State Codes and Statutes

Statutes > California > Fin > 1560-1565

FINANCIAL CODE
SECTION 1560-1565



1560.  A trust company may invest its contributed capital only in
the securities and properties in which a commercial bank is permitted
to invest its funds pursuant to Sections 1000 to 1018, inclusive,
and in loans on real property which commercial banks are permitted to
make pursuant to Article 2 (commencing with Section 1220) of Chapter
10.



1561.  Trust funds received by any trust company in connection with
its trust business, if invested, shall be invested as provided in
Part 4 (commencing with Section 16000) of Division 9 of the Probate
Code.


1561.1.  (a) As used in this section:
   (1) "Fund" means any investment company registered under the
Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.), as
amended from time to time.
   (2) "Trust" means any court trust or private trust.
   (3) "Trust Law" means Division 9 (commencing with Section 15000)
of the Probate Code.
   (b) Within the standards established by trust law, including, but
not limited to, Division 9 (commencing with Section 15000) of the
Probate Code, a trust company acting in any capacity under a trust
may, in the exercise of its investment discretion unless the trust
instrument provides expressly to the contrary, invest and reinvest in
the securities of or other interests in any fund to which the trust
company or its affiliate is providing services including, but not
limited to, services as an investment adviser, sponsor, distributor,
custodian, agent, registrar, administrator, servicer, or manager, and
for which the trust company or its affiliate receives compensation.
   (c) Before or within 30 days after the initial investment upon the
exercise of discretionary powers authorized by subdivision (b), the
trust company, acting in any capacity under a trust, shall furnish
written notice of the exercise of the discretionary powers and a copy
of the prospectus relating to the securities to all persons to whom
the trust company is required to render statements of account
pursuant to applicable provisions of the Trust Law or to whom the
trust company regularly provides a statement of account unless
specifically waived in writing.
   (d) With respect to any trust so invested, the trust company shall
disclose to all persons identified in subdivision (c), at least
annually by prospectus, statement of account, or other written
notice, a brief description of the fees or rates charged by the trust
company and its affiliates for its services as investment adviser or
investment manager to the fund.
   (e) In connection with an investment or reinvestment authorized by
subdivision (b), the portion of compensation a trust company
receives from the trust reasonably attributable to investment
advisory or investment management services to the trust shall be
reduced (but not below zero) by an amount equal to compensation that
is received by the trust company or its affiliates for providing
investment advisory or investment management services to the fund for
the portion of the trust invested in the fund.



1562.  Any trust company or bank authorized to engage in the trust
business holding trust funds awaiting investment or distribution may
deposit or leave on deposit such funds with any state or national
bank. Such funds shall not, however, be deposited or left with the
same corporation or association depositing or leaving on deposit such
funds or with any corporation or association holding or owning a
majority of the capital stock of the trust company or bank making or
leaving such deposit, unless such corporation or association shall
first pledge, as security for such deposit, securities eligible for
investment by savings banks having a market value of not less than
the funds so deposited. No security shall be required with respect to
any part of such deposits which is insured under the provisions of
any law of the United States.



1563.  Any trust company acting in any capacity under a court or
private trust or when acting in such capacity with one or more
persons as cofiduciary or cofiduciaries, unless the instrument
creating such trust contains a provision to the contrary, may, with
the consent of such cofiduciary or cofiduciaries cause any stock or
other securities held in any such capacity to be registered in the
name of a nominee or nominees of such trust company and any trust
company when acting as depositary or custodian for the trustee of any
other court or private trust, unless the instrument creating the
trust contains a provision to the contrary, may, with the consent of
the trustee of such other trust, cause any stock or other securities
held by it in such capacity to be registered in the name of a nominee
or nominees of such trust company. Any such trust company shall be
liable for any loss occasioned by the acts of any nominee of such
trust company with respect to such stock or other securities so
registered. The records of such trust company shall at all times show
the ownership of any such stock or other securities and of those
held in bearer form. Such stock or other securities and those held in
bearer form shall at all times be kept by such trust company
separate and apart from its other assets and may be kept by such
trust company:
   (a) In a manner such that all certificates representing the stock
or other securities from time to time constituting the assets of a
particular estate, trust or other fiduciary account are held separate
from those of all other estates, trusts or accounts; or
   (b) In a manner such that, without certification as to ownership
attached, certificates representing stock or other securities of the
same class of the same issuer and from time to time constituting
assets of particular estates, trusts or other fiduciary accounts are
held in bulk, including, to the extent feasible, the merging of
certificates of small denomination into one or more certificates of
large denomination, provided that a trust company, when operating
under the method of safekeeping security certificates described in
this subdivision, shall be subject to such rules and regulations as,
in the case of state chartered institutions, the commissioner and, in
the case of national bank associations, the Comptroller of the
Currency, may from time to time issue. Such trust company shall, on
demand by any party to an accounting by such trust company as
fiduciary or on demand by the attorney for such party, certify in
writing the stock or other securities held by such trust company as
such fiduciary for such party.
   No domestic or foreign corporation or the registrar or transfer
agent of any such corporation shall be liable for registering or
causing to be registered on the books of such corporation any share
or shares or other securities in the name of any nominee of such
trust company or for transferring or causing to be transferred on the
books of any such corporation any share or shares or other
securities theretofore registered by such corporation in the name of
any nominee of such trust company as herein provided when the
transfer is made upon the authorization of such nominee.



