Re: Rule 17f-5 ("Rule 17f-5") and Rule 17f-7 ("Rule 17f-7") Under the Investment Company Act of 1940 (the "1940 Act")
New
Alternatives Fund, Inc.
000
Xxxxxxxxxxx Xxxx Xxxxx
000
Xxxxxxxx,
Xxx Xxxx 00000
PFPC
Trust Company
Xxxxxxxx
Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000
| Re: |
Rule
17f-5 ("Rule 17f-5") and Rule 17f-7 ("Rule 17f-7") Under the
Investment Company Act
of 1940 (the "1940 Act")
|
Dear
Sirs:
Reference
is made to the Subcustodial Services Agreement dated as of January 10, 1996
(the
"Foreign Custody Agreement"), as amended, by and between Citibank, N.A.
("Custodian"), Citicorp
and PFPC Trust Company ("PFPC") with respect to the custody of assets by
Custodian for
the
account of PFPC on behalf of certain customers of PFPC, including those
investment portfolio(s) of New Alternatives Fund, Inc. as are set forth on
Exhibit A hereto (each a "Fund" and
collectively the "Funds"). Reference is also made to the custodian services
agreement dated as
of
May 1,
2001 (the "Fund Custody Agreement") by and between PFPC and New Alternatives
Fund,
Inc.
1.
Rule
17f-5
1.1. With
respect to the "Foreign Assets" (as defined in Rule 17f-5(a)(2)) in such
jurisdictions as Custodian provides custody services under the Foreign Custody
Agreement for a Fund, each Fund hereby delegates to Custodian and Custodian
hereby accepts the delegation to it,
of
the obligation to serve as the Fund's "Foreign Custody Manager" (as defined
in
Rule 17f-5(a)(3)).
As
Foreign Custody Manager, Custodian shall:
| a. |
select
"Eligible Foreign Custodians" (as defined in Rule 17f-5(a)(1)) to
serve as
foreign custodians and place and maintain each Fund's Foreign Assets
with such Eligible Foreign
Custodians;
|
|
b.
|
in
selecting an Eligible Foreign Custodian, first determine that Foreign
Assets placed and maintained in the care of the Eligible Foreign
Custodian
shall
be subject to reasonable care, based on the standards applicable
to
custodians
in the relevant market, after having considered all factors relevant
to the safekeeping of such Foreign Assets including, without limitation,
those factors set forth in Rule
17f-5(c)(l)(i)-(iv);
|
|
c.
|
enter
into a written contract with each Eligible Foreign Custodian selected
by
Custodian hereunder;
|
| d. |
determine
that the written contract with each Eligible Foreign Custodian will
provide reasonable care for the Foreign Assets, based on the standards
applicable
to custodians in the relevant market and after having considered
all
factors relevant to the safekeeping of such Foreign Assets (including,
without limitation, those factors set forth
in Rule
17f-5(c)(l)(i)-(iv)),
and
that
each such contract satisfies the requirements of Rule
17f-5(c)(2);
|
-
1 -
|
e.
|
provide
written reports (i) notifying the Board or similar governing body
(each,
a "Board") of each Fund of the placement of such Fund's Foreign
Assets
with a particular Eligible Foreign Custodian, such reports to be
provided
at such time as such Board deems reasonable and appropriate, but
not less often than quarterly, and (ii) promptly notifying each Board
of
any
material change in the arrangements with an Eligible Foreign Custodian;
and
|
| f |
have
established a system to monitor (i) the appropriateness of maintaining
a Fund's Foreign Assets with a particular Eligible Foreign Custodian
selected hereunder and (ii) the performance of the governing contractual
arrangements; it being understood, however, that in the event Custodian
shall determine that the arrangement with any Eligible Foreign
Custodian
would no longer afford a Fund's Foreign Assets reasonable care
(as
defined in Section 1.1(b) above) or would no longer be governed by
a
written
contract providing for such care, Custodian shall promptly so advise
such Fund.
|
Without
limiting any duties set forth in the Foreign Custody Agreement, Custodian shall
not be responsible for the duties described in this Section 1.1 with respect
to
any foreign securities depository or foreign clearing agency.
1.2. In
acting
as a Foreign Custody Manager, Custodian shall exercise reasonable care, prudence
and diligence such as
a
person
having responsibility for the safekeeping of Foreign Assets
would exercise in each jurisdiction where Custodian acts as subcustodian for
assets of a Fund.
