Exhibit 23(h)(iii)
SERVICES AMENDMENT
April 5, 2004
streetTRACKS Series Trust
State Street Bank and Trust Company Xxx
Xxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxx, XX 00000
Dear Sir or Madam:
streetTRACKS Series Trust (the "Fund") and State Street Bank and Trust Company
(the "Transfer Agent") are parties to an agreement dated as September 22, 2000
(the "Agreement") under which the Transfer Agent performs certain transfer
agency and/or recordkeeping services for the Fund. In connection with the
enactment of the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 ("USA PATRIOT
Act") and the regulations promulgated thereunder, (collectively, the "Patriot
Act"), the Fund has requested and the Transfer Agent has agreed to amend the
Agreement as of the date hereof in the manner set forth below:
WHEREAS, Section 326 of the USA PATRIOT Act (the "Patriot Act") and final rules
adopted by the Department of the Treasury's Financial Crimes Enforcement Network
(the "Rules") require the Fund to develop and implement an anti-money laundering
program, which among other things, is designed to verify the identity of any
person opening an account, determine whether such person appears on lists of
known or suspected terrorists or terrorist organizations and identify and report
unusual and suspicious account activity to regulators;
WHEREAS, the Patriot Act authorizes a mutual fund to delegate to a service
provider, including its transfer agent, the implementation and operation of
certain aspects of the Fund's anti-money laundering program; and
WHEREAS, in order to assist its transfer agent clients with their customer
identification compliance responsibilities under the Patriot Act and the Rules,
the Transfer Agent has provided to the Fund for its consideration and approval
written procedures describing various tools designed to assist in the (i)
verification of persons opening accounts with the Fund and determination of
whether such persons appear on any list of known or suspected. terrorists or
terrorist organizations, and (ii) identifying and reporting of unusual and
suspicious activity in connection with accounts opened with the Fund. The Fund
has, after review, selected various procedures to comply with its customer
identification and suspicious activity monitoring program and its obligations
under the Patriot Act and the Rules (the "Program"); and
WHEREAS, the Fund recognizes the importance of complying with the Patriot Act
and desires to implement its procedures as part of its overall anti-money
laundering program and, subject to
the terms of the Rules, delegate to the Transfer Agent the day-to-day operation
of certain of its procedures on behalf of the Fund.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements hereinafter contained, the parties hereby agree to amend the
Agreement, pursuant to the terms thereof, as follows:
1. Delegation: Duties.
1.1 Subject to the terms and conditions set forth in the Agreement, the
Fund hereby instructs and directs the Transfer Agent to implement the procedures
on its behalf as set forth on Exhibit A, which is attached to and made a part
of, this Agreement (the "Procedures"). Exhibit A may be amended, from time to
time, by the Transfer Agent in writing to the Fund with at least 30 days prior
notice of such effective change.
1.2 The Transfer Agent agrees to perform such delegated Procedures,
with respect to the ownership of shares in the Fund(s) set forth in Exhibit B
for which the Transfer Agent maintains the applicable shareholder information,
subject to and in accordance with the terms and conditions of the Agreement.
Exhibit B, which is attached to and made a part of, this Agreement, may be
amended from time to time by mutual agreement of the parties upon the execution
by both parties of a revised Exhibit B.
1.3 The Fund acknowledges that it has had an opportunity to review,
consider and comment upon and select the Procedures and the Fund has determined
that they, as part of the Fund's overall anti-money laundering Program, are
reasonably designed to prevent the Fund from being used for money laundering or
the financing of terrorist activities and to achieve compliance with the
applicable provisions of the Patriot Act, Bank Secrecy Act and their
implementing regulations thereunder, which compliance the Fund acknowledges to
be its responsibility. Notwithstanding anything to the contrary contained in
this Agreement, in no event shall the Transfer Agent be obligated to file with
any regulator, on behalf of the Fund, any requisite forms or other information
in connection with the Program. Any filing by the Transfer Agent shall be in its
own name and on its own behalf. The Fund shall be responsible for complying with
any and all requisite regulatory filings which arise as a result of the
Procedures or Program generally.
