By: Grusendorf H.B. No. 1441
73R5089 LJD-F
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, a bank or trust company acting as a fiduciary,
1-22 agent, or otherwise, in the exercise of its investment discretion
1-23 or at the direction of another person authorized to direct the
1-24 investment of funds held by the bank or trust company as fiduciary,
2-1 may invest and reinvest in the securities of an open-end or
2-2 closed-end management investment company or investment trust
2-3 registered under the Investment Company Act of 1940 (15 U.S.C. Sec.
2-4 80a-1 et seq.) if the portfolio of the investment company or
2-5 investment trust consists substantially of investments that are not
2-6 prohibited by the governing instrument. The fact that the bank or
2-7 trust company or an affiliate of the bank or trust company provides
2-8 services to the investment company or investment trust, such as
2-9 those of an investment advisor, custodian, transfer agent,
2-10 registrar, sponsor, distributor, manager, or otherwise, and
2-11 receives compensation for those services does not preclude the bank
2-12 or trust company from investing or reinvesting in the securities if
2-13 the compensation is disclosed. In this subsection, "fiduciary"
2-14 means an independent executor, administrator, trustee, or an agent
2-15 or custodian acting for an individual, firm, or corporation in any
2-16 of those capacities. The term does not include an executor or
2-17 administrator of an estate under a dependent administration or a
2-18 guardian of an estate unless the court having jurisdiction of the
2-19 estate or guardianship specifically authorizes the executor,
2-20 administrator, or guardian to act in the manner authorized by this
2-21 subsection.
2-22 SECTION 2. The importance of this legislation and the
2-23 crowded condition of the calendars in both houses create an
2-24 emergency and an imperative public necessity that the
2-25 constitutional rule requiring bills to be read on three several
2-26 days in each house be suspended, and this rule is hereby suspended,
2-27 and that this Act take effect and be in force from and after its
3-1 passage, and it is so enacted.