EXHIBIT 23(g)(4)
AMENDMENT TO CUSTODIAN CONTRACT
This Amendment to the Custodian Contract is made as of June 28, 2001,
by and between The Commerce Funds (the "Fund") and State Street Bank and Trust
Company (the "Custodian"). Capitalized terms used in this Amendment without
definition shall have the respective meanings given to such terms in the
Custodian Contract referred to below.
WHEREAS, the Fund and the Custodian entered into a Custodian Contract
dated as of December 1, 1994 (as amended and in effect from time to time, the
"Contract"); and
WHEREAS, the Fund is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets, and the Fund has made the series listed on
Exhibit A hereto subject to the Contract (each such series, together with all
other series subsequently established by the Fund and made subject to the
Contract in accordance with the terms thereof, shall be referred to as a
"Portfolio", and, collectively, the "Portfolios"); and
WHEREAS, the Fund and the Custodian desire to amend certain
provisions of the Contract to reflect revisions to Rule 17f-5 ("Rule 17f-5")
and the adoption of Rule 17f-7 ("Rule 17f-7") promulgated under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund and the Custodian desire to amend and restate
certain other provisions of the Contract relating to the custody of assets of
each of the Portfolios held outside of the United States.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter contained, the parties hereby agree to
amend the Contract, pursuant to the terms thereof, as follows:
I. Article 3 of the Contract is hereby deleted, and Articles 4 through
21 of the Contract are hereby renumbered, as of the effective date of
this Amendment, as Articles 5 through 22, respectively.
II. New Articles 3 and 4 of the Contract are hereby added, as of the
effective date of this Amendment, as set forth below.
3. PROVISIONS RELATING TO RULES 17f-5 AND 17f-7
3.1 DEFINITIONS. Capitalized terms in this Amendment shall have the
following meanings:
"Country Risk" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment, economic and financial infrastructure
(including any Eligible Securities Depository operating in
the country), prevailing or developing custody and settlement practices, and
laws and regulations applicable to the safekeeping and recovery of Foreign
Assets held in custody in that country.
"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of
Rule 17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank
(as defined in Rule 17f-5), a bank holding company meeting the requirements of
an Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other
appropriate action of the U.S. Securities and Exchange Commission (the
"SEC")), or a foreign branch of a Bank (as defined in Section 2(a)(5) of the
0000 Xxx) meeting the requirements of a custodian under Section 17(f) of the
1940 Act, the term does not include any Eligible Securities Depository.
"Eligible Securities Depository" has the meaning set forth in section (b)(1)
of Rule 17f-7.
"Foreign Assets" means any of the Portfolios' 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 the
Portfolios' transactions in such investment.
"Foreign Custody Manager" has the meaning set forth in section (a)(3) of Rule
17f-5.
3.2 THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
3.2.1 DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER. The
Fund, by resolution adopted by its Board of Trustees (the "Board"), hereby
delegates to the Custodian, subject to Section (b) of Rule 17f-5, the
responsibilities set forth in this Section 3.2 with respect to Foreign Assets
of the Portfolios held outside the United States, and the Custodian hereby
accepts such delegation as Foreign Custody Manager with respect to the
Portfolios.
3.2.2 COUNTRIES COVERED. The Foreign Custody Manager shall be
responsible for performing the delegated responsibilities defined below only
with respect to the countries and custody arrangements for each such country
listed on Schedule A to this Contract, which list of countries may be amended
from time to time by the Fund with the agreement of the Foreign Custody
Manager. Such agreement will not be reasonably withheld. The Foreign Custody
Manager shall list on Schedule A the Eligible Foreign Custodians selected by
the Foreign Custody Manager to maintain the assets of the Portfolios, which
list of Eligible Foreign Custodians may be amended from time to time in the
sole discretion of the Foreign Custody Manager, with notice to the Fund as
provided in Section 3.2.5 herein. The Foreign Custody Manager will provide
amended versions of Schedule A in accordance with Section 3.2.5 hereof.
