OFFICE OF COMPTROLLER DEPARTMENT OF BANKING AND FINANCE STATE OF FLORIDA "TALLAHASSEE 32399-0350 Roper F. MILLIGAN COMPTROLLER OF FLORIDA December 14, 1998 Ms. Lynn Shofistall Division of Corporations 409 East Gaines Street Tallahassee, Florida 32399 Dear Ms. Shoffstall: ‘This is to advise that this office has no objection to Stanford Trust Company Limited, Antigua, registering to do business in the State of Florida as “Stanford Trust Company Limited, Inc. d/b/a Stanford Fiduciary Investor Services”. Ifyou have any questions, please let me know. Sincerely, Ap ua Art Simon Director Division of Banking 101 East Gaines Street, Suite 636 (850) 410-9111 AS:dbCONFIDENTIAL Inter-Office Robert F. Milligan Communication Comptroller of Florida DATE: November 9, 1998 TO: Director Simon FROM: —_ David Burgess SUBJECT: Stanford Trust Company ‘This is an offshore trust company, chartered under the laws of Antigua, They wish to establish a trust representative office (TRO) here, to... mect with customers ...and facilitate the transfer of documents and assist in customer communications,...”. All of the actual trust or fiduciary business of the trust company would be conducted at its place of business in Antigua. ‘The customers are non US citizens. Attached is the original letter dated October 12, 1998, from counsel for the trust company regarding the proposal, We advised them that this was not a routine matter and would be subject to additional review over that accorded to domestic institutions. Richard Donelan and I met with representatives of Greenberg Traurig and the trust company. At that time we were provided an analysis of the proposal by Greenberg ‘Traurig, attached, supporting their contention that they can establish a TRO. In our meeting with trust company representatives, we were given certain verbal information regarding the Stanford Group to establish the trust company bonafides: the Antigua presence is substantial, they ‘own a registered Florida broker dealer, they own a Louisiana trust company, they are active in cleaning up the Antigua banking laws, references if we require from ex DEA officials, etc. We were also advised that if we did agree to establishment of a TRO, they would be willing to provide a written agreement for us to examine the office. My analysis follows. Richard Donelan is of the opinion that they cannot establish an office. I'll let him advise as to his reasoning; I'd probably leave out something basic to it in my translation. In the past, in our general position on TROs, the proposed business would not be considered to be a “trust business”. See attached 6-30-81 letter to J, Thomas Cardwell, Esq. Because the proposed activity of a trust representative office is not considered conducting a trust bbusiness, the restrictions of 655,922(2) (c) cannot apply: The proposed TRO business cannot imply that the business being conducted is the kind or character of business transacted or conducted by a financial institution, because the business to be transacted or conducted is not a “trust business”. It could be conducted by anybody under this section.However, 655.922(2) states that “No person other than a financial institution shall, in this state: (a) ‘Transact business under any name or title that contains the words... “trust company”...”, ‘There seem to be two questions here: (1) Is the TRO transacting business under the meaning of this definition, and (2) Is it a financial institution? Regarding question (1), my opinion is they are. We restrict the use of the name bank or trust company in the title of any business a company may be engaged in , if its not banking business. This would apply here. Regarding question (2), [think the answer is no, “Financial institution” as defined at Section 655.005(1) (h) means a state or federal association, bank, savings bank, trust company, international bank agency, representative office, or international administrative office, or credit union. Stanford Trust Company may not be a “trust company” as defined by statute. “Trust company” is defined at Section 658.12(21) to mean any business organization, other than a bank or state or federal association, which is authorized by lawful authority to engage in a trust business. Section 658.12(11) defines “law” to mean each “... valid and applicable statute...of any state and each of its political subdivisions or of the United States and each ofits departments, ....” I doesn’t include law of another country, Therefore, pursuant to our statutes, it may not have “lawful authority”. It certainly is not a “...state or federal ...trust company...””. Stanford Trust Company is not a financial institution under our statutes. Legal counsel for Stanford is of the opinion that because the trust company is not an international ‘banking corporation, and because the TRO would not engage in “banking business”, Chapter 663 would not be applicable to the proposal. I don’t know anything about international banking offices or business, so won't comment. Conclusion It appears to me that a strict reading of our statutes says the TRO cannot be established directly by the ‘ust company. They cannot open an office in the name of the trust company for any kind of business; they are not a financial institution and so cannot use the title “trust company” in their name while ‘engaging in any business in Florida. They probably can engage in the proposed activity if they do it outside the auspices of the trust company, e.g, through a subsidiary or affilitate office if employees of the subsidiary provide the services. However, if we wanted to make it a policy decision to permit such an arrangement, perhaps the definition of trust company can be stretched to include offshore trust companies lawfully established pursuant to the laws of another country. Co: Linda Townsend Richard DonelanMEMORANDUM REGARDING THE LEGAL AUTHORITY OF STANFORD TRUST COMPANY LIMITED TO ESTABLISH A TRUST REPRESENTATIVE OFFICE IN THE STATE OF FLORIDA Greenberg Traurig, P.A. 1221 Brickell Avenue Miami, Florida 33134 (305) 579-0500 November 2, 19981. INTRODUCTION AND BACKGROUND, This memorandum is submitted on behalf of our client, Stanford ‘Trust Company Limited (the “Trust Company”), a trust company organized under the laws of Antigua and Barbuda, As of September 30, 1998, the Trust Company had approximately U.S.$60,000,000 in assets under management, Established in 1990, the Trust Company is solely owned by Stanford Financial Group Limited, an Antigua-based financial services holding company. Other subsidiaries of Stanford Financial Group Limited include both ‘The Bank of Antigua and Stanford International Bank Limited, each an “international banking corporation” (as defined under Chapter 663, Florida Statutes) organized under the laws of Antigua and Barbuda, ‘On October 12, 1998, Greenberg Traurig, P.A., the Trust Company's United States outside counsel, submitted a letter to the Division of Banking of the Florida Department of Banking and Finance (the “Banking Division”) notifying it that the Trust Company expected to open a trust representative office (“TRO”) in Miami, Florida. Greenberg Traurig notified the Banking Division that, consistent with the long-standing position of the Banking Division with respect to TROs of out-of-state trust companies, as discussed in Section II.B, below, the TRO would act only as a representative of the Trust, ‘Company and would not make discretionary investment decisions or accept, approve or otherwise administer fiduciary accounts in Florida. We now understand that the staff of the Banking Division is suggesting that Florida law may require the Trust Company to apply to the Banking Division for an {international representative office license in order engage in the activities that it would have engaged in through the proposed TRO. Below, we explain why Florida law neither requires nor permits the Trust Company to oblain an international representative office license from the Banking Division, We then review the pertinent statutory authority and the Banking Division’s