HB 550: "An Act relating to investments by fiduciaries; and providing for an effective date."
00HOUSE BILL NO. 550 01 "An Act relating to investments by fiduciaries; and providing for an effective 02 date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 06.05.180(10) is amended to read: 05 (10) whenever the instrument or power governing the fiduciary 06 relationship directs, requires, authorizes, or permits investment in obligations of the 07 United States government, or its agencies or instrumentalities, invest in those 08 obligations either directly or [, FOR SHORT-TERM CASH MANAGEMENT 09 PURPOSES,] in the form of securities of, or other interests in, [A MONEY MARKET 10 MUTUAL FUND OPERATING AS] an open-end or closed-end management type 11 investment company or investment trust registered under 15 U.S.C. 80a-1 - 80a-64 12 (Investment Company Act of 1940) [,] if 13 (A) the portfolio of the investment company or investment trust 14 is limited to
01 (i) obligations of the United States government, or its 02 agencies or instrumentalities; 03 (ii) [AND] repurchase agreements fully collateralized by 04 the obligations identified in (i) of this subparagraph; and 05 (iii) securities of, or other interests in, other open-end 06 or closed-end management type investment companies or 07 investment trusts registered under 15 U.S.C. 80a-1 - 80a-64 whose 08 portfolios are limited to the obligations and repurchase agreements 09 identified in (i) and (ii) of this subparagraph; and 10 (B) the investment company or investment trust takes delivery 11 of the collateral for any repurchase agreement directly or through an 12 authorized custodian. 13 * Sec. 2. AS 13.90.010, as added by sec. 4, ch. 10, SLA 1996, is amended to read: 14 Sec. 13.90.010. INVESTMENTS BY FIDUCIARIES. (a) Notwithstanding 15 other provisions of law, except for AS 13.36.300 and the standards of judgment and 16 care established by law, and subject to any express provision or limitation contained 17 in a particular instrument creating the fiduciary relationship, fiduciaries are authorized 18 to acquire and hold securities of an [OPEN-END OR CLOSED-END MANAGEMENT 19 TYPE] investment company [OR INVESTMENT TRUST IF THE COMPANY OR 20 TRUST IS REGISTERED UNDER 15 U.S.C. 80a-1 - 80a-64 (INVESTMENT 21 COMPANY ACT OF 1940), AS THAT ACT EXISTS NOW OR IS AMENDED IN 22 THE FUTURE]. 23 (b) Whenever [UNDER (a) OF THIS SECTION, WHENEVER] an instrument 24 or power governing [CREATING] a fiduciary relationship directs, requires, 25 authorizes, or permits investment in obligations of the United States government, or 26 its agencies or instrumentalities, the fiduciary may invest in those [AND HOLD 27 THE] obligations either directly or in the form of securities of, or other interests [AS 28 ANOTHER INTEREST] in, an investment company if 29 (1) the portfolio of the company is limited to 30 (A) obligations of the United States government, or its agencies 31 or instrumentalities;
01 (B) [AND TO] repurchase agreements fully collateralized by the 02 obligations identified in (A) of this paragraph; [,] and 03 (C) securities of, or other interests in, other investment 04 companies whose portfolios are limited to the obligations and repurchase 05 agreements identified in (A) and (B) of this paragraph; and 06 (2) [, IF A REPURCHASE AGREEMENT IS INVOLVED,] the 07 investment company takes delivery of the collateral for any repurchase agreement 08 either directly or through an authorized custodian. 09 (c) Under (a) and (b) of this section, if a bank or trust company is the 10 fiduciary, the bank or trust company may invest or reinvest in the securities of an 11 investment company even if the fiduciary or an affiliated bank or trust company 12 provides services to the investment company and the fiduciary or affiliate receives 13 reasonable compensation for the services. Upon request of the person, the fiduciary 14 shall furnish a copy of the prospectus relating to the securities acquired under this 15 subsection to a person to whom a regular periodic accounting is ordinarily rendered 16 under an instrument creating a fiduciary relationship. 17 (d) In this section, 18 (1) "affiliated" means two or more banks or trust companies in which 19 (A) 25 percent or more of the voting shares, excluding shares 20 owned by the United States or by a corporation or another entity wholly owned 21 by the United States, is directly or indirectly owned or controlled by a holding 22 company; or 23 (B) the election of a majority of the directors is controlled in 24 any manner by a holding company; 25 (2) "bank" means an organization that is authorized by the United 26 States Comptroller of the Currency, or by the director of banking or the equivalent 27 position in the state of its organization, to accept deposits and to make commercial 28 loans, and whose deposits are insured by the Federal Deposit Insurance Corporation; 29 (3) "fiduciary" includes guardians and conservators under AS 13.26, 30 persons performing the trustee activities described under AS 06.05.180 whether or not 31 the persons are covered by AS 06.05.180, and other persons acting in a fiduciary
01 capacity; 02 (4) "investment company" means an open-end or closed-end 03 management type investment company or investment trust registered under 15 U.S.C. 04 80a-1 - 80a-64 (Investment Company Act of 1940), as that act exists now or as 05 amended in the future; 06 (5) "services" includes acting as an investment advisor, custodian, 07 transfer agent, registrar, sponsor, distributor, [OR] manager, and services related to 08 acting as an investment advisor, custodian, transfer agent, registrar, sponsor, 09 distributor, or manager; 10 (6) "trust company" means a financial institution, corporation, or other 11 legal entity, authorized to exercise general trust powers, but does not include a natural 12 person. 13 * Sec. 3. If the effective date of SB 131 am H, passed by the Nineteenth Alaska State 14 Legislature, is before sec. 2 of this Act takes effect, sec. 2 of this Act is retroactive to the 15 effective date of SB 131 am H. 16 * Sec. 4. Section 2 of this Act takes effect on the effective date of SB 131 am H, passed 17 by the Nineteenth Alaska State Legislature.