Collective Investment Funds

Review of Participating Accounts

To comply with 12 CFR 9.18 and other federal laws, only eligible accounts may participate in CIFs. Prior to using a CIF as an investment vehicle for an account, the bank must determine that each account is eligible and authorized to participate. Often this is done at the time of account acceptance, with bank personnel reviewing and coding each account as to CIF eligibility. Factors to consider during this initial review include:

• Investment objectives.

• Eligibility for participation based on account type.

• Specific authorization for ERISA-regulated employee benefit plans.

• Whether the plan allows for use of CIFs of the trustee bank, or the trustee bank and affiliates.

• Whether the plan trust document for employee benefit accounts participating pursuant to RR 81-100 in A2 funds incorporates by reference the terms of the CIF’s plan.

• If a particular kind of CIF, such as a guaranteed investment contract (GIC) fund, requires an extended notice prior to withdrawal, whether the fund has adhered to standard practice by obtaining a signed acknowledgement of the notice period prior to such investment.

The bank should also conduct periodic reviews to:

• Evaluate the appropriateness of CIF holdings in each account. The reviews may be part of the annual investment reviews for each participating account.

• Ensure the eligibility of all participating accounts in the fund.

• Ensure that interests in CIFs are not used as collateral for loans with the bank.

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