Rule 5095-1

Deposit of Funds in the Registry Account

(a)  Court Order Required.  No funds shall be deposited into the registry without a Court order. The Clerk shall deposit such funds into the Court Registry Investment System (CRIS).     

(b)  Accounts in CRIS.  An account for each case will be established in the CRIS, titled in the name of the case giving rise to the deposit of funds. Money from each case deposited in the CRIS will be “pooled” together with those on deposit with Treasury to the credit of other courts in the CRIS and used to purchase Government Account Series securities through the Bureau of Public Debt, which will be held at Treasury, in an account in the name and to the credit of the Director of the Administrative Office of the United States Courts. The pooled funds will be invested in accordance with the principles of the CRIS Investment Policy as approved by the Registry Monitoring Group.

(1)  Interpleader Case.  For each interpleader case, an account shall be established in the CRIS “Disputed Ownership Fund” (DOF), titled in the name of the case giving rise to the deposit invested in the fund. Income generated from fund investments will be distributed to each case after the DOF fee has been applied and tax withholdings have been deducted from the fund. Reports showing the interest earned and the principal amounts contributed in each case will be available through the FedInvest/CMS application for each court participating in the CRIS and made available to litigants and/or their counsel. On appointment of the administrator authorized to incur expenses on behalf of the DOF in a case, the case DOF funds should be transferred to another investment account as directed by court order.

(2)  Non-Interpleader Funds.  For non-interpleader funds, an account will be established in the CRIS Liquidity Fund titled in the name of the case giving rise to the deposit invested in the fund. Income generated from fund investments will be distributed to each case based on the ration each account’s principal and earnings has to the aggregate principal and income total in the fund after the CRIS fee has been applied. Reports showing the interest earned and the principal amounts contributed in each case will be prepared and distributed to each court participating in the CRIS and made available to litigants and/or their counsel.

(c)  CRIS Fees and Taxes.  The custodian shall deduct the CRIS fee of an annualized ten (10) basis points on assets on deposit for all CRIS funds, excluding the case funds held in the DOF, for the management of investments in the CRIS. According to the Court’s Miscellaneous Fee Schedule, the CRIS fee is assessed from interest earnings to the pool before a pro rata distribution of earnings is made to Court cases.

(d)  DOF Fees and Taxes.  The custodian shall deduct the DOF fee of an annualized twenty (20) basis points on assets on deposit in the DOF for management of investments and tax administration. According to the Court’s Miscellaneous Fee Schedule, the DOF fee is assessed from interest earnings to the pool before a pro rata distribution of earnings is made to court cases. The custodian shall withhold and pay federal taxes due on behalf of the DOF.  

(e)  Cash Bonds.  Cash bonds posted with the Court shall be deposited into the registry account of the Court and the clerk is directed to use the CRIS unless ordered otherwise by the Court.

(f)  Order for Payment.  Payment of funds shall be by Court order containing the amounts and names of the parties to whom funds are to be paid, including any interest earned. The parties to whom funds are to be disbursed shall provide to the financial deputy their tax identification numbers or social security numbers and complete any forms required by the Internal Revenue Service for the reporting of earned interest.

 


Notes 2018:  LR amended to reflect that interpleader funds deposited under 28 U.S.C. § 1335 meet the IRS definition of a DOF, a taxable entity that requires tax administration 

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