PETITION OF:

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In the Year Two Thousand and Seven.

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An Act relative to the investment powers of trust departments.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Paragraph 11 of section 3 of chapter 167G, as appearing in the 2004 Official Edition, is hereby amended by striking out said paragraph and inserting in place thereof the following new paragraph:

11. Any association or corporation authorized to do a banking business and to exercise trust powers in the commonwealth while acting as a fiduciary is authorized, in the absence of an express provision to the contrary in the instrument, judgment, decree or order creating a trust or other fiduciary relationship, to purchase for the fiduciary estate, directly from underwriters or distributors or in the secondary market, bonds, or other securities which are underwritten or distributed by such association or corporation or an affiliate thereof or by any syndicate which includes such association or corporation or affiliate thereof or for which such association or corporation or any affiliate thereof acts as adviser, distributor, transfer agent, placement agent, registrar, sponsor, manager, shareholder servicing agent or custodian or in any other capacity for which it receives or has received a fee or commission; provided, however, that (1) nothing in this section shall affect the degree of prudence which is required of fiduciaries generally under the common law of the commonwealth or the charging of reasonable compensation and (2) any such bonds or securities so purchased shall have sufficient liquidity and quality to satisfy the principles of fiduciary investment. As used in this paragraph, “securities” includes, by way of illustration and not limitation, shares in a private investment fund (including a private investment fund organized as a limited partnership, a limited liability company, a statutory or common law business trust, or a real estate investment trust), joint venture or other general or limited partnership, or an open-end or closed-end management type investment or investment trust registered under the Investment Company Act of 1940. Any such association or corporation purchasing bonds or securities pursuant to this paragraph shall, in any written communication or account statement reflecting such purchase, disclose the fact that it or an affiliate may have an interest in the underwriting or distribution of such bonds or securities and any capacities in which it or an affiliate acts for the issuer of such securities. Any such association or corporation purchasing securities of an investment company pursuant to this paragraph shall disclose the provision of the stated services, and the receipt of compensation for such services, annually by mailing a statement or letter describing the same, to the last known address of each person to whom statements for the fiduciary estate are rendered.