2023 New York Laws › RSS - Retirement and Social Security › Article 4-A - Investments of Public Pension Funds › 178-A - Custody and Nominee Registration of Stock and Securities.

§  178-a. Custody and nominee registration of stock and securities. 1.
Notwithstanding any other provision of law, including the provisions  of
the  administrative  code of the city of New York and the education law,
the public officer or officers designated by law as the custodian  of  a
fund  are authorized, in accordance with the provisions of this section,
to turn over the physical custody and safekeeping of any stock or  other
securities,  in registered or bearer form, owned by such fund to (a) any
state bank or trust company located in this state, or (b)  any  national
bank located in this state, or (c) any private banker duly authorized by
the  superintendent  of  financial  services  of this state to engage in
business here. All such  private  bankers  shall,  as  private  bankers,
maintain  a  permanent  capital  of not less than one million dollars in
this state. Transfers of stocks or securities  must  receive  the  prior
consent of the trustees of such fund, under such terms and conditions as
they may specify. The custodian of such fund may direct such bank, trust
company  or  private  banker  to  register  and  hold  any such stock or
securities in its custody, in the name of its nominee. The custodian  of
such  fund may also authorize such bank, trust company or private banker
to deposit, or arrange for the deposit, of such stock or securities in a
clearing corporation  (as  defined  in  article  eight  of  the  uniform
commercial  code).  In addition, the custodian of such fund may deposit,
or authorize such bank, trust company or private banker, to deposit,  or
arrange  for  the  deposit  of  any of such securities the principal and
interest of which the  United  States,  or  any  department,  agency  or
instrumentality  thereof  has  agreed to pay, or has guaranteed payment,
with a federal reserve bank to be credited to an account as to which the
ownership of, and other interests in, such securities may be transferred
by entries on the books of such federal reserve  bank  without  physical
delivery  of  any securities. The records of such bank, trust company or
private banker shall show, at all times, the ownership of such stock and
securities, and they shall, when held in the possession  of  such  bank,
trust company or private banker be, at all times, kept separate from the
assets  of  such  bank,  trust  company or private banker. When any such
stock or securities are so registered in the name  of  a  nominee,  such
bank, trust company or private banker shall be absolutely liable for any
loss  occasioned  by the acts of such nominee with respect to such stock
or securities.
2. (a) The custodian of such fund may also authorize such bank,  trust
company or private banker to appoint one or more foreign entities as its
agent  to hold and register foreign securities. Such foreign entity must
be either:
(i) a banking institution or trust company holding  securities  itself
or  in  a  securities  depository  or  clearing  agency  which acts as a
securities depository; or
(ii) a securities depository  or  clearing  agency  which  acts  as  a
securities depository.
(b)  For purposes of the appointment of a foreign entity as agent, the
term "banking institution or trust company" shall mean an  entity  which
is:
(i)   regulated   by   the   relevant  regulatory  authority  in  that
jurisdiction and has shareholders equity of not less  than  one  hundred
million dollars; or
(ii)  a  branch  of, or a majority-owned direct or indirect subsidiary
of, a domestic bank, trust company or  private  banker  eligible  to  be
authorized to have custody of securities under this section.
(c)  For purposes of the appointment of a foreign entity as agent, the
term  "securities  depository  or  clearing  agency  which  acts  as   a
securities depository" shall mean an entity which:
(i) is regulated by the relevant national regulatory authority in that
jurisdiction;
(ii) is operated pursuant to the charter and by-laws of any company or
association  organized  as  a  securities  depository or clearing agency
which operates a system  for  the  central  handling  of  securities  or
equivalent book entries; or
(iii)  may be used as a securities depository or clearing agency which
acts as a securities depository by an investment company (as defined  by
an act of congress entitled the "Investment Company Act of 1940").
(d)  Registration of foreign securities may be in the name of any such
foreign entity or its nominee, provided that the books  and  records  of
the  domestic  bank,  trust  company  or  private  banker which made the
appointment of  the  foreign  entity  shall  show,  at  all  times,  the
beneficial ownership of the fund.
(e) A domestic bank, trust company or private banker which has custody
of  foreign  securities  of such fund shall be absolutely liable for any
loss with respect to such securities which is occasioned  by  its  acts,
the acts of its agent, the acts of its nominee or its agent's nominee or
the  acts  of  any  foreign  entity  appointed by it or any such foreign
entity's agent or nominee.