Upon the receipt by the Foreign Custody Manager of Proper Instructions to open
an account or to place or maintain Foreign Assets in a country listed on
Schedule A, and the fulfillment by the Fund, on behalf of the Portfolios, of
the applicable account opening requirements for such country, the Foreign
Custody Manager shall be deemed to have been delegated by the Board on behalf
of the Portfolios responsibility as Foreign Custody Manager with respect to
that country and to have accepted such delegation. Execution of this Amendment
by the Fund shall be deemed to be a Proper Instruction to open an account, or
to place or maintain Foreign Assets, in each country listed on Schedule A in
which the Custodian has previously placed or currently
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maintains Foreign Assets pursuant to the terms of the Contract. Following the
receipt of Proper Instructions directing the Foreign Custody Manager to close
the accounts of a Portfolio with all of the Eligible Foreign Custodians
selected by the Foreign Custody Manager in a designated country, the
delegation by the Board on behalf of the Portfolios to the Custodian as
Foreign Custody Manager for that country shall be deemed to have been
withdrawn and the Custodian shall immediately cease to be the Foreign Custody
Manager of the Portfolios with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to
the Fund. Forty-five (45) days (or such longer period to which the parties
agree in writing) after receipt of any such notice by the Fund, the Custodian
shall have no further responsibility in its capacity as Foreign Custody
Manager to the Fund with respect to the country as to which the Custodian's
acceptance of delegation is withdrawn.
3.2.3 SCOPE OF DELEGATED RESPONSIBILITIES.
(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject
to the provisions of this Section 3.2, the Foreign Custody Manager may place
and maintain the Foreign Assets in the care of the Eligible Foreign Custodian
selected by the Foreign Custody Manager in each country listed on Schedule A,
as amended from time to time. In performing its delegated responsibilities as
Foreign Custody Manager to place or maintain Foreign Assets with an Eligible
Foreign Custodian, the Foreign Custody Manager shall determine that the
Foreign Assets will be subject to reasonable care, based on the standards
applicable to custodians in the country in which the Foreign Assets will be
held by that Eligible Foreign Custodian, after considering all factors
relevant to the safekeeping of such assets, including, without limitation, the
facts specified in Rule 17f-5(c)(1).
(b) CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The
Foreign Custody Manager shall determine that the contract governing the
foreign custody arrangements with each Eligible Foreign Custodian selected by
the Foreign Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).
(c) MONITORING. In each case in which the Foreign
Custody Manager maintains Foreign Assets with an Eligible Foreign Custodian
selected by the Foreign Custody Manager, the Foreign Custody Manager shall
establish a system to monitor, in accordance with Rule 17f-5(c)(3), (i) the
appropriateness of maintaining the Foreign Assets with such Eligible Foreign
Custodian and (ii) the performance of the contract governing the custody
arrangements established by the Foreign Custody Manager with the Eligible
Foreign Custodian. In the event the Foreign Custody Manager determines that
the custody arrangements with an Eligible Foreign Custodian it has selected
are no longer appropriate, the Foreign Custody Manager shall notify the Board
in accordance with Section 3.2.5 hereunder. Where the Foreign Custody Manager
has selected an alternative Eligible Foreign Custodian in accordance with
Section 3.2.3(a) hereof, the Foreign Custody Manager will arrange the transfer
of the affected Foreign Assets to such Eligible Foreign Custodian as soon as
reasonably practicable.
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3.2.4 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For
purposes of this Section 3.2, the Board shall be deemed to have considered and
determined to accept such Country Risk as is incurred by placing and
maintaining the Foreign Assets in each country for which the Custodian is
serving as Foreign Custody Manager of the Portfolios.
3.2.5 REPORTING REQUIREMENTS. The Foreign Custody Manager shall
report the withdrawal of the Foreign Assets from an Eligible Foreign Custodian
and the placement of such Foreign Assets with another Eligible Foreign
Custodian by providing to the Board an amended Schedule A at the end of the
calendar quarter in which an amendment to such Schedule has occurred. The
Foreign Custody Manager shall make written reports notifying the Board of any
other material change in the foreign custody arrangements of the Portfolios
described in this Section 3.2 after the occurrence of the material change.
3.2.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF A PORTFOLIO.
In performing the responsibilities delegated to it, the Foreign Custody
Manager agrees to exercise reasonable care, prudence and diligence such as a
person having responsibility for the safekeeping of assets of management
investment companies registered under the 1940 Act would exercise.
3.2.7 REPRESENTATIONS WITH RESPECT TO RULE 17f-5. The Foreign
Custody Manager represents to the Fund that it is a U.S. Bank as defined in
section (a)(7) of Rule 17f-5. The Fund represents to the Custodian that the
Board has determined that it is reasonable for the Board to rely on the
Custodian to perform the responsibilities delegated pursuant to this Contract
to the Custodian as the Foreign Custody Manager of the Portfolios.
3.2.8 EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN
CUSTODY MANAGER. The Board's delegation to the Custodian as Foreign Custody
Manager of the Portfolios shall be effective as of the date hereof and shall
remain in effect until terminated at any time, without penalty, by written
notice from the terminating party to the non-terminating party. Termination
will become effective thirty (30) days after receipt by the non-terminating
party of such notice. The provisions of Section 3.2.2 hereof shall govern the
delegation to and termination of the Custodian as Foreign Custody Manager of
the Portfolios with respect to designated countries.