1564.  (a) For purposes of this section, two or more trust companies
shall be deemed to be affiliated if they are members of the same
affiliated group, within the meaning of Section 1504 of the Internal
Revenue Code.
   (b) Any trust company may establish and administer common trust
funds composed of property permitted by law for the investment of
trust funds, for the purpose of furnishing investments to any one or
more of the following: (1) itself, as fiduciary; (2) itself and
others, as cofiduciaries; (3) any affiliated trust company including,
without limitation, any foreign (other state) affiliated trust
company, as fiduciary; and (4) any affiliated trust company
including, without limitation, any foreign (other state) affiliated
trust company and others, as cofiduciaries. Any trust company may as
such fiduciary or cofiduciary invest funds which it lawfully holds
for investment in interests in common trust funds administered by
itself or by any affiliated trust company including, without
limitation, any foreign (other state) affiliated trust company, if
such investment is not prohibited by the instrument, judgment,
decree, order, or statute creating or governing such fiduciary
relationship, and if, in the case of cofiduciaries, the trust company
procures the consent of its cofiduciaries to such investment.
   (c) Each common trust fund established hereunder shall be treated
as an entity separate and distinct from the fiduciary relationships
participating therein. No fiduciary in administering a participating
fiduciary relationship shall be required to make any apportionment or
allocation between the principal and income of this relationship
different from that made for the common trust fund. No participating
fiduciary relationship, nor any person having an interest in that
relationship, shall have or be deemed to have any ownership in any
particular property of the common trust fund, but each participating
fiduciary relationship shall have a proportionate undivided interest
in the fund and its income, and the ownership of all property of the
common trust fund shall be in the trustee of the fund.
   (d) This section shall apply to fiduciary relationships now in
existence or hereafter established, whether the same be revocable or
irrevocable. The commissioner, at his or her direction, may make an
examination of any common trust fund established hereunder at the
times and to the extent as he or she may deem advisable. The
provisions of the Corporate Securities Law shall not apply to the
creation, administration, or termination of common trust funds, nor
to participation therein.


1565.  With regard to any participation certificates heretofore
issued by any trust company, secured by a trust deed or mortgage, the
full legal title in the deed or mortgage and debt (referred to in
this section as "security") shall be held by the trust company
issuing the certificates as trustee of an express trust, with all
powers necessary to extend, renew, enforce, collect, and liquidate
the same, acquire title to the property covered thereby either
through foreclosure or by voluntary conveyance; manage, lease, sell
(either for cash or upon deferred payments), exchange, or otherwise
realize upon the security or property and distribute the net proceeds
thereof. All sums so realized shall, as and when received by such
trustee, after payment of its compensation and all costs, charges,
and expenses, including brokers' commissions and advances for taxes
and assessments, incurred or made in connection with the protection,
administration, and liquidation of the security or property, be
distributed to the trusts or persons who are beneficiaries of the
trust, as their interests may appear therein. The rights and
interests therein of any such beneficiary failing to contribute on
demand its or his pro rata of sums advanced, expended, or required by
the trust company in the protection, administration, or liquidation
of the trust shall be subject to a lien for all sums, with legal
interest thereon advanced, expended, or required for any of such
purposes by the trustee or by any other beneficiary of the trust.
   The trust in such security or property shall continue in the trust
company so long as any of the certificates are outstanding,
irrespective of any distribution of the certificates from the trust
in which the same are held.
   The purpose of this section is to define and clarify the rights
and obligations of trust companies and of all persons and trusts
interested in participation certificates issued under any authority
of law.

