H*3476(Rat #0229, Act #0158 of 1991)  General Bill, By R.A. Barber, P.M. Burch, 
J.D. Cole, R.S. Corning, L.L. Elliott, J.V. Gregory, Haskins, J.H. Hodges, 
M.F. Jaskwhich, J.C. Johnson, Koon, J.G. Mattos, J. Rama, Scott, C.L. Sturkie, 
Wilkins and J.B. Williams
 A Bill to amend Section 62-7-302, as amended, Code of Laws of South Carolina,
 1976, relating to the duties and responsibilities of a fiduciary, so as to
 authorize fiduciaries to invest in mutual funds sponsored by affiliated
 organizations.

   02/12/91  House  Introduced and read first time HJ-3
   02/12/91  House  Referred to Committee on Judiciary HJ-3
   04/17/91  House  Committee report: Favorable Judiciary HJ-15
   04/25/91  House  Debate adjourned until Tuesday, April 30, 1991 HJ-7
   05/01/91  House  Read second time HJ-12
   05/02/91  House  Read third time and sent to Senate HJ-19
   05/07/91  Senate Introduced and read first time SJ-25
   05/07/91  Senate Referred to Committee on Judiciary SJ-25
   05/22/91  Senate Committee report: Favorable with amendment
                     Judiciary SJ-12
   05/30/91  Senate Read second time SJ-66
   05/30/91  Senate Ordered to third reading with notice of
                     amendments SJ-66
   06/05/91  Senate Amended SJ-78
   06/05/91  Senate Read third time and returned to House with
                     amendments SJ-78
   06/06/91  House  Concurred in Senate amendment and enrolled HJ-2
   06/06/91         Ratified R 229
   06/12/91         Signed By Governor
   06/12/91         Effective date 06/12/91
   06/12/91         Act No. 158
   07/02/91         Copies available

AN ACT TO AMEND SECTION 62-7-302, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DUTIES AND RESPONSIBILITIES OF A FIDUCIARY, SO AS TO AUTHORIZE FIDUCIARIES TO INVEST IN MUTUAL FUNDS SPONSORED BY AFFILIATED ORGANIZATIONS.

Be it enacted by the General Assembly of the State of South Carolina:

Fiduciary may invest in certain mutual funds

SECTION 1. Section 62-7-302(a) of the 1976 Code, as last amended by Act 521 of 1990, is further amended by adding:

"(6) invest and reinvest in the securities of an open-end or closed-end management investment company or of an investment trust registered under the Investment Company Act of 1940, as amended. A bank or trust company may invest in these securities even if the bank or trust company, or an affiliate of the bank or trust company, provides services to the investment company or investment trust such as that of an investment advisor, custodian, transfer agent, registrar, sponsor, distributor, manager, or otherwise, and receives reasonable remuneration for those services."

Powers of fiduciary

SECTION 2. Section 62-7-302(a)(4) and (5) of the 1976 Code, as last amended by Act 521 of 1990, is further amended to read:

"(4) retain the securities into which corporate securities owned by the fiduciary may be converted or which may be derived therefrom as a result of merger, consolidation, stock dividends, splits, liquidations, and similar procedures (and may exercise by purchase or otherwise any rights, warrants, or conversion features attaching to any such securities);

(5) purchase or otherwise acquire and retain any security underwritten by a syndicate, even if the fiduciary or its affiliate (defined as any entity which owns or is owned by, in whole or in part, the fiduciary or is owned by the same entity that owns the fiduciary) participates or has participated as a member of the syndicate, provided the fiduciary does not purchase the security from itself, its affiliate, or from another member of the underwriting syndicate or its affiliate pursuant to an implied or express reciprocal agreement between the fiduciary or its affiliate, and such other member or its affiliate, to purchase all or part of each other's underwriting participation commitment within the syndicate. The propriety of an investment decision is to be determined by what the fiduciary knew or should have known at the time of the decision about the inherent nature and expected performance of the investment, the attributes of the portfolio, the general economic conditions, the anticipated tax consequences of the investment, the anticipated duration of the fiduciary account, the needs and objectives of the beneficiaries of the account, and other pertinent circumstances as they existed at the time of the decision. Any determination of liability for investment performance shall consider not only the performance of a particular investment but also the performance of the portfolio as a whole. Any fiduciary acting under a governing instrument shall not be liable to anyone whose interests arise from that instrument for the fiduciary's good faith reliance on the express provisions of such instrument. The standards set forth in this section may be expanded, restricted, or eliminated by express provisions in a governing instrument; and".

Time effective

SECTION 3. This act takes effect upon approval by the Governor.

Approved the 12th day of June, 1991.