3.3 ELIGIBLE SECURITIES DEPOSITORIES.
3.3.1 ANALYSIS AND MONITORING. The Custodian shall (a) provide the
Fund (or its duly-authorized investment manager or investment adviser) with an
analysis of the custody risks associated with maintaining assets with the
Eligible Securities Depositories set forth on Schedule B hereto in accordance
with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on a
continuing basis, and promptly notify the Fund (or its duly-authorized
investment manager or investment adviser) of any material change in such
risks, in accordance with section (a)(1)(i)(B) of Rule 17f-7. The Custodian
shall notify the Fund if and when a foreign securities depository no longer
meets the definition of Eligible Securities Depository as set forth in Rule
17f-7(b)(1).
3.3.2 STANDARD OF CARE. The Custodian agrees to exercise
reasonable care, prudence and diligence in performing the duties set forth in
Section 3.3.1.
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4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIOS
HELD OUTSIDE THE UNITED STATES.
4.1 DEFINITIONS. Certain of the capitalized terms in this Article 4
shall have the following meanings:
"Foreign Securities System" means an Eligible Securities Depository listed on
Schedule B hereto, as amended from time to time by the Custodian and provided
to the Fund pursuant to Section 3.3.1.
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.
4.2 HOLDING SECURITIES. The Custodian shall identify on its books as
belonging to each applicable Portfolio the foreign securities (including cash
equivalents, as may be applicable) held by each Foreign Sub-Custodian or
Foreign Securities System. The Custodian may hold foreign securities for all
of its customers, including the Portfolios, with any Foreign Sub-Custodian in
an account that is identified as belonging to the Custodian for the benefit of
its customers, provided however, that (i) the records of the Custodian with
respect to foreign securities of the Portfolios which are maintained in such
account shall identify those securities as belonging to each applicable
Portfolio and (ii), to the extent permitted and customary in the market in
which the account is maintained, the Custodian shall require that securities
so held by the Foreign Sub-Custodian be held separately from any assets of
such Foreign Sub-Custodian or of other customers of such Foreign
Sub-Custodian.
4.3 FOREIGN SECURITIES SYSTEMS. Foreign securities shall be maintained
in a Foreign Securities System in a designated country through arrangements
implemented by the Custodian or a Foreign Sub-Custodian, as applicable, in
such country.
4.4 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1 DELIVERY OF FOREIGN ASSETS. The Custodian or a Foreign
Sub-Custodian shall release and deliver foreign securities (including cash
equivalents, as may be applicable) of the Portfolios held by the Custodian or
such Foreign Sub-Custodian, or in a Foreign Securities System account, only
upon receipt of Proper Instructions, which may be continuing instructions when
deemed appropriate by the parties, and only in the following cases:
(i) upon the sale of such foreign securities for the Portfolio
in accordance with commercially reasonable market practice
in the country where such foreign securities are held or
traded, including, without limitation: (A) delivery against
expectation of receiving later payment; or (B) in the case
of a sale effected through a Foreign Securities System, in
accordance with the rules governing the operation of the
Foreign Securities System;
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(ii) in connection with any repurchase agreement related to
foreign securities;
(iii) to the depository agent in connection with tender or other
similar offers for foreign securities of the Portfolios;
(iv) to the issuer thereof or its agent when such foreign
securities are called, redeemed, retired or otherwise become
payable;
(v) to the issuer thereof, or its agent, for transfer into the
name of the Custodian (or the name of the respective Foreign
Sub-Custodian or of any nominee of the Custodian or such
Foreign Sub-Custodian) or for exchange for a different
number of bonds, certificates or other evidence representing
the same aggregate face amount or number of units;
(vi) to brokers, clearing banks or other clearing agents for
examination or trade execution in accordance with market
custom; provided that in any such case the Foreign
Sub-Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities prior
to receiving payment for such securities except as may arise
from the Foreign Sub-Custodian's own negligence or willful
misconduct;
(vii) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement;
(viii) in the case of warrants, rights or similar foreign
securities, the surrender thereof in the exercise of such
warrants, rights or similar securities or the surrender of
interim receipts or temporary securities for definitive
securities;
(ix) for delivery as security in connection with any borrowing by
the Portfolios requiring a pledge of assets by the
Portfolios;
(x) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(xi) in connection with the lending of foreign securities; and
(xii) for any other purpose, but only upon receipt of Proper
Instructions specifying the foreign securities to be
delivered and naming the person or persons to whom delivery
of such securities shall be made.
