(a)

1. (1) Funds held by a state bank in a fiduciary capacity shall be invested in accordance with the instrument establishing the fiduciary relationship and local law.
2. (2) When such instrument does not specify the character or class of investments to be made and does not vest in the bank, its directors, or its officers a discretion in the matter, funds held pursuant to such instrument shall be invested in any investment in which corporate fiduciaries may invest under local law.

(b)

1. (1) If, under local law, corporate fiduciaries appointed by a court are permitted to exercise a discretion in investments, or if a state bank acting as fiduciary under appointment by a court is vested with a discretion in investments by an order of such court, funds of such accounts may be invested in investments which are permitted by local law.
2. (2) Otherwise, a state bank acting as fiduciary under appointment by a court must make all investments of funds in such accounts under an order of that court.
3. (3) Such orders in either case shall be preserved with the fiduciary records of the bank.

(d) As a part of each examination of the trust department of a state bank the State Bank Department will examine the investments held by such bank as fiduciary, including the investment of funds under the provisions of 23 CAR § 320-1401, in order to determine whether such investments are in accordance with:

1. (1) Law;
2. (2) This part; and
3. (3) Sound fiduciary principles.