STATE OF NEW YORK
________________________________________________________________________
5632
2011-2012 Regular Sessions
IN SENATE
June 8, 2011
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Introduced by COMMITTEE ON RULES -- (at request of the State Comp-
troller) -- read twice and ordered printed, and when printed to be
committed to the Committee on Rules
AN ACT to amend the retirement and social security law, in relation to
prohibiting the use of placement agents by managers doing business
with the common retirement fund
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 425 of the retirement and social security law is
2 renumbered section 426 and a new section 425 is added to read as
3 follows:
4 § 425. Use of placement agents or intermediaries prohibited. 1. The
5 fund shall not engage, hire, invest with or commit to an investment
6 manager that is using the services of a placement agent or intermediary
7 to assist such investment manager in obtaining investments by the fund
8 nor shall the fund engage, hire, invest with or commit to an investment
9 manager without obtaining from such investment manager a certification
10 in the form and manner prescribed by the fund stating that such invest-
11 ment manager has not used the services of a placement agent or other
12 intermediary to assist such investment manager in obtaining investments
13 by the fund.
14 2. For the purposes of this section:
15 (a) "investment manager" shall mean any person, other than an employee
16 of the comptroller, or entity engaged by the common retirement fund to
17 manage a part or all of an investment portfolio of the fund. "Manage"
18 shall include, but is not limited to, the analysis of portfolio hold-
19 ings, and the purchase, sale, and lending thereof. Any investment made
20 by the fund pursuant to subdivision seven of section one hundred seven-
21 ty-seven of this chapter shall be deemed to be the investment of the
22 fund in such investment entity rather than in the assets of such invest-
23 ment entity.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11511-04-1
S. 5632 2
1 (b) "placement agent or intermediary" shall mean any person or entity,
2 including registered lobbyists, directly or indirectly engaged and
3 compensated by an investment manager, other than an employee of the
4 investment manager, to assist the investment manager in obtaining
5 investments by the fund whether compensated on a flat fee, a contingent
6 fee, or any other basis. Employees of an investment manager and its
7 affiliates are excluded from this definition unless they are employed
8 principally for the purpose of securing or influencing the decision to
9 secure a particular investment transaction or investment by the fund.
10 § 2. This act shall take effect immediately.
