Section 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 banks 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.