I work for a Trust Company and we complete 5500's for clients that have Master Trusts. Thus, we must complete schedule D's.

The Schedule D that is filed with each plan must have Part I completed. My question is this:

Part 1 (a) is the name of MTIA (ie. client name Master Trust).

Part 1 (b) asks for the sponsor of entity listed in (a). We've been putting the trust company name in the past but have been told it's incorrect and we should use client name (employer sponsoring plan).

Which is correct? The instructions are not clear and I've found in the 1999 instructions you should use a financial institution, etc.

Please help and provide a source. Thanks!

Actually, the requirement has apparently changed since the 1999 returns (though I cannot tell you why).
Since the MTIA is required to file its own 5500, it will have a "sponsor" for 5500 purposes; the sponsor of the MTIA shown on the investing plan's Sched D should be the same as the "sponsor" shown in line 2 of the MTIA's 5500. For purposes of the MTIA's 5500, the instructions to line 2(a) state that in the case of an MTIA "one of the sponsoring employers" should be shown as the "sponsor" . The same instruction to the 1999 form did not contain the phrase referring to "one of the sponsoring employers" in the case of an MTIA.
In the case of a bank common or collective trust, the bank would be the "sponsor". The only difference that I can see here is that, since the MTIA contains assets of plans of only one employer (or controlled group), it is thought to make sense to identify that employer as the "sponsor" of the MTIA.
Personally, it makes more sense to me to continue to have the bank shown as the sponsor, but somebody decided to make the change to the instructions.