PROPERTY CODE
SUBTITLE B. FIDUCIARIES
CHAPTER 161. MANAGEMENT AND CONTROL OF SECURITIES
SUBCHAPTER A. GENERAL PROVISIONS
§ 161.001. DEFINITIONS. In this chapter:
(1) "Fiduciary" means an executor, administrator, or
trustee of an express trust, including a corporation or a natural
person acting as fiduciary, and a successor or substitute, whether
or not designated in a trust instrument.
(2) "Clearing corporation" has the meaning assigned by
Section 8.102, Business & Commerce Code, as amended.
Acts 1983, 68th Leg., p. 3715, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.002. DECREE OR GOVERNING INSTRUMENT
CONTROLS. The authority granted in this chapter is subject to
contrary or limiting provisions in the instrument or court order
appointing the fiduciary of the securities or in a subsequent court
order.
Acts 1983, 68th Leg., p. 3715, ch. 576, § 1, eff. Jan. 1, 1984.
SUBCHAPTER B. CUSTODIAN OF SECURITIES
§ 161.021. AUTHORITY OF FIDUCIARY. A fiduciary who
holds a security in a fiduciary capacity may:
(1) employ a bank incorporated in this state or a
national bank located in this state as custodian of the security;
and
(2) whether the fiduciary is an individual or a bank
and if any individual who is a cofiduciary with the bank consents,
authorize the security to be registered and held in the name of a
nominee of the bank without disclosing the fiduciary relationship.
Acts 1983, 68th Leg., p. 3716, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.022. SEPARATE ASSETS. (a) A bank holding a
security under this subchapter, whether in registered or bearer
form, at all times shall keep the security separate from the bank's
assets. The bank may:
(1) hold separately the certificates representing
securities that periodically comprise the assets of a particular
fiduciary account from those of all other accounts; or
(2) without certification as to ownership attached,
hold in bulk certificates representing the same class of securities
of the same issuer that periodically comprise the assets of
different fiduciary accounts and, to the extent feasible, merge
certificates of small denomination into one or more certificates of
large denomination.
(b) A bank that holds security certificates in bulk is
subject to the regulations issued by the Finance Commission of
Texas if the bank is chartered by this state or by the comptroller
of the currency if the bank is a national banking association.
Acts 1983, 68th Leg., p. 3716, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.023. EXPENSE OF CUSTODIANSHIP. Unless the
fiduciary is a corporation, the cost of employing a bank as a
custodian of securities under this subchapter is a charge against
the estate or trust.
Acts 1983, 68th Leg., p. 3716, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.024. RECORDS. A bank holding a security under
Section 161.021, whether in registered or bearer form, at all times
shall keep records showing the ownership of the security.
Acts 1983, 68th Leg., p. 3716, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.025. REDELIVERY OF SECURITY HELD BY
NOMINEE. (a) A bank holding a security in the name of a nominee of
the bank under this subchapter may not redeliver the security to the
individual fiduciary who authorized its registration in the name of
the nominee without registering the security in the name of the
individual fiduciary, as fiduciary.
(b) A sale of the security by the bank at the direction of
the individual fiduciary is not a redelivery.
Acts 1983, 68th Leg., p. 3717, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.026. DISPOSITION OF SECURITY HELD BY NOMINEE. A
bank holding a security in the name of a nominee under this
subchapter may make any disposition of the security that is
authorized or ordered by a court having jurisdiction of the estate
or trust.
Acts 1983, 68th Leg., p. 3717, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.027. LIABILITY. A bank holding a security in the
name of a nominee under this subchapter is liable for a loss
resulting from the acts of the bank's nominee with respect to the
security.
Acts 1983, 68th Leg., p. 3717, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.028. CERTIFICATION. (a) On the demand of a
fiduciary employing a bank to hold a security as custodian under
this subchapter, the bank shall identify in a written certification
the securities it holds for the fiduciary.
(b) On the demand of a party, or the attorney of a party, to
an accounting by a bank holding a security in the name of a nominee
under this subchapter, the bank shall identify in a written
certification the securities it holds as fiduciary.
Acts 1983, 68th Leg., p. 3717, ch. 576, § 1, eff. Jan. 1, 1984.
