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2002 Legislative Session: 3rd Session, 37th Parliament
FIRST READING
The following electronic version is for informational
purposes only.
The printed version remains the official version.
HONOURABLE GEOFF PLANT
ATTORNEY GENERAL AND MINISTER
RESPONSIBLE FOR TREATY NEGOTIATIONS
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:
1 Section 82 (2) of the Architects Act, R.S.B.C. 1996, c. 17, is amended by adding "property or" before "securities".
2 Section 45 (4) of the Cemetery and Funeral Services Act, R.S.B.C. 1996, c. 45, is repealed and the following substituted: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.
3 Section 30 of the College and Institute Act, R.S.B.C. 1996, c. 52, is repealed and the following substituted:
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.
4 Section 288 (4) of the Company Act, R.S.B.C. 1996, c. 62, is repealed and the following substituted: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.
5 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".
6 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:
(4) Subject to any terms and conditions the Minister of 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.
7 Section 60 (1) (b) is amended by striking out "section 40 (1)" and substituting "section 40 (6)".
8 Section 272 (1) (a) of the Financial Institutions Act, R.S.B.C. 1996, c. 141, is repealed.
9 Section 31 of the Institute of Technology Act, R.S.B.C. 1996, c. 225, is repealed and the following substituted:
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.
10 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.
11 Section 98 (2) of the Medical Practitioners Act, R.S.B.C. 1996, c. 285, is amended adding "property or" after "invested in".
12 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; .
13 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,".
14 Section 14 (a) is amended by striking out "registered, despite section 20 of the Trustee Act," and substituting "registered".
15 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).
16 Section 21 (8) of the Real Estate Act, R.S.B.C. 1996, c. 397, is amended by striking out everything after "trust funds".
17 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.
18 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.
19 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.
20 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.
21 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; .
22 Section 292 (2) is amended by adding the following paragraph:
(l.1) specifying permitted investments for the purposes of section 95 (2) (a); .
23 Section 15 of the Trustee Act, R.S.B.C. 1996, c. 464, is repealed and the following sections are added:
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.
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.
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.
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.
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 in
(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.
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:
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.
25 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."
26 This Act comes into force by regulation of the Lieutenant Governor in Council.
SECTION 1: [Architects Act, amends section 82 (2)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 2: [Cemetery and Funeral Services Act, repeals and replaces section 45 (4)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 3: [College and Institute Act, re-enacts section 30] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 4: [Company Act, repeals and replaces section 288 (4)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 5: [Farmers and Womens Institutes Act, amends section 7 (2)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 6: [Financial Administration Act, amends section 40] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 7: [Financial Administration Act, amends section 60 (1) (b)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 8: [Financial Institutions Act, repeals section 272 (1) (a)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 9: [Institute of Technology Act, re-enacts section 31] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 10: [Islands Trust Act, repeals and replaces section 43 (3)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 11: [Medical Practitioners Act, amends section 98 (2)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 12: [Municipal Finance Authority Act, repeals and replaces section 16 (3) (e)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 13: [Public Guardian and Trustee Act, amends section 8] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 14: [Public Guardian and Trustee Act, amends section 14 (a)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 15: [Public Guardian and Trustee Act, amends section 28] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 16: [Real Estate Act, amends section 21 (8)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 17: [Real Estate Act, repeals and replaces section 27 (1)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 18: [Real Estate Act, repeals and replaces section 29.4 (1)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 19: [Science Council Act, repeals and replaces section 10 (6)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 20: [Society Act, repeals and replaces section 32 (2) and (3)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 21: [Strata Property Act, repeals and replaces section 95 (2) (a)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 22: [Strata Property Act, amends section 292 (2)] is consequential to the amendments to the Trustee Act enacted by this Bill.
SECTION 23: [Trustee Act, repeals section 15 and enacts sections 15.1 to 15.6] enacts provisions that allow prudent investments by trustees and reflect contemporary exchange trading methods.
SECTION 24: [Trustee Act, repeals sections 16, 17, 18 and 20 and enacts section 17.1] repeals provisions to allow investment of trust property through contemporary exchange trading methods and enacts a new provision to prohibit a corporation that is a trustee from investing trust money in its own securities except as permitted under the new section 15.1 (3).
SECTION 25: [Workers Compensation Act, amends section 67 (2)] is consequential to the amendments to the Trustee Act enacted by this Bill.
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