93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB2634


 
Introduced 2/4/2004, by Terry Link
 
SYNOPSIS AS INTRODUCED:
 		













205 ILCS 5/84 new










    Amends the Illinois Banking Act. Adds provisions concerning investments and participation by affiliates of any bank or trust company acting in its fiduciary capacity. Provides that any bank or trust company may purchase services or products from an affiliate provided that the purchase is otherwise prudent and not prohibited by the instrument governing the fiduciary relationship. Provides that the compensation for the service or product may be in addition to the compensation which the bank, trust company, or its affiliate is otherwise entitled as a fiduciary. Provides that the bank or trust company must disclose, in a specified manner, any purchase authorized by the new provisions. Applies to any bank or trust company doing banking or trust business in this State including any national bank, national trust company, or any of its affiliates. Effective January 1, 2005.



















LRB093 18195 SAS 43890 b




















 


 


A BILL FOR









 














SB2634

LRB093 18195 SAS 43890 b









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    AN ACT concerning financial regulation.

 
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    Be it enacted by the People of the State of Illinois,
 
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represented in the General Assembly:


 
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    Section 5. The Illinois Banking Act is amended  by adding 
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Section 84 as follows:
 
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    (205 ILCS 5/84  new)
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    Sec. 84. Investments and participation by affiliates.

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    (a) Any bank or trust company acting in its fiduciary 
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capacity may purchase services or products, including, but not 
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limited to, life insurance, equity derivatives, or securities 
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underwritten or otherwise distributed by an affiliate of such 
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bank or trust company or its affiliate directly from such 
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affiliate or from a syndicate or selling group which includes 
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the bank, trust company, or its affiliate, provided that the 
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purchase is otherwise prudent and not prohibited by the 
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instrument governing the fiduciary relationship. The 
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provisions of this Section shall apply to such purchases of 
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services or products made at the time of the initial offering 
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thereof or at any time thereafter.
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    (b) The compensation for the services or products may be in 
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addition to the compensation to which the bank, trust company, 
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or its affiliate is otherwise entitled as fiduciary.
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    (c) Any bank or trust company acting in its fiduciary 
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capacity may effect such purchases of services or products with 
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or through its affiliate, provided that the fees paid to its 
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affiliate and the terms and conditions of such purchases are 
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reasonable and the transaction is not prohibited by the 
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instrument governing the fiduciary relationship.
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    (d) A bank or a trust company shall disclose at least 
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annually any purchase authorized
by this Section that was made 
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by the bank or trust company during the reporting period. The 
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disclosure shall be given, in writing or electronically, to all 
 


 









SB2634
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LRB093 18195 SAS 43890 b







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persons entitled to receive statements of account activity, and 
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shall include any capacities
in which the bank or trust company 
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or an affiliate acts for the issuer of the securities or the 
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provider of the products or services and the fact that the 
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bank,
trust company or an affiliate may have an interest in the 
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products or services.
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    (e) Notwithstanding the applicable provisions of Illinois 
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law, including Section 2 of this Act, the provisions of this 
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Section apply to any bank or trust company doing banking or 
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trust business in this State, including, without limiting the 
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generality of the foregoing, any national bank, national trust 
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company, or any of
its affiliates even if its principal place 
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of business is not in this State.

 
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    Section 99. Effective date. This Act takes effect January 
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1, 2005.