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| 1 | AN ACT concerning financial regulation.
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| 2 | Be it enacted by the People of the State of Illinois,
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| 3 | represented in the General Assembly:
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| 4 | Section 5. The Corporate Fiduciary Act is amended by adding | ||||||
| 5 | Section 2-14 as follows: | ||||||
| 6 | (205 ILCS 620/2-14 new)
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| 7 | Sec. 2-14. Investments and participation by affiliates. | ||||||
| 8 | (a) Any bank or trust company acting in its fiduciary | ||||||
| 9 | capacity may purchase services or products, including, but not | ||||||
| 10 | limited to, life insurance, equity derivatives, or securities | ||||||
| 11 | underwritten or otherwise distributed by an affiliate of such | ||||||
| 12 | bank or trust company or its affiliate, directly from such | ||||||
| 13 | affiliate or from a syndicate or selling group that includes | ||||||
| 14 | the bank or trust company or its affiliate, provided that the | ||||||
| 15 | purchase is otherwise prudent and not prohibited by the | ||||||
| 16 | instrument governing the fiduciary relationship. The | ||||||
| 17 | provisions of this Section shall apply to such purchases of | ||||||
| 18 | services or products made at the time of the initial offering | ||||||
| 19 | thereof or at any time thereafter. | ||||||
| 20 | (b) The compensation for the services or products may be in | ||||||
| 21 | addition to the compensation to which the bank or trust company | ||||||
| 22 | or its affiliate is otherwise entitled as fiduciary. | ||||||
| 23 | (c) Any bank or trust company acting in its fiduciary | ||||||
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| 1 | capacity may effect such purchases of services or products with | ||||||
| 2 | or through its affiliate, provided that the fees paid to its | ||||||
| 3 | affiliate and the terms and conditions of such purchases are | ||||||
| 4 | reasonable and the transaction is not prohibited by the | ||||||
| 5 | instrument governing the fiduciary relationship. | ||||||
| 6 | (d) A bank or a trust company shall disclose at least | ||||||
| 7 | annually any purchase authorized
by this Section that was made | ||||||
| 8 | by the bank or trust company during the reporting period. The | ||||||
| 9 | disclosure shall be given, in writing or electronically, to all | ||||||
| 10 | persons entitled to receive statements of account activity, and | ||||||
| 11 | shall include any capacities
in which the bank or trust company | ||||||
| 12 | or an affiliate acts for the issuer of the securities or the | ||||||
| 13 | provider of the products or services and the fact that the bank | ||||||
| 14 | or trust company or an affiliate may have an interest in the | ||||||
| 15 | products or services. | ||||||
| 16 | (e) Notwithstanding the applicable provisions of Illinois | ||||||
| 17 | law, the provisions of this Section apply to any bank or trust | ||||||
| 18 | company doing banking or trust business in this State, | ||||||
| 19 | including, without limiting the generality of the foregoing, | ||||||
| 20 | any national bank or national trust company or any of
its | ||||||
| 21 | affiliates even if its principal place of business is not in | ||||||
| 22 | this State.
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