Exhibit 23(h)(1)(ii)
FORM OF AMENDMENT TO
TRANSFER AGENCY AGREEMENT
AMENDMENT made as of this 24th day of July, 2002, between PROFUNDS (the
"Trust"), a Delaware business trust having its principal place of business at
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000 Xxxxxxxx, Xxxxxxxx 00000, and BISYS FUND
SERVICES, INC. ("BISYS"), a Delaware corporation having its principal place of
business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, to that certain Transfer
Agency Agreement between the Trust and BISYS, under which BISYS performs
transfer agency services for the Trust (as amended and in effect on the date
hereof, the "Agreement").
WHEREAS, under the Agreement BISYS is designated as the Trust's transfer
agent and performs the transfer agency services for the Trust that are
enumerated in the Agreement or a Schedule thereto;
WHEREAS, the Agreement provides that BISYS shall perform such additional
services as are mutually agreed upon and provided in an amendment to the
Agreement or its schedules, in consideration of such fees as the parties may
agree upon;
WHEREAS, the Trust desires that BISYS perform certain additional services
for the Trust related to anti-money laundering and fraud prevention;
WHEREAS, BISYS is willing to perform the services enumerated in this
Amendment on the terms and conditions set forth in this Amendment (the "AML
Services"); and
WHEREAS, BISYS and Trust wish to enter into this Amendment to the Agreement
in order to set forth the terms under which BISYS will perform the AML Services
enumerated herein on behalf of the Trust, and to supplement and clarify certain
provisions of the Agreement.
NOW, THEREFORE, in consideration of the covenants herein contained, the
Trust and BISYS hereby agree as follows:
1. Compliance with Laws / Delegation to BISYS.
The Trust acknowledges that it is a financial institution subject to the
law entitled Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism ("U.S.A. Patriot") Act of 2001 and
the Bank Secrecy Act (collectively, the "AML Acts") and shall comply with the
AML Acts and applicable regulations adopted thereunder (collectively, the
"Applicable AML Laws") in all relevant respects, subject to the delegation of
certain responsibilities to BISYS, as provided in the next paragraph below.
The Trust hereby delegates to BISYS the performance, on behalf of the
Trust, of the AML Services set forth in Schedule B to this Amendment as concerns
the shareholder accounts maintained by BISYS pursuant to the Agreement
(including direct accounts; accounts maintained through FUND/SERV and
Networking, to the extent provided below; and omnibus accounts, to the extent
provided below). BISYS agrees to the foregoing delegation and agrees to
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perform the delegated services in accordance with the anti-money laundering
program that has been adopted by the Trust (the "AML Program"). In connection
therewith, BISYS agrees to maintain policies and procedures, and related
internal controls, that are consistent with the Trust's AML Program and the
requirement that the Trust employ procedures reasonably designed to achieve
compliance with the Applicable AML Laws, including the requirement to have
policies and procedures that can be reasonably expected to detect and cause the
reporting of transactions under Section 5318 of the Bank Secrecy Act. BISYS'
obligations under this delegation shall be subject to Sections 5 and 6 of this
Amendment, which require that the AML Program adopted by the Trust and any
material amendments thereto be submitted to BISYS.
The Trust agrees and acknowledges that, notwithstanding the delegation
provided for in the foregoing paragraph, the Trust maintains full responsibility
for ensuring that its AML Program is, and shall continue to be, reasonably
designed to ensure compliance with the Applicable AML Laws, in light of the
particular business of the Trust, taking into account factors such as its size,
location, activities and risks or vulnerabilities to money laundering.
In connection with the foregoing delegation, the Trust also
acknowledges that the performance of the AML Services enumerated in Schedule B
involves the exercise of discretion, which in certain circumstances may result
in consequences to the Trust and its shareholders (such as in the case of the
reporting of suspicious activities and the freezing of shareholder accounts). In
this regard, (i) under circumstances in which the AML Program authorizes the
taking of certain actions, BISYS is granted the discretion to take any such
action as may be authorized, and consultation with the Trust shall not be
required in connection therewith unless expressly required by the AML Program,
and (ii) the Trust instructs BISYS that it may avail the Trust of any safe
harbor from civil liability that may be available under Applicable AML Laws for
making a disclosure or filing a report thereunder.
As concerns Networking Level III accounts and omnibus accounts, the
AML Services performed by BISYS are subject to a more limited scope, as
contemplated under the interim final rule of the Department of the Treasury, 31
CFR 103, effective April 24, 2002 (the "Interim Final Rule") and the performance
by the Trust of the risk-based evaluation of entities holding such accounts, as
contemplated under the Interim Final Rule. The foregoing reference to the
Interim Final Rule shall be deemed to include laws and regulations adopted
subsequent to the Interim Final Rule, if and to the extent consistent therewith.
