Under what conditions can a corporate trustee purchase its own bank stock in a fiduciary account?

A corporate trustee can purchase its own bank stock in a fiduciary account when there is specific authorization in the governing instrument. This is because fiduciary duties require trustees to act in the best interest of the beneficiaries while adhering to the terms laid out in the trust agreement or governing document. If the governing instrument specifically allows for the purchase of the bank's own stock, it ensures that the investment aligns with the direct intentions of the trustor and confirms that the trustee is operating within the legal confines of its responsibilities. This safeguard is essential in maintaining the integrity of the fiduciary relationship and ensuring that the investments made are meant to benefit the beneficiaries as intended.

Without this explicit authorization, purchasing its own stock could present a conflict of interest and raise concerns about self-dealing, which is generally viewed as contrary to a trustee's fiduciary responsibilities. Thus, having that specific authorization in place is crucial to ensure both legal compliance and ethical standards are upheld in managing the fiduciary account.