EXHIBIT (h)(28)(a)
INFORMATION SHARING AND
RESTRICTED TRADING AGREEMENT
THIS AGREEMENT is effective as of April 16, 2007, or such other compliance
date mandated by Rule 22c-2 of the Investment Company Act of 1940, as amended
(the "1940 Act"), whichever shall last occur, by and between VALIC Company I
(the "Fund") and American International Life Assurance Company of New York
("Intermediary"), on behalf of certain of its separate accounts.
WHEREAS, the Intermediary offers or otherwise makes available the
Funds to or for Contract owners of the Intermediary;
WHEREAS, pursuant to Rule 22c-2 under the 1940 Act, the Fund is
required to enter into a shareholder information agreement with every
intermediary who holds shares of the Funds in omnibus accounts and
submits orders directly to the Fund or the Fund's transfer agent or to a
registered clearing agency;
WHEREAS, this Agreement sets forth the terms and conditions for
information sharing for the Fund and Intermediary in accordance with
Rule 22c-2; and
WHEREAS, this Agreement shall inure to the benefit of and shall be
binding upon the undersigned and each such entity shall be either a Fund
or Intermediary for purposes of this Agreement (the Fund and the
Intermediary shall be collectively referred to herein as the "Parties"
and individually as a "Party");
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, which consideration is full and complete, the Fund and the
Intermediary hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the
following meanings, unless a different meaning is clearly required by the
contexts:
"Contracts" shall include any variable annuity contract or variable life
insurance policy issued by the Intermediary.
Intermediary shall mean (i) any broker, dealer, bank, or other entity that
holds securities of record issued by the Fund in nominee name; and (ii) an
insurance company separate account.
Fund Agent is either (i) an investment adviser to or administrator for the
Funds, (ii) the principal underwriter or distributor for the Funds or
(iii) the transfer agent for the Funds.
"Fund" includes the fund's principal underwriter and transfer agent. The
term not does include any "excepted funds" as defined in Rule 22c-2(b) under
the 1940 Act.
"Good Cause" means an instance where (i) a Fund has experienced unusual
levels or patterns of purchase or redemption activity and the Fund
reasonably believes such activity is an indication that trading activity in
an Account is inconsistent with Fund Policies, (ii) upon review of
Shareholder Information you reasonably believe you need additional
Shareholder Information to investigate compliance with Fund Policies, or
(iii) the Fund reasonably believes it needs additional Shareholder
Information for the purpose of a periodic compliance review or audit.
"Policies" shall mean policies and procedures adopted by the board of
directors/trustees of the Fund (which may be amended from time-to-time) for
the purpose of eliminating or reducing any dilution of the value of the
outstanding Shares issued by the Fund.
"Shares" shall mean the interests of Shareholders corresponding to the
redeemable securities of record issued by the Fund under the 1940 Act that
are held by the Intermediary.
"Shareholder" shall mean Contract owners of the Intermediary who maintains
an interest in an account with the Fund(s).
The term "written" includes electronic writings and facsimile transmissions.
2. Shareholder Information.
2.1. Agreement to Provide Information. Intermediary agrees to use reasonable
efforts to provide the Fund or Fund Agent, promptly upon request, the taxpayer
identification number ("TIN"), if known, or an equivalent identifying number,
of any or all Shareholder(s) of the account, and the amount, date and
transaction type (purchase, redemption, transfer, or exchange) of every
purchase, redemption, transfer, or exchange of Shares held through an account
maintained by the Intermediary during the period covered by the request.
Intermediary shall only be required to provide the information in regard to
transactions that are initiated or directed by the Shareholder, and shall not
be required to provide information in regard to transactions that are executed
automatically by the Intermediary pursuant to contractual or systematic
programs or enrollments, such transactions resulting from dollar cost averaging
programs, asset allocation programs, automatic rebalancing programs, periodic
deduction of charges or fees, redemptions pursuant to a systematic withdrawal
plan, or the payment of a death benefit from a Contract.
All Shareholder Information requests must be directed to the Intermediary's
representatives identified in Appendix A to this Agreement, and shall be sent
via overnight mail. The timing with which the Intermediary must provide the
requested Shareholder Information shall commence upon receipt of the written
request.
2.1.1. Period Covered by Request. Requests must set forth a specific
period to be examined, which shall not exceed 180 days from the date of the
request and which shall cover a period no earlier than 10 business days
preceding the date of the request. The Fund or Fund Agent may request
transaction information older than 180 days from the date of the request as
it deems necessary to investigate compliance with the Policies. Any such
information request must be reasonable as to the period covered, and Fund or
Fund Agent will not initiate any such request without a basis for concern.
2.1.1(a) Timing of Requests. Requests for Shareholder Information
shall be made no more frequently than semi-annually, unless Good Cause
justification is demonstrated by the Fund or Fund Agent that a more
frequent request is necessary to enforce its restrictions on market
timing and similar abusive transactions. If Good Cause is not
demonstrated by the Fund or Fund Agent, it shall pay the expenses
incurred by the Intermediary in complying with the request.
