June 9, 1992
TO: INSTITUTIONAL FUNDS COMMITTEE NO. 10-92
RE: UPDATED SURVEY OF STATE FIDUCIARY INVESTMENT LAWS
__________________________________________________________
Attached is an updated survey of state fiduciary investment
laws relating to the ability of a fiduciary such as a bank
trustee to invest trust assets in shares of a registered
investment company. The survey has been revised among other
things to reflect new legislation adopted since the previous
survey (dated 12/91) and to fill in additional information. The
attached survey should replace all previous versions.
Several states recently adopted legislation specifying that
a bank trustee may invest trust assets in shares of a registered
investment company, notwithstanding the fact that the trustee or
an affiliate provides other services (e.g., serves as investment
adviser, custodian or transfer agent) to the investment company.
These states are: Connecticut, Georgia, Idaho, Illinois, Iowa,
Michigan, Minnesota, Mississippi, Nebraska, New Jersey, Utah and
West Virginia. Details of these new provisions are described in
footnote 1 on the final page of the survey. Similar legislation
is currently pending in Arizona and Ohio. Kansas adopted
legislation (effective on July 1, 1992) providing that "if a bank
or trust company, or an affiliate of a bank or trust company,
provides services to an open or closed-end management investment
company or investment trust registered under the investment
company act of 1940, and receives compensation for such services,
such bank or trust company shall not invest or reinvest in the
securities of such investment trust." It is not clear whether
such investments would be permitted if the compensation is
waived.
If you have any questions about the attached survey, please
call me at (202) 955-3514.
Frances M. Stadler
Assistant Counsel
Attachment