4.4.2 PAYMENT OF PORTFOLIO MONIES. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate by
the parties, the Custodian shall pay out, or direct the respective Foreign
Sub-Custodian or the respective Foreign Securities System to pay out, monies
of a Portfolio in the following cases only:
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(i) upon the purchase of foreign securities for the Portfolio,
unless otherwise directed by Proper Instructions, by (A)
delivering money to the seller thereof or to a dealer
therefor (or an agent for such seller or dealer) against
expectation of receiving later delivery of such foreign
securities; or (B) in the case of a purchase effected
through a Foreign Securities System, in accordance with the
rules governing the operation of such Foreign Securities
System;
(ii) in connection with any repurchase agreement related to
foreign securities;
(iii) in connection with the conversion, exchange or surrender of
foreign securities of the Portfolio;
(iv) for the payment of any expense or liability of the
Portfolio, including, but not limited to, the following
payments: interest, taxes, investment advisory fees,
transfer agency fees, fees under this Contract, legal fees,
accounting fees, and other operating expenses;
(v) for the purchase or sale of foreign exchange or foreign
exchange contracts for the Portfolio, including transactions
executed with or through the Custodian or its Foreign
Sub-Custodians;
(vi) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(vii) for payment of part or all of the dividends received in
respect of securities sold short;
(viii) for transfer to a time deposit account of the Fund in any
bank, whether domestic or foreign; such transfer may be
effected prior to receipt of a confirmation from a broker
and/or the applicable bank pursuant to Proper Instructions
from the Fund;
(ix) in connection with the borrowing or lending of foreign
securities; and
(x) for any other purpose, but only upon receipt of Proper
Instructions specifying the amount of such payment and
naming the person or persons to whom such payment is to be
made.
4.4.3 MARKET CONDITIONS. Notwithstanding any provision of this
Contract to the contrary, settlement and payment for Foreign Assets received
for the account of a Portfolio and delivery of Foreign Assets maintained for
the account of a Portfolio may be effected in accordance with the customary
established securities trading or processing practices and procedures in the
country or market in which the transaction occurs, including, without
limitation, delivering Foreign Assets to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) with the expectation of
receiving later payment for such Foreign Assets from such purchaser or dealer.
For purposes of this Section 4.4.3, "Institutional Clients"
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means U.S. registered investment companies, or major, U.S.-based commercial
banks, insurance companies, pension funds or substantially similar financial
institutions which, as a part of their ordinary business operations, purchase
or sell securities and make use of non-U.S. custodial services.
The Custodian shall provide to the Board the information with respect to
custody and settlement practices in countries in which the Custodian employs a
Foreign Sub-Custodian described on Schedule C hereto at the time or times set
forth on such Schedule. The Custodian may revise Schedule C from time to time,
provided that no such revision shall result in the Board being provided with
substantively less information than had been previously provided hereunder.
4.5 REGISTRATION OF FOREIGN SECURITIES. The foreign securities maintained
in the custody of a Foreign Sub-Custodian (other than bearer securities) shall
be registered in the name of the applicable Portfolio or in the name of the
Custodian or in the name of any Foreign Sub-Custodian or in the name of any
nominee of the foregoing, and the Fund on behalf of such Portfolio agrees to
hold any such nominee harmless from any liability as a holder of record of
such foreign securities. The Custodian or a Foreign Sub-Custodian shall not be
obligated to accept securities on behalf of a Portfolio under the terms of
this Contract unless the form of such securities and the manner in which they
are delivered are in accordance with reasonable market practice.
4.6 BANK ACCOUNTS. The Custodian shall identify on its books as belonging
to the Fund cash (including cash denominated in foreign currencies) deposited
with the Custodian. Where the Custodian is unable to maintain, or market
practice does not facilitate the maintenance of, cash on the books of the
Custodian, a bank account or bank accounts shall be opened and maintained
outside the United States on behalf of a Portfolio with a Foreign
Sub-Custodian. All accounts referred to in this Section shall be subject only
to draft or order by the Custodian (or, if applicable, such Foreign
Sub-Custodian) acting pursuant to the terms of this Agreement to hold cash
received by or from or for the account of the Portfolio. Cash maintained on
the books of the Custodian (including its branches, subsidiaries and
affiliates), regardless of currency denomination, is maintained in bank
accounts established under, and subject to the laws of, The Commonwealth of
Massachusetts.
4.7 COLLECTION OF INCOME. The Custodian shall use reasonable commercial
efforts to collect all income and other payments with respect to the Foreign
Assets held hereunder to which the Portfolios shall be entitled and shall
credit such income, as collected, to the applicable Portfolio. In the event
that extraordinary measures are required to collect such income, the Fund and
the Custodian shall consult as to such measures and as to the compensation and
expenses of the Custodian relating to such measures.
