCIPLINARY ACTION AND REMEDIAL ACTION
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1. The violation of any of the provisions of thischapter by the officers or directors, or the managers or members acting in amanagerial capacity, of any trust company is sufficient cause for theCommissioner to close the trust company, liquidate its business and revoke itslicense.
2. If a trust company or any person authorized to acton the behalf of the trust company refuses to allow the Commissioner or hisdeputies to inspect all books, records, papers and effects of the business ofthe trust company, the Commissioner may revoke its license and proceed to windup the affairs of the trust company.
(Added to NRS by 1969, 1189; A 1983, 1762; 1987,1947; 1999, 849)
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1. If the Commissioner ascertains by examination orotherwise that the capital or assets of a trust company are impaired or thatthe affairs of a trust company are in an unsafe condition which may result indanger to the public, he may immediately take possession of all the property,business and assets of the company which are located in this state and retainpossession of them pending further proceedings as provided in this chapter.
2. If the directors or officers of a corporation orthe managers or members acting in a managerial capacity of a limited-liabilitycompany refuse to allow the Commissioner to take possession of the property ofthe company, the Commissioner shall communicate that fact to the AttorneyGeneral. Upon notification from the Commissioner, the Attorney General shallimmediately institute such proceedings as may be necessary to place theCommissioner in immediate possession of the property of the company. Uponpossession of the property, the Commissioner shall make or have made aninventory of the assets and known liabilities of the company.
3. The Commissioner shall file one copy of theinventory in his office and one copy in the office of the clerk of the districtcourt of the county in which the principal office of the trust company islocated and shall mail one copy to each director or officer of the corporation,or the manager or member acting in a managerial capacity of thelimited-liability company, at his last known address.
4. The clerk of the court with which the copy of theinventory is filed shall file it as any other case or proceeding pending in thecourt and shall give it a docket number.
(Added to NRS by
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1. The directors or officers of a corporation or themanagers or members acting in a managerial capacity of a limited-liabilitycompany licensed as a trust company may, within 60 days after the date theCommissioner takes possession of the property, business and assets of thecorporation or limited-liability company licensed as a trust company, make goodany deficit that exists or remedy the unsafe condition of the affairs of thecorporation or limited-liability company licensed as a trust company.
2. At the expiration of the 60-day period set forth insubsection 1, if the deficiency in assets or capital has not been made good orthe unsafe condition remedied, the Commissioner may apply to the court to beappointed receiver and proceed to liquidate the assets of the company that arelocated in this state in the same manner as now provided by law for liquidationof a private corporation in receivership.
3. Another person may not be appointed receiver by anycourt unless he first gives the Commissioner ample notice of his application.
4. The inventory made by the Commissioner pursuant to
5. The expenses of the receiver and compensation ofcounsel, as well as all expenditures required in the liquidation proceedings,must be fixed by the Commissioner subject to the approval of the court and,upon certification of the Commissioner, must be paid out of the money in hishands as the receiver.
(Added to NRS by
UNLAWFUL ACTS; PENALTIES
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1. If a trust company fails to submit any reportrequired pursuant to this chapter or any regulation adopted pursuant theretowithin the prescribed period, the Commissioner may impose and collect a fee ofnot more than $10 for each day the report is overdue.
2. The Commissioner shall adopt regulationsestablishing the amount of the fee that may be imposed pursuant to thissection.
(Added to NRS by
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(Added to NRS by 1969, 1189; A 1983, 1763; 1987,1947; 1995, 1317; 1999,849)
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1. Without a license, conducts any business oractivity for which a license is required pursuant to the provisions of thischapter; or
2. Violates any provision of this chapter or anyregulation adopted pursuant thereto.
(Added to NRS by
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(Added to NRS by 1969, 1189)
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