Custodian shall reimburse and pay each Fund for any loss or damage suffered
by
the Fund as
a
result of the performance of Custodian's duties under this Section 1 where
such
loss or damage
results from an act of negligence or willful misconduct on the part of Custodian
hereunder;
provided that the liability of Custodian hereunder shall not exceed the fair
market value
of
any loss of assets resulting from such negligence or willful misconduct, at
the
time of such negligence or willful misconduct. Any payment to a Fund under
this
Section 1.2 shall limit the
Fund's right and ability to enforce any rights under the Foreign Custody
Agreement for loss of
such
assets. Notwithstanding anything else in this document, Custodian shall not
be
liable to a Fund
for
any indirect, special, consequential or general damages or from reasons or
causes beyond
its control. PFPC shall be indemnified by a Fund for any damages PFPC may incur
in connection
with the provision by Custodian of the services set forth in this Section I
with
respect to such Fund (provided PFPC will not be indemnified for damages which
are the result of PFPC's
failure to comply with its liability standard of care set forth in the Fund
Custody Agreement
with such Fund). In no event shall PFPC have responsibility or liability for
any
action
or
inaction of Custodian under Section 1 hereof.
1.3. In
acting
as a
Foreign
Custody Manager, Custodian shall not supervise, recommend
or advise PFPC or any Fund relative to the investment, purchase, sale, retention
or disposition
of any assets in any particular country, including with respect to prevailing
country risks.
-
2 -
2. Rule
17f-7
2.1. (a) Each
Fund
and PFPC appoint Custodian to provide the Fund (or its duly-authorized
investment manager or investment adviser) with an analysis (in form and
substance as reasonably determined by Custodian) of the custody risks associated
with maintaining assets with
each
foreign securities depository or foreign clearing agency listed on Exhibit
B
hereto (as the
same
may be changed by Custodian from time to time) in accordance with Rule
17f-7(a)(1)(i)(A).
Custodian
shall monitor such custody risks on a continuing basis and in such manner as
Custodian deems reasonable, and shall promptly notify each applicable Fund
(or
its duly-authorized
investment manager or investment adviser) of any adverse material changes in
such
risks in accordance with Rule 17f-7(a)(1)(i)(B).
(b) Only
an
entity that Custodian has determined satisfies the requirements of Rule
17f-7(b)(1) as an "Eligible Securities Depository" (as defined in Rule
17f-7(b)(1)) will be included
by Custodian on Exhibit B hereto (as the same may be changed by Custodian from
time to
time).
In such manner as Custodian deems reasonable, Custodian shall give each Fund
prompt notice
of
any material change known to Custodian that would adversely effect Custodian's
determination
that an entity is an Eligible Securities Depository.
2.2. In
performing its obligations under this Section 2, Custodian may obtain
information
from sources Custodian believes to be reliable, but Custodian does not warrant
its completeness
or accuracy and has no duty to verify or confirm any such information. Custodian
is not obligated to make any determination regarding whether any Eligible
Securities Depository provides
reasonable care for Foreign Assets or to provide any information or evaluation
comparing
any Eligible Securities Depository to any other securities depository or any
existing or
proposed standards for securities depositories.
2.3.
The
Funds
acknowledge that they may maintain assets only at the foreign securities
depositories or foreign clearing agencies listed on Exhibit B hereto (as the
same may be
changed by Custodian from time to time). If a Fund maintains assets at a foreign
securities depository or foreign clearing agency listed on Exhibit B (including
assets maintained by the Fund
at
the time this document is entered into) or a Fund enters into a transaction
with
respect to assets that as a matter of practice are or may be maintained at
a
foreign securities depository or foreign
clearing agency listed on Exhibit B, such action will (unless the Fund provides
written notice
to
Custodian and PFPC specifically stating that a particular foreign securities
depository or foreign clearing agency is not acceptable to it) serve as
the
Fund's acknowledgement that such foreign securities depository or foreign
clearing agency is acceptable to it.
