Which of the following is NOT allowed under OCC Regulation 9?

Which of the following is NOT allowed under OCC Regulation 9?

• A. A member of the trust administration committee also is on the investment committee.
• B. A member of the trust committee also is on the bank's loan and discount committee.
• C. A director/officer who participates significantly in the administration of fiduciary activities serving on the trust audit committee.
• D. A member of the trust administration committee is an officer of a non-affiliated bank.

Answer: (C)

The correct answer highlights a key aspect of OCC Regulation 9, which pertains to the governance of fiduciary activities, particularly focusing on the separation of duties within trust administration and auditing functions. In this context, having a director or officer who is actively involved in the administration of fiduciary activities serve on the trust audit committee could create significant conflicts of interest. The audit committee’s purpose is to review and ensure the integrity of fiduciary activities, and if a committee member is also involved in the administration of those activities, it undermines the objective independence necessary for an effective audit process. The other scenarios involve instances where members serve on multiple committees or hold positions that may not directly contradict the principles laid out in OCC Regulation 9. For example, having a member of the trust administration committee also on the investment committee may reflect appropriate collaborative functions within the bank's internal structure, as long as safeguards against conflicts of interest are observed. Similarly, a member of the trust administration committee being an officer of a non-affiliated bank does not present a conflict under the regulation, provided there are no overlapping interests that could compromise fiduciary duties. Overall, the emphasis on ensuring that those who audit fiduciary activities are independent from those who administer them is a crucial component of

The correct answer highlights a key aspect of OCC Regulation 9, which pertains to the governance of fiduciary activities, particularly focusing on the separation of duties within trust administration and auditing functions.

In this context, having a director or officer who is actively involved in the administration of fiduciary activities serve on the trust audit committee could create significant conflicts of interest. The audit committee’s purpose is to review and ensure the integrity of fiduciary activities, and if a committee member is also involved in the administration of those activities, it undermines the objective independence necessary for an effective audit process.

The other scenarios involve instances where members serve on multiple committees or hold positions that may not directly contradict the principles laid out in OCC Regulation 9. For example, having a member of the trust administration committee also on the investment committee may reflect appropriate collaborative functions within the bank's internal structure, as long as safeguards against conflicts of interest are observed. Similarly, a member of the trust administration committee being an officer of a non-affiliated bank does not present a conflict under the regulation, provided there are no overlapping interests that could compromise fiduciary duties.

Overall, the emphasis on ensuring that those who audit fiduciary activities are independent from those who administer them is a crucial component of