Rhode Island General Laws 18-12.1-5. Delegation of management and investment functions
(a) Subject to any specific limitation set forth in a gift instrument or in law other than this chapter, 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, 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 to monitor the agent’s performance and compliance with the scope and terms of the delegation.
Terms Used In Rhode Island General Laws 18-12.1-5
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Institution: means :
(i) a person, other than an individual, organized and operated exclusively for charitable purposes;
(ii) a government or governmental subdivision, agency, or instrumentality, to the extent that it holds funds exclusively for a charitable purpose; or
(iii) a trust that had both charitable and noncharitable interests, after all noncharitable interests have terminated. See Rhode Island General Laws 18-12.1-2
- Institutional fund: means a fund held by an institution exclusively for charitable purposes. See Rhode Island General Laws 18-12.1-2
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Rhode Island General Laws 18-12.1-2
(b) In performing a delegated function, an agent owes a duty to the institution to exercise reasonable care to comply with the scope and terms of the delegation.
(c) An institution that complies with subsection (a) 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) An institution may delegate management and investment functions to its committees, officers, or employees as authorized by law of this state other than this chapter.
History of Section.
P.L. 2009, ch. 61, § 2; P.L. 2009, ch. 63, § 2.