{"data":{"id":"us-ky/krs-386.550","jurisdiction":"us-ky","citation":"KRS 386.550","heading":"Corporate powers -- Limitations and restrictions.","body":"Every fiduciary investment company in which a trust institution or foreign trust institution\nis authorized by KRS 386.510 to 386.590 to own and hold corporate stock or shares, in\norder to qualify for such investments, shall have such corporate powers as may be granted\nby the Kentucky Business Corporation Act by virtue of its incorporation under that law\nand shall, in addition, have the following corporate powers under its articles of\nincorporation and, by its articles of incorporation or its bylaws, be subj ect to the\nlimitations and restrictions hereinafter set forth.\n(1) The stock of any such fiduciary investment company shall be owned and held only\nby trust institutions and foreign trust institutions acting as fiduciaries or co -\nfiduciaries but may be regis tered in the name of the nominee or nominees of any\nsuch institution or foreign trust institution. Such stock shall not be subject to\ntransfer or assignment except to the trust institution or foreign trust institution on\nwhose behalf the stock is held by a ny such nominee or nominees, or to a fiduciary\nor co-fiduciary which becomes successor to the shareholder and which is also a trust\ninstitution or foreign trust institution qualified to hold such stock.\n(2) A fiduciary investment company shall have no less  than five (5) directors who need\nnot be shareholders but shall be officers or directors of trust institutions or foreign\ntrust institutions holding stock in such fiduciary investment company; provided,\nhowever, no one trust institution or foreign trust in stitution shall have more than a\nforty percent (40%) representation on the board of directors of any fiduciary\ninvestment company.\n(3) In acquiring, investing, reinvesting, exchanging, selling and managing its assets,\nevery fiduciary investment company shall exercise the judgment and care under the\ncircumstances then existing which men of prudence, discretion and intelligence\nexercise in the management of their own affairs, not in regard to speculation but in\nregard to the permanent disposition of their fun ds, considering the probable income\nas well as the safety of their capital. Within the foregoing limitations, a fiduciary\ninvestment company may acquire and retain every kind of investment, specifically\nincluding (but not by way of limitation) bonds, deben tures and other corporate\nobligations, corporate stocks, preferred or common, which men of prudence,\ndiscretion and intelligence acquire or retain for their own account; provided, a\nfiduciary investment company shall not at any time:\n(a) Invest in real est ate, commodities or commodity contracts, except that a\nfiduciary investment company may invest in securities secured by real estate\nor interests therein, in securities issued by companies which deal in real estate\nor investments therein, and in certificate s of beneficial interest issued by real\nestate investment trusts;\n(b) Participate on a joint or joint and several basis in any securities trading\naccount;\n(c) Invest in companies for the purpose of exercising control or management;\n(d) Make loans to any pe rson or persons, except that the purchase of a portion of\nan issue of debt securities, convertible debt securities, debt securities with\nwarrants, rights or options attached or other similar securities when originally\nissued or thereafter, of a character c ommonly distributed publicly shall not be\nconsidered the making of a loan;\n(e) Purchase or retain the securities of any issuer if immediately after such\nacquisition and as a result thereof the following requirements would not be\nmet: at least seventy -five percent (75%) of the total assets in the fiduciary\ninvestment company taken at market value are represented by (i) cash and\ncash items, securities issued or guaranteed by the United States or any\ninstrumentality thereof, and (ii) other securities which, as  to any one (1)\nissuer, do not represent more than ten percent (10%) of the voting securities of\nsuch issuer or more than five percent (5%) of the value of the total assets of\nthe fiduciary investment company;\n(f) Act as underwriter of the securities of other issuers;\n(g) Borrow money; or\n(h) Engage in margin transactions or short sales, or write, put or call options for\nthe purchase or sale of securities.","path":["KRS Chapter 386"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=35949","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:16Z","sha256":"20f4caa571a7afe88a535adb005d34cf1c9f0dd100d832b0f3321e3ef7ca81bc","source_id":"us-ky","stale":false,"prev":"us-ky/krs-386.540","next":"us-ky/krs-386.560"},"notice":"GroundRules: Original legal text. Not legal advice."}