(1)A bank, association, trust company, or affiliate thereof, in establishing, maintaining, and administering one or more common trust funds for the purposes of furnishing investments to itself as fiduciary as set forth in s. 660.42, shall have a duty to invest and manage such common trust fund assets as follows:
(a)The bank, association, trust company, or affiliate has a duty to invest and manage common trust assets as a prudent investor would considering the purposes, terms, distribution requirements, and other circumstances of the common trust fund. This standard requires the exercise of reasonable care, any special skills or expertise that the trustee has, and caution and is to be applied to investments not in isolation, but in the context of the common trust fund portfolio as a whole
Free access — add to your briefcase to read the full text and ask questions with AI
(1) A bank, association, trust company, or affiliate thereof, in establishing, maintaining, and administering one or more common trust funds for the purposes of furnishing investments to itself as fiduciary as set forth in s. 660.42, shall have a duty to invest and manage such common trust fund assets as follows: (a) The bank, association, trust company, or affiliate has a duty to invest and manage common trust assets as a prudent investor would considering the purposes, terms, distribution requirements, and other circumstances of the common trust fund. This standard requires the exercise of reasonable care, any special skills or expertise that the trustee has, and caution and is to be applied to investments not in isolation, but in the context of the common trust fund portfolio as a whole and as a part of an overall investment strategy that should incorporate risk and return objectives reasonably suitable to the common trust fund. (b) No specific investment or course of action is, taken alone, prudent or imprudent. The bank, association, trust company, or affiliate may invest in every kind or property and type of investment, subject to this section. The bank’s, association’s, trust company’s, or affiliate’s investment decisions and actions are to be judged in terms of its reasonable business judgment regarding the anticipated effect on the common trust fund portfolio as a whole under the facts and circumstances prevailing at the time of the decision or action. The standard set forth in this subsection is a test of conduct and not of resulting performance. (c) The circumstances that the bank, association, trust company, or affiliate may consider in making investment decisions include, without limitation, the general economic conditions, the possible effect of inflation, the role each investment or course of action plays within the overall portfolio, and the expected total return.
(2) A bank, association, trust company, or affiliate may not delegate the investment functions of a common trust fund established or operating under s. 584 of the Internal Revenue Code of 1986, as amended, pursuant to s. 660.42 except as authorized by the Bureau of the Comptroller of the Currency of the United States Department of the Treasury. A bank, association, trust company, or affiliate may hire one or more agents to give the trustee advice with respect to investments of a common trust fund and pay reasonable and appropriate compensation to the agent provided that the final investment decisions and the exclusive management of the common trust fund remain with the bank, association, trust company, or affiliate.
(3) This section applies to all existing and future common trust funds, but only as to acts or omissions occurring after October 1, 1993.