CBA Publications >> CBA Regulatory Compliance Bulletin >> Vol 2002 No.16 October 1, 2002

Vol 2002 No. 16 October 1, 2002

Timing Requirement For Beneficiary Notices Relaxed

Under a new bill sponsored by the California Bankers Association, AB 2126, trust companies that invest or reinvest in securities of a mutual fund for which they are providing services are now permitted to provide notice to beneficiaries of the initial investment in an affiliated fund at any time before the investment but within 30 days after.

Existing Financial Code Section 1561.1 requires a trust company furnish written notice of its execise of the discretionary powers and a copy of the prospectus relating to the securities to all persons to whom the trust company is required by law to render statements of account or to whom it regularly provides a statement account.This change, which removes limits on advance notices, is intended to provide greater flexibility because of market timing issues or tax consequences for the funds. The bill amends Section 1561.1 of the Financial Code.

If you have any questions, you may call CBA's lead lobby on AB 2126, Maurine Padden, VP/Chief Legislative Counsel at 916-441-7377 x212.