New York Laws
Article 5-A - Prudent Management of Institutional Funds Act
554 - Delegation of Management and Investment Functions.

(a) Subject to any specific limitation set forth in a gift instrument
or in law other than this article, an institution may delegate to an
external agent the management and investment of an institutional fund to
the extent that an institution could prudently delegate under the
circumstances. An institution shall act in good faith, with the care
that an ordinarily prudent person in a like position would exercise
under similar circumstances as required by section seven hundred
seventeen of this chapter, in:
(1) selecting, continuing or terminating an agent, including assessing
the agent's independence including any conflicts of interest such agent
has or may have;
(2) establishing the scope and terms of the delegation, including the
payment of compensation, consistent with the purposes of the institution
and the institutional fund; and
(3) monitoring the agent's performance and compliance with the scope
and terms of the delegation.
(b) In performing a delegated function, an agent owes a duty to the
institution to exercise reasonable care, skill and caution to comply
with the scope and terms of the delegation.
(c) An institution that complies with paragraph (a) of this section is
not liable for the decisions or actions of an agent to which the
function was delegated.
(d) By accepting delegation of a management or investment function
from an institution that is subject to the laws of this state, an agent
submits to the jurisdiction of the courts of this state in all
proceedings arising from or related to the delegation or the performance
of the delegated function.
(e) Each contract, if any, pursuant to which authority is so delegated
shall provide that it may be terminated by the institution at any time,
without penalty, upon not more than sixty days notice.
(f) An institution may delegate management and investment functions to
its committees, officers, or employees as authorized by the laws of this
state other than this article, as set forth in, inter alia, section 514
(Delegation of investment management).
(g) Nothing in this article shall impair the operation of section 717
(Duty of directors and officers).