1.4 Except as otherwise expressly stated in this Agreement, the
Transfer Agent makes no representation or warranty, either express, implied or
statutory, concerning the Procedures herein. The Fund expressly confirms that it
has not relied upon any representation by the Transfer Agent as a basis for
entering into this Amendment. The provisions of this Section 1.4 shall survive
the termination of this Amendment.
2. Consent to Examination. In connection with the performance by the Transfer
Agent of the Procedures, the Transfer Agent understands and acknowledges that
the Fund remains responsible for assuring compliance with the Patriot Act and
that the records the Transfer Agent maintains for the Fund relating to the
Fund's Program may be subject, from time to time, to examination and/or
inspection by federal regulators in order that the regulators may evaluate such
compliance. The Fund hereby directs, and the Transfer Agent acknowledges, that
the Transfer Agent shall (1) permit federal regulators access to
2
such information and records maintained by the Transfer Agent and relating to
the Transfer Agent' implementation of the Procedures on behalf of the Fund, as
they may request, and (2) permit such federal regulators to inspect the Transfer
Agent' implementation of the Procedures on behalf of the Fund. The Transfer
Agent hereby consents to such examination and/or inspection and agrees to
cooperate with such federal examiners in connection with their review. For
purposes of such examination and/or inspection, the Transfer Agent will use its
best efforts to make available, during normal business hours, all required
records and information for review by such examiners.
3. Limitation on Delegation.
3.1 The Fund acknowledges and agrees that in accepting the delegation
hereunder, the Transfer Agent is agreeing to perform only those aspects of the
Fund's Program that have been expressly delegated as part of the Procedures and
is not undertaking and shall not be responsible for any other aspect of the
Fund's Program or for the overall compliance by the Fund with the Patriot Act.
Additionally, the parties acknowledge and agree that the Transfer Agent shall
only be responsible for performing the Procedures with respect to the ownership
of shares in the Fund for which the Transfer Agent maintains the applicable
shareholder information.
3.2 The Fund also acknowledges and agrees that the Transfer Agent's
provision of the Procedures hereunder is dependent upon the receipt by the
Transfer Agent of certain services from third parties. In the event services
from any such third party becomes unavailable, the Transfer Agent shall use
reasonable efforts to obtain equivalent services from an alternative provider or
may, in its discretion, discontinue the delegated duties upon such prior notice
to the Fund as may be reasonably practicable. Notwithstanding anything to the
contrary contained herein, the Transfer Agent will have no liability for the
performance or nonperformance of any such third party except to the extent the
Transfer Agent failed to exercise the same care in its selection of such third
party as the Transfer Agent exercises in the conduct of its own operations.
4. Reports. The Transfer Agent agrees to provide to the Fund (i) any reports
received by the Transfer Agent from any government agency pertaining to the
Transfer Agent's anti-money laundering monitoring on behalf of the Fund as
provided in this Amendment, (ii) any action taken in response to anti-money
laundering violations as described in (i), and (iii) an annual report of its
verification activities on behalf of the Fund. The Transfer Agent shall provide
such other reports on the verification activities conducted at the direction of
the Fund as may be agreed to from time to time by the Transfer Agent and the
Fund.
5. Fees & Expenses.
5.1 In consideration of the performance of the foregoing duties, the
Fund agrees on behalf of each of the Funds to pay the Transfer Agent a fee for
each Shareholder account as set out in the Fee Schedule which is attached to,
and made a part of, this Agreement. Such fees and out-of-pocket expenses and
advances identified in Section 5.2 below may be changed from time to time
subject to mutual written agreement between the Fund and the Transfer Agent.
3
5.2 In addition to such fees paid under Section 5.1 above, the Fund
agrees on behalf of each of the Portfolios to reimburse the Transfer Agent for
the reasonable administrative expenses that may be associated with such
additional duties including, but not limited to, confirmation production,
postage, forms, telephone, microfilm, microfiche, records storage, or advances
incurred by the Transfer Agent for the items set forth in the fee schedule
attached hereto. The terms of the Agreement shall apply with respect to the
payment of such expenses in the same manner and to the same extent as any other
expenses incurred under the Agreement.
