1. (a)

   1. (1) This concept permits the consolidation of the assets of the various trusts being administered by the bank into a common fund for investment purposes and to allocate to each trust a specific interest in this fund based on the amount of its contribution.
   2. (2) An insured state-chartered nonmember bank or trust establishing a common trust fund should consult the Federal Deposit Insurance Corporation regarding its rules on such common trust funds.

2. (b)

   1. (1) The Internal Revenue Code and the regulations and rulings promulgated thereunder contain certain provisions that exempt common trust funds from income taxation and instead impose the tax on each trust, whether or not the income is distributed.
   2. (2) If there is a co-fiduciary, the bank establishing the common trust fund must secure the permission of the co-fiduciary prior to the investment of trust assets into the fund.
   3. (3) If the bank merely acts as an investment agent in respect to the investments of one (1) of its customers, such funds may not be placed in the common trust fund.

   4. (4)

      1. (A) Any state bank establishing a common trust fund shall obtain approval of the Bank Commissioner in advance of implementation.
      2. (B) Such approval shall not be unreasonably withheld.

Codification Notes: This section was promulgated as Section 47-701.4 of the State Bank Department Rules prior to codification into the Code of Arkansas Rules. This section as promulgated prior to codification into the Code of Arkansas Rules provided as follows: "(Reference A.C.A. § 23-47-701)"