55-525.3 - Separately identified accounts, or qualified escrows or qualified trusts. - Virginia Statutes

§ 55-525.3. Separately identified accounts, or qualified escrows or qualifiedtrusts.

A. An exchange facilitator at all times shall:

1. Deposit the exchange funds in a deposit account that is a separatelyidentified account, as defined in Treasury Regulation § 1.468B-6(c)(ii), andprovide that any withdrawals from such separately identified account requirethe written authorization of the exchange client and written acknowledgmentof the exchange facilitator. Authorization for withdrawals may be deliveredby any commercially reasonable means, including (i) the exchange client'sdelivery to the exchange facilitator of the exchange client's authorizationto disburse exchange funds and the exchange facilitator's delivery to thefinancial institution of the exchange facilitator's authorization to disburseexchange funds or (ii) delivery to the financial institution of both theexchange client's and the exchange facilitator's authorizations to disburseexchange funds. For purposes of this chapter, a "deposit account" means ademand, time, savings, passbook, money market, certificate of deposit, orsimilar account maintained with a financial institution; or

2. Deposit the exchange funds in a deposit account that is a qualified escrowor qualified trust as those terms are defined under Treasury Regulation §1.1031(k)-1(g)(3).

B. The deposit account shall be with a financial institution and the interestearned on such account shall accrue to the parties as provided in a writtenagreement between the exchange facilitator and the exchange client. However,the exchange client may expressly direct the exchange facilitator in writingto invest the exchange proceeds in an investment of the exchange client'schoice, provided that the exchange facilitator provides writtenacknowledgment back to the exchange client that includes a confirmation ofhow the exchange proceeds will be invested.

(2010, c. 409.)