6. Reliance on Information and Authenticity. The Fund hereby acknowledges and
understands that the Transfer Agent's ability to perform the Procedures under
the terms and conditions set forth in this Agreement is contingent upon the
Fund's ongoing cooperation with the Transfer Agent. The Fund shall use all
reasonable efforts in good faith to cooperate with the Transfer Agent taking all
action in a timely manner which the Transfer Agent, in its reasonable opinion,
deems necessary to enable or assist the Transfer Agent in performing any of the
Procedures under this Agreement, including but not limited to, providing, or
causing to be provided, to the Transfer Agent any information or documents which
the Transfer Agent deems reasonable or appropriate to provide the duties
hereunder. The Transfer Agent shall, when performing hereunder, be entitled to
rely upon (i) the accuracy of information, data and authorizations received from
the Fund or any Shareholder, and (ii) the authenticity of any representation
purporting to be from, or signature purporting to be of, the Fund or a
Shareholder. In no event shall the Transfer Agent be liable in any way for any
losses, penalties, expenses or other harm or injury which may arise in
connection with the Transfer Agent's delay in establishing, or refusal to
establish, a shareholder account as a result of the Transfer Agent's failure to
receive in a timely manner an application to open such account which, in the
Transfer Agent's sole discretion, it deems complete.
7. Miscellaneous.
7.1 Except as set forth herein, the terms and provisions of the
Agreement shall remain unchanged and continue to apply with full force and
effect. Except as otherwise defined herein, all capitalized terms used in this
Amendment shall have the same meaning as set forth in the Agreement.
7.2 The parties to this Agreement understand and acknowledge that the
Transfer Agent shall act on behalf of and as agent for the Fund with respect to
the Procedures set forth in Exhibit A. In no event shall the Transfer Agent be
liable for its failure to perform under the terms of this Amendment or any
Exhibit, except where the Transfer Agent has acted with negligence or willful
misconduct. This Agreement shall not be deemed to constitute the Fund and the
Transfer Agent as partners or joint ventures.
7.3 The Fund shall indemnify and hold harmless the Transfer Agent from
and against any and all losses, penalties, expenses or other harm or injury
which the Transfer Agent may incur or suffer or which may be asserted by any
person or entity, including reasonable attorneys' fees and court costs arising
out of (i) any failure by the Fund to observe and perform properly each and
every covenant of this Agreement or any other wrongdoing of the Fund, or (ii)
any action taken or omitted to be taken by the Transfer Agent in reasonable
reliance upon information provided to the Transfer Agent by the Fund; provided,
however, that the Fund shall
4
not be required to indemnify and hold harmless the Transfer Agent from any
losses which are caused by the Transfer Agent's negligence. The provisions of
Section 6 shall survive the termination of this Amendment.
7.4 In the event that the Transfer Agent, in its sole judgment,
believes that its performance of any duty set forth herein may create a risk of
financial, reputation or other loss for it, the Transfer Agent may, upon notice
to the Fund, suspend its performance of the Procedures; provided, however, that
if the Fund takes such action as may be requested by the Transfer Agent to
eliminate such risk, the Transfer Agent shall not suspend the Procedures, or, if
the Procedures have been suspended, shall reinstate its provision of the
Procedures.
7.5 Each party represents to the other that the execution and delivery
of this Amendment has been duly authorized.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed in its name and behalf by its duly authorized representative as of the
date first above written.
WITNESSED BY: STATE STREET BANK AND TRUST
COMPANY
By: /s/ Xxxxxxxxx Xxxxxxx
-------------------------
By: /s/ Xxxxxx Xxxxxxx
----------------------
Name: Xxxxxx Xxxxxxx
Title: SVP
WITNESSED BY: streetTRACKS SERIES TRUST
By: /s/ Xxxxxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxx
------------------------- ---------------------
Name: Xxxxxxxxx Xxxxxxx Name: Xxxxxx Xxxxxx
Title: Assistant Secretary Title: Treasurer
5
EXHIBIT A
PROCEDURES
The Transfer Agent agrees to perform the duties set forth below, with respect to
the ownership of shares in the Fund(s) set forth in Exhibit B for which the
Transfer Agent maintains the applicable account shareholder information, subject
to and in accordance with the terms and conditions of this Agreement.