The provisions of the Agreement concerning recordkeeping and
confidentiality are subject to the provisions of this Section.
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2. Reimbursement of Expenses and Miscellaneous Service Fees.
In addition to all fees, expenses and miscellaneous fees or charges
provided for under the Agreement, BISYS shall be entitled to receive from the
Trust the amounts set forth on Exhibit C hereto, reflecting the amounts charged
by BISYS for the performance of delegated services under this Amendment with
respect to the Trust's AML Program.
3. Bank Accounts.
BISYS is hereby granted such power and authority as may be necessary
to establish one or more bank accounts for the Trust with such bank or banks as
are selected or approved by the Trust, as may be necessary or appropriate from
time to time in connection with the services performed by BISYS. The Trust shall
be deemed to be the customer of such Bank or Banks for all purposes in
connection with such accounts. To the extent that the performance of such
services hereunder shall require BISYS to disburse amounts from such accounts in
payment of dividends, redemption proceeds or for other purposes, the Trust shall
provide such bank or banks with all instructions and authorizations necessary
for BISYS to effect such disbursements.
4. Instructions/Procedures.
The Trust acknowledges and agrees that deviations from BISYS' written
transfer agent compliance procedures may involve a substantial risk of loss. In
the event an authorized representative of the Trust requests that an exception
be made from any written compliance or transfer agency procedures adopted by
BISYS, or adopted by the Trust and approved by BISYS (including any requirements
of the Trust's AML Program), BISYS may in its sole discretion determine whether
to permit such exception. In the event BISYS determines to permit such
exception, the same shall become effective when set forth in a written
instrument executed by an authorized representative of the Trust (other than an
employee of BISYS) and delivered to BISYS (an "Exception"); provided that an
Exception concerning the requirements of the Trust's AML Program shall be
authorized by the Trust's anti-money laundering compliance officer ("AML
Compliance Officer"). An Exception shall be deemed to remain effective until the
relevant instrument expires according to its terms (or if no expiration date is
stated, until BISYS receives written notice from the Trust that such instrument
has been terminated and the Exception is no longer in effect). Notwithstanding
any provision of the Agreement or this Amendment that expressly or by
implication provides to the contrary, as long as BISYS acts in good faith and
without willful misconduct, BISYS shall have no liability for any loss,
liability, expenses or damages to the Trust resulting from the Exception, and
the Trust shall indemnify BISYS and hold BISYS harmless from any loss,
liability, expenses (including reasonable attorneys fees) and damages resulting
to BISYS therefrom.
The Trust acknowledges receipt of a copy of BISYS' policy related to
the acceptance of trades for prior day processing (the "BISYS As-Of Trading
Policy"). BISYS may amend the BISYS As-of Trading Policy from time to time in
its sole discretion. A copy of any such amendments shall be delivered to the
Trust upon request. BISYS may apply the BISYS As-Of Trading Policy whenever
applicable, unless BISYS agrees in writing to process trades according to such
other as-of trading policy as may be adopted by the Trust and furnished to BISYS
by the Trust.
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The parties may amend any procedures adopted, approved or set forth
under the Agreement by mutual written agreement as may be appropriate or
practical under the circumstances. BISYS may conclusively assume that any
special procedure which has been approved by an executive officer of the Trust
(other than an officer or employee of BISYS) does not conflict with or violate
any requirements of the Trust's Declaration of Trust, By-Laws or then-current
prospectuses, or any rule, regulation or requirement of any regulatory body.
5. Representations and Warranties.
The Trust represents and warrants that (a) the Trust has adopted the
written AML Program that has been submitted to BISYS pursuant to Section 6, and
has appointed the Trust's AML Compliance Officer, who is, or who will be
appointed at the next regularly scheduled meeting of the Board of Trustees of
the Trust (the "Board"), an officer of the Trust; (b) the AML Program and the
designation of the AML Officer have been approved by the Board; (c) the
delegation of certain services thereunder to BISYS, as provided in Section 1 of
this Amendment, has been approved by the Board; and (d) the Trust will submit
any material amendments to the AML Program to BISYS for BISYS' review. Any
amendment that would have a material impact upon the AML Services to be rendered
by BISYS or the responsibilities of BISYS shall be subject to approval by BISYS
prior to adoption. The Trust's AML Compliance Officer need not be an officer of
the Trust if not required by applicable laws and regulations.
BISYS represents and warrants to the Trust that it has adopted and
will maintain a written program concerning the anti-money laundering services it
provides to its various clients, and that its policies and procedures are
reasonably adequate for it to provide the AML Services and comply with its
obligations under this Amendment.