2.1.2. Form and Timing of Response. Intermediary agrees to make a
reasonable effort to transmit the requested information that is on its books
and records to the Fund or its designee promptly, but in any event not later
than 10 business days, after receipt of a request. If the requested
information is not on the Intermediary's books and records, Intermediary
agrees to use reasonable efforts to:
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(i) promptly obtain and transmit the requested information from
Shareholders who hold an account with an indirect intermediary;
(ii) arrange for the indirect intermediary to provide the requested
information to the Fund promptly; or
(iii) if the indirect intermediary refuses to provide the requested
information and the Fund or Fund Agent so directs in writing,
use reasonable efforts to block further purchases of Shares
from such indirect intermediary accountholder.
In such instance, Intermediary agrees to inform the Fund or Fund Agent
whether it plans to perform (i), (ii) or (iii). Responses required by this
paragraph must be communicated in writing and in a format mutually agreed
upon by the Parties. For purposes of this provision, an "indirect
intermediary" is an intermediary that trades through the first-tier
Intermediary.
Responses required by this paragraph must be communicated in writing and in
a format mutually agreed upon by the Parties.
2.1.3. Limitations on Use of Information. The Fund agrees not to use the
information received pursuant to this Agreement for any purpose other than
as necessary to comply with the provisions of Rule 22c-2, or for any purpose
not permitted under the privacy provisions of Title V of the
Xxxxx-Xxxxx-Xxxxxx Act (Public Law 106-102) and comparable state laws,
including but not limited to marketing or any other similar purpose without
the prior written consent of the Intermediary.
2.1.4. Indemnification. The Fund agrees to indemnify and hold harmless
Intermediary from any and all liability, claim, loss, demand, damages, costs
and expenses (including reasonable attorney's fees) arising in connection
with third party claim or action brought against Intermediary as a result of
any unauthorized disclosure of a Shareholder's TIN provided to the Fund in
response to a Shareholder Information request.
2.2. Agreement to Restrict Trading. Intermediary agrees to execute written
instructions from the Fund or Fund Agent to restrict or prohibit further
purchases or exchanges of Shares by a Shareholder that has been identified by
the Fund as having engaged in transactions of the Shares (directly or
indirectly through the Intermediary's account) that violate the Policies. Any
such restrictions or prohibitions shall only apply to transactions initiated or
directed by the Shareholder and shall not apply to non-initiated or directed
transactions as set forth in Section 2.1. All instructions to restrict trading
must be directed to the Intermediary's representatives identified in Appendix A.
The Fund will request a restriction on a Shareholder's ability to trade in
Shares only after the Fund has determined that the Shareholder has engaged in
transactions (directly or indirectly through the Intermediary's account) that
violate the Policies. Intermediary agrees to execute such instructions with
respect to the Shareholder, but only for the Contract(s) through which such
transactions in the Shares occurred. Instructions must be received by the Fund
at the following address, or such other address that the Fund may communicate
to Intermediary in writing from time to time:
VALIC Company I
The Variable Annuity Life Insurance Company
0000 Xxxxx Xxxxxxx X0-00
Xxxxxxx, Xxxxx 00000
ATTN: Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxxx
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2.2.1. Form of Instructions. Instructions must include the TIN, if known,
and the specific restriction(s) to be executed, including how long the
restriction(s) is(are) to remain in place. If the TIN is not known, the
instructions must include an equivalent identifying number of the
Shareholder(s) or account(s) or other agreed upon information to which the
instruction relates.
2.2.2. Timing of Response. Intermediary agrees to execute instructions as
soon as reasonably practicable, but not later than ten (10) business days
after receipt of the instructions by the Intermediary.
2.2.3. Confirmation by Intermediary. Intermediary must provide written
confirmation to the Fund that instructions have been executed. Intermediary
agrees to provide confirmation as soon as reasonably practicable, but not
later than fifteen (15) business days after the instructions have been
executed.
2.2.4. Force Majeure. Either Party is excused from performance and shall
not be liable for any delay in performance or non-performance, in whole or
in part, caused by the occurrence of any event or contingency beyond the
control of the Parties including, but not limited to, work stoppages, fires,
civil disobedience, riots, rebellions, natural disasters, acts of God, acts
of war or terrorism, actions or decrees of governmental bodies, and similar
occurrences. The Party who has been so affected shall promptly give written
notice to the other Party and shall use its best efforts to resume
performance. Upon receipt of such notice, all obligations under this
Agreement shall be immediately suspended for the duration of such Force
Majeure Event.
3. Best Efforts. Both Parties mutually agree to act in good faith utilizing
their best efforts to timely and effectively execution the shareholder
information sharing provisions of Rule 22c-2. Good faith and best efforts means
attempting to process all relevant requests in a timely manner, or in the event
such requests cannot be met within the time provisions of this Agreement, to
make best efforts to fulfill such requests as soon as reasonably practicable.
Also, if Intermediary is aware of a possible delay in the fulfillment of a
request, Intermediary will provide notice of the impending delay as soon as
possible after the impending delay is discovered.
