(a) A bank or trust company that is qualified to act as a fiduciary in this state, or in another state if affiliated with a bank or trust company that is qualified to act as a fiduciary in this state, may establish common trust funds for the purpose of furnishing investments to

(1) itself as fiduciary;

(2) itself and others as cofiduciaries; or

(3) its affiliated bank or trust company as fiduciary.

(b) A bank or trust company may invest, as fiduciary or cofiduciary, in the common trust funds it establishes under (a) of this section, the funds that the bank or trust company lawfully holds for investment, if the investment is not prohibited by the instrument, court judgment, court decree, or court order creating the fiduciary relationship, and if, in the case of cofiduciaries, the bank or trust company procures the consent of its cofiduciary or cofiduciaries to the investment.

(c) Notwithstanding (a) and (b) of this section, a bank or trust company that is qualified to act as a fiduciary in the state where the bank or trust company is organized or otherwise formed and that is not a member of the Federal Reserve System shall in the establishment of or investment in a common trust fund under (a) - (b) of this section comply with the law regulating financial institutions in the state where the bank or trust company is organized or otherwise formed.

(d) The Department of Commerce, Community, and Economic Development may adopt regulations under AS 44.62 (Administrative Procedure Act) to implement this section.

(e) In this section,

(1) “affiliated” means two or more banks or trust companies in which

(A) 25 percent or more of the voting shares, excluding shares owned by the United States or by a corporation or other entity wholly owned by the United States, is directly or indirectly owned or controlled by a holding company; or

(B) the election of a majority of the directors is controlled in any manner by a holding company;

(2) “bank” means an organization that is authorized by the United States Comptroller of the Currency, or by the director of banking or the equivalent position in the state of organization, to accept deposits and to make commercial loans, and whose deposits are insured by the Federal Deposit Insurance Corporation;

(3) “trust company” means a financial institution, corporation, or other legal entity, authorized to exercise general trust powers, but does not include a natural person.