§ 554. Delegation of management and investment functions.\n (a) Subject to any specific limitation set forth in a gift instrument\nor in law other than this article, an institution may delegate to an\nexternal agent the management and investment of an institutional fund to\nthe extent that an institution could prudently delegate under the\ncircumstances. An institution shall act in good faith, with the care\nthat an ordinarily prudent person in a like position would exercise\nunder similar circumstances as required by section seven hundred\nseventeen of this chapter, in:\n (1) selecting, continuing or terminating an agent, including assessing\nthe agent's independence including any conflicts of interest such agent\nhas or may have;\n (2) establishing the scope and terms of the delegation, including the\npayment of compensation, consistent with the purposes of the institution\nand the institutional fund; and\n (3) monitoring the agent's performance and compliance with the scope\nand terms of the delegation.\n (b) In performing a delegated function, an agent owes a duty to the\ninstitution to exercise reasonable care, skill and caution to comply\nwith the scope and terms of the delegation.\n (c) An institution that complies with paragraph (a) of this section is\nnot liable for the decisions or actions of an agent to which the\nfunction was delegated.\n (d) By accepting delegation of a management or investment function\nfrom an institution that is subject to the laws of this state, an agent\nsubmits to the jurisdiction of the courts of this state in all\nproceedings arising from or related to the delegation or the performance\nof the delegated function.\n (e) Each contract, if any, pursuant to which authority is so delegated\nshall provide that it may be terminated by the institution at any time,\nwithout penalty, upon not more than sixty days notice.\n (f) An institution may delegate management and investment functions to\nits committees, officers, or employees as authorized by the laws of this\nstate other than this article, as set forth in, inter alia, section 514\n(Delegation of investment management).\n (g) Nothing in this article shall impair the operation of section 717\n(Duty of directors and officers).\n
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