4.8 SHAREHOLDER RIGHTS. With respect to the foreign securities held
pursuant to this Article 4, the Custodian will use reasonable commercial
efforts to facilitate the exercise of voting and other shareholder rights,
subject always to the laws, regulations and practical constraints that may
exist in the country where such securities are issued. The Fund acknowledges
that local conditions, including lack of regulation, onerous procedural
obligations, lack of notice and other
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factors may have the effect of severely limiting the ability of the Fund to
exercise shareholder rights.
4.9 COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The Custodian shall
transmit promptly to the Fund written information with respect to materials
received by the Custodian via the Foreign Sub-Custodians from issuers of the
foreign securities being held for the account of the Portfolios (including,
without limitation, pendency of calls and maturities of foreign securities and
expirations of rights in connection therewith). With respect to tender or
exchange offers, the Custodian shall transmit promptly to the Fund written
information with respect to materials so received by the Custodian from
issuers of the foreign securities whose tender or exchange is sought or from
the party (or its agents) making the tender or exchange offer. The Custodian
shall not be liable for any untimely exercise of any tender, exchange or other
right or power in connection with foreign securities or other property of the
Portfolios at any time held by it unless (i) the Custodian or the respective
Foreign Sub-Custodian is in actual possession of such foreign securities or
property and (ii) the Custodian receives Proper Instructions with regard to
the exercise of any such right or power, and both (i) and (ii) occur at least
three business days prior to the date on which the Custodian is to take action
to exercise such right or power.
4.10 LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which
the Custodian employs a Foreign Sub-Custodian shall, to the extent possible,
require the Foreign Sub-Custodian to exercise reasonable care in the
performance of its duties, and to indemnify, and hold harmless, the Custodian
from and against any loss, damage, cost, expense, liability or claim arising
out of or in connection with the Foreign Sub-Custodian's performance of such
obligations. At the Fund's election, the Portfolios shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims against a
Foreign Sub-Custodian as a consequence of any such loss, damage, cost,
expense, liability or claim if and to the extent that the Portfolios have not
been made whole for any such loss, damage, cost, expense, liability or claim.
4.11 TAX LAW. The Custodian shall have no responsibility or liability for
any obligations now or hereafter imposed on the Fund, the Portfolios or the
Custodian as custodian of the Portfolios by the tax law of the United States
or of any state or political subdivision thereof. It shall be the
responsibility of the Fund to notify the Custodian of the obligations imposed
on the Fund with respect to the Portfolios or the Custodian as custodian of
the Portfolios by the tax law of countries other than those mentioned in the
above sentence, including responsibility for withholding and other taxes,
assessments or other governmental charges, certifications and governmental
reporting. The sole responsibility of the Custodian with regard to such tax
law shall be to use reasonable efforts to assist the Fund with respect to any
claim for exemption or refund under the tax law of countries for which the
Fund has provided such information.
4.12 LIABILITY OF CUSTODIAN. Except as may arise from the Custodian's own
negligence or willful misconduct or the negligence or willful misconduct of a
Foreign Sub-Custodian, the Custodian shall be without liability to the Fund
for any loss, liability, claim or expense resulting from or caused by anything
which is part of Country Risk.
The Custodian shall be liable for the acts or omissions of a Foreign
Sub-Custodian to the same extent as set forth with respect to sub-custodians
generally in the Contract and, regardless of
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whether assets are maintained in the custody of a Foreign Sub-Custodian or a
Foreign Securities System, the Custodian shall not be liable for any loss,
damage, cost, expense, liability or claim resulting from nationalization,
expropriation, currency restrictions, or acts of war or terrorism, or any
other loss where the Sub-Custodian has otherwise acted with reasonable care.
III. Except as specifically superseded or modified herein, the terms and
provisions of the Contract shall continue to apply with full force
and effect. In the event of any conflict between the terms of the
Contract prior to this Amendment and this Amendment, the terms of
this Amendment shall prevail. If the Custodian is delegated the
responsibilities of Foreign Custody Manager pursuant to the terms of
Article 3 hereof, in the event of any conflict between the provisions
of Articles 3 and 4 hereof, the provisions of Article 3 shall
prevail.
IV. The obligations of the Fund under this Amendment are not binding upon
any of the Trustees, officers or shareholders of the Fund
individually but are binding only upon the Fund and its assets. No
Portfolio of the Fund shall be liable for the obligations of any
other Portfolio hereunder.
