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2002 Legislative Session: 3rd Session, 37th

Parliament

THIRD READING

The following electronic version is for

informational purposes only.

The printed version remains the official

version.

Certified correct as passed Third Reading on the 2nd day of

May, 2002

Ian D. Izard, Law Clerk

HONOURABLE GEOFF PLANT

ATTORNEY GENERAL AND

MINISTER

RESPONSIBLE FOR TREATY NEGOTIATIONS

BILL 30 – 2002

TRUSTEE INVESTMENT STATUTES

AMENDMENT ACT, 2002

HER MAJESTY, by and with the advice and consent of the Legislative Assembly

of the Province of British Columbia, enacts as follows:

Architects Act

Section 82 (2) of the Architects Act, R.S.B.C. 1996, c. 17, is

amended by adding "property or" before

"securities" .

Cemetery and Funeral Services Act

Section 45 (4) of the Cemetery and Funeral Services Act, R.S.B.C.

1996, c. 45, is repealed and the following substituted:

(4) The provisions of the Trustee Act respecting

the investment of trust property by a trustee apply to care funds.

College and Institute Act

Section 30 of the College and Institute Act, R.S.B.C. 1996, c. 52, is

repealed and the following substituted:

Investments

30 The board may invest for the benefit of the

institution money belonging to it and available for investment only as permitted

under the provisions of the Trustee Act respecting the investment of

trust property by a trustee.

Company Act

Section 288 (4) of the Company Act, R.S.B.C. 1996, c. 62, is repealed

and the following substituted:

(4) Until required for distribution to creditors and

members, cash balances held by the liquidator may be invested as follows and any

dividends or interest received from the investments form part of the assets of

the company:

(

a) in an interest bearing account with any savings

institution;

(

b) as permitted under the provisions of the Trustee

Act respecting the investment of trust property by a trustee.

Farmers and Womens Institutes Act

Section 7 (2) of the Farmers and Womens Institutes Act, R.S.B.C.

1996, c. 133, is amended by adding "property or" before

"securities" .

Financial Administration Act

Section 40 of the Financial Administration Act, R.S.B.C. 1996, c.

138, is amended

(

a) by repealing subsection (1) and substituting the

following:

(1) The Minister of Finance may invest money of the

consolidated revenue fund not immediately required for

payments. ,

(

b) by repealing subsection (4) and substituting the

following:

Finance considers advisable and subject to the regulations of the Lieutenant

Governor in Council, if money of a trust fund is not immediately required for

payments, it may be invested by the person having authority to invest the money

as permitted under the provisions of the Trustee Act respecting the

investment of trust property by a trustee. , and

(

c) by repealing subsections (6) to (8) and substituting the

following:

(6) When investing any money other than under subsection

(4), the Minister of Finance must exercise the care, skill, diligence and

judgment that a prudent investor would exercise in making investments.

Section 60 (1) (

b) is amended by striking out "section 40

(1)" and substituting "section 40 (6)" .

Financial Institutions Act

Section 272 (1) (

a) of the Financial Institutions Act, R.S.B.C. 1996,

c. 141, is repealed.

Institute of Technology Act

Section 31 of the Institute of Technology Act, R.S.B.C. 1996, c. 225,

is repealed and the following substituted:

Investments

31 The board may invest for the benefit of the

institute money belonging to it and available for investment only as permitted

under the provisions of the Trustee Act respecting the investment of

trust property by a trustee.

Islands Trust Act

Section 43 (3) of the Islands Trust Act, R.S.B.C. 1996, c. 239, is

repealed and the following substituted:

(3) Subject to the approval of the minister, the property

of the trust fund may be invested as permitted under the provisions of the

Trustee Act respecting the investment of trust property by a trustee.

Medical Practitioners Act

Section 98 (2) of the Medical Practitioners Act, R.S.B.C. 1996, c.

285, is amended adding "property or" after "invested

in" .

Municipal Finance Authority Act

Section 16 (3) (

e) of the Municipal Finance Authority Act, R.S.B.C.

1996, c. 325, is repealed and the following substituted:

(

e) investments permitted under the provisions of the

Trustee Act respecting the investment of trust property by a trustee;

Public Guardian and Trustee Act

Section 8 of the Public Guardian and Trustee Act, R.S.B.C. 1996, c.

383, is amended by adding "the regulations," after "this

Act," .

Section 14 (

a) is amended by striking out "registered,

despite

section 20 of the Trustee Act ," and substituting

"registered" .

Section 28 is amended

(

a) by repealing subsection (2) (

b) and substituting the

following:

(

b) authorizing the Public Guardian and Trustee to invest

in specified types of investments in addition to investments permitted under the

provisions of the Trustee Act respecting the investment of trust property

by a trustee; , and

(

b) by repealing the second subsection (3).

Real Estate Act

Section 21 (8) of the Real Estate Act, R.S.B.C. 1996, c. 397, is

amended by striking out everything after "trust

funds" .

Section 27 (1) is repealed and the following

substituted:

(1) The corporation may invest any part of the insurance

fund not presently required for disposition, as permitted under the provisions

of the Trustee Act respecting the investment of trust property by a

trustee.

