Limited Purpose Trust Company

AAA

DEFINITION of 'Limited Purpose Trust Company'

A trust company that has been chartered by the state to perform specific trust functions. These functions can include acting as a depositor or safekeeper for securities or mortgages. The Participants Trust Company is an example of a mortgage depositor trust.

INVESTOPEDIA EXPLAINS 'Limited Purpose Trust Company'

The Depository Trust Company (DTC) in New York is another example of a limited purpose trust company. This trust holds securities in safekeeping for banks and investment firms. This allows them to make book-entry settlements on their trades.

RELATED TERMS
  1. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  2. Bank

    A financial institution licensed as a receiver of deposits. There ...
  3. Trust Company

    A legal entity that acts as fiduciary, agent or trustee on behalf ...
  4. Early Warning Tests

    A series of financial ratios and other performance criteria used ...
  5. Correction Notice

    A notice indicating that a process or application contains errors ...
  6. Qualified Longevity Annuity Contract

    A Qualified Longevity Annuity Contract (QLAC) is a deferred annuity ...
RELATED FAQS
  1. What are the ethical arguments against government subsidies to companies like Tesla?

    The ethical argument behind government subsidies is that they should be put into place to help industries that will, in turn, ... Read Full Answer >>
  2. Has deregulation helped or hurt the profitability of companies in the telecommunications ...

    Deregulation is almost always a double-edged sword in terms of business profitability. The profits of legally protected monopolies ... Read Full Answer >>
  3. What do I do if I think an accountant is in violation of the Generally Accepted Accounting ...

    The Financial Accounting Standards Board (FASB) promulgates generally accepted accounting principles (GAAP) in the United ... Read Full Answer >>
  4. What are the primary risks an investor should consider when investing in the retail ...

    The retail sector consists of companies operating in multiple industries such as specialty retail, general retail, food and ... Read Full Answer >>
  5. What level of reserve ratios is typical for an insurance company to protect against ...

    In the United States, and most developed nations, regulators impose required statutory capital reserve ratios on insurance ... Read Full Answer >>
  6. Can a special administrative region declare autonomy?

    Special administrative regions, or SARs, namely Hong Kong and Macau, do not declare autonomy so much as they are granted ... Read Full Answer >>
Related Articles
  1. Options & Futures

    The REIT Way

    Ever considered investing in real estate? Read about the REIT and see if it's the investment for you.
  2. Home & Auto

    Simple Ways To Invest In Real Estate

    Owning property isn't always easy, but there are plenty of perks. Find out how to buy in.
  3. Bonds & Fixed Income

    The Impact Of Interest Rates On Real Estate Investment Trusts

    REITs are high-yield investments, but do they have an inverse relationship with interest rates? Find out here.
  4. Economics

    Explaining the Liquidity Coverage Ratio

    The liquidity coverage ratio requires banks and other financial institutions to hold enough cash and liquid assets on hand to weather market stress.
  5. Taxes

    Gay Weddings Mean Big Business

    The coming boom in same sex marriages represents a money-making opportunity for anyone in the wedding industry.
  6. Personal Finance

    Why Best Buy Failed in China

    Best Buy entered China with much fanfare in 2006. The Minnesota-based retailer exited quietly last year. What went wrong?
  7. Entrepreneurship

    Lockheed Martin Is Tight With The US Government

    The relationship between Lockheed Martin and the U.S. government is long-standing and the company's biggest revenue source, but it may be deteriorating.
  8. Retirement

    Understanding Regulations on Qualified Longevity Annuity Contracts

    QLACs provide retirees a way to guarantee a lifetime income – as long as the regulations set out by the IRS are followed. Here's an overview.
  9. Investing Basics

    Calculating the Tier 1 Capital Ratio

    The Tier 1 capital ratio is a measure of a depository financial institution’s financial health and capital adequacy.
  10. Credit & Loans

    Why Fannie Mae And Freddie Mac Might Be In Trouble

    Fannie Mae and Freddie Mac are under increased scrutiny as debates continue about conservatorship, share price, and profit allocations.

You May Also Like

Hot Definitions
  1. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  2. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  3. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  4. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  5. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
  6. Touchline

    The highest price that a buyer of a particular security is willing to pay and the lowest price at which a seller is willing ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!