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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
/s/ Xxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxxx
----------------------------- --------------------
Xxxx X. Xxxx Name: Xxxxxx X. Xxxxxx
Assistant Vice President Title: Executive Vice President
and Associate Counsel
WITNESSED BY: THE COMMERCE FUNDS
/s/ Xxxxxxx Xxxxxxxx
----------------------------- By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxxx Xxxxxxxx --------------------
Title: Name: Xxxxxx X. Xxxxxx
Title: President
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EXHIBIT A
to
Amendment to Custodian Contract
by and between
The Commerce Funds
and
State Street Bank and Trust Company
June 28, 2001
List of Series
Commerce Short-Term Government Fund
Commerce Bond Fund
Commerce Balanced Fund
Commerce Growth Fund
Commerce MidCap Growth Fund
Commerce International Equity Fund
Commerce National Tax-Free Intermediate Bond Fund
Commerce Missouri Tax-Free Intermediate Bond Fund
Commerce Value Fund
Commerce Core Equity Fund
Commerce Kansas Tax-Free Intermediate Bond Fund
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS
COUNTRY SUBCUSTODIAN
Argentina Citibank, N.A.
Australia Westpac Banking Corporation
Austria Erste Bank der Oterreichischen Sparkassen AG
Bahrain HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking
Corporation Limited)
Bangladesh Standard Chartered Bank
Belgium Fortis Bank nv-sa
Bermuda The Bank of Bermuda Limited
Bolivia BankBoston, N.A.
Botswana Barclays Bank of Botswana Limited
Brazil Citibank, N.A.
Bulgaria ING Bank N.V.
Canada State Street Trust Company Canada
Chile BankBoston, N.A.
People's Republic of China The Hongkong and Shanghai Banking Corporation
Limited, Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. Sociedad Fiduciaria
Costa Rica Banco BCT S.A.
Croatia Privredna Banka Zagreb d.d.
Cyprus The Cyprus Popular Bank Ltd.
Czech Republic Ceskoslovenska Obchodni Banka, A.S.
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XXXXX XXXXXX SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS
COUNTRY SUBCUSTODIAN
Denmark Danske Bank A/S
Ecuador Citibank, N.A.
Egypt Egyptian British Bank S.A.E.
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Estonia Hansabank
Finland Xxxxxx Bank Plc.
France BNP Paribas, S.A.
Germany Dresdner Bank AG
Ghana Barclays Bank of Ghana Limited
Greece National Bank of Greece S.A.
Hong Kong Standard Chartered Bank
Hungary Citibank Rt.
Iceland Icebank Ltd.
India Deutsche Bank AG
The Hong Kong and Shanghai Banking Corporation
Limited
Indonesia Standard Chartered Bank
Ireland Bank of Ireland
Israel Bank Hapoalim B.M.
Italy BNP Paribas, Italian Branch
Ivory Coast Societe Generale de Banques en Cote d'Ivoire
Jamaica Scotiabank Jamaica Trust and Merchant Bank Ltd.
-0-
XXXXX XXXXXX SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS
COUNTRY SUBCUSTODIAN
Japan The Fuji Bank, Limited
The Sumitomo Bank, Limited
Jordan HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Kazakhstan HSBC Bank Kazakhstan
Kenya Barclays Bank of Kenya Limited
Republic of Korea The Hongkong and Shanghai Banking Corporation
Limited
Latvia A/s Hansabanka
Lebanon HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Lithuania Vilniaus Bankas AB
Malaysia Standard Chartered Bank Malaysia Berhad
Mauritius The Hongkong and Shanghai Banking Corporation
Limited
Mexico Citibank Mexico, S.A.
Morocco Banque Commerciale du Maroc
Namibia Standard Bank Namibia Limited
Netherlands Fortis Bank (Nederland) N.V.
New Zealand ANZ Banking Group (New Zealand) Limited
Nigeria Stanbic Merchant Bank Nigeria Limited
Norway Christiania Bank og Kreditkasse ASA
-0-
XXXXX XXXXXX SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS
COUNTRY SUBCUSTODIAN
Oman HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Pakistan Deutsche Bank AG
Palestine HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Panama BankBoston, N.A.
Peru Citibank, N.A.
Philippines Standard Chartered Bank
Poland Bank Handlowy w Warszawie S.A.
Portugal Banco Comercial Portugues
Qatar HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Romania ING Bank N.V.
Russia Credit Suisse First Boston AO - Moscow
(as delegate of Credit Suisse First Boston -
Zurich)
Singapore The Development Bank of Singapore Limited
Slovak Republic Ceskoslovenska Obchodni Banka, A.S.
Slovenia Bank Austria Creditanstalt d.d. - Ljubljana
South Africa Standard Bank of South Africa Limited
Spain Banco Santander Central Hispano S.A.
