10VAC5-22-80: Delegation of trust functions; confidentiality

A trust company, as trustee, is responsible to settlors and beneficiaries of trusts for carrying out the terms of trust agreements. This responsibility remains with the company regardless of any arrangement that may place one or more trust functions (e.g., administration, custody, investment advice, investment management) with a third party. The trust company must retain sufficient control of trust accounts to be able to meet its responsibilities.

In instances where investment discretion, i.e., the authority to determine what securities or other property shall be bought or sold for an account, is delegated to an affiliate of a trust company, the affiliate must be named by the settlor in the trust agreement or other controlling document. The trustee may advise the settlor in selecting such affiliate, and shall review its performance periodically and advise the settlor whether it is in the best interest of the trust to continue the delegation of investment discretion to such affiliate.

A trust company shall preserve the confidentiality of customers' financial information and shall not disclose such information without the consent of the customer.