Trustee Bill - continued        House of Lords
PART IV, AGENTS, NOMINEES AND CUSTODIANS - continued

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Nominees and custodians
Power to appoint nominees.     16. - (1) Subject to the provisions of this Part, the trustees of a trust may-
 
 
    (a) appoint a person to act as their nominee in relation to such of the assets of the trust as they determine, and
 
    (b) take such steps as are necessary to secure that those assets are vested in a person so appointed.
      (2) An appointment under this section must be in or evidenced in writing.
 
      (3) This section does not apply to any trust having a custodian trustee.
 
Power to appoint custodians.     17. - (1) Subject to the provisions of this Part, the trustees of a trust may appoint a person to act as a custodian in relation to such of the assets of the trust as they may determine.
 
      (2) For the purposes of this Act a person is a custodian in relation to assets if he undertakes the safe custody of the assets or of any documents or records concerning the assets.
 
      (3) An appointment under this section must be in or evidenced in writing.
 
      (4) This section does not apply to any trust having a custodian trustee.
 
Investment in bearer securities.     18. - (1) If trustees retain or invest in securities payable to bearer, they must appoint a person to act as a custodian of the securities.
 
      (2) Subsection (1) does not apply if the trust instrument contains provision which (however expressed) permits the trustees to retain or invest in securities payable to bearer without appointing a person to act as a custodian.
 
      (3) An appointment under this section must be in or evidenced in writing.
 
      (4) This section does not apply to any trust having a custodian trustee.
 
Persons who may be appointed as nominees or custodians.     19. - (1) A person may not be appointed under section 16, 17 or 18 as a nominee or custodian unless one of the relevant conditions is satisfied.
 
      (2) The relevant conditions are that-
 
 
    (a) the person carries on a business which consists of or includes acting as a nominee or custodian;
 
    (b) the person is a body corporate which is controlled by the trustees.
      (3) The question whether a body corporate is controlled by trustees is to be determined in accordance with section 840 of the Income and Corporation Taxes Act 1988.
 
      (4) The trustees of a charitable trust which is not an exempt charity must act in accordance with any guidance given by the Charity Commissioners concerning the selection of a person for appointment as a nominee or custodian under section 16, 17 or 18.
 
      (5) Subject to subsections (1) and (4), the persons whom the trustees may under section 16, 17 or 18 appoint as a nominee or custodian include-
 
 
    (a) one of their number, if that one is a trust corporation, or
 
    (b) two (or more) of their number, if they are to act as joint nominees or joint custodians.
      (6) The trustees may under section 16 appoint a person to act as their nominee even though he is also-
 
 
    (a) appointed to act as their custodian (whether under section 17 or 18 or any other power), or
 
    (b) authorised to exercise functions as their agent (whether under section 11 or any other power).
      (7) Likewise, the trustees may under section 17 or 18 appoint a person to act as their custodian even though he is also-
 
 
    (a) appointed to act as their nominee (whether under section 16 or any other power), or
 
    (b) authorised to exercise functions as their agent (whether under section 11 or any other power).
Terms of appointment of nominees and custodians.     20. - (1) Subject to subsection (2) and sections 29 to 32, the trustees may under section 16, 17 or 18 appoint a person to act as a nominee or custodian on such terms as to remuneration and other matters as they may determine.
 
      (2) The trustees may not under section 16, 17 or 18 appoint a person to act as a nominee or custodian on any of the terms mentioned in subsection (3) unless it is reasonably necessary for them to do so.
 
      (3) The terms are-
 
 
    (a) a term permitting the nominee or custodian to appoint a substitute;
 
    (b) a term restricting the liability of the nominee or custodian or his substitute to the trustees or to any beneficiary;
 
    (c) a term permitting the nominee or custodian to act in circumstances capable of giving rise to a conflict of interest.
 
Review of and liability for agents, nominees and custodians etc.
Application of sections 22 and 23.     21. - (1) Sections 22 and 23 apply in a case where trustees have, under section 11, 16, 17 or 18-
 
 
    (a) authorised a person to exercise functions as their agent, or
 
    (b) appointed a person to act as a nominee or custodian.
      (2) Subject to subsection (3), sections 22 and 23 also apply in a case where trustees have, under any power conferred on them by the trust instrument-
 
 
    (a) authorised a person to exercise functions as their agent, or
 
    (b) appointed a person to act as a nominee or custodian.
      (3) If the application of section 22 or 23 is inconsistent with the terms of the trust instrument, the section in question does not apply.
 
Review of agents, nominees and custodians etc.     22. - (1) While the agent, nominee or custodian continues to act for the trust, the trustees-
 
 
    (a) must keep under review the arrangements under which the agent, nominee or custodian acts and how those arrangements are being put into effect,
 
    (b) if circumstances make it appropriate to do so, must consider whether there is a need to exercise any power of intervention that they have, and
 
    (c) if they consider that there is a need to exercise such a power, must do so.
      (2) If the agent has been authorised to exercise asset management functions, the duty under subsection (1) includes, in particular-
 
 
    (a) a duty to consider whether there is any need to revise or replace the policy statement made for the purposes of section 15,
 
    (b) if they consider that there is a need to revise or replace the policy statement, a duty to do so, and
 
    (c) a duty to assess whether the policy statement (as it has effect for the time being) is being complied with.
      (3) Subsections (3) and (4) of section 15 apply to the revision or replacement of a policy statement under this section as they apply to the making of a policy statement under that section.
 
      (4) "Power of intervention" includes-
 
 
    (a) a power to give directions to the agent, nominee or custodian;
 
    (b) a power to revoke the authorisation or appointment.
 
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