Sri Lanka The Hongkong and Shanghai Banking Corporation
Limited
-0-
XXXXX XXXXXX SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS
COUNTRY SUBCUSTODIAN
Swaziland Standard Bank Swaziland Limited
Sweden Skandinaviska Enskilda Banken
Switzerland UBS AG
Taiwan - R.O.C. Central Trust of China
Thailand Standard Chartered Bank
Trinidad & Tobago Republic Bank Limited
Tunisia Banque Internationale Arabe de Tunisie
Turkey Citibank, N.A.
Ukraine ING Bank Ukraine
United Kingdom State Street Bank and Trust Company, London Branch
Uruguay BankBoston, N.A.
Venezuela Citibank, N.A.
Vietnam The Hongkong and Shanghai Banking Corporation
Limited
Zambia Barclays Bank of Zambia Limited
Zimbabwe Barclays Bank of Zimbabwe Limited
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Argentina Caja de Valores S.A.
Australia Austraclear Limited
Reserve Bank Information and Transfer System
Austria Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)
Belgium Caisse Interprofessionnelle de
Depots et de Virements de Titres, S.A.
Banque Nationale de Belgique
Brazil Companhia Brasileira de Liquidacao e Custodia
sistema Especial de Liquidacas e de Custodia (SELIC)
Central de Custodia e de Liquidacao Financeira de Titulos Privados
(CETIP)
Bulgaria Central Depository AD
Bulgarian National Bank
Canada Canadian Depository for Securities Limited
Chile Deposito Central de Valores S.A.
People's Republic of China Shanghai Securities Central Clearing & Registration Corporation
Shenzhen Securities Central Clearing Co., Ltd.
Columbia Deposito Centralizado de Valores
Costa Rica Central de Valores S.A.
Croatia Ministry of Finance
National Bank of Croatia
Sredisnja Depozitarna Agencija d.d.
-0-
XXXXX XXXXXX SCHEDULE B
GLOBAL CUSTODY NETWORK
DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Czech Republic Stredisko cennych papiru
Czech National Bank
Denmark Vaerdipapircentralen (Danish Securities Center)
Egypt Misr for Clearing, Settlement, and Depository
Estonia Eesti Vaartpaberite Keskdepositoorium
Finland Finnish Central Securities Depository
France Euroclear France
Germany Clearstream Banking AG, Frankfurt
Greece Bank of Greece,
System for Monitoring Transactions in Securities in Book-Entry Form
Apothetirion Titlon AE - Central Securities Depository
Hong Kong Central Clearing and Settlement System
Central Moneymarkets Unit
Hungary Kozponti Elszamolohaz es Ertektar
(Budapest) Rt. (KELER)
India National Securities Depository Limited
Central Depository Services India Limited
Reserve Bank of India
Indonesia Bank Indonesia
PT Kustodian Sentral Efek Indonesia
Israel Tel Aviv Stock Exchange Clearing House Ltd. (TASE Clearinghouse)
Italy Monte Titoli S.p.A.
-2-
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Ivory Coast Depositaire Central - Banque de Reglement
Jamaica Jamaica Central Securities Depository
Japan Japan Securities Depository Center (JASDEC)
Bank of Japan Net System
Kazakhstan Central Depository of Securities
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository
Latvia Latvian Central Depository
Lebanon Custodian and Clearing Center of
Financial Instruments for Lebanon
and the Middle East (Midclear)
X.X.X.
Banque du Liban
Lithuania Central Securities Depository of Lithuania
Malaysia Malaysian Central Depository Sdn. Bhd.
Bank Negara Malaysia,
Scripless Securities Trading and Safekeeping System
Mauritius Central Depository and Settlement Co. Ltd.
Bank of Mauritius
Mexico S.D. INDEVAL
(Instituto para el Deposito de Valores)
Morocco Maroclear
Netherlands Nederlands Centraal Instituut voor Giraal Effectenverkeer B.V.
(NECIGEF)
New Zealand New Zealand Central Securities Depository Limited
Nigeria Central Securities Clearing System Limited
-3-
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Norway Verdipapirsentralen (Norweigian Central Securities Depository)
Oman Muscat Depository & Securities Registration Company, SAOC
Pakistan Central Depository Company of Pakistan Limited
State Bank of Pakistan
Palestine Clearing Depository and Settlement, a department of the Palestine
Stock Exchange
Peru Caja de Valores y Liquidaciones, Institucion de Compensacion y
Liquidacion de Valores S.A.
Philippines Philippine Central Depository, Inc.
