NYSBL 100-c and GRBB Part 22
October 5, 2005
To: Ed Halligan
From: Bryan Farrell
Subject: Procedure for conversion of Common Trust Fund to Mutual Fund
I have reviewed the regulations applicable to common trust funds and have consulted with the Applications Section in an effort to determine the appropriate conversion procedures that would apply. The regulations are silent on the matter, and Applications was unaware of any particular procedure or application that would apply.
I then reviewed the materials submitted by [ ] in 1996 in connection with a similar conversion, which the Legal Division noted with approval. That package of documents, which is attached, would suggest that the following documents should be submitted by the bank:
- A detailed description of the plan that can also serve in satisfaction of a 30 day notice requirement
- Appropriate Board resolutions
- An opinion that the exchange of shares between the CTF and the mutual funds would be tax-free (otherwise the proposal could diminish the value of present CTF share values)—in house counsel opinion should suffice
- Appropriate notices to co-fiduciaries.
- Any required plan amendments
- A final judicial accounting