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ORDER GRANTING A WAIVER OF CERTAIN SECTION 468
|v||RSGroup Trust Company:||Trust, custody and administrative services for qualified and non-qualified programs;|
|v||Retirement System Consultants Inc.:||Administrative, actuarial and recordkeeping services;|
|v||Retirement System Investors Inc.:||Registered investment advisor providing investment advisory and management services to mutual funds;|
|v||Retirement System Distributors Inc.:||Registered broker-dealer distributing proprietary mutual funds; and|
|v||RSG Insurance Agency Inc.::||Licensed insurance agency.|
Section 468 was established to limit the risks to a financial institution from transactions with its affiliates. The law, which closely mirrored long-established federal law, requires all transactions between a financial institution and its affiliates to be on market terms (i.e., on terms and conditions that are substantially the same, or at least as favorable to the financial institution, as those prevailing at the time for comparable transactions with unaffiliated companies) and limits certain credit and investment-related transactions to a percentage of the financial institution's capital. Additionally, Section 468 requires extensions of credit to, or on behalf of, an affiliate to be appropriately secured.
During a recent routine examination of RSTrust by the Bureau, it was determined that RSTrust had receivables from affiliates that did not comply fully with the requirements of Section 468. However, if the inter-company receivables were deducted from RSTrust's capital, RSTrust's net capital would remain in excess of the Bureau's capital guidelines for nondepository trust companies. In addition, RSTrust maintained restricted bank deposits in excess of its initial equity capital.
In light of the interrelationship among RSTrust, RSGroup and other affiliates, the Bureau's acknowledged examination powers vis-à-vis inter-company transactions, and the absence of federal deposit insurance-related concerns, the Bureau hereby waives the quantitative limitations and the collateral requirements set forth in Section 468(3) and establishes the following requirements for RSTrust:
This waiver may be revoked or amended at the Bureau's discretion.
Any person aggrieved by this Order shall be entitled to a review of the Order in accordance with the Maine Administrative Procedure Act, Title 5, Chapter 375, subchapter IV, by filing a request for hearing within thirty days after receiving a copy of this Order.
By order of the Superintendent, effective May 6, 2003.
/s/ Howard R. Gray, Jr.
May 6, 2003
August 9, 2006
 The Bureau generally requires nondepository trust companies to maintain Tier 1 capital, as defined in Regulation 27, of not less than the sum of (1) 10 basis points (0.10%) of discretionary assets and (2) 5 basis points (0.05%) of nondiscretionary assets.
Last Updated: October 21, 2010
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