Nondeposit investment products are products that you are selling to a customer. These may include but are not limited to mutual funds, annuities, insurance, individual equity securities, etc.
These are investments that are frequently sold by a registered broker dealer. The payment of incentives for the promotion of these products is regulated by the NASD and others. The payment of incentives for the promotion of these products is also addressed in the December 2006 issuance of Proposed Reg R by the SEC.
Investment securities, stock, bonds, mutual funds, etc purchased by a trust department when acting as investment agent or as trustee are not, in my opinion, covered under by the Interagency Guidance of the Sale of Non-deposit Investment Products. The difference as I understand it is that the bank is not "selling a product" it is investing in an asset that the investment activity is governed under separate regulatory and state statutory requirements.
The typical trust department that I am familiar with exercises discretionary authority and therefore isn't selling anything directly to the client. Admittedly it's a fine line, but the financial services industry is full of fine lines that we all manuver daily. This is just another one of them.
As for the payment of incentives for the referral of trust business. I say that...IF the trust department is a division of your insured financial institution and NOT a separate corporate entity either by way of a subsidiary or affiliate, then the payment of incentives for that business is goverened only by what your specific state statue may require and your internal business model and profitability. It is not governed as a NDIP.