<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 51A-6A-19 - Determining capital--Minimum--Purpose of capital--Fidelity bond and liability insurance policy. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2071674Normal { margin-top: 0; margin-bottom: 0; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2071674SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2071674CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2071674Normal-000000 { margin-top: 0; margin-bottom: 0; text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2071674DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2071674000001 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2071674SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2071674SCL-000002 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } </style></head><body><div><p dir="ltr" class="s2071674Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=51A-6A-19"><span class="s2071674SENU">51A-6A-19</span></a><span xml:space="preserve" class="s2071674SENU">. </span><span class="s2071674CL">Determining capital--Minimum--Purpose of capital--Fidelity bond and liability insurance policy.</span></p><p dir="ltr" class="s2071674Normal-000000"><span class="s2071674DefaultParagraphFont">For purposes of this section, the capital of a trust company is the total of the aggregate par value of its outstanding shares of capital stock or ownership units, its surplus, and its undivided profits. The minimum capital of a trust company is two hundred thousand dollars. The director may require that the trust company have more capital than the amount specified if the director determines that the amount and character of the anticipated business of the trust company and the safety of the customers so require. This chapter recognizes that capital for a trust company serves a different purpose than does capital for a bank. It is not intended that capital requirements for trust companies be judged by the same standards as banks. Basic protection for fiduciary clients of a trust company shall be provided by the purchase of a fidelity bond and a director's and officer's liability insurance policy. The bond and insurance shall be in an amount of not less than one million dollars each. The trust company shall give notice of cancellation or nonrenewal of the bond or insurance policy to the director within ten days of the receipt of cancellation or nonrenewal. Except as may be provided elsewhere in this chapter, no trust company may reduce voluntarily its capital stock or ownership units or surplus below the amount required in this section.</span></p><p dir="ltr" class="s2071674Normal"><span xml:space="preserve" class="s2071674000001"> </span></p><p dir="ltr" class="s2071674Normal"><span class="s2071674SCL">Source:</span><span xml:space="preserve" class="s2071674SCL-000002"> SL 1995, ch 268, § 17; SL 2002, ch 220, § 2; SL 2006, ch 243, § 2; SL 2008, ch 258, § 8; SL 2013, ch 239, § 3.</span></p></div></body></html><br /><hr><br /><html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 51A-6A-19 - Determining capital--Minimum--Purpose of capital--Fidelity bond and liability insurance policy. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2071675Normal { text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s2071675SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2071675CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2071675Normal-000000 { text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s2071675DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s2071675Normal-000001 { margin-left: 0.70in; text-indent: -0.45in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-right: 0; margin-bottom: .001pt; } p.s2071675Normal-000002 { text-indent: 0.25in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s2071675000003 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2071675SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2071675SCL-000004 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } </style></head><body><div><p dir="ltr" class="s2071675Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=51A-6A-19.1"><span class="s2071675SENU">51A-6A-19.1</span></a><span xml:space="preserve" class="s2071675SENU">. </span><span class="s2071675CL">Additional capital requirements--Safety and soundness factors to be considered--Effective date of order--Hearing.</span></p><p dir="ltr" class="s2071675Normal-000000"><span class="s2071675DefaultParagraphFont">The director may require additional capital for an existing trust company if the director finds the condition and operations of an existing trust company requires additional capital consistent with the safety and soundness of the trust company. The safety and soundness factors to be considered by the director in the exercise of such discretion include:</span></p><p dir="ltr" class="s2071675Normal-000001"><span class="s2071675DefaultParagraphFont">(1)    The nature and type of business conducted;</span></p><p dir="ltr" class="s2071675Normal-000001"><span class="s2071675DefaultParagraphFont">(2)    The nature and degree of liquidity in assets held in a corporate capacity;</span></p><p dir="ltr" class="s2071675Normal-000001"><span class="s2071675DefaultParagraphFont">(3)    The amount of fiduciary assets under management or administration;</span></p><p dir="ltr" class="s2071675Normal-000001"><span class="s2071675DefaultParagraphFont">(4)    The type of fiduciary assets held and the depository of such assets;</span></p><p dir="ltr" class="s2071675Normal-000001"><span