Form OTS Form 1240 OTS Form 1240 Application for Fiduciary Powers

OMB No. 1550-0037
Expiration Date: __________

DRAFT
OFFICE OF THRIFT SUPERVISION
APPLICATION FOR FIDUCIARY POWERS

PAPERWORK REDUCTION ACT STATEMENT
Office of Thrift Supervision (OTS) will use this information to evaluate a Federal savings
association’s proposed fiduciary activities in light of statutory and regulatory criteria.
Collection of the information is mandatory for Federal savings associations as defined in
Section 2 of the Home Owners’ Loan Act (HOLA) (12 U.S.C. § 1462(5)).
PUBLIC REPORTING BURDEN FOR THIS COLLECTION OF INFORMATION IS ESTIMATED
TO AVERAGE 27 HOURS PER RESPONSE, INCLUDING THE TIME FOR REVIEWING
INSTRUCTIONS, SEARCHING EXISTING DATA SOURCES, GATHERING AND
MAINTAINING THE DATA NEEDED, AND COMPLETING AND REVIEWING THE
COLLECTION OF INFORMATION. SEND COMMENTS REGARDING THIS BURDEN
ESTIMATE OR ANY OTHER ASPECT OF THIS COLLECTION OF INFORMATION,
INCLUDING SUGGESTIONS FOR REDUCING THIS BURDEN, TO THE OFFICE OF THRIFT
SUPERVISION, 1700 G STREET, N.W., WASHINGTON, DC 20552 AND TO THE OFFICE OF
MANAGEMENT AND BUDGET, PAPERWORK REDUCTION PROJECT (1550-0037),
WASHINGTON, DC 20503.
An organization or a person is not required to respond to a collection of information
unless it displays a currently valid OMB control number.

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OTS Form 1240
Revised 2006

OMB No. 1550-0037
Expiration Date: __________

OFFICE OF THRIFT SUPERVISION
APPLICATION FOR FIDUCIARY POWERS
Instructions to Applicant
An “Application For Fiduciary Powers” (application) must be completed by all
Federal savings associations (you or your), as defined in Section 2 of the HOLA, 12
U.S.C. § 1462(5), seeking authorization to engage in fiduciary activities, pursuant to 12
U.S.C. § 1464(n) and 12 C.F.R. Part 550. The application is required whether the fiduciary
activities will be offered directly through the savings association, through an operating
subsidiary, or through a service corporation as defined in 12 C.F.R. § 559.2.
OTS will use the information you provide on the fiduciary powers application to
evaluate your proposed fiduciary activities using applicable statutory and regulatory
criteria. You must provide complete responses to each item. You may include additional
information that would clarify or support your request to engage in fiduciary activities.
OTS may also request that you provide additional information. Refer to 12 C.F.R. Parts
516 and 550 for the appropriate filing procedures. All questions concerning OTS
procedures for processing fiduciary powers applications should be directed to the OTS
Regional Office responsible for your supervision.
OTS will consider the following factors when reviewing your application:
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your financial condition;
whether your capital can support the proposed fiduciary activities;
your overall performance in operating your other activities;
the nature of the proposed fiduciary activities;
whether your directors and management appear qualified to supervise the
proposed fiduciary activities;
whether your legal counsel appears qualified to advise you regarding your
proposed fiduciary activities;
your proposed business plan;
the needs of the community for the proposed fiduciary activities; and
any other factors or circumstances that the OTS considers proper.

If approval is granted, you must provide written notice to OTS within ten days of
acceptance of your first account relationship. If you do not commence the fiduciary
activities within one year of the date of approval, you may be asked to furnish current or
additional information prior to accepting any accounts. If you do not commence the
fiduciary activities within five years of the date of approval, your fiduciary powers will be
considered as revoked and you must reapply before accepting any fiduciary accounts.