2.4. Custodian
shall exercise reasonable care, prudence and diligence in performing its
duties
pursuant to Section 2 hereof. Custodian shall reimburse and pay each Fund for
any loss or damaged
suffered by the Fund as a result of the performance of Custodian's duties under
this Section 2 where such loss or damage results from an act of negligence
or
willful misconduct on the part of Custodian hereunder; provided that the
liability of Custodian hereunder shall not exceed
the fair market value of any loss of assets resulting from such negligence
or
willful misconduct, at the time of such negligence or willful misconduct. Any
payment to a Fund under this Section 2.4 shall limit the Fund's right and
ability to enforce any rights under the Foreign Custody
Agreement for loss of such assets. Notwithstanding anything else in this
document, Custodian
shall not be liable to a Fund for any indirect, special, consequential or
general damages or from reasons or causes beyond its control. PFPC shall be
indemnified by a Fund for any
damages PFPC may incur in connection with the provision by Custodian of the
services set forth
in
this Section 2 with respect to such Fund (provided PFPC will not be indemnified
for damages
which are the result of PFPC's failure to comply with its liability standard
of
care set forth
in
the Fund Custody Agreement with such Fund). Each Fund and PFPC agrees that
PFPC's obligation
to exercise reasonable care, prudence and diligence in providing for the
services set forth
in
Section 2.1 above is satisfied by the appointment of Custodian hereunder to
provide those
services. In no event shall PFPC have responsibility or liability for any action
or inaction of
Custodian under Section 2 hereof.
-
3 -
3.
General
3.1.
A. As
between Custodian and PFPC, Section 7(a) of the Foreign Custody Agreement
is hereby amended and restated in its entirety with respect to the Funds as
follows:
"(a)
The
Bank
may maintain investments (including foreign currencies) for which the
primary
market
is
outside the United States (and such cash and cash equivalents as are reasonably
necessary to effect transactions in such investments) (collectively,
"Foreign Securities") and which are maintained hereunder in subcustody
accounts which have been established by the Bank with (x) branches of
"U.S.
banks"
as
defined in Rule l 7f-5 under the Investment Company Act (as effective
June 12, 2000) ("Rule 17f-5") ("Branches"), or (y) foreign custodians
that
meet
the definition of "eligible foreign custodian" under Rule 17f-5(a)(1) and
which
the
Bank has determined are eligible to maintain assets pursuant to the requirements
of Rule 17f-5 (such Branches and such foreign custodians, collectively,
"Eligible Foreign Custodians"). The Bank or an Eligible Foreign Custodian
is authorized to hold Foreign Securities of a particular investment portfolio
of
a Fund in an account with any foreign securities depository or foreign
clearing
agency (provided the same are "eligible securities depositories" as defined
in Rule 17f-7(b)(1) under the Investment Company Act) which is listed
on
Exhibit B hereto (as the same may be amended from time to time), provided
that
the
particular foreign securities depository or foreign clearing agency is
acceptable for that particular investment portfolio (each such foreign
securities depository
or foreign clearing agency, an "Eligible Foreign Securities Depository").
Any Property held by an Eligible Foreign Custodian or Eligible Foreign
Securities Depository shall be subject to applicable laws, regulations,
decrees,
orders, government acts, restrictions, customs, procedures and market
practices
(the "Laws") (i) to which such Eligible Foreign Custodian or Eligible
Foreign
Securities Depository is subject, (ii) as exist in the country in which such
Property
is held and (iii) of the country of the currency in which the Property is
denominated.
The Customer acknowledges that, as is normally the case with respect
to deposits outside the United States, deposits with Citibank London and
any
other
entity authorized to hold Property pursuant to this Agreement are not
insured
by the Federal Deposit Insurance Corporation."
-
4 -
B. As
between Custodian and PFPC, the final sentence of Section 7(b) of the
Foreign
Custody Agreement is hereby amended and restated in its entirety with respect
to
the Funds
as
follows:
"Notwithstanding
any of the foregoing provisions of this subsection (b) of this Section 7, the
Bank's undertaking to provide to the Customer, or at the direction of the
Customer to the Fund, the information referred to in this subsection (b) of
this
Section 7 shall neither increase
the Bank's duty of care nor reduce any other entity's responsibility to
determine for itself the prudence of entrusting its assets to any particular
foreign securities depository."
C.
As
between Custodian and PFPC, Section 9 of the Foreign Custody Agreement
is amended to insert the word "Eligible" before the words "Foreign Securities
Depositories."
D. As
between Custodian and PFPC, the fifth paragraph of Section 4 of the Foreign
Custody Agreement is hereby deleted.
3.2. The
duties of Custodian set forth herein are in addition to the duties of Custodian
under the Foreign Custody Agreement.
3.3.
Notwithstanding
the provisions of any arrangements between a particular Fund and PFPC or
otherwise, each Fund hereby agrees that assets may be maintained with any
Eligible Foreign
Custodian referred to in Section 1.1 hereof and any foreign securities
depository or foreign
clearing agency which is acceptable to it pursuant to Section 2.3 above (without
the need to
comply
with any notice or consent or other requirements which may be set forth in
any
such arrangements).
PFPC will not be deemed to have chosen any such Eligible Foreign Custodians
or
any
such foreign securities depositories or foreign clearing agencies.