SUBCHAPTER C. DEPOSIT OF SECURITY WITH FEDERAL RESERVE BANK OR
CLEARING CORPORATION
§ 161.051. APPLICATION. (a) Except as provided by
Subsection (b), this subchapter applies to a fiduciary holding a
security in its fiduciary capacity and to a bank, trust company, or
private banker holding a security as a fiduciary, custodian,
custodian for a fiduciary, or managing agent, regardless of:
(1) the date of the agreement, instrument, or court
order by which the fiduciary, custodian, or managing agent is
appointed; and
(2) ownership by the fiduciary, custodian, or managing
agent of capital stock of the clearing corporation.
(b) This subchapter does not apply to a security held by a
fiduciary, bank, trust company, or private banker on behalf of a
domestic insurance company, unless the prior express approval of
the State Board of Insurance is obtained. The board may grant
approval to all domestic insurance companies generally, or to
specific insurance companies on a case-by-case basis.
(c) For the purposes of this subchapter, "fiduciary"
includes a state or national bank acting in a fiduciary capacity.
Acts 1983, 68th Leg., p. 3717, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.052. AUTHORITY OF FIDUCIARY. A fiduciary holding
a security in its fiduciary capacity and a bank, trust company, or
private banker holding a security as a custodian for a fiduciary, a
managing agent, or a custodian may deposit or arrange for the
deposit of the security with:
(1) the Federal Reserve Bank of Dallas if the United
States has agreed to pay or has guaranteed payment of the security's
principal and interest; or
(2) a clearing corporation, either in this state or
elsewhere, regardless of whether the clearing corporation conducts
or is authorized to conduct business in this state.
Acts 1983, 68th Leg., p. 3718, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.053. BULK HOLDINGS. A clearing corporation may
merge and hold in bulk certificates representing the same class of
securities of the same issuer that are deposited with it under this
subchapter, together with any other securities deposited with the
clearing corporation by any person in the name of the nominee of the
clearing corporation, regardless of the ownership of the
securities. Certificates of small denomination may be merged into
one or more certificates of larger denomination.
Acts 1983, 68th Leg., p. 3718, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.054. RECORDS. A fiduciary, bank, trust company,
or private banker depositing a security under this subchapter shall
show in its records at all times the ownership of the securities
deposited in the account.
Acts 1983, 68th Leg., p. 3719, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.055. REGULATION. A bank, trust company, or
private banker depositing securities under this subchapter is
subject to the regulations issued by the Finance Commission of
Texas if the institution is chartered by this state or is private or
by the comptroller of the currency if the institution is a national
banking association.
Acts 1983, 68th Leg., p. 3719, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.056. BOOK TRANSFERS. The Federal Reserve Bank of
Dallas or a clearing corporation holding securities deposited under
this subchapter may transfer ownership of or other interests in the
securities by making entries in the books of the bank or corporation
and without physical delivery of certificates representing the
securities.
Acts 1983, 68th Leg., p. 3719, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.057. LIABILITY. A fiduciary who deposits
securities in a clearing corporation is liable to the beneficial
owner of the securities for a loss resulting from the acts or
omissions of the clearing corporation. This subchapter does not
affect a liability between the fiduciary and the clearing
corporation.
Acts 1983, 68th Leg., p. 3719, ch. 576, § 1, eff. Jan. 1, 1984.
§ 161.058. CERTIFICATION. (a) On the demand of a
fiduciary for whom a bank, trust company, or private banker is
acting as custodian, the bank, trust company, or private banker
shall identify in a written certification the securities deposited
by the bank, trust company, or private banker with the federal
reserve bank or in the clearing corporation for the account of the
fiduciary.
(b) On the demand of a party, or the attorney of a party, to
an accounting by a fiduciary or by a bank, trust company, or private
banker that is acting as a fiduciary, a custodian, a custodian for a
fiduciary, or a managing agent, the fiduciary, bank, trust company,
or private banker shall identify in a written certification to the
party the securities deposited by the fiduciary, bank, trust
company, or private banker with the federal reserve bank or the
clearing corporation.
Acts 1983, 68th Leg., p. 3719, ch. 576, § 1, eff. Jan. 1, 1984.
