Collective Investment Funds

Periodic Account Reviews (Investment Reviews)

12 CFR 9.6(c) requires the bank, at least once during each calendar year, to conduct a review of all assets for which it has investment discretion. All CIF assets must be reviewed at least once a year; most are reviewed more frequently. The review must determine whether CIF assets are consistent with the fund’s plan and investment strategy. The review should focus upon the fund’s investment policy statement, analyze investment performance, and reaffirm or change the investment policy statement, including asset allocation guidelines. If certain assets are no longer appropriate for the fund, those assets should be replaced consistent with prudent investment practices. Items to consider include fund objectives, beneficiaries’ needs, and income tax consequences.

Fiduciaries should also perform periodic administrative reviews of each CIF to determine whether the fund is being administered in accordance with the terms and conditions of the governing instrument. Periodic fund reviews are generally completed by an administrative officer working with a designated investment manager or adviser, and are normally submitted to and reviewed by an appropriate fiduciary committee.

If investment management is outsourced, the bank must provide adequate oversight, as required by the exclusive management and prudent delegation requirements of 12 CFR 9.18(b)(2).

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