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OTS Form 1240
Revised 2006

OMB No. 1550-0037
Expiration Date: __________

OFFICE OF THRIFT SUPERVISION
APPLICATION FOR FIDUCIARY POWERS
Section I
1. You intend to exercise fiduciary powers:

2. You intend to use fiduciary powers:

___ exclusively
___ in addition to other activities
(e.g., taking deposits, lending)

___ primarily as a customer accommodation
___ to establish a viable profit center

3. You intend to exercise fiduciary powers at:

___ the savings association
___ an operating subsidiary
___ a service corporation

4. You intend to exercise fiduciary powers under the name of (i.e., doing business as):
__________________________________
__________________________________
5. You are requesting:

___ full fiduciary powers (skip to No. 6)
___ limited fiduciary powers (complete No. 5a)

5a. You intend to seek fiduciary accounts where you will be named:
Personal:

___ trustee
___ executor
___ administrator
___ guardian

___ conservator
___ other (specify)
_______________
_______________

Employee Benefit:

___ trustee

___ other (specify)
_______________
_______________

Corporate:

___ trustee
___ transfer agent
___ registrar

___ other (specify)
_______________
_______________

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OTS Form 1240
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OMB No. 1550-0037
Expiration Date: __________

Investment Manager - (having sole or shared authority to determine what
securities or other assets to purchase or sell on behalf of
another)
or
Investment Advisor - (giving investment advice for a fee)
for:

___ individuals
___ personal trusts
___ employee benefit plans
___ corporate trusts
___ common or collective funds

___ mutual funds
___ endowments
___ foundations
___ charities
___ other (specify)
_______________
_______________

6. Addresses where you will operate offices that provide core fiduciary functions, such
as entering into binding commitments, making discretionary decisions, and giving
advice:
_________________________________________
_________________________________________
_________________________________________
7. Person to whom questions regarding this application should be addressed:
Name and Title:
Mailing Address:
Phone and Email:

_______________________________________________
_______________________________________________
_______________________________________________

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OTS Form 1240
Revised 2006

OMB No. 1550-0037
Expiration Date: __________

OFFICE OF THRIFT SUPERVISION
APPLICATION FOR FIDUCIARY POWERS

APPLICANT (Name and Home office location)

DOCKET NUMBER

_______________________________________
_______________________________________

________________

Section II
General Information

1.

Provide a copy of the Board of Director’s resolution approving the
exercise of fiduciary powers and the name of the entity(s) that will be
exercising them.

2.

Provide a legal opinion of independent counsel stating that the fiduciary
services you intend to offer are permitted under state law in all states
where you intend to conduct core fiduciary activities. Include citations
and copies of cited state laws and regulations.

3.

Submit a certification stating that the capital you intend to maintain, at a
minimum, is equivalent to the state law requirements for state-chartered
banks, trust companies, and corporations exercising fiduciary powers in
the states where you intend to conduct core fiduciary activities.

4.

If the state requires corporations acting in a fiduciary capacity to deposit
securities with state authorities for the protection of private or court
trusts, indicate how you will meet this requirement.

5.

Submit an organizational chart of the overall institution (parent,
subsidiaries, and affiliates) including descriptions of the business lines of
each entity. Discuss in detail the intended use of affiliates or other related
entities to support the proposed fiduciary activities.

6.

Submit an organizational chart of personnel, including the Board of
Directors, various committees, and management responsible for the
oversight, direction, and performance of the proposed fiduciary activities.

7.

Provide resumes and discuss specific qualifications of your Board of
Directors to supervise the proposed fiduciary activities. Discuss any
anticipated changes to your Board’s composition.

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OTS Form 1240
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8.

Discuss anticipated Board of Directors’ committee structure relating to
the proposed fiduciary activities, specifically addressing the duties of
each committee and naming committee members.

9.

Provide resumes and discuss specific qualifications of anticipated
management and staff to support the proposed fiduciary activities.

10. Discuss any proposed use of dual Board members, officers or staff (i.e.,
individuals employed by both the entity offering the trust services and any
related entity) and the proposed reporting structure. Address the
potential for conflicts of interest arising from their dual roles and how
they will be managed. Explain how costs such as overhead and salaries
will be allocated for dual employees.
11. Identify your proposed legal counsel for fiduciary matters and describe
their qualifications and experience in handling fiduciary activities. Detail
any services they currently perform for you.
12. Provide a copy of policies and procedures to support your proposed
fiduciary activities, including, as applicable, but not limited to, the specific
requirements of 12 C.F.R. § 550.140.
13. Describe the proposed audit program for overseeing fiduciary activities in
compliance with 12 C.F.R. §§ 550.440 through 550.480. Identify the
internal and/or external auditors to be used and their specific fiduciary
auditing qualifications.
14. Describe your proposed investment decision-making process relating to
discretionary fiduciary account relationships. State whether you, or any
related entity, are a registered investment advisor under the Investment
Advisers Act of 1940 (15 USC 80b-1, et. seq.).
15. Describe your current or proposed Internet site and how your proposed
fiduciary activities may be incorporated into it. Describe anticipated
customer access capabilities. Address requirements under 12 C.F.R. Part
555 if applicable.
16. Identify the data processing system to be used to support the proposed
fiduciary activities. Describe the types of records it will generate and how
they will be maintained to ensure compliance with 12 C.F.R. §§ 550.410
through 550.430. Address the qualifications and training of data
processing and support staff. Also address compliance with
recordkeeping and confirmation requirements for securities transactions
under 12 C.F.R. Part 551, if applicable.

