Trustee Bill [H.L.] - continued        House of Lords
PART IV, AGENTS, NOMINEES AND CUSTODIANS - continued
Nominees and custodians - continued

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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 or by any enactment or any provision of subordinate legislation-
 
 
    (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 or the enactment or provision of subordinate legislation, 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.
Liability for agents, nominees and custodians etc.     23. - (1) A trustee is not liable for any act or default of the agent, nominee or custodian unless he has failed to comply with the duty of care applicable to him, under paragraph 3 of Schedule 1-
 
 
    (a) when entering into the arrangements under which the person acts as agent, nominee or custodian, or
 
    (b) when carrying out his duties under section 22.
      (2) If a trustee has agreed a term under which the agent, nominee or custodian is permitted to appoint a substitute, the trustee is not liable for any act or default of the substitute unless he has failed to comply with the duty of care applicable to him, under paragraph 3 of Schedule 1-
 
 
    (a) when agreeing that term, or
 
    (b) when carrying out his duties under section 22 in so far as they relate to the use of the substitute.
 
Supplementary
Effect of trustees exceeding their powers.     24. A failure by the trustees to act within the limits of the powers conferred by this Part-
 
 
    (a) in authorising a person to exercise a function of theirs as an agent, or
 
    (b) in appointing a person to act as a nominee or custodian,
       does not invalidate the authorisation or appointment.
 
Sole trustees.     25. - (1) Subject to subsection (2), this Part applies in relation to a trust having a sole trustee as it applies in relation to other trusts (and references in this Part to trustees- except in sections 12(1) and (3) and 19(5)- are to be read accordingly).
 
      (2) Section 18 does not impose a duty on a sole trustee if that trustee is a trust corporation.
 
Restriction or exclusion of this Part etc.     26. The powers conferred by this Part are-
 
 
    (a) in addition to powers conferred on trustees otherwise than by this Act, but
 
    (b) subject to any restriction or exclusion imposed by the trust instrument or by any enactment or any provision of subordinate legislation.
Existing trusts.     27. This Part applies in relation to trusts whether created before or after its commencement.
 
 
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