I. REQUESTS FOR NEW ACCOUNT
Upon receipt from the Fund of an application to establish an account in the
name of one of its shareholders, the Transfer Agent shall review it for
completeness. The Transfer Agent shall deem the application complete as to the
shareholder or any authorized signers or beneficiaries on the account if with
respect to such entity (i) the application includes such entity's name, U.S.
resident street address, social security number and date of birth or (ii) the
Fund (a) certifies to the Transfer Agent as to the successful verification of
the identity of such entity and the manner in which the Fund verified such
identity, and (b) provides the detailed information so verified (i.e. passport
number, drivers license number, birth certificate, etc.) which, in the
Transfer's Agent's opinion, fulfills applicable regulatory requirements.
If the application is incomplete as to the shareholder, the Transfer Agent will
not open the account and will notify the Fund and request additional information
from the Fund. If the Fund fails to provide the necessary shareholder
information to complete the application within two business days of the Transfer
Agent's request, the Transfer Agent shall promptly return the application as
incomplete and return any funds earmarked for deposit in such account to the
shareholder, unless upon receipt of the Transfer Agent's request, the Fund
requests additional time to provide the missing information in which such
application and funds will be returned to the shareholder if the missing
information is not provided within five (5) business days of the Transfer
Agent's request. If the Transfer Agent determines, in its sole discretion, that
the shareholder information has been completed within a timely manner, the
Transfer Agent shall establish the account; provided, however, that such account
shall be restricted from any and all redemption transactions unless and until
such restriction is lifted by the Transfer Agent in accordance with the terms
below.
If the shareholder information is complete but the application is incomplete as
to any authorized signer and/or beneficiary, the Transfer Agent will open the
account and restrict such account from any redemption transactions with respect
to such entity unless and until such restriction is lifted by the Transfer Agent
in accordance with the terms below.
The Transfer Agent may file a Suspicious Activity Report or other appropriate
report on its own behalf with applicable regulator(s) if in attempting to
collect any requisite information it deems such action necessary or appropriate.
The trade date for the purchase of shares on a newly established account shall
be the date on which the Transfer Agent deems the application complete as to
shareholder information.
6
II. SCREENING AGAINST THE BLOCKED PERSONS AND OTHER RESTRICTED LISTS
Newly Established Accounts
Once the application is deemed complete by the Transfer Agent and the account is
established, the Transfer Agent will scan the application into a database,
inputting the name and address of the shareholder and any authorized signer(s)
and beneficiar(ies) on the account and shall compare it against the published
lists set forth in Exhibit C, and such other lists as the Transfer Agent may
utilize, in an effort to determine whether or not such entity is named on any of
the said lists (if so, a so-called "Positive Match").
Such scanning will result in a report of potential matches (the "Exception
Report"), which mayor may not include a Positive Match. If, upon review of the
Exception Report and any information available to it, the Transfer Agent
determines in its sole discretion that any potential match(es) is not a valid
Positive Match, then such match will be deemed a False Match and the Transfer
Agent shall so document to the file without reporting it to the Fund. If the
Transfer Agent believes a potential match is a Positive Match or requires
additional information to make a determination, then such match will be reported
to the Fund. If additional information is provided by the Fund, the Transfer
Agent will make any necessary corrections and will re-evaluate such "match" by
re-scanning the updated information. If the Transfer Agent determines, in its
sole discretion, that a Positive Match exists or that it is unable to determine
with reasonable certainty that no Positive Match exists, the Transfer Agent will
notify the Fund and provide supporting documentation. It also will file the
appropriate report(s) on its own behalf with the applicable regulators and
comply with instructions of appropriate regulator(s) which may include, without
limitation, freezing the account and its assets, refusing to add an authorized
signer or beneficiary to the account, and/or closing the account.
If the Transfer Agent determines, in its sole discretion, that no Positive Match
exists on items reported, the Transfer Agent will notify the Fund and document
its review. If the Fund, in its sole discretion, believes that a Positive Match
does exist, the Transfer Agent will take instructions from the Fund, subject to
any regulatory limitations, and will document its files.