State Codes and Statutes

Statutes > California > Fin > 1560-1565

FINANCIAL CODE
SECTION 1560-1565



1560.  A trust company may invest its contributed capital only in
the securities and properties in which a commercial bank is permitted
to invest its funds pursuant to Sections 1000 to 1018, inclusive,
and in loans on real property which commercial banks are permitted to
make pursuant to Article 2 (commencing with Section 1220) of Chapter
10.



1561.  Trust funds received by any trust company in connection with
its trust business, if invested, shall be invested as provided in
Part 4 (commencing with Section 16000) of Division 9 of the Probate
Code.


1561.1.  (a) As used in this section:
   (1) "Fund" means any investment company registered under the
Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.), as
amended from time to time.
   (2) "Trust" means any court trust or private trust.
   (3) "Trust Law" means Division 9 (commencing with Section 15000)
of the Probate Code.
   (b) Within the standards established by trust law, including, but
not limited to, Division 9 (commencing with Section 15000) of the
Probate Code, a trust company acting in any capacity under a trust
may, in the exercise of its investment discretion unless the trust
instrument provides expressly to the contrary, invest and reinvest in
the securities of or other interests in any fund to which the trust
company or its affiliate is providing services including, but not
limited to, services as an investment adviser, sponsor, distributor,
custodian, agent, registrar, administrator, servicer, or manager, and
for which the trust company or its affiliate receives compensation.
   (c) Before or within 30 days after the initial investment upon the
exercise of discretionary powers authorized by subdivision (b), the
trust company, acting in any capacity under a trust, shall furnish
written notice of the exercise of the discretionary powers and a copy
of the prospectus relating to the securities to all persons to whom
the trust company is required to render statements of account
pursuant to applicable provisions of the Trust Law or to whom the
trust company regularly provides a statement of account unless
specifically waived in writing.
   (d) With respect to any trust so invested, the trust company shall
disclose to all persons identified in subdivision (c), at least
annually by prospectus, statement of account, or other written
notice, a brief description of the fees or rates charged by the trust
company and its affiliates for its services as investment adviser or
investment manager to the fund.
   (e) In connection with an investment or reinvestment authorized by
subdivision (b), the portion of compensation a trust company
receives from the trust reasonably attributable to investment
advisory or investment management services to the trust shall be
reduced (but not below zero) by an amount equal to compensation that
is received by the trust company or its affiliates for providing
investment advisory or investment management services to the fund for
the portion of the trust invested in the fund.



1562.  Any trust company or bank authorized to engage in the trust
business holding trust funds awaiting investment or distribution may
deposit or leave on deposit such funds with any state or national
bank. Such funds shall not, however, be deposited or left with the
same corporation or association depositing or leaving on deposit such
funds or with any corporation or association holding or owning a
majority of the capital stock of the trust company or bank making or
leaving such deposit, unless such corporation or association shall
first pledge, as security for such deposit, securities eligible for
investment by savings banks having a market value of not less than
the funds so deposited. No security shall be required with respect to
any part of such deposits which is insured under the provisions of
any law of the United States.



1563.  Any trust company acting in any capacity under a court or
private trust or when acting in such capacity with one or more
persons as cofiduciary or cofiduciaries, unless the instrument
creating such trust contains a provision to the contrary, may, with
the consent of such cofiduciary or cofiduciaries cause any stock or
other securities held in any such capacity to be registered in the
name of a nominee or nominees of such trust company and any trust
company when acting as depositary or custodian for the trustee of any
other court or private trust, unless the instrument creating the
trust contains a provision to the contrary, may, with the consent of
the trustee of such other trust, cause any stock or other securities
held by it in such capacity to be registered in the name of a nominee
or nominees of such trust company. Any such trust company shall be
liable for any loss occasioned by the acts of any nominee of such
trust company with respect to such stock or other securities so
registered. The records of such trust company shall at all times show
the ownership of any such stock or other securities and of those
held in bearer form. Such stock or other securities and those held in
bearer form shall at all times be kept by such trust company
separate and apart from its other assets and may be kept by such
trust company:
   (a) In a manner such that all certificates representing the stock
or other securities from time to time constituting the assets of a
particular estate, trust or other fiduciary account are held separate
from those of all other estates, trusts or accounts; or
   (b) In a manner such that, without certification as to ownership
attached, certificates representing stock or other securities of the
same class of the same issuer and from time to time constituting
assets of particular estates, trusts or other fiduciary accounts are
held in bulk, including, to the extent feasible, the merging of
certificates of small denomination into one or more certificates of
large denomination, provided that a trust company, when operating
under the method of safekeeping security certificates described in
this subdivision, shall be subject to such rules and regulations as,
in the case of state chartered institutions, the commissioner and, in
the case of national bank associations, the Comptroller of the
Currency, may from time to time issue. Such trust company shall, on
demand by any party to an accounting by such trust company as
fiduciary or on demand by the attorney for such party, certify in
writing the stock or other securities held by such trust company as
such fiduciary for such party.
   No domestic or foreign corporation or the registrar or transfer
agent of any such corporation shall be liable for registering or
causing to be registered on the books of such corporation any share
or shares or other securities in the name of any nominee of such
trust company or for transferring or causing to be transferred on the
books of any such corporation any share or shares or other
securities theretofore registered by such corporation in the name of
any nominee of such trust company as herein provided when the
transfer is made upon the authorization of such nominee.