class="s2071675DefaultParagraphFont">(5)    The complexity of fiduciary duties and degree of discretion undertaken;</span></p><p dir="ltr" class="s2071675Normal-000001"><span class="s2071675DefaultParagraphFont">(6)    The competence and experience of management;</span></p><p dir="ltr" class="s2071675Normal-000001"><span class="s2071675DefaultParagraphFont">(7)    The extent and adequacy of internal controls;</span></p><p dir="ltr" class="s2071675Normal-000001"><span class="s2071675DefaultParagraphFont">(8)    The presence or absence of annual unqualified audits by an independent certified public accountant;</span></p><p dir="ltr" class="s2071675Normal-000001"><span class="s2071675DefaultParagraphFont">(9)    The reasonableness of business plans for retaining or acquiring additional capital;</span></p><p dir="ltr" class="s2071675Normal-000001"><span class="s2071675DefaultParagraphFont">(10)    The existence and adequacy of insurance obtained or held by the trust company for the purpose of protecting its clients, beneficiaries, and grantors; and</span></p><p dir="ltr" class="s2071675Normal-000001"><span class="s2071675DefaultParagraphFont">(11)    Any other factor deemed relevant by the director.</span></p><p dir="ltr" class="s2071675Normal-000002"><span xml:space="preserve" class="s2071675DefaultParagraphFont">The proposed effective date of an order requiring an existing trust company to increase its capital must be stated in the order as on or after the thirty-first day after the date of the proposed order. Unless the trust company requests a hearing before the commission in writing before the effective date of the proposed order, the order becomes effective and is final. Any hearing before the commission shall be held pursuant to chapter </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=1-26"><span class="s2071675DefaultParagraphFont">1-26</span></a><span class="s2071675DefaultParagraphFont">.</span></p><p dir="ltr" class="s2071675Normal"><span xml:space="preserve" class="s2071675000003"> </span></p><p dir="ltr" class="s2071675Normal"><span class="s2071675SCL">Source:</span><span xml:space="preserve" class="s2071675SCL-000004"> SL 2010, ch 232, § 20.</span></p></div></body></html><br /><hr><br /><html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 51A-6A-19 - Determining capital--Minimum--Purpose of capital--Fidelity bond and liability insurance policy. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2071676Normal { margin-top: 0; margin-bottom: 0; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2071676SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2071676CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2071676Normal-000000 { margin-top: 0; margin-bottom: 0; text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2071676DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s2071676Normal-000001 { margin-top: 0; margin-bottom: 0; text-indent: 0.25in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2071676000002 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2071676SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2071676SCL-000003 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } </style></head><body><div><p dir="ltr" class="s2071676Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=51A-6A-19.2"><span class="s2071676SENU">51A-6A-19.2</span></a><span xml:space="preserve" class="s2071676SENU">. </span><span class="s2071676CL">Investments pledged to division for security of trust creditors of trust company--Amount--Income from investments--Pledge increase--Hearing.</span></p><p dir="ltr" class="s2071676Normal-000000"><span xml:space="preserve" class="s2071676DefaultParagraphFont">Before any trust company authorized by this title transacts any trust company business, the trust company shall pledge to the division, and maintain at all times, investments for the security of the trust creditors of the trust company, including as a priority claim costs incurred by the division in a receivership or liquidation of the trust company if the trust company should fail. The director shall determine the amount of the pledge in an amount deemed appropriate to defray the costs incurred by the division in a receivership or liquidation of the trust company, but the amount of the pledge may not be less than a market value of one hundred thousand dollars, nor exceed five hundred thousand dollars for a private trust company or one million dollars for a public trust company. Notwithstanding the maximum pledge amount allowed under this section, the director may require a public trust company to maintain a pledge of greater than one million dollars if the director finds that an increased pledge amount is required based upon consideration of the factors in § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=51A-6A-19.1"><span class="s2071676DefaultParagraphFont">51A-6A-19.1</span></a><span class="s2071676DefaultParagraphFont">. The director may authorize a reduction of any previously established pledge, provided that no pledge may be less than a market value of one hundred thousand dollars. All investments pledged to the division shall be held at a depository institution in this state and all costs associated with pledging and holding the investments are the responsibility of the trust company.