§ 19-3-8 - Prudent person rule. - Rhode Island Statutes

SECTION 19-3-8

   § 19-3-8  Prudent person rule. – (a) In addition to investments set forth in this title, any financialinstitution may also, to the extent prescribed, invest in any securities thatwould be acquired by prudent persons of discretion and intelligence in thesematters who are seeking a reasonable income and the preservation of theircapital, as are set forth below:

   (1) In corporate interest bearing securities not eligibleunder the laws of this state for investment, subject to a maximum of threepercent (3%) of the financial institution's assets in any one obligation of anyone obligor;

   (2) In shares of common, preferred, or guaranteed stocks,including the various classifications of stocks, not eligible under the laws ofthis state for investment, subject to a maximum of one half of one percent(.5%) of the financial institution's assets in any one corporation;

   (3) In the shares of any open end or closed end managementtype investment company or trust which is registered under the FederalInvestment Company Act of 1940, U.S.C. § 80a-1 et seq., subject to amaximum of one percent (1%) of the financial institution's assets in any onecompany or trust.

   (b) No financial institution shall invest more than tenpercent (10%) of its assets in investments authorized in this section, unlessotherwise expressly provided.