Kingdom Trust operates in a regulated environment. The company recognizes all current regulations and has developed good relationships with the governmental agencies and departments involved in oversight of the industry and charged with ensuring those under their jurisdiction comply with appropriate laws and regulations.
Rules and Regulations of South Dakota Trust
Kingdom Trust is a South Dakota-chartered trust company and must comply with that state’s laws and regulations, including
(a) SB 103, section 18, defines trust administration and requires one or more of the following services to be performed wholly or partly in South Dakota at the chartered trust company’s registered place of business in South Dakota:
- Annual account reviews;
- Trust accountings;
- Audits physically performed in South Dakota;
- Tax reports sent from South Dakota;
- Governing board, committee or other trust administration meetings with a quorum physically present in South Dakota; or
- Such other activities as approved by the director.
(b) SDCL Chapter 51A-6A, The Creation of Trust Companies, contains relevant South Dakota laws governing trust companies chartered in South Dakota. It requires trust companies to, among other things,
- Purchase 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.
- Be subject to examination by the Division of Banking at least once every thirty-six months or more frequently if the director considers it necessary to make a full and careful examination and inquiry into the condition of the affairs of the trust company.
- Hold at least four regular meetings of the board of directors each year, at least one of which shall be held during each calendar quarter. The governing board or an auditor selected by them shall make a thorough examination of the books, records, funds and securities held by the trust company at each of the quarterly meetings. The result of the examination shall be recorded in detail.
- Make at least one report to the Director of the Division of Banking during each year, at a time determined by the director. The director may require additional reports from each trust company if the director considers it advisable.
Patriot Act and CIP Compliance
Kingdom Trust has policies and procedures to fully comply with the USA Patriot Act, a federal statute first enacted by the United States Government in 2001 (and updated in 2006). The Act expanded the Secretary of the Treasury’s authority to regulate financial transactions, particularly those involving foreign individuals and entities. The Act seeks to identify potential money laundering transactions by requiring specific individual disclosures for every account opened. Kingdom Trust must identify all the nominal and beneficial owners of every account and substantiate identity as required by the Act and by the correspondent custodian bank.
In addition, Kingdom Trust policies require prospective clients to submit the minimum information now required by the Bank Secrecy Act. Kingdom Trust complies with the Customer Identification Program (CIP) rule that applies to the custodian bank when opening an account within the meaning of 31 CFR 103.121. The CIP is intended to enable the custodian to form a reasonable belief that it knows the true identity of each customer. This is why Kingdom Trust must have a copy of the account holder’s driver’s license or passport. If the prospective client’s identity cannot be verified utilizing the non-documentary method, the custodian requires a copy of the driver’s license or passport.
Internal Revenue Service, Internal Revenue Code
The Employee’s Retirement Income Security Act (ERISA) created Individual Retirement Accounts. The provisions of ERISA have been codified in Chapter 26 of the Internal Revenue Code, with Sections 401, 408 and 4975 among the most relevant. Among other things, the code requires custodians to
- Annually report the fair market value of each IRA’s assets on Form 5498;
- Use Form 5305-A for the account agreement; and
- Report the amount of required minimum distributions to IRA owners.