TRUST ENTERPRISES MUST NOT BID ZERO FEE FOR CUSTODIANSHIP

07/01/2002

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Since 2001, in order to acquire custodianship business from major funds, various banks en-gaged in trust business have bid to become cus-todian banks on the basis of zero fees. This has led to a price war. In response, the FTC stated that trust enterprises must not use zero fees as a marketing device as this may violate the relevant provisions of the FTL. The FTC also stated that if trust enterprises jointly set fixed or minimum fees in their self-regulatory codes, this would constitute a prohibited concerted action under Article 7 of the FTL.