WILLIAM DONALD SCHAEFER, Governor                           S.B. 442

(A)     (1) IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS
INDICATED.

(2)      "FIDUCIARY" MEANS:

(I)      A CORPORATE FIDUCIARY TRUST COMPANY;

(II)     AN INVESTMENT ADVISOR THAT IS CONTROLLED BY OR IS
UNDER COMMON CONTROL WITH A CORPORATE FIDUCIARY TRUST COMPANY; OR

(III)    A PERSON WHO MAKES AN ELECTION UNDER SUBSECTION (G)
OF THIS SECTION.

(3)      "FIDUCIARY ASSETS" MEANS ASSETS HELD BY A FIDUCIARY AS
TRUSTEE, GUARDIAN, CONSERVATOR, COMMITTEE, CUSTODIAN UNDER THE
MARYLAND UNIFORM TRANSFERS TO MINORS ACT, INVESTMENT MANAGER, OR
INVESTMENT ADVISOR.

(4)      "INVESTMENT ADVISOR" MEANS ANY COMPANY REGISTERED
UNDER THE PROVISIONS OF THE FEDERAL INVESTMENT ADVISERS ACT OF 1940.

(B)     A FIDUCIARY SHALL:

(1)      INVEST AND MANAGE FIDUCIARY ASSETS AS A PRUDENT INVESTOR
WOULD, CONSIDERING THE PURPOSES, TERMS, DISTRIBUTION REQUIREMENTS, AND
OTHER CIRCUMSTANCES OF THE GOVERNING INSTRUMENT AND THE NATURE OF
THE FIDUCIARY APPOINTMENT;

(2)      EXERCISE REASONABLE CARE, SKILL, AND CAUTION REGARDING
THE ANTICIPATED EFFECT ON THE FIDUCIARY ASSETS AS A WHOLE UNDER THE
FACTS AND CIRCUMSTANCES PREVAILING AT THE TIME OF ANY ACTION BY THE
FIDUCIARY;

(3)      INVEST AND MANAGE NOT IN ISOLATION BUT IN THE CONTEXT OF
THE FIDUCIARY ASSETS AS A WHOLE AND AS PART OF AN OVERALL INVESTMENT
STRATEGY THAT INCORPORATES RISK AND RETURN OBJECTIVES REASONABLY
SUITABLE UNDER THE TERMS OF THE GOVERNING INSTRUMENT AND THE NATURE
OF THE FIDUCIARY APPOINTMENT;

(4)      DIVERSIFY INVESTMENTS UNLESS, UNDER THE CIRCUMSTANCES,
THE FIDUCIARY REASONABLY BELIEVES IT IS IN THE BEST INTERESTS OF THE
BENEFICIARIES OR FURTHERS THE PURPOSES FOR WHICH THE FIDUCIARY WAS
APPOINTED NOT TO DIVERSIFY;

(5)      REVIEW FIDUCIARY ASSETS WITHIN A REASONABLE TIME AFTER
ACCEPTANCE OF THE FIDUCIARY APPOINTMENT AND MAKE AND IMPLEMENT
DECISIONS CONCERNING THE RETENTION OR DISPOSITION OF INVESTMENTS
EXISTING PRIOR TO THE APPOINTMENT IN ORDER TO CONFORM WITH THIS
SECTION;

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