3.4. Each
Fund
shall be entitled to enforce its rights directly against Custodian with
respect
to any action or omission of Custodian taken or omitted hereunder,
notwithstanding any other
agreement to the contrary. If a Fund is able to effectively enforce its rights
against Custodian
hereunder, PFPC will not also seek to enforce such rights against Custodian
under the Foreign
Custody Agreement.
3.5.
This
document shall apply only to the Funds on Exhibit A hereto (as the same may
be
amended from time to time on written agreement of Custodian, PFPC and the
applicable Fund), and shall not apply to any other customer of
PFPC.
-
5 -
If
the
foregoing corresponds to your understanding of our agreement, please indicate
your acceptance
by signing below.
|
Very
truly yours, CITIBANK,
N.A.
|
|||
|
By:
|
/S/
Xxxxx X Xxxxxx
|
||
|
Name:
|
Xxxxx
X. Xxxxxx
|
||
|
Title:
|
Vice
President
|
||
|
Agreed
and Accepted: PFPC
TRUST COMPANY
|
|||
|
By:
|
/S/
Xxxxxx Xxxxxxxx
|
||
|
Name:
|
Xxxxxx
Xxxxxxxx
|
||
|
Title:
|
Chairman
|
||
|
NEW
ALTERNATIVES FUND, INC.
|
|||
|
By:
|
/S/
Xxxxx X Xxxxxxxxxx
|
||
|
Name:
|
Xxxxx
X. Xxxxxxxxxx
|
||
|
Title:
|
President
|
||
|
Dated:
|
7/02/01
|
||
-
6 -
Exhibit
A
Funds
New
Alternatives Fund, Inc.
-
7 -
Exhibit
B
Foreign
Securities Depositories and Foreign Clearing Agencies
|
Argentina
|
Caja
De Valores S.A.Central
de Registration y Liquidationde Instrumentos de Endeudamiento
Publico
|
CDVCRYL
|
|
Australia
|
Austraclear,
Ltd.Clearing
House Electronic Sub-Register SystemReserve
Bank Information and Transfer System
|
AustraclearCHESSRITS
|
|
Austria
|
Wertpapiersammelbank
-
Division
of Oesterreichische Kontrolbank AG
|
OeKB
|
|
Belgium
|
Caisse
Interprofessionnelle de Depots et de Virments TitresEuroclearBanque
Nationale de Belgique (National Bank of Belgium)
|
CIKEuroclearNBB
|
|
Brazil
|
Companhia
Brasileira de Liquidacao e CustodiaCentral
of Custody and Financial Settlement of SecuritiesCentral
Bank / Sistema Especial de Liquidacao e Custodia
|
CBLCCETIPSELIC
|
|
Bulgaria
|
Central
Securities DepositoryBulgarian National Bank
|
CDADBNB
|
|
Canada
|
Canadian
Depository Clearing for Securities Limited
|
CDS
|
|
Chile
|
Deposito
Central de Valores, S.A.
|
DCV
|
|
China
|
Shanghai
Securities Clearing/Registration Corp.Shenzhen
Securities Central Clearing Company, Ltd.
|
SSCCRCSSCC
|
|
Columbia
|
Deposito
Central de ValoresDeposito Centralizado de Valores
|
DCVDECEVAL
|
|
Costa
Rica
|
Central
de Valores de la Bolsa Nacional de Valores
|
CEVAL
|
|
Croatia
|
Ministry
of France
|
MoF
|
|
Croatia
|
Central
Depository Agency Inc. .
(Stredisnja
Depozitarna Agencija)
|
SDA
|
|
Czech.
Rep.
|
Streisko
Cennych Papiru (Central Securities Registry)Registracni
Centrum Papiru (Czech National Bank)
|
SCPTKD
|
|
Denmark
|
The
Danish Securities Centre
|
VP
|
|
Egypt
|
Misr
for Clearing Settlement and Depository
|
MCSD
|
|
Estonia
|
The
Estonian Central Depository for Securities Ltd.
|
ECDS
|
|
Finland
|
Finnish
Central Securities Depository Ltd.
|
_APK
|
|
France
|
Euroclear
-
France
|
Euroclear
|
|
Germany
|
Clearstream
Banking Frankfurt AG
|
CBF
|
|
Greece
|
Apothetirio
Titlon A. E. -
The
Central Security DepositoryNational
Bank of Greece (BoG)/Securities Clearing House
|
CSDBoG
|
|
Hong
Kong
|
Hong
Kong Monetary Authority/ Central Money Markets UnitHong Kong Securities
Clearing House
|
_ _CMUCCASS
|
|
Hungary
|
Central
Depository and Clearing House Ltd.
