94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB0263


 
Introduced 2/3/2005, by Sen. Terry Link
 
SYNOPSIS AS INTRODUCED:
 		













205 ILCS 620/5-15 new










    Amends the Corporate Fiduciary Act. Authorizes any bank or trust company to purchase services or products from an affiliate of the bank or trust company if the purchase is otherwise prudent and not prohibited by the instrument governing the fiduciary relationship. Provides that compensation for the services or products may be in addition to any compensation to 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 from an affiliate. Applies to any bank or trust company doing banking or trust business in this State, including any national bank, national trust company, or its affiliates. Effective January 1, 2006.
















LRB094 08677 MKM 38888 b

















 


 


A BILL FOR









 











SB0263

LRB094 08677 MKM 38888 b






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    AN ACT concerning 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 Corporate Fiduciary Act is amended  by adding 
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Section 5-15 as follows:
 
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    (205 ILCS 620/5-15 new)

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    Sec. 5-15. 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 
 


 






SB0263
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LRB094 08677 MKM 38888 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 bank

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or 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 the Illinois Banking Act, the 
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provisions of this Section apply to any bank or trust company 
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doing banking or trust business in this State, including, 
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without limiting the generality of the foregoing, any national 
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bank, national trust company, or any     of
its affiliates even if 
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its principal place 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, 2006.