                                 CODE OF VIRGINIA

FUNDS AWAITING INVESTMENT OR DISTRIBUTION (§ 6.2-1089)

A. Funds and assets held in a fiduciary capacity by an association awaiting
investment or distribution shall not be held uninvested or undistributed any
longer than is reasonable for the proper management of the trust account.

B. Funds and assets held in trust by an association, including managing agency
accounts, awaiting investment or distribution, unless prohibited by the
governing instrument, may be deposited in other departments of the association,
provided that the association shall first set aside under the sole control of
the trust department, as collateral security:

   1. Direct obligations of the United States, or other obligations fully
   guaranteed by the United States as to principal and interest;

   2. Readily marketable securities of the classes in which fiduciaries are
   authorized or permitted to invest trust funds, as set forth in &#xA7;
   64.2-1502; or

   3. Other readily marketable securities as may be authorized by the
   Commissioner.
   				Such collateral securities, or securities substituted therefor as
   collateral, shall at all times be at least equal in face value to the amount
   of trust funds so deposited, but such security shall not be required to the
   extent that the funds so deposited are insured by the Federal Deposit
   Insurance Corporation or other federal insurance agency. The requirements of
   this subsection are met when qualifying assets of the association are pledged
   in such manner as to fully secure all trust account funds deposited by the
   trust department of the association in another department of the association.

C. Any funds held by an association as fiduciary awaiting investment or
distribution and deposited in other departments of the association shall be made
productive.

D. In the event of the failure or liquidation of an association, the owners of
the funds held in trust and deposited in another department of the association
shall have a first lien on the securities set apart as collateral for such
funds, in addition to any other claim that such owners may have against the
association.

HISTORY: 1984, c. 303, § 6.1-195.86; 1990, c. 3; 1992, c. 810; 2010, c. 794.