What is required for a national bank to retain stock held in a trust account?

The correct response involves understanding the requirements pertaining to the retention of stock held in a trust account by a national bank. A national bank can retain stock in a trust account if the assets received have undergone inventory and the governing instrument explicitly allows for this retention. This is significant because the governing instrument serves as a legal framework that outlines the terms and conditions under which the trust operates.

The ability to retain stock is not solely a matter of investment prudence or local law; rather, it is directly tied to the terms specified in the governing instrument. Thus, having specific provisions in the documentation which allow for stock retention is essential. This ensures that the bank is operating within the legal bounds set out by the creator of the trust, and it provides transparency and accountability in the management of trust assets.

Understanding this is crucial for both trusts and the fiduciary duties involved, as these processes are designed to protect the interests of beneficiaries while adhering to regulatory standards.