1564.  (a) For purposes of this section, two or more trust companies
shall be deemed to be affiliated if they are members of the same
affiliated group, within the meaning of Section 1504 of the Internal
Revenue Code.
   (b) Any trust company may establish and administer common trust
funds composed of property permitted by law for the investment of
trust funds, for the purpose of furnishing investments to any one or
more of the following: (1) itself, as fiduciary; (2) itself and
others, as cofiduciaries; (3) any affiliated trust company including,
without limitation, any foreign (other state) affiliated trust
company, as fiduciary; and (4) any affiliated trust company
including, without limitation, any foreign (other state) affiliated
trust company and others, as cofiduciaries. Any trust company may as
such fiduciary or cofiduciary invest funds which it lawfully holds
for investment in interests in common trust funds administered by
itself or by any affiliated trust company including, without
limitation, any foreign (other state) affiliated trust company, if
such investment is not prohibited by the instrument, judgment,
decree, order, or statute creating or governing such fiduciary
relationship, and if, in the case of cofiduciaries, the trust company
procures the consent of its cofiduciaries to such investment.
   (c) Each common trust fund established hereunder shall be treated
as an entity separate and distinct from the fiduciary relationships
participating therein. No fiduciary in administering a participating
fiduciary relationship shall be required to make any apportionment or
allocation between the principal and income of this relationship
different from that made for the common trust fund. No participating
fiduciary relationship, nor any person having an interest in that
relationship, shall have or be deemed to have any ownership in any
particular property of the common trust fund, but each participating
fiduciary relationship shall have a proportionate undivided interest
in the fund and its income, and the ownership of all property of the
common trust fund shall be in the trustee of the fund.
   (d) This section shall apply to fiduciary relationships now in
existence or hereafter established, whether the same be revocable or
irrevocable. The commissioner, at his or her direction, may make an
examination of any common trust fund established hereunder at the
times and to the extent as he or she may deem advisable. The
provisions of the Corporate Securities Law shall not apply to the
creation, administration, or termination of common trust funds, nor
to participation therein.


1565.  With regard to any participation certificates heretofore
issued by any trust company, secured by a trust deed or mortgage, the
full legal title in the deed or mortgage and debt (referred to in
this section as "security") shall be held by the trust company
issuing the certificates as trustee of an express trust, with all
powers necessary to extend, renew, enforce, collect, and liquidate
the same, acquire title to the property covered thereby either
through foreclosure or by voluntary conveyance; manage, lease, sell
(either for cash or upon deferred payments), exchange, or otherwise
realize upon the security or property and distribute the net proceeds
thereof. All sums so realized shall, as and when received by such
trustee, after payment of its compensation and all costs, charges,
and expenses, including brokers' commissions and advances for taxes
and assessments, incurred or made in connection with the protection,
administration, and liquidation of the security or property, be
distributed to the trusts or persons who are beneficiaries of the
trust, as their interests may appear therein. The rights and
interests therein of any such beneficiary failing to contribute on
demand its or his pro rata of sums advanced, expended, or required by
the trust company in the protection, administration, or liquidation
of the trust shall be subject to a lien for all sums, with legal
interest thereon advanced, expended, or required for any of such
purposes by the trustee or by any other beneficiary of the trust.
   The trust in such security or property shall continue in the trust
company so long as any of the certificates are outstanding,
irrespective of any distribution of the certificates from the trust
in which the same are held.
   The purpose of this section is to define and clarify the rights
and obligations of trust companies and of all persons and trusts
interested in participation certificates issued under any authority
of law.


