New South Wales Consolidated Acts

TRUSTEE COMPANIES ACT 1964 - SECT 16

16 Common trust funds

(1) A trustee company may establish and keep in its books one or more funds to be known as common trust funds and, if more than one, with an appropriate distinguishing number.

(2) Before establishing a common trust fund the trustee company shall determine the class or classes of investment in which moneys to the credit of that common trust fund may be invested.

(3) Subject to this Act, balances to the credit of any current account in the books of the trustee company at the commencement of this Act or at any time thereafter kept by it as executor or administrator or as holder of any of the offices mentioned in section 11 may be carried to the appropriate common trust fund: Provided that:

(a) Nothing in this section shall authorise the carrying to the credit of any common trust fund of any moneys the investment of which in a common trust fund is expressly forbidden by the instrument creating the trust or by the conditions subject to which such moneys are held by the trustee company.

(b) The balance to the credit of any particular account shall not be carried to a common trust fund unless by the determination relating to that common trust fund investment is limited to such class or classes of investment as would be lawful investments for such balance if separately invested.

(4) Investments made from moneys forming part of a common trust fund shall not be made in the name or on account of, nor shall they belong to, any particular estate, trust, property or person, but the trustee company shall keep an account in its books showing at all times the current amount for the time being at credit in the common trust fund on account of each estate, trust, property or person.

(5) Any profits or losses upon realisation of any investment in a common trust fund shall be credited or debited (as the case may require) to the common trust fund and be received or borne proportionately by the several amounts constituting the common trust fund at the time of such realisation.

(6) A trustee company may sell investments belonging to a common trust fund and may withdraw any of the moneys belonging to a common trust fund for any purpose of or relating to the exercise and discharge of its powers, authorities, duties and functions.

(7) A trustee company may, in its discretion, at any time withdraw from a common trust fund any amount at credit in the common trust fund on account of any estate, trust, property or person, and invest such amount on the separate account of such estate, trust, property or person.

(8) Amounts so withdrawn from a common trust fund shall, as from the date of such withdrawal, cease to have any claim for interest or otherwise from the common trust fund.

(9) If for the purpose of providing for any withdrawal any investment is realised, then, for the purposes of this section, that part of the moneys arising from such realisation which is equal to the amount of interest accrued on such investment shall be deemed to be income of the common trust fund and the balance shall be deemed to be capital.

(10) The trustee company must, on at least one day during each calendar month, determine the value of the investments in each common trust fund as on that day.

(11) Investments in and withdrawals from a common trust fund during a calendar month are to be effected on the basis of the value of the investments in the fund on the date of the last valuation made under subsection (10).

(12) At intervals of not more than 6 months the trustee company shall pay or allocate the income arising from a common trust fund proportionately to or among the estates, trusts, properties and persons entitled to the income arising from the capital sums invested in the common trust fund according to the several sums so invested and the periods for which they remain so invested.

(13) Where a trustee company is appointed and acts jointly with any other person as executor or administrator or as holder of any of the offices mentioned in section 11 the following provisions shall have effect:

(a) the trustee company may, with the consent in writing of such other person, exercise and discharge in relation to any of the property jointly held or controlled all or any of the powers, authorities, duties and functions conferred or imposed by this section which the trustee company, if acting alone would have had or might have exercised or discharged,

(b) all moneys under the control of the trustee company and such other person jointly may with the consent in writing of such other person be dealt with by the trustee company alone in the same manner as moneys under the control of the trustee company alone,

(c) the person acting jointly with the trustee company shall be exonerated from any liability which, but for this paragraph, might have arisen in consequence of the exercise of the powers conferred by this subsection.

(14) In addition to the commission, fees and remuneration which it is entitled to receive in accordance with this Act, a trustee company shall be entitled to charge and receive from or out of any income received by a common trust fund a fee (according to the value of the work done and the services rendered) calculated at a rate not exceeding one per cent per annum upon the capital sums invested in the common trust fund during the period in respect of which the income is received or allocated, for the establishment, keeping (including the keeping of books of account) and conduct of the common trust fund.