62.Section 15 places special requirements on trustees in relation to the delegation of their asset management functions; that is, their functions relating to the investment of trust assets and the acquisition, disposal and management of trust property (section 15(5)).  First, although there is no requirement of writing in relation to agency agreements generally, the terms of an agreement authorising the agent to exercise asset management functions on behalf of the trustees must be in writing or evidenced in writing (section 15(1)) and must require the agent to secure compliance with the trustees’ guidance as to how the functions are to be exercised for the time being (section 15(2)).  This guidance must be in writing or evidenced in writing (section 15(4)) and must be framed with a view to ensuring the functions will be exercised in the best interests of the trust (section 15(3)). The document containing or evidencing the guidance is referred to in the Act as a “policy statement” (section 15(2)(a)). The policy statement must be prepared before the agent is authorised to act, but can be revised or replaced (section 15(2)(a) and (b)(ii)). The duty of care under section 1 applies to the preparation of a policy statement (Schedule 1 paragraph 3(2)(c)). The policy statement need not be in any particular form, provided that it constitutes a record of the trustees’ policy on how the functions in question should be exercised.
63.For example, if trustees delegate their powers of investment to an agent, they must enter into an agreement with the agent at the outset setting out the investment objectives of the trust.  Such an agreement may include considerations as to liquidity of assets to meet the needs of the trust, the desired balance between capital growth and income yield, and any “ethical” considerations relevant to the investment policy of the trust.  The policy statement may expand upon the manner in which the duties imposed by section 4 (duty to invest and to review investments having regard to the standard investment criterion) should be discharged in respect of the trust.  In relation to the delegation of functions relating to the acquisition and management of land on behalf of the trust, the policy statement may include considerations as to the value and type of property that may be acquired, and the quality of title required.  Where relevant it may also consider the terms upon which land may be let, sold or charged.  The requirement for a policy statement only applies where the trustees delegate their discretion in relation to the matters concerned.  It does not apply, for example, in cases where the trustees obtain investment advice but take decisions on investment matters themselves.
64.The duties of trustees with respect to keeping the delegation of functions (and any policy statement) under review are contained in section 22.
Commentary on Sections Part IV: Agents, Nominees and Custodians Section 15: Asset management: special restrictions