State Codes and Statutes

State Codes and Statutes

Statutes > California > Fin > 1560-1565

FINANCIAL CODE
SECTION 1560-1565



1560.  A trust company may invest its contributed capital only in
the securities and properties in which a commercial bank is permitted
to invest its funds pursuant to Sections 1000 to 1018, inclusive,
and in loans on real property which commercial banks are permitted to
make pursuant to Article 2 (commencing with Section 1220) of Chapter
10.



1561.  Trust funds received by any trust company in connection with
its trust business, if invested, shall be invested as provided in
Part 4 (commencing with Section 16000) of Division 9 of the Probate
Code.


1561.1.  (a) As used in this section:
   (1) "Fund" means any investment company registered under the
Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.), as
amended from time to time.
   (2) "Trust" means any court trust or private trust.
   (3) "Trust Law" means Division 9 (commencing with Section 15000)
of the Probate Code.
   (b) Within the standards established by trust law, including, but
not limited to, Division 9 (commencing with Section 15000) of the
Probate Code, a trust company acting in any capacity under a trust
may, in the exercise of its investment discretion unless the trust
instrument provides expressly to the contrary, invest and reinvest in
the securities of or other interests in any fund to which the trust
company or its affiliate is providing services including, but not
limited to, services as an investment adviser, sponsor, distributor,
custodian, agent, registrar, administrator, servicer, or manager, and
for which the trust company or its affiliate receives compensation.
   (c) Before or within 30 days after the initial investment upon the
exercise of discretionary powers authorized by subdivision (b), the
trust company, acting in any capacity under a trust, shall furnish
written notice of the exercise of the discretionary powers and a copy
of the prospectus relating to the securities to all persons to whom
the trust company is required to render statements of account
pursuant to applicable provisions of the Trust Law or to whom the
trust company regularly provides a statement of account unless
specifically waived in writing.
   (d) With respect to any trust so invested, the trust company shall
disclose to all persons identified in subdivision (c), at least
annually by prospectus, statement of account, or other written
notice, a brief description of the fees or rates charged by the trust
company and its affiliates for its services as investment adviser or
investment manager to the fund.
   (e) In connection with an investment or reinvestment authorized by
subdivision (b), the portion of compensation a trust company
receives from the trust reasonably attributable to investment
advisory or investment management services to the trust shall be
reduced (but not below zero) by an amount equal to compensation that
is received by the trust company or its affiliates for providing
investment advisory or investment management services to the fund for
the portion of the trust invested in the fund.



1562.  Any trust company or bank authorized to engage in the trust
business holding trust funds awaiting investment or distribution may
deposit or leave on deposit such funds with any state or national
bank. Such funds shall not, however, be deposited or left with the
same corporation or association depositing or leaving on deposit such
funds or with any corporation or association holding or owning a
majority of the capital stock of the trust company or bank making or
leaving such deposit, unless such corporation or association shall
first pledge, as security for such deposit, securities eligible for
investment by savings banks having a market value of not less than
the funds so deposited. No security shall be required with respect to
any part of such deposits which is insured under the provisions of
any law of the United States.



1563.  Any trust company acting in any capacity under a court or
private trust or when acting in such capacity with one or more
persons as cofiduciary or cofiduciaries, unless the instrument
creating such trust contains a provision to the contrary, may, with
the consent of such cofiduciary or cofiduciaries cause any stock or
other securities held in any such capacity to be registered in the
name of a nominee or nominees of such trust company and any trust
company when acting as depositary or custodian for the trustee of any
other court or private trust, unless the instrument creating the
trust contains a provision to the contrary, may, with the consent of
the trustee of such other trust, cause any stock or other securities
held by it in such capacity to be registered in the name of a nominee
or nominees of such trust company. Any such trust company shall be
liable for any loss occasioned by the acts of any nominee of such
trust company with respect to such stock or other securities so
registered. The records of such trust company shall at all times show
the ownership of any such stock or other securities and of those
held in bearer form. Such stock or other securities and those held in
bearer form shall at all times be kept by such trust company
separate and apart from its other assets and may be kept by such
trust company:
   (a) In a manner such that all certificates representing the stock
or other securities from time to time constituting the assets of a
particular estate, trust or other fiduciary account are held separate
from those of all other estates, trusts or accounts; or
   (b) In a manner such that, without certification as to ownership
attached, certificates representing stock or other securities of the
same class of the same issuer and from time to time constituting
assets of particular estates, trusts or other fiduciary accounts are
held in bulk, including, to the extent feasible, the merging of
certificates of small denomination into one or more certificates of
large denomination, provided that a trust company, when operating
under the method of safekeeping security certificates described in
this subdivision, shall be subject to such rules and regulations as,
in the case of state chartered institutions, the commissioner and, in
the case of national bank associations, the Comptroller of the
Currency, may from time to time issue. Such trust company shall, on
demand by any party to an accounting by such trust company as
fiduciary or on demand by the attorney for such party, certify in
writing the stock or other securities held by such trust company as
such fiduciary for such party.
   No domestic or foreign corporation or the registrar or transfer
agent of any such corporation shall be liable for registering or
causing to be registered on the books of such corporation any share
or shares or other securities in the name of any nominee of such
trust company or for transferring or causing to be transferred on the
books of any such corporation any share or shares or other
securities theretofore registered by such corporation in the name of
any nominee of such trust company as herein provided when the
transfer is made upon the authorization of such nominee.