</span></p><p dir="ltr" class="s2071676Normal-000001"><span xml:space="preserve" class="s2071676DefaultParagraphFont">The investments pledged to the division shall be of the same nature and quality as those required for public funds under §§ </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=4-5-6"><span class="s2071676DefaultParagraphFont">4-5-6</span></a><span xml:space="preserve" class="s2071676DefaultParagraphFont">, </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=4-5-6.1"><span class="s2071676DefaultParagraphFont">4-5-6.1</span></a><span xml:space="preserve" class="s2071676DefaultParagraphFont">, and </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=4-5-6.2"><span class="s2071676DefaultParagraphFont">4-5-6.2</span></a><span class="s2071676DefaultParagraphFont">.</span></p><p dir="ltr" class="s2071676Normal-000001"><span xml:space="preserve" class="s2071676DefaultParagraphFont">The commission may promulgate rules, pursuant to chapter </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=1-26"><span class="s2071676DefaultParagraphFont">1-26</span></a><span class="s2071676DefaultParagraphFont">, to establish additional investment guidelines or investment options for purposes of the pledge required by this section.</span></p><p dir="ltr" class="s2071676Normal-000001"><span class="s2071676DefaultParagraphFont">In the event of a receivership of a trust company, the director may, without regard to priorities, preferences, or adverse claims, reduce the pledged investments to cash and, as soon as practicable, utilize the cash to defray the costs associated with the receivership.</span></p><p dir="ltr" class="s2071676Normal-000001"><span class="s2071676DefaultParagraphFont">Income from the investments pledged shall belong to and be paid to the trust company so long as the trust company continues to conduct its business in the ordinary course and so long as authorized by the director.</span></p><p dir="ltr" class="s2071676Normal-000001"><span xml:space="preserve" class="s2071676DefaultParagraphFont">If the director requires a trust company to increase its pledge, the director shall provide the trust company with notice and an order setting forth the amount of the pledge. The proposed effective date of the order setting forth the amount of the pledge shall be stated in the order as on or after the thirty-first day after the date of the order. Unless the trust company requests a hearing before the commission in writing before the proposed effective date of the order, the order is effective and final on the proposed effective date. Any hearing before the commission shall be held pursuant to chapter </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=1-26"><span class="s2071676DefaultParagraphFont">1-26</span></a><span class="s2071676DefaultParagraphFont">.</span></p><p dir="ltr" class="s2071676Normal"><span xml:space="preserve" class="s2071676000002"> </span></p><p dir="ltr" class="s2071676Normal"><span class="s2071676SCL">Source:</span><span xml:space="preserve" class="s2071676SCL-000003"> SL 2010, ch 232, § 21; SL 2012, ch 233, § 1; SL 2015, ch 240, § 5; SL 2019, ch 205, § 2.</span></p></div></body></html><br /><hr><br /><html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 51A-6A-19 - Determining capital--Minimum--Purpose of capital--Fidelity bond and liability insurance policy. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2071677Normal { margin-top: 0; margin-bottom: 0; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2071677SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2071677CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2071677Normal-000000 { margin-top: 0; margin-bottom: 0; text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2071677DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2071677000001 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2071677SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2071677SCL-000002 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } body { text-decoration-skip-ink: none; } </style></head><body><div><p dir="ltr" class="s2071677Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=51A-6A-19.3"><span class="s2071677SENU">51A-6A-19.3</span></a><span xml:space="preserve" class="s2071677SENU">. </span><span class="s2071677CL">Pledge available to satisfy claims upon liquidation, abandonment of trust powers, or resignation.</span></p><p dir="ltr" class="s2071677Normal-000000"><span xml:space="preserve" class="s2071677DefaultParagraphFont">Upon liquidation, abandonment of trust powers, or resignation from all duties exercised pursuant to § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=51A-6A-29"><span class="s2071677DefaultParagraphFont">51A-6A-29</span></a><span xml:space="preserve" class="s2071677DefaultParagraphFont">, the pledge required by § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=51A-6A-19"><span class="s2071677DefaultParagraphFont">51A-6A-19</span></a><span class="s2071677DefaultParagraphFont">. 2 shall be made available for the reasonable satisfaction of claims involving trust company accounts. Any surplus remaining after the satisfaction of all such claims and costs incurred by the division shall be returned to the trust company. Unless the division has reason to believe that claims are forthcoming, the division shall release any pledge no later than twelve months from the date all affected accounts are moved to a successor trustee, custodian, or administrator.</span></p><p dir="ltr" class="s2071677Normal"><span xml:space="preserve" class="s2071677000001"> </span></p><p dir="ltr" class="s2071677Normal"><span class="s2071677SCL">Source:</span><span xml:space="preserve" class="s2071677SCL-000002"> SL 2013, ch 239, § 2.</span></p></div></body></html>