Registry of Scripless Securities (XXXX) of the Bureau of Treasury
Poland National Depository of Securities
(Krajowy Depozyt Papierow Wartoseciowych SA)
Central Treasury Bills Registrar
Portugal Central de Valores Mobiliarios
Qatar Central Clearing and Registration (CCR), a department of the Doha
Securities Market
Romania National Securities Clearing, Settlement and Depository Company
Bucharest Stock Exchange Registry Division
National Bank of Romania
Singapore Central Depository (Pte) Limited
Monetary Authority of Singapore
-0-
XXXXX XXXXXX SCHEDULE B
GLOBAL CUSTODY NETWORK
DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Slovak Republic Stredisko cennych papierov
National Bank of Slovakia
Slovenia Klirinsko Depotna Xxxxxx x.x.
South Africa Central Depository Limited
Share Transactions Totally Electronic
(STRATE) Ltd.
Spain Servicio de Compensacion y
Liquidacion de Valores, S.A.
Banco de Espana, Central de Anotaciones en Cuenta
Sri Lanka Central Depository System (Pvt) Limited
Sweden Vardepapperscentralen VPC AB
(Swedish Central Securities Depository)
Switzerland SegaIntersettle AG (SIS)
Taiwan - R.O.C. Taiwan Securities Central Depository Co., Ltd.
Thailand Thailand Securities Depository Company Limited
Tunisia Societe Tunisienne Interprofessionelle pour la Compensation et de
Depots des Valeurs Mobilieres
Turkey Takas ve Saklama Bankasi A.S. (TAKASBANK)
Central Bank of Turkey
Ukraine National Bank of Ukraine
United Kingdom Central Gilts Office and Central Moneymarkets Office
Venezuela Banco Central de Venezuela
Zambia XxXX Central Shares Depository Limited
Bank of Zambia
TRANSNATIONAL
-5-
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Euroclear
Clearstream Banking AG
-6-
SCHEDULE C
MARKET INFORMATION
PUBLICATION/TYPE OF INFORMATION
-------------------------------
(SCHEDULED FREQUENCY) BRIEF DESCRIPTION
-----------------
The Guide to Custody in World Markets An overview of settlement and safekeeping procedures, custody
(hardcopy annually and regular website updates) practices and foreign investor considerations for the markets
in which State Street offers custodial services.
Global Custody Network Review Information relating to Foreign Sub-Custodians in State
(annually) Street's Global Custody Network. The Review stands as an
integral part of the materials that State Street provides to
its U.S. mutual fund clients to assist them in complying with
SEC Rule 17f-5. The Review also gives insight into State
Street's market expansion and Foreign Sub-Custodian selection
processes, as well as the procedures and controls used to
monitor the financial condition and performance of our
Foreign Sub-Custodian banks.
Securities Depository Review Custody risk analyses of the Foreign Securities Depositories
(annually) presently operating in Network markets. This publication is an
integral part of the materials that State Street provides to
its U.S. mutual fund clients to meet informational obligations
created by SEC Rule 17f-7.
Global Legal Survey With respect to each market in which State Street offers
(annually) custodial services, opinions relating to whether local law
restricts (i) access of a fund's independent public accountants
to books and records of a Foreign Sub-Custodian or Foreign
Securities System, (ii) a fund's ability to recover in the
event of bankruptcy or insolvency of a Foreign Sub-Custodian or
Foreign Securities System, (iii) the Fund's ability to recover
in the event of a loss by a Foreign Sub-Custodian or Foreign
Securities System, and (iv) the ability of a foreign investor
to convert cash and cash equivalents to U.S. dollars.
-1-
Subcustodian Agreements Copies of the contracts that State Street has
(annually) entered into with each Sub-Custodian that maintains U.S.
mutual fund assets in the markets in which State Street offers
custodial services.
Global Market Bulletin Information on changing settlement and custody conditions in
(daily or as necessary) markets where State Street offers custodial services. Includes
changes in market and tax regulations, depository
developments, dematerialization information, as well as other
market changes that may impact State Street's clients.
Network Bulletins Developments of interest to investors in the markets in which
(daily) State Street Bank and Trust Company offers custodial services.
Foreign Custody Advisories For those markets where State Street offers custodial services
(as necessary) that exhibit special risks or infrastructures impacting
custody, State Street issues market advisories to highlight
those unique market factors which might impact our ability to
offer recognized custody service levels.
Material Change Notices Informational letters and accompanying materials confirming
(presently on a quarterly basis State Street's foreign custody arrangements, including a
or as otherwise necessary) summary of material changes with Foreign Sub-Custodians that
have occurred during the previous quarter. The notices also
identify any material changes in the custodial risks
associated with maintaining assets with Foreign Securities
Depositories.
-2-
