95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB0242


 
Introduced 1/19/2007, by Rep. Mark H. Beaubien, Jr.
 
SYNOPSIS AS INTRODUCED:
 		













205 ILCS 620/2-14 new










    Amends the Corporate Fiduciary 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 that the bank or 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. Provides that the new provisions apply to any bank or trust company doing banking or trust business in this State, including any national bank or national trust company or any of its affiliates.
















LRB095 04730 MJR 24789 b

















 


 


A BILL FOR









 











HB0242

LRB095 04730 MJR 24789 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 Corporate Fiduciary Act is amended  by adding 
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Section 2-14 as follows:
 
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    (205 ILCS 620/2-14 new)

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    Sec. 2-14. 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 that includes 
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the bank or 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 or 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 
 


 






HB0242
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LRB095 04730 MJR 24789 b




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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 
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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, the provisions of this Section apply to any bank or trust 
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company doing banking or trust business in this State, 
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including, without limiting the generality of the foregoing, 
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any national bank or national trust company or any of
its 
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affiliates even if its principal place of business is not in 
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this State.