RED FLAGS SERVICES AMENDMENT
EX-99.28(h)(viii)
RED FLAGS SERVICES AMENDMENT
This Red Flags Services Amendment (“Amendment”) is being entered into as of January 1, 2011,
by and between BNY Mellon Investment Servicing (US) Inc. (f/k/a PFPC Inc. and PNC Global Investment
Servicing (U.S.) Inc.) (“BNYM”) and Driehaus Mutual Funds (“Fund”) and amends the Transfer Agency
Services Agreement dated as of September 25, 1996 between BNYM and the Fund pursuant to which BNYM
provides transfer agency services to the Fund, as amended to date (“Existing Agreement”).
IN CONSIDERATION of the mutual covenants made herein and other good and valuable
consideration, receipt of which is hereby acknowledged, the parties, intending to be legally bound,
hereby agree to amend the Existing Agreement as follows:
1. Modifications to Existing Agreement. The Existing Agreement shall be modified as
follows:
(a) The phrase “PFPC Inc.” shall be replaced each place it appears with “BNY Mellon Investment
Servicing (US) Inc.” and the term “PFPC” shall be replaced each place it appears with “BNYM”.
(b) A new Section 22 which reads in its entirety as follows shall be added:
22. Red Flag Services (the “Red Flag Section”).
(a) BNYM agrees to provide the Fund with the “Red Flag Services”, which is hereby defined to
mean the following services:
(i) BNYM will maintain written controls reasonably designed to detect the occurrence of Red
Flags (as defined below) in connection with (i) account opening and other account activities
and transactions conducted directly through BNYM with respect to Direct Accounts (as defined
below), and (ii) transactions effected directly through BNYM by Covered Persons (as defined
below) in Covered Accounts (as defined below). Such controls, as they may be revised from
time to time hereunder, are referred to herein as the “Controls”. Solely for purposes of
the Red Flag Section, the capitalized terms below will have the respective meaning ascribed
to each:
(A) “Red Flag” means a pattern, practice, or specific activity or a combination of
patterns, practices or specific activities which may indicate the possible existence of
Identity Theft (as defined below) affecting a Registered Owner (as defined below) or a
Covered Person.
(B) “Identity Theft” means a fraud committed or attempted using the identifying
information of another person without authority.
(C) “Registered Owner” means a natural person who is the owner of record of a Direct
Account on the books and records of the Fund maintained by BNYM as registrar of the Fund
(the “Fund Registry”).
(D) “Covered Person” means a natural person who is the owner of record of a Covered
Account on the Fund Registry.
(E) “Direct Account” means an account holding Fund shares established directly with and
through BNYM by a natural person as a registered account on the Fund Registry and through
which the owner of record has the ability to directly conduct account and transactional
activity with and through BNYM.
(F) “Covered Account” means an account holding Fund shares established by a financial
intermediary for a natural person as the owner of record on the Fund Registry and through
which
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such owner of record has the ability to conduct transactions in Fund shares directly with
and through BNYM.
(ii) BNYM will provide the Fund with a printed copy of or Internet viewing access to the
Controls.
(iii) BNYM will notify the Fund of Red Flags which it detects and reasonably determines to
indicate a significant risk of Identity Theft to a Registered Owner or Covered Person
(“Possible Identity Theft”) and assist the Fund in determining the appropriate response of
the Fund to the Possible Identity Theft.
(iv) BNYM will (A) engage an independent auditing firm or other similar firm of independent
examiners to conduct an annual testing of the Controls and issue a report on the results of
the testing (the “Audit Report”), and (B) furnish a copy of the Audit Report to the Fund;
and
(v) Upon Fund request, issue a certification in a form determined to be appropriate by BNYM
in its reasonable discretion, certifying to BNYM’s continuing compliance with the Controls
after the date of the most recent Audit Report.
(b) The Fund agrees it is responsible for complying with and determining the applicability to
the Fund of Section 114 of the Fair and Accurate Credit Transaction Act of 2003 and regulations
promulgated thereunder by the Federal Trade Commission (the “Red Flag Requirements”), for
determining the extent to which the Red Flag Services assist the Fund in complying with the Red
Flag Requirements, and for furnishing any supplementation or augmentation to the Red Flag
Services it determines to be appropriate, and that BNYM has given no advice and makes no
representations with respect to such matters. This Red Flag Section shall not be interpreted in
any manner which imposes a duty on BNYM to act on behalf of the Fund or otherwise, including any
duty to take any action upon the occurrence of a Red Flag, other than as expressly provided for
in this Red Flag Section. The Controls and the Red Flag Services may be changed at any time and
from time to time by BNYM in its reasonable sole discretion to include commercially reasonable
provisions appropriate to the Red Flag Requirements, as they may be constituted from time to
time. The Fund shall be obligated to pay, and BNYM shall be entitled to receive, the fee for
Red Flag Services as established by BNYM from time to time by written notice. Other than the
initially proposed annual fee which shall be payable as of the commencement of the Red Flags
Services, the Fund shall be obligated to pay any revised fee commencing thirty (30) days after
the Fund’s receipt of such written notice. The Fund’s sole remedy in the event it does not
agree to a revised fee is to terminate the Red Flag Services.
(c) Notwithstanding any other provision of the Existing Agreement:
(i) BNYM’s cumulative, aggregate liability to the Fund for any and all losses, claims,
suits, controversies, breaches or damages (“claims”) for any cause whatsoever related to the
terms of this Amendment and regardless of the form of action or legal theory shall not
exceed the greater of (i) $25,000, or (ii) fees received by BNYM for the Red Flag Services
during the six (6) months immediately prior to the date of the last such claim, up to a
maximum of $50,000; and
(ii) In the event of a material breach of this Red Flag Section by BNYM, the Fund shall be
entitled exclusively to terminate the Red Flag Services by complying with the notice and
cure period provisions in the Existing Agreement applicable to a material breach of the
Existing Agreement, but shall not be entitled to terminate the Existing Agreement. For
purposes of clarification: The foregoing provision is not intended to restrict, modify or
abrogate any remedy available to the Fund for a breach of the Red Flags Section by BNYM
other than the termination remedy.
2. Remainder of Existing Agreement; Governing Law. Except as specifically modified by this
Amendment, all terms and conditions of the Existing Agreement shall remain in full force and
effect. The governing law of the Existing Agreement shall be the governing law of this Amendment.
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3. Entire Agreement; Facsimile Signatures; Counterparts. This Amendment constitutes the
final, complete, exclusive and fully integrated record of the agreement of the parties with respect
to the subject matter herein and the amendment of the Existing Agreement with respect to such
subject matter. This Amendment may be executed in one or more counterparts; such execution of
counterparts may occur by manual signature, facsimile signature, manual signature transmitted by
means of facsimile transmission or manual signature contained in an imaged document attached to an
email transmission; and each such counterpart executed in accordance with the foregoing shall be
deemed an original, with all such counterparts together constituting one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly
authorized officers, as of the day and year first above written.
BNY Mellon Investment Servicing (US) Inc.
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Driehaus Mutual Funds | ||
By: /s/ Xxxxxxx XxXxxxxx
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By: /s/ Xxxxxx X. Xxxxxx | ||
Title: Executive Vice President,
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Title: Senior Vice President | ||
Senior Managing Director |
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