CODE OF VIRGINIA

ASSOCIATION’S OPERATION AND SUPERVISION OF TRUST DEPARTMENT (§ 6.2-1086)

A. The board of directors of an association is responsible for the proper
exercise of fiduciary powers by the association. All matters pertinent thereto,
including the determination of policies, the investment and disposition of
property held in a fiduciary capacity, and the direction and review of the
actions of all officers, employees, and committees utilized by the association
in the exercise of its fiduciary powers, are the responsibility of the board. In
discharging this responsibility, the board of directors may assign, by action
duly entered in the minutes, the administration of such of the
association’s trust powers as it may consider proper to assign to such
directors, officers, employees, or committees as it may designate.

B. No fiduciary account shall be accepted without the approval of the directors,
officers, or committees to whom the board may have assigned the performance of
that responsibility. A written record shall be made of such acceptances and of
the relinquishment or closing out of all fiduciary accounts.

C. Upon the establishment of a trust account for which the association has
investment authority, a prompt review of the assets of such account shall be
made. The board of directors shall also ensure that at least once during every
calendar year thereafter, and within 15 months of the last review, all the
assets held in or held for each trust account for which the association has
investment authority are reviewed to determine the advisability of retaining or
disposing of such assets. The board of directors shall act to ensure that all
investments have been made in accordance with the terms and purposes of the
governing instrument and in accordance with applicable law.

D. The trust department may utilize personnel and facilities of other
departments of the association, and other departments of the association may
utilize personnel and facilities of the trust department to the extent not
otherwise prohibited by the law.

E. Every association exercising trust powers shall adopt written policies and
procedures to ensure that the securities laws of the United States and the
Commonwealth are complied with in connection with any decision or recommendation
to purchase or sell any security. Such policies and procedures, in particular,
shall ensure that the association’s trust department shall not use
material inside information in connection with any decision or recommendation to
purchase or sell any security.

F. Every association exercising fiduciary powers shall designate, employ, or
retain legal counsel who shall be readily available to pass upon fiduciary
matters and to advise the association and its trust department.

HISTORY: 1984, c. 303, § 6.1-195.83; 2010, c. 794.