(a) Authority--A savings bank may act as a managing agent for the purpose of receiving, investing, reinvesting and managing property received or deposited with the savings bank in such capacity and shall have the power to be a trustee with respect to such property, subject to the limitation that such property may be invested and reinvested only in collective investment funds established and maintained pursuant to this section.

(b) Collective investment funds--A savings bank may establish and maintain collective investment funds for the investment and reinvestment of property received or deposited with it as managing agent to the same extent as a bank and trust company or a trust company may establish and maintain such collective investment funds under the provisions of sections 404(b)(i) and 404(b)(iii),¹ subject to qualification of each such collective investment fund for exemption from Federal income taxation as a common trust fund.

(c) Investments--A savings bank may invest property held by it in a collective investment fund, without limitation as to type or amount of investment and without regard to the provisions of this act governing investments by the savings bank for its own account, subject to the prudent man rule of section 504(c)² of this act.

(d) Effect of mistake--No mistake made in good faith and in the exercise of due care in connection with the administration of a collective investment fund shall be deemed a violation of this section or of any other duty of the savings bank, if promptly after the discovery of the mistake, the savings bank takes whatever action may be practicable in the circumstances to remedy the mistake.

(e) Definition of “managing agent”--For the purpose of this section, “managing agent” shall mean the fiduciary relationship assumed by a savings bank upon the creation of an account which confers investment discretion on the savings bank.