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.
BREAKING DOWN '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.