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OTS Form 1240
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OMB No. 1550-0037
Expiration Date: __________

17. Supply names of anticipated fiduciary service providers, including related
entities, describing their qualifications and experience and the activities
you expect to delegate to them. Provide copies or details of anticipated
service agreements. If agreements will be between you or your subsidiary
and a parent or affiliate, describe how the arrangements will comply with
Section 23B of the Federal Reserve Act (12 USC 371c-1), Section 1468 of
the HOLA, 12 C.F.R. § 563.41, and Regulation W.
18. Describe the anticipated role of any employees, agents, or independent
contractors of the parent, affiliate, subsidiary, service corporation, or
independent third-party in the marketing, advertising or soliciting of
customers for your proposed fiduciary activities. Describe the training
you intend to provide to them to ensure compliance with applicable law
and your fiduciary policies and procedures.
19. Describe any anticipated payments of direct or indirect referral fees, how
they will be determined, who will be eligible, and the anticipated impact on
fiduciary income.
20. Describe any litigation pending against you, your parent, affiliates, or
subsidiaries, including the names of plaintiffs, docket numbers, and the
nature and amount of claims. Provide details of any government
investigations (e.g., SEC, NASD, state attorneys general, state insurance
commissions) of you, your parent, affiliates, or subsidiaries performed
during the past ten years.
21. Provide information on your major insurance coverage (e.g., fidelity,
errors and omissions, employee dishonesty) and state whether it meets
the requirements of 12 C.F.R. § 550.190. Discuss any anticipated changes
to address your proposed fiduciary activities.
22. Provide any additional comments or information in support of your
application.

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OTS Form 1240
Revised 2006

OMB No. 1550-0037
Expiration Date: __________

OFFICE OF THRIFT SUPERVISION
APPLICATION FOR FIDUCIARY POWERS

APPLICANT (Name and Home office location)

DOCKET NUMBER

______________________________________
______________________________________

________________

Section III
PROPOSED FIDUCIARY POWERS
Directors, Fiduciary Officers and Managers
Submit the following information for EACH Director, Manager of Fiduciary Activities, and
Fiduciary Officer:

Name of Director, Manager or Officer:
Present Employer:
Present Position and Years Employed:
Present Duties:
Proposed Position:
Proposed Duties:
Proposed Location:
Proposed Duality of Employment (internally or with a parent, affiliate or subsidiary):
Describe any specialized fiduciary or investment training and any prior employment
history that would support their qualifications related to fiduciary or investment
activities.
Furnish the name, location, individual’s position, and business description for all
companies and partnerships in which the individual is a director, officer, employee,
partner or substantial shareholder. Indicate whether any of these business interests
involve entities that do business with you or compete with you in any manner.

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OTS Form 1240
Revised 2006

OMB No. 1550-0037
Expiration Date: __________

OFFICE OF THRIFT SUPERVISION
APPLICATION FOR FIDUCIARY POWERS

APPLICANT (Name and Home office location)

DOCKET NUMBER

______________________________________
______________________________________

________________

Section IV
Proposed Fiduciary Powers
Committee Structure
Submit the following information for EACH member of any committee (e.g., fiduciary,
investment, audit) with fiduciary supervision responsibilities and indicate whether the
committee is at the Board of Directors level or lower:

Name of Committee:
Name of Committee Member:
Position with you or your subsidiary, parent, or affiliate:
Principal Occupation:
Discuss the committee member’s qualifications to fulfill the committee assignment.

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OTS Form 1240
Revised 2006

OMB No. 1550-0037
Expiration Date: __________

OFFICE OF THRIFT SUPERVISION
APPLICATION FOR FIDUCIARY POWERS

APPLICANT (Name and Home office location)

DOCKET NUMBER

______________________________________
______________________________________

________________

Section V
Fiduciary Business Plan
Submit a copy of your business plan for the proposed fiduciary activities. The plan
should, at a minimum, address the following issues:
1.

