(a)Unless otherwise provided in an agreement
or a trust, a bank or trust company that holds funds or property as a
fiduciary may use the funds or property to purchase from the bank, the
trust company, or an affiliate of the bank or trust company a product,
service, or security, including an insurance product or security that is
underwritten by the bank, the trust company, an affiliate of the bank or
trust company, or a syndicate or selling group that includes the bank,
the trust company, or an affiliate of the bank or trust company if the:
(1)purchase price and any ongoing charges and costs are fair,
reasonable, and substantially equivalent to the cost of similar
products and services; and
(2)purchase complies with IC 30-4-3.5.
The compensation for the product, services, or security rec
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(a) Unless otherwise provided in an agreement
or a trust, a bank or trust company that holds funds or property as a
fiduciary may use the funds or property to purchase from the bank, the
trust company, or an affiliate of the bank or trust company a product,
service, or security, including an insurance product or security that is
underwritten by the bank, the trust company, an affiliate of the bank or
trust company, or a syndicate or selling group that includes the bank,
the trust company, or an affiliate of the bank or trust company if the:
(1) purchase price and any ongoing charges and costs are fair,
reasonable, and substantially equivalent to the cost of similar
products and services; and
(2) purchase complies with IC 30-4-3.5.
The compensation for the product, services, or security received by the
bank, trust company, an affiliate of the bank or trust company, or a
syndicate or selling group that includes the bank, the trust company, or
an affiliate of the bank or trust company may be in addition to the
compensation that the bank or trust company is otherwise entitled to
from the fiduciary account.
(b) A bank or trust company that makes a purchase or sale described
in subsection (a) shall disclose, at least annually, to each person
entitled to receive statements of account activity from the bank or trust
company any purchase or sale made by the bank or trust company
during the year. The disclosure must be in writing or an electronic
format and include the following:
(1) Any capacity in which the bank, the trust company, or an
affiliate of the bank or trust company acts for:
(A) the issuer of the securities; or
(B) the provider of the products or services;
that is the subject of the purchase or sale.
(2) A statement that the bank, the trust company, or an affiliate of
the bank or trust company has an interest in the subject of the
purchase or sale, if applicable.
(3) The rate and method by which that compensation was
determined.
(4) The name, telephone number, street address, and mailing
address of an officer of the bank or trust company who may be
contacted for further information.
(5) A notice that the bank's or trust company's ability to make
transactions described in subsection (a) ends upon receipt at any
time of a notice of objection by a majority of the persons entitled
to receive statements of account activity.
(c) The following apply to a purchase or sale under subsection (a):
(1) Except as provided in subdivisions (2) and (3), if the fiduciary
relationship is a trust or an agency, the trustee or agent shall treat
the purchase or sale under subsection (a) as if it were a conflict of
interest transaction under IC 30-4-3-5 and shall give any notice
and obtain any consent that may be required under IC 30-4-3-5,
subject to the following:
(A) IC 30-2-14-16 applies to any notice required to be given by
a trustee or an agent under this subdivision, subject to the
following:
(i) If the fiduciary relationship is a revocable trust with one
(1) or more living grantors, the trustee must give notice only
to the living grantors, who shall be considered to have all
income and principal interests in the trust at the time the
notice is given. If a grantor is incapacitated, the trustee shall
give notice to the grantor's court appointed guardian, the
principal under a durable power of attorney, or a co-trustee of
the revocable trust, unless the guardian, principal, or
co-trustee is the bank or trust company that seeks the consent.
If the representative of the incapacitated grantor is the bank
or trust company that seeks the consent to a purchase or sale
under subsection (a), the trustee shall obtain consent from the
court.
(ii) If the fiduciary relationship is a revocable trust and the
assets of the revocable trust are distributable to one (1) or
more other trusts, notice shall be given to the trustees of the
other trusts. However, if the bank or trust company that seeks
the consent to a purchase or sale under subsection (a) is the
trustee of another trust to which the assets of the revocable
trust are distributable, the bank or trust company shall give
notice to those beneficiaries of the other trust who are entitled
to receive statements of account activity from the bank or
trust company.
(iii) If the fiduciary relationship is an agency, the principal
must consent to the purchase or sale under subsection (a) in
writing in advance of the transaction. The principal shall be
considered to have all income and principal interests in the
account at the time the notice of the proposed transaction is
given. If the principal is incapacitated, consent must be
obtained from the principal's court appointed guardian, unless
the guardian of the incapacitated principal is the bank or trust
company that seeks the consent. If the guardian of the
incapacitated principal is the bank or trust company that
seeks the consent, consent to a purchase or sale under
subsection (a) must be obtained from the court supervising
the principal's guardianship.
(B) If the fiduciary relationship is a trust, the following apply
with respect to any consent required to be obtained under IC 30-4-3-5(a)(2):
(i) Notwithstanding the requirement under IC 30-4-3-5(a)(2)(A) that all interested persons provide written
consent to the proposed action, and subject to subdivision (2),
a trustee, for a proposed purchase or sale under subsection
(a), need only obtain the written consent of a majority of the
persons entitled to notice under IC 30-2-14-16, as modified
by subdivision (1)(A). However, the trustee must obtain the
written consent of at least one (1) beneficiary who is
receiving income under the trust at the time of the notice and
at least one (1) individual who would receive a distribution of
principal if the trust were terminated at the time notice is
given.
(ii) Upon obtaining the written consents required under item
(i), the trustee need not wait until the period to make written
objections under IC 30-2-14-16 ends in order to take the
proposed action.
(2) Any consent granted under subdivision (1)(B)(i) may be
revoked by a writing signed by a majority of the persons entitled
to notice under IC 30-2-14-16, as modified by subdivision (1)(A).
However, the revocation must be signed by:
(A) at least one (1) beneficiary who is receiving income under
the trust at the time the revocation is signed; and
(B) at least one (1) individual who would receive a distribution
of principal if the trust were terminated at the time the
revocation is signed.
(3) The notice and consent otherwise required under subdivision
(1) are not required if the purchase or sale under subsection (a) is
specifically authorized:
(A) in the document creating the fiduciary relationship; or
(B) under IC 30-4-3-7.