§ 18-12.1-5 - Delegation of management and investment functions. - Rhode Island Statutes

SECTION 18-12.1-5

   § 18-12.1-5  Delegation of management andinvestment functions. – (a) Subject to any specific limitation set forth in a gift instrument or in lawother than this chapter, an institution may delegate to an external agent themanagement and investment of an institutional fund to the extent that aninstitution could prudently delegate under the circumstances. An institutionshall act in good faith, with the care that an ordinarily prudent person in alike position would exercise under similar circumstances, in:

   (1) Selecting an agent;

   (2) Establishing the scope and terms of the delegation,consistent with the purposes of the institution and the institutional fund; and

   (3) Periodically reviewing the agent's actions in order tomonitor the agent's performance and compliance with the scope and terms of thedelegation.

   (b) In performing a delegated function, an agent owes a dutyto the institution to exercise reasonable care to comply with the scope andterms of the delegation.

   (c) An institution that complies with subsection (a) is notliable for the decisions or actions of an agent to which the function wasdelegated.

   (d) By accepting delegation of a management or investmentfunction from an institution that is subject to the laws of this state, anagent submits to the jurisdiction of the courts of this state in allproceedings arising from or related to the delegation or the performance of thedelegated function.

   (e) An institution may delegate management and investmentfunctions to its committees, officers, or employees as authorized by law ofthis state other than this chapter.