4. Construction of the Agreement; Fund Participation Agreements. The Parties
have entered into one or more Fund Participation Agreements between or among
them for the purchase and redemption of Shares of the Funds by the
Intermediary. This Agreement is an addendum to those Fund Participation
Agreements. To the extent the terms of this Agreement conflict with the terms
of a Fund Participation Agreement, the terms of this Agreement shall control.
5. Termination. This Agreement will terminate upon the termination of the Fund
Participation Agreement(s).
6. Exhibits. Attached as Exhibit B to this Agreement is a copy of the Policies.
Attached as Exhibit C to this Agreement is a copy of the market timing policies
of the Intermediary.
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IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed
as of the date first above written.
THE FUND INTERMEDIARY:
VALIC COMPANY I AMERICAN INTERNATIONAL LIFE
VALIC COMPANY II ASSURANCE COMPANY OF NEW YORK,
ON BEHALF OF CERTAIN OF ITS
VARIABLE ACCOUNTS
By: By:
-------------------------------- --------------------------------
Name: Xxxxxx Xxxxxx Name:
--------------------------------
Date: President Date:
--------------------------------
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APPENDIX A
Representatives of the Intermediary
Xxxxxxxx Xxxxxx
Senior Counsel
AIG American General
0000 Xxxxx Xxxxxxx, X00-00
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
and to:
Xxxxxxx XxXxxxxx
Variable Products Accounting
0000-X Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
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EXHIBIT B
Market Timing Policies of the Fund
VALIC Company I
VALIC Company II
(collectively, the "Funds")
MARKET TIMING TRADING POLICIES AND PROCEDURES
Introduction
These policies and procedures are designed to ensure compliance with the
Funds' disclosed policies regarding "market timing," i.e., the excessive or
short-term trading of Fund shares that may be harmful to the Funds.
Procedures
The Funds are not intended for "market timing" or other forms of short-term
or excessive trading that may be detrimental to the Funds. Fund shares are
generally held through insurance company separate accounts and certain
employer-sponsored retirement plans. The insurance company separate accounts
and retirement plan sponsors do not transmit to the Funds' purchase and sales
transactions in a Portfolio's shares on an individual basis but in the
aggregate, thus the Funds have limited access to the information they would
need to identify possible market timing activity in these accounts. As such,
the Funds are dependent on the cooperation and policies of the participating
insurance companies or retirement plans to identify and address such issues.
There is no guarantee that the Funds will be able to detect market timing
activity or the participants engaged in such activity, or, if it is detected,
to prevent its recurrence. In situations in which the Funds become aware of
possible market timing activity, the Funds will notify the insurance company or
retirement plan in order to help facilitate the enforcement of such company's
or plan's market timing policies and procedures. The Funds reserve the right,
in their sole discretion and without prior notice, to reject or refuse purchase
orders received from insurance company separate accounts or plan sponsors,
whether directly or by transfer, including orders that have been accepted by a
financial intermediary, that the Funds determine not to be in the best interest
of the Funds or the Funds' participants.
Last Review Date: 02/08/06
B - 1
EXHIBIT C
Market Timing Policies of the Intermediary
Market Timing
The Policies are not designed for professional market timing organizations
or other entities or individuals using programmed and frequent transfers
involving large amounts. Market timing carries risks with it, including:
. dilution in the value of Fund shares underlying investment options of
other Policy owners;
. interference with the efficient management of the Fund's portfolio; and
. increased administrative costs.
We have policies and procedures that require us to monitor the Policies to
determine if a Policy owner requests:
. an exchange out of a variable investment option, other than the money
market investment option, within two calendar weeks of an earlier
exchange into that same variable investment option;
. an exchange into a variable investment option, other than the money
market investment option, within two calendar weeks of an earlier
exchange out of that same variable investment option; or
. exchanges into or out of the same variable investment option, other than
the money market investment option, more than twice in any one calendar
quarter.
If any of the above transactions occurs, we will suspend such Policy owner's
same day or overnight delivery transfer privileges (including website, e-mail
and facsimile communications) with prior notice to prevent market timing
efforts that could be harmful to other Policy owners or beneficiaries. Such
notice of suspension will take the form of either a letter mailed to your last
known address, or a telephone call from our Administrative Center to inform you
that effective immediately, your same day or overnight delivery transfer
privileges have been suspended. A Policy owner's first violation of this policy
will result in the suspension of Policy transfer privileges for ninety days. A
Policy owner's subsequent violation of this policy will result in the
suspension of Policy transfer privileges for six months. Transfers under dollar
cost averaging, automatic rebalancing or any other automatic transfer
arrangements to which we have agreed are not affected by these procedures.
The procedures above will be followed in all circumstances and we will treat
all Policy owners the same.
In addition, Policy owners incur a $25 charge for each transfer in excess of
12 each Policy year.
C - 1
Restrictions Initiated By the Funds
The Funds have policies and procedures restricting transfers into the Fund.
For this reason or for any other reason the Fund deems necessary, a Fund may
instruct us to reject a Policy owner's transfer request. Additionally, a Fund
may instruct us to restrict all purchases or transfers by a particular Policy
owner, whether into or out of the Fund. We will follow the Fund's instructions.
Please read the Funds' prospectuses and supplements for information about
restrictions that may be initiated by the Funds.
C - 2