Existing Accounts
Each month, or as otherwise agreed to by the parties, the Transfer Agent shall
scan the shareholder's name and that of each authorized signer and beneficiary
on existing accounts in an effort to identify whether or not a Positive Match
exists, in which case the Transfer Agent and Fund shall act in accordance with
the applicable terms above.
The Transfer Agent will retain records of scanning function and results, in
accordance with applicable Bank Secrecy Act regulation(s).
III. IDENTITY VERIFICATION
Upon receipt of a complete application, as described in Section I above to
establish an account or add an authorized signer or beneficiary, the Transfer
Agent will attempt to verify the identity of the shareholder and its authorized
signers and/or beneficiaries, as applicable. The extent and nature of the
information
7
needed by the Transfer Agent to perform such verification shall depend upon the
nature of the accountholder, authorized signer or beneficiary (e.g. corporation,
individual, trust, non-U.S. resident) but shall at a minimum include, without
limitation, the entity's name, US. street address, social security number and,
if applicable, date of birth. The Transfer Agent shall deem the identity
verified, as to the shareholder or any authorized signers or beneficiaries on
the account, if (i) such entity's name, US. resident street address, social
security number and date of birth matches information in the database utilized
by the Transfer Agent or (ii) the Fund, to the Transfer Agent's reasonable
satisfaction, (a) certifies to the successful verification by the Fund of the
identity of such entity and the manner in which the Fund verified such identity,
and (b) provides copies of the detailed information verified (i.e. passport
number, drivers license number, birth certificate, etc.) which, in the
Transfer's Agent's opinion, fulfills applicable regulatory requirements.
Examples of acceptable documentary evidence, as agreed upon by the parties,
include driver's license, military driver's license or other military
identification card, alien registration card, birth certificate identification
card issued by a state within the last 6 months, certified copy of a court order
with full name and date of birth, and passport.
The Transfer Agent also shall attempt to so verify the identity of any
authorized signer or beneficiary which the Fund and/or shareholder requests to
be added to any existing account established after October 1,2003.
In cases where the Fund has not certified to the entity's identity as described
above and the Transfer Agent is unable to verify such information, the Transfer
Agent shall so notify the Fund, furnish supporting documentation to it and
request that additional evidence or such certification from the Fund.
In cases where the shareholder's identity cannot be verified by the Transfer
Agent and the Fund has failed to provide a certification with respect to the
shareholder's identity to the Transfer Agent's reasonable satisfaction, the
Transfer Agent, in its sole discretion or upon the Fund's request, may close the
account. If it is an authorized signer or beneficiary's identity that cannot be
verified to the Transfer Agent's reasonable satisfaction, the Transfer Agent, in
its sole discretion or at the Fund's request, may close the account or refuse to
add such entity(ies) to the account. In either case, the Transfer Agent may file
the appropriate report(s) on its own behalf with the applicable regulators and
comply with instructions of appropriate regulator(s) which may include, without
limitation, freezing the account and its assets, refusing to add an authorized
signer or beneficiary to the account, and/or closing the account.
The Transfer Agent shall redeem any shares in a closed account with the opening
net asset value as of the date on which such account was closed, with the
proceeds forwarded to the shareholder when available.
The restrictions against redemption transactions with respect to an account or
any authorized signer or beneficiary on such account shall be removed only when
the Transfer Agent determines that (i) no Positive Match exists with respect to
the shareholder, authorized signer or beneficiary, as the case may be, and (ii)
such entity's identity has been verified by the Transfer Agent as described
above.
8
IV. SUSPICIOUS ACTIVITY MONITORING:
The Transfer Agent, for each shareholder account, will establish an activity
pattern (the account "Profile") based on its transactional history for the
immediately preceding twelve month time period or such shorter period if the
account has been established for less than a year. The Profile will be based
upon the number of purchases and redemptions, as well as the average dollar
amount of such purchase and redemptions during such period. Exchange
transactions mayor may not be a part of the Profile, as determined by
___________. The Profile shall not include other transactional activity
including, but not limited to, dividends, share adjustments and stock splits.
The Fund shall provide written approval of their acceptance of such Profiles.