1564.  (a) For purposes of this section, two or more trust companies
shall be deemed to be affiliated if they are members of the same
affiliated group, within the meaning of Section 1504 of the Internal
Revenue Code.
   (b) Any trust company may establish and administer common trust
funds composed of property permitted by law for the investment of
trust funds, for the purpose of furnishing investments to any one or
more of the following: (1) itself, as fiduciary; (2) itself and
others, as cofiduciaries; (3) any affiliated trust company including,
without limitation, any foreign (other state) affiliated trust
company, as fiduciary; and (4) any affiliated trust company
including, without limitation, any foreign (other state) affiliated
trust company and others, as cofiduciaries. Any trust company may as
such fiduciary or cofiduciary invest funds which it lawfully holds
for investment in interests in common trust funds administered by
itself or by any affiliated trust company including, without
limitation, any foreign (other state) affiliated trust company, if
such investment is not prohibited by the instrument, judgment,
decree, order, or statute creating or governing such fiduciary
relationship, and if, in the case of cofiduciaries, the trust company
procures the consent of its cofiduciaries to such investment.
   (c) Each common trust fund established hereunder shall be treated
as an entity separate and distinct from the fiduciary relationships
participating therein. No fiduciary in administering a participating
fiduciary relationship shall be required to make any apportionment or
allocation between the principal and income of this relationship
different from that made for the common trust fund. No participating
fiduciary relationship, nor any person having an interest in that
relationship, shall have or be deemed to have any ownership in any
particular property of the common trust fund, but each participating
fiduciary relationship shall have a proportionate undivided interest
in the fund and its income, and the ownership of all property of the
common trust fund shall be in the trustee of the fund.
   (d) This section shall apply to fiduciary relationships now in
existence or hereafter established, whether the same be revocable or
irrevocable. The commissioner, at his or her direction, may make an
examination of any common trust fund established hereunder at the
times and to the extent as he or she may deem advisable. The
provisions of the Corporate Securities Law shall not apply to the
creation, administration, or termination of common trust funds, nor
to participation therein.


1565.  With regard to any participation certificates heretofore
issued by any trust company, secured by a trust deed or mortgage, the
full legal title in the deed or mortgage and debt (referred to in
this section as "security") shall be held by the trust company
issuing the certificates as trustee of an express trust, with all
powers necessary to extend, renew, enforce, collect, and liquidate
the same, acquire title to the property covered thereby either
through foreclosure or by voluntary conveyance; manage, lease, sell
(either for cash or upon deferred payments), exchange, or otherwise
realize upon the security or property and distribute the net proceeds
thereof. All sums so realized shall, as and when received by such
trustee, after payment of its compensation and all costs, charges,
and expenses, including brokers' commissions and advances for taxes
and assessments, incurred or made in connection with the protection,
administration, and liquidation of the security or property, be
distributed to the trusts or persons who are beneficiaries of the
trust, as their interests may appear therein. The rights and
interests therein of any such beneficiary failing to contribute on
demand its or his pro rata of sums advanced, expended, or required by
the trust company in the protection, administration, or liquidation
of the trust shall be subject to a lien for all sums, with legal
interest thereon advanced, expended, or required for any of such
purposes by the trustee or by any other beneficiary of the trust.
   The trust in such security or property shall continue in the trust
company so long as any of the certificates are outstanding,
irrespective of any distribution of the certificates from the trust
in which the same are held.
   The purpose of this section is to define and clarify the rights
and obligations of trust companies and of all persons and trusts
interested in participation certificates issued under any authority
of law.

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