By Grusendorf H.B. No. 1441
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the investment of funds by certain trustees in the
1-3 securities of an open-end or closed-end management investment
1-4 company or investment trust.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 113.053, Property Code, is amended by
1-7 amending Subsection (a) and adding Subsection (g) to read as
1-8 follows:
1-9 (a) Except as provided by Subsections (b), (c), (d), (e),
1-10 <and> (f), and (g), a trustee shall not directly or indirectly buy
1-11 or sell trust property from or to:
1-12 (1) the trustee or an affiliate;
1-13 (2) a director, officer, or employee of the trustee or
1-14 an affiliate;
1-15 (3) a relative of the trustee; or
1-16 (4) the trustee's employer, partner, or other business
1-17 associate.
1-18 (g) In addition to other investments authorized by law for
1-19 the investment of funds held by a fiduciary or by the instrument
1-20 governing the fiduciary relationship, and notwithstanding any other
1-21 provision of law and subject to the standard contained in Section
1-22 113.056, a bank or trust company acting as a fiduciary, agent, or
1-23 otherwise, in the exercise of its investment discretion or at the
1-24 direction of another person authorized to direct the investment of
2-1 funds held by the bank or trust company as fiduciary, may invest
2-2 and reinvest in the securities of an open-end or closed-end
2-3 management investment company or investment trust registered under
2-4 the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.)
2-5 if the portfolio of the investment company or investment trust
2-6 consists substantially of investments that are not prohibited by
2-7 the governing instrument. The fact that the bank or trust company
2-8 or an affiliate of the bank or trust company provides services to
2-9 the investment company or investment trust, such as those of an
2-10 investment advisor, custodian, transfer agent, registrar, sponsor,
2-11 distributor, manager, or otherwise, and receives compensation for
2-12 those services does not preclude the bank or trust company from
2-13 investing or reinvesting in the securities if the compensation is
2-14 disclosed by prospectus, account statement, or otherwise. An
2-15 executor or administrator of an estate under a dependent
2-16 administration or a guardian of an estate shall not so invest or
2-17 reinvest unless specifically authorized by the court in which such
2-18 estate or guardianship is pending.
2-19 SECTION 2. The importance of this legislation and the
2-20 crowded condition of the calendars in both houses create an
2-21 emergency and an imperative public necessity that the
2-22 constitutional rule requiring bills to be read on three several
2-23 days in each house be suspended, and this rule is hereby suspended,
2-24 and that this Act take effect and be in force from and after its
2-25 passage, and it is so enacted.