§ 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.