A trust receipt can be defined and used in various ways depending on the particular industry involved and the transaction for which the instrument is used. The trust receipt is a flexible, widely recognized and utilized financial instrument in the financial world.
The trust receipt instrument is used by commercial banks and other financial institutions worldwide. It also is accepted and even required for certain transactions by the United States and state and local governments. The US Federal Government recognizes the trust receipt as “property,” “property interests,” and “assets”.
In Addition, the trust receipt is recognize as giving rise to a valid security interest under Article 9, of the Uniform Commercial Code (UCC), that recognizes these instruments as giving rise to valid security interests. The trust receipt also conforms to recognized protocols for credit and related financial documents.
The Pacific Stock Exchange Rule 8.200 states that a Trust Issued Receipt is a security that is issued by a trust ("Trust") which holds specific securities deposited with the Trust.
FSA's affiliated Trust's trust receipts are Irrevocable Trust Receipts (ITRs) and issued against "cash assets" held in "either FDIC banks or top rated international banks.