Sec. 36a-276. Investments in equity securities and equity mutual funds.
Sec. 36a-276. Investments in equity securities and equity mutual funds. (a) As
used in this section: (1) "Equity security" means any stock or similar security, certificate
of interest or participation in any profit-sharing agreement, preorganization certificate
or subscription, transferable share, voting trust certificate or certificate of deposit for
an equity security, limited partnership interest, interest in a joint venture or certificate
of interest in a business trust; or any security convertible, with or without consideration,
into such a security, or carrying any warrant or right to subscribe to or purchase such a
security; or any such warrant or right; or any put, call, straddle or other option or privilege
of buying such a security from or selling such a security to another without being bound
to do so, but excludes a debt mutual fund, as defined in section 36a-275, and an equity
mutual fund; and (2) "equity mutual fund" means a partnership interest in, shares of
stock of, units of beneficial interest in or other ownership interest in any one investment
company which is registered under the Investment Company Act of 1940, as from time to
time amended, commonly described as mutual funds, money market funds, investment
trusts or business trusts, but excludes a debt mutual fund, as defined in section 36a-275.
(b) In addition to other investments authorized by sections 36a-275 to 36a-277,
inclusive, and 36a-280, any Connecticut bank may purchase or hold for its own account
equity securities and equity mutual funds, without regard to any other liability to the
Connecticut bank of the issuer of such equity securities and equity mutual funds, provided: (1) The total amount of equity securities and equity mutual funds of any one
issuer purchased or held by a Connecticut bank or for a Connecticut bank's account
may not exceed, at any time, twenty-five per cent of its total equity capital and reserves
for loan and lease losses; and (2) the total amount of any equity securities and equity
mutual funds purchased or held by a Connecticut bank or for a Connecticut bank's
account pursuant to this subsection may not exceed, at any time, twenty-five per cent
of its assets.
(c) In addition to other investments authorized by sections 36a-275 to 36a-277,
inclusive, and 36a-280, any Connecticut bank may purchase or hold for its own account,
without regard to any other liability to the Connecticut bank of the issuer, ten per cent
or more of the equity securities, including convertible securities, of a bank, out-of-state
bank or holding company in accordance with law.
(d) In addition to other investments authorized by sections 36a-275 to 36a-277,
inclusive, and 36a-280, any Connecticut bank, with the approval of the commissioner,
may purchase or hold for its own account, without regard to any other liability to the
Connecticut bank of the issuer, a controlling interest in a corporation or other entity,
the functions of which are limited to one or more of the functions which the bank may
carry on directly in the exercise of its express or incidental powers. For purposes of
this subsection, a "controlling interest" means at least fifty-one per cent of the equity
securities issued by the corporation or other entity, unless the commissioner determines
that under the circumstances, a lesser percentage constitutes effective working control
of the corporation or other entity.
(e) The bank shall notify the commissioner, in writing, twenty-four hours prior to
making any investment under subsections (b) and (c) of this section which would result
in such bank having invested in the aggregate in twenty-five per cent or more of the
equity securities of a corporation.
(P.A. 94-122, S. 125, 340; P.A. 95-70, S. 4, 8; 95-155, S. 21, 29; P.A. 96-44, S. 5.)
History: P.A. 94-122 effective January 1, 1995; P.A. 95-70 amended Subsec. (b)(2) by deleting reference to laws and
supervisory authority governing the bank and by adding a holding company to the list, amended Subsec. (c) by deleting
reference to Subsec. (e), amended Subsec. (d) by changing "ten" to "fifteen", and by renumbering the Subdiv. and adding
Subdiv. (3) re determination of prudence, amended Subsec. (e) by adding references to Subsec. (b)(1) and (c), by deleting
reference to time of investment re the rating, by deleting reference to the opinion of the bank and instead requiring a
determination by the governing board re prudence, by deleting the sentence re review and retention of investments that
are not prudent, by adding a new Subdiv. (2) re bank's investment policy, and by renumbering Subsec. (e)(2) to Subsec.
(f), amended Subsec. (f) by deleting references to Subsec. (e), (f)(1)(A) and (f)(1)(B), by adding references to Subsec.
(d)(3) and (e)(1), and by adding the provision re divestiture, effective May 31, 1995; P.A. 95-155 amended Subsec. (a)(2)
to add proviso re five-year requirement, to add references to the general statutes and to delete the requirement re approval,
effective June 27, 1995; P.A. 96-44 replaced prior provisions re investments in equity securities with new provisions, and
added provisions re equity mutual funds and re controlling interests in entities carrying on functions within bank powers.