Specify the fiduciary services to be offered and fees to be charged.

2.

Discuss the reasons for seeking fiduciary powers. If the fiduciary powers will be
used to establish a profit center, estimate a realistic timeframe for achieving
profitable operating results and discuss factors that may affect meeting business
goals or influence profitability.

3.

Discuss how you intend to market your services and establish your customer
base. Include any plans to acquire business through the purchase or transfer of
existing fiduciary account relationships.

4.

Discuss your current financial condition and performance, including available
capital resources. Prepare pro-forma financial statements reflecting the addition
of fiduciary activities to your operations over the next three fiscal years. Discuss
your ability to support fiduciary activities, including potential operating losses,
and their impact on your overall financial condition.

5.

Discuss the anticipated budget process as it relates to fiduciary activities.

6.

Discuss your assessment of the risks to you associated with the proposed
fiduciary services. Include your plans for identifying, measuring, monitoring, and
controlling those risks on an ongoing basis.

7.

Address general economic conditions and competitive conditions relating to
fiduciary services you intend to provide in your market area.

8.

Address the knowledge and expertise of management and staff, system
capabilities, and other factors discussed in Sections I through IV of this
application.

9.

Complete Tables 1 and 2 (attached) and discuss the underlying assumptions
supporting the information furnished.

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OTS Form 1240
Revised 2006

OMB No. 1550-0037
Expiration Date: __________

OFFICE OF THRIFT SUPERVISION
APPLICATION FOR FIDUCIARY POWERS

APPLICANT (Name and Home office location)

DOCKET NUMBER

______________________________________
______________________________________

________________

ESTIMATED INCOME AND EXPENSE FROM FIDUCIARY ACTIVITIES
Table 1
Description

Year One

Year Two

Income from Fees
Income/Credit from
Fiduciary Cash Deposited
in Own/Related Institution
Other Income (specify)
TOTAL INCOME

Personnel Expense
Occupancy Expense
IT Expense
Investment Related
Expense
Legal Fees
Other Expense (specify)
TOTAL EXPENSE

NET PROFIT/(LOSS)

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OTS Form 1240
Revised 2006

Year Three

OMB No. 1550-0037
Expiration Date: __________

OFFICE OF THRIFT SUPERVISION
APPLICATION FOR FIDUCIARY POWERS

APPLICANT (Name and Home office location)

DOCKET NUMBER

_______________________________________
_______________________________________

________________

ESTIMATED STAFFING AND ACCOUNT INFORMATION
Table 2
Description

Year One

Year Two

Year Three

Number of Officers
Number of Staff
Amount
(000)

Accounts
(#)

Amount
(000)

DISCRETIONARY
ACCOUNTS
Estate/Court Accounts
Personal Trust
Employee Benefit Trust
Corporate Trust
Investment Management &
Investment Advisory
Accounts
Other (specify)
Total Discretionary
Accounts

NON-DISCRETIONARY
ACCOUNTS
Estate/Court Accounts
Directed Personal Trust or
Agency
Directed Employee Benefit
Trust or Agency
Corporate Trust/Agency
Custody and Safekeeping
Accounts
Other (specify)
Total Non-Discretionary
Accounts

Total Discretionary and
Non-Discretionary
Accounts
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OTS Form 1240
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Accounts
(#)

Amount
(000)

Accounts
(#)

OMB No. 1550-0037
Expiration Date: __________

RESOLUTION AND CERTIFICATION OF BOARD OF DIRECTORS

This application is made pursuant to authorization and direction of the Board of
Directors of this institution, as evidenced by the following resolution adopted by said
Board at a meeting duly called and held on the __________ day of
_____________________, 20____.
RESOLVED, That an application be made by this institution for the written approval of the
Office of Thrift Supervision to exercise full fiduciary powers / limited fiduciary powers
(strike one) as set forth in the accompanying “Application for Fiduciary Powers” dated
_____________________.
FURTHER RESOLVED, That the Chief Executive Officer and the Secretary of the
association are hereby authorized and directed, on behalf of this institution, to execute
and submit such application to the Office of Thrift Supervision.

______________________________
Applicant Name

(SEAL)

______________________________
Location
ATTEST:

BY:

______________________________
Secretary

_______________
Date

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OTS Form 1240
Revised 2006

______________________________
Chief Executive Officer