It is enacted by the General Assembly as follows:

SECTION 1. Section 19-9-16 of the General Laws in Chapter 19-9 entitled "Investments" is hereby amended to read as follows:

{ADD 19-9-16. Permitted investments -- Trust companies. -- ADD} Any state or federally chartered bank or trust company 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, or to advise others including any investment company or investment trust to purchase, directly from underwriters of distributors or in the secondary market, bonds or other securities which are underwritten or distributed by such bank or trust company or an affiliate thereof or by any syndicate which includes such bank or trust company or an affiliate thereof and securities of any investment company {ADD or investment trust ADD} for which such bank or trust company or any affiliate thereof acts as adviser, distributor, transfer agent, registrar, sponsor, manager, shareholder servicing agent or custodian {ADD in return for reasonable compensation ADD} ; 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 state and

(2) any such bonds or securities so purchased shall have sufficient liquidity and quality to satisfy the principles of fiduciary investment; provided, further, that {DEL either

(i) the investment advisory fees, commissions or similar fees which the trustee or fiduciary is entitled to receive as trustee or fiduciary shall be reduced by the amount of any investment advisory fees, commissions or similar fees paid to the trustee or fiduciary by the investment company or investment trust with respect to investments by the fiduciary estate in the investment company or investment trust or

(ii) the investment advisory fees, commissions or similar fees paid to the trustee or fiduciary by the investment company or investment trust shall be received in lieu of any investment advisory fees, commissions or similar fees that the trustee or fiduciary would otherwise be entitled to receive for the investment management of the trust or fiduciary account. Any such bank or trust company purchasing bonds or securities pursuant to this section 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 issue of such securities. DEL}

{ADD (i) Any bank or trust company purchasing bonds or other securities which are underwritten or distributed by the bank or trust company or an affiliate thereof or by any syndicate which includes the bank or trust company or an affiliate thereof 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 the bonds or securities and any capacities in which it or an affiliate acts for the issuer of such securities; and

(ii) Any bank or trust company purchasing securities of any investment company or investment trust for which the bank or trust company of any affiliate thereof acts as advisor, distributor, transfer agent, registrar, sponsor, manager, shareholder servicing agent or custodian shall disclose the provision of the stated services, and the receipt of compensation for such services, annually by mailing a prospectus, statement or letter describing the same to the last known address of each person to whom statements for the fiduciary estate are rendered. ADD}

SECTION 2. This act shall take effect upon passage.