|
KELER
|
|
India
|
Central
Depository Services LimitedNational
Securities Depository LimitedReserve
Bank of India (Public Debt Office)
|
CDSLNSDLRBI
|
|
Indonesia
|
PT
Kustodian Sentral Efek Indonesia
|
KSEI
|
|
Ireland
|
EuroclearCREST
|
Euroclear_CREST
|
|
Israel
|
Tel
Aviv Stock Exchange Clearing House
|
TASE/CH
|
|
Italy
|
Monte
Titoli
|
MT
|
|
Japan
|
Bank
of JapanJapan Securities Depository Center
|
BOJJASDEC
|
|
Korea
|
Korea
Securities Depository
|
KSD
|
|
Latvia
|
Latvia
Central DepositoryBank
of Latvia
|
LCDBOL
|
|
Lithuania
|
Central
Securities Depository
|
CSDL
|
|
Luxembourg
|
Clearstream
Banking S.A.
|
CSSA
|
|
Malaysia
|
_Malaysian
Central Depository Sdn. Bhd.
|
MCD
|
-
8 -
|
Mauritius
|
Central
Depository and Settlement Co. Ltd.
|
CDSC
|
|
Mexico
|
Instituto
para el Deposito de Valores (S.D.
Indeval,
SA de CV)
|
INDEVAL
|
|
Morocco
|
Maroclear
|
MCLR
|
|
Netherlands
|
Nederlands
Centraal instituut Coor Giraal Effectenverkeer B.V.Netherlands
Interprofessionee Effectcentrium NEIC
|
NECIGEFNEIC
|
|
New
Zealand
|
Reserve
Bank of New Zealand/Austraclear New Zealand System
|
NZCDS
|
|
Norway
|
Verdipapirsentralen
(Norwegian Central Securities Depository)
|
VPS
|
|
Pakistan
|
Central
Depository Company of Pakistan, LimitedState
Bank of Pakistan
|
CDCSBP
|
|
Panama
|
Central
Latinoamericana Valores S.A.
|
LatinClear
|
|
Peru
|
Interbolsa
|
CAVALI
|
|
Philippines
|
Philippines
Central Depository, Inc.Registration
of Scripless Securities (Bureau of the Treasury)
|
PCDBTr
|
|
Poland
|
National
Depository for SecuritiesNational
Bank of Poland (Central Register for Treasury Bills)
|
NDSNBP
|
|
Portugal
|
Central
de Valores Mobiliaros
|
CVM
|
|
Romania
|
Societe
Nationale de Compendare Depository/Settlement BankBucharest
Stock Exchange
|
SNCDDBSE
|
|
Russia
|
National
Depository CenterBank
for Foreign Trade of the Russian Federation
(Rosvneshtorgbank)
|
NDCVTB
|
|
Singapore
|
Central
Depository Pte. Ltd.
|
CDP
|
|
Slovak
Rep.
|
Streisko
Cennych Papirrov SR, A.S. (Securities Register Center)Registracni
Centrum Papiru (Registration Center of the National Bankof
Slovakia)
|
SCPNBS
|
|
Slovenia
|
Centraina
Klirinsko Depontna Druzba d.d
|
KDD
|
|
South
Africa
|
Share
Transaction Totally ElectronicThe Central Depository Limited
(Pty)
|
STRATECDL
|
|
Spain
|
Servicio
de Compensation y Liquidacion de ValoresBanco De Espana (Bank of
Spain)
|
SCLVBOS
|
|
Sri
Lanka
|
Central
Depository System
|
CDS
|
|
Sweden
|
Vardepapperscentralen
VPC AB (Central Securities Depository andClearing
Organization)
|
VPC
|
|
Switzerland
|
SIS
Segalntersettle, A.G.
|
SIS
|
|
Taiwan
|
Taiwan
Securities Central Depository Co, Ltd.
|
TSCD
|
|
Thailand
|
Thailand
Securities Depository Company, LTD.
|
TSD
|
|
Turkey
|
Istanbul
Stock Exchange Settlement/Custody BankCentral
Bank of Turkey
|
TakasbankCBT
|
|
U.K.
|
CRESTCo
LimitedCentral Money Market
|
CRESTCMO
|
|
Venezuela
|
Central
Bank -
Banco
Central do VenezuelaCaja
Venezoland de Valores
|
BCVCVV
|
-
9 -