On a daily basis, the Transfer Agent will input a file of the purchase,
redemption, exchange, and transfer transactions on a shareholder account into
its database in an effort to analyze and report any transaction (an "Exception
Report") that does not correspond to the established account Profile or, upon
request by Fund, upon rules established by Fund (e.g. report on any transaction
below a dollar minimum) and agreed upon by the Transfer Agent.
The Transfer Agent will review each Exception Report produced by the database.
If the Transfer Agent, upon review of the information available to it,
determines an item listed on the Exception Report is not suspicious, it will
document its findings. Any item which the Transfer Agent, in its reasonable
opinion, determines is or may be suspicious will be reported to the Fund. Upon
receipt of such notice, the Fund shall promptly provide any additional
information which it would like the Transfer Agent to consider. Upon review of
such additional information, the Transfer Agent may determine that the item is
not suspicious in nature, in which case the Transfer Agent will report its
findings to the Fund. If, however, the Transfer Agent cannot, in its sole
judgment, determine the nature/cause of the suspicious transaction, the Transfer
Agent will consider the item to be "suspicious" in nature and notify the Fund,
unless prohibited by applicable law, rule or regulation. The Transfer Agent may
file the appropriate report(s) on its own behalf with the applicable regulators
and comply with instructions of appropriate regulator(s) which may include,
without limitation, freezing the account and its assets, refusing to add an
authorized signer or beneficiary to the account, and/or closing the account.
With respect to any newly established account, the Transfer Agent will review
the account for thirty (30) days following the initial deposit into such account
any and all redemptions that occur and determine, in its sole discretion,
whether or not any such redemptions are "suspicious" in nature. If the Transfer
Agent determines that any redemption is suspicious, it will promptly notify the
Fund, unless prohibited by applicable law, rule or regulation, file the
appropriate report(s) on its own behalf with the applicable regulators and
comply with instructions of appropriate regulator(s) which may include, without
limitation, freezing the account and its assets, refusing to add an authorized
signer or beneficiary to the account, and/or closing the account.
The Fund acknowledges that the Transfer Agent does not accept cash equivalents
(bank drafts, bank notes, etc.) in connection with any shareholder accounts.
9
The Transfer Agent will notify the Fund of any change in payment instructions
which in the sole discretion of the Transfer Agent is deemed to be "suspicious"
in nature and await instruction from the Fund as to whether or not such change
should be implemented by the Transfer Agent.
The Transfer Agent will review any changes to shareholders' account statement
address that occur within 30 days of the account opening and notify Fund of any
such changes that it deems to be "suspicious" in nature, unless prohibited by
applicable law, rule or regulation. Upon such notice or upon instruction from
the Fund, the Transfer Agent may file the appropriate report(s) on its own
behalf with the applicable regulators and comply with instructions of
appropriate regulator(s) which may include, without limitation, freezing the
account and its assets, refusing to add an authorized signer or beneficiary to
the account, and/or closing the account And
STATE STREET BANK STREETTRACKS SERIES TRUST
AND TRUST COMPANY
By: /s/ Xxxxxx Xxxxxxx By: Xxxxxx Xxxxxx
------------------- --------------
Name: Xxxxxx Xxxxxxx Name: Xxxxxx Xxxxxx
Title: SVP Title: Treasurer
Date: 4/6/04 Date: 4/6/04
--------------------- -------
10
Exhibit B - Fund List
11
EXHIBIT C
OFAC SDN list
OFAC Blocked Countries
Bank of England
Canadian Consolidated List (OSFI)
12
ANNEX A
streetTRACKS(R) Dow Xxxxx U.S. Large Cap Growth Index Fund
streetTRACKS(R) Dow Xxxxx U.S. Large Cap Value Index Fund
streetTRACKS(R) Dow Xxxxx U.S. Small Cap Growth Index Fund
streetTRACKS(R) Dow Xxxxx U.S. Small Cap Value Index Fund
streetTRACKS(R) Dow Xxxxx Global Titans Index Fund
streetTRACKS(R) Wilshire REIT Index Fund
streetTRACKS(R) Xxxxxx Xxxxxxx Technology Index Fund
FORTUNE 500(R) Index Fund
Dated: September 22, 2000