Section 29.4 (1) as enacted by

section 20 of the Finance and

Corporate Relations Statutes Amendment Act, 1998, S.B.C. 1998, c. 7, is repealed

and the following substituted:

(1) The special compensation corporation may invest any

part of the compensation fund, not presently required for disposition, as

permitted under the provisions of the Trustee Act respecting the

investment of trust property by a trustee.

Science Council Act

Section 10 (6) of the Science Council Act, R.S.B.C. 1996, c. 415, is

repealed and the following substituted:

(6) The council may invest money in its hands as permitted

under the provisions of the Trustee Act respecting the investment of

trust property by a trustee.

Society Act

Section 32 (2) and (3) of the Society Act, R.S.B.C. 1996, c.

433, is repealed and the following substituted:

(2) A society that has and exercises powers within the

scope of

section 14 must adhere to prudent standards as defined in

section 136

(1) of the Financial Institutions Act in investing its funds.

(3) A society to which subsection (2) does not apply may

invest its funds in investments authorized by its constitution or bylaws, but if

that investment is not authorized, the society must invest its funds only as

permitted under the provisions of the Trustee Act respecting the

investment of trust property by a trustee.

Strata Property Act

Section 95 (2) (

a) of the Strata Property Act, S.B.C. 1998, c. 43,

is repealed and the following substituted:

(

a) those investments permitted by the regulations;

Section 292 (2) is amended by adding the following

paragraph:

(l.1) specifying permitted investments for the purposes of

section 95 (2) (a); .

Trustee Act

Section 15 of the Trustee Act, R.S.B.C. 1996, c. 464, is repealed

and the following sections are added:

Investment of trust property

15.1

(1) A trustee may invest property in any form

of property or security in which a prudent investor might invest, including a

security issued by a mutual fund as defined in the Securities Act .

(2) Subsection (1) does not authorize a trustee to invest

in a manner that is inconsistent with the trust.

(3) Without limiting subsection (1), a trustee may invest

trust property in a common trust fund managed by a trust company, whether or not

the trust company is a co-trustee.

Standard of care

15.2 In investing trust property, a trustee must

exercise the care, skill, diligence and judgment that a prudent investor would

exercise in making investments.

Trustee not liable if overall investment strategy is

prudent

15.3 A trustee is not liable for a loss to the

trust arising from the investment of trust property if the conduct of the

trustee that led to the loss conformed to a plan or strategy for the investment

of the trust property, comprising reasonable assessments of risk and return,

that a prudent investor would adopt under comparable circumstances.

Abrogation of common law rules: anti-netting rules

15.4

(1) The rule of general trust law that

requires the assessment of the decisions of a trustee on an investment by

investment basis if the decisions are called into question is abrogated.

(2) The rule for the assessment of damages for breach of

trust that prohibits losses from being off set by gains is abrogated except in

respect of circumstances in which the breach is associated with dishonesty on

the part of the trustee.

Delegation of authority with respect to investment

15.5

(1) In this section, "agent" means any

person to whom a trustee delegates investment responsibility.

(2) A trustee may delegate to an agent the degree of

authority with respect to the investment of trust property that a prudent

investor might delegate in accordance with ordinary business practice.

(3) A trustee who delegates authority under subsection

(2) must determine the investment objectives for the trust and exercise prudence

(

a) selecting an agent,

(

b) establishing the terms and limits of the authority

delegated,

(

c) acquainting the agent with the investment objectives,

and

(

d) monitoring the performance of the agent to ensure

compliance with the terms of the delegation.

(4) In performing a delegated function, an agent owes a

duty to the trust to exercise reasonable care to comply with the terms of the

delegation.

(5) A trustee who complies with the requirements of

subsection (3) is not liable to the beneficiaries or to the trust for the

decisions or actions of the agents to whom the function was delegated.

(6) This

section does not authorize a trustee to delegate

authority under circumstances in which the trust requires the trustee to act

personally.

(7) Investment in a mutual fund referred to in

section

15.1 (1) or a common trust fund referred to in

section 15.1 (3) is not a

delegation of authority with respect to the investment of trust property.

Interpretation of trust instrument in relation to

sections 15.1 to 15.5

15.6 For the purposes of sections 15.1 to 15.5 and

any investment made after the coming into force of this section, if the terms of

the instrument that created a trust express the powers of the trustee as powers

to invest property of the trust in the investments permitted under

section 15 as

that

section read at any time before its repeal, the instrument is to be

interpreted as authorizing the investments permitted under sections 15.1 to

15.5, unless a particular investment would be expressly authorized or expressly

prohibited by the terms of the instrument.

24 Sections 16, 17, 18 and 20 are repealed and the following

substituted:

Corporate trustee not to invest trust money in own

securities

17.1 Except as provided in

section 15.1 (3), a

corporation that is a trustee must not invest trust money in its own

securities.

Workers Compensation Act

Section 67 (2) of the Workers Compensation Act, R.S.B.C. 1996, c.

492, is amended by striking out everything after "reinvested" and

substituting "and in doing so must exercise the care, skill, diligence

and judgment that a prudent investor would exercise in making investments."

Commencement

26 This Act comes into force by regulation

of the Lieutenant Governor in Council.

Copyright (c) 2002:

Queen's Printer, Victoria, British Columbia, Canada