6. Information to be Furnished by the Trust.
The Trust has furnished to BISYS the following, as amended and current
as of the date of this Amendment:
(a) A list of all officers of the Trust, with the Trust's AML
Compliance Officer included among the officers therein, and any
other persons (who may be associated with the Trust or its
investment advisor), together with specimen signatures of those
officers and other persons who (except as otherwise provided
herein to the contrary) shall be authorized to instruct BISYS in
all matters.
(b) A copy of the Trust's written AML Program, as defined in Section
1 of this Amendment, including related Policies and Procedures.
7. Information Furnished by BISYS.
BISYS has furnished to the Trust the following:
(a) The currently effective BISYS "As-of" Trading Policy.
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(b) The written program concerning anti-money laundering services
rendered by BISYS to its various clients.
8. Privacy.
Nonpublic personal financial information relating to consumers or customers
of the Trust provided by, or at the direction of the Trust to BISYS, or
collected or retained by BISYS in the course of performing its transfer agency
duties, shall be considered confidential information. BISYS shall not give, sell
or in any way transfer such confidential information to any person or entity,
other than affiliates of BISYS except at the direction of the Trust or as
required or permitted by law (including Applicable AML Laws). BISYS represents,
warrants and agrees that it has in place and will maintain physical, electronic
and procedural safeguards reasonably designed to protect the security,
confidentiality and integrity of, and to prevent unauthorized access to or use
of records and information relating to consumers or customers of the Trust. The
Trust represents to BISYS that it has adopted a Statement of its privacy
policies and practices as required by the Securities and Exchange Commission's
Regulation S-P and agrees to provide BISYS with a copy of that statement
annually.
9. Access to be Provided.
BISYS shall grant reasonable access to each of the Trust, the AML
Compliance Officer, and regulators having jurisdiction over the Trust, to the
books and records maintained by BISYS as the same relates to the services
performed hereunder on behalf of the Trust. Records may be edited or redacted to
maintain confidentiality of materials related to other clients of BISYS. BISYS
shall make its relevant personnel available to meet with the Board concerning
the AML Services at least annually or at such other intervals as may be
reasonably necessary or appropriate.
10. Reports to be Furnished to the Trust.
At least quarterly, BISYS shall provide a report to the Trust
containing the information listed on Schedule D hereto.
11. Miscellaneous.
(a) This Amendment supplements and amends the Agreement. The
provisions set forth in this Amendment supersede all prior
negotiations, understandings and agreements bearing upon the
subject matter covered herein, including any conflicting
provisions of the Agreement or any provisions of the Agreement
that directly cover or indirectly bear upon matters covered under
this Amendment.
(b) Each reference to the Agreement in the Agreement (as it existed
prior to this Amendment) and in every other agreement, contract
or instrument to which the parties are bound, shall hereafter be
construed as a reference to the Agreement as amended by this
Amendment. Except as provided in this Amendment, the provisions
of the Agreement remain in full force and effect (including,
without limitation, the term of the Agreement). No
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amendment or modification to this Amendment shall be valid unless
made in writing and executed by both parties hereto.
(c) Paragraph headings in this Amendment are included for convenience
only and are not to be used to construe or interpret this
Amendment.
(d) This Amendment may be executed in counterparts, each of which
shall be an original but all of which, taken together, shall
constitute one and the same agreement.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed all as of the day and year first above written.
PROFUNDS
By:
-----------------------------------
Xxxxxxx X. Xxxxx
Chairman and President
BISYS FUND SERVICES, INC.
By:
-----------------------------------
Xxxxxxx X. Xxxxx
President
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SCHEDULE B
TO THE AMENDMENT TO THE
TRANSFER AGENCY AGREEMENT
BETWEEN
PROFUNDS
AND
BISYS FUND SERVICES, INC.
SERVICES
a. Verify shareholder identity upon opening new accounts.
b. Monitor, identify and report shareholder transactions and identify and
report suspicious activities that are required to be so identified and
reported, and provide other required reports to the Securities and
Exchange Commission, the U.S. Treasury Department, the Internal
Revenue Service or each agency's designated agent, in each case
consistent with the Trust's AML Program.
c. Place holds on transactions in shareholder accounts or freeze assets
in shareholder accounts, as provided in the Trust's AML Program.
d. Create documentation to provide a basis for law enforcement
authorities to trace illicit funds.
e. Maintain all records or other documentation related to shareholder
accounts and transactions therein that are required to be prepared and
maintained pursuant to the Trust's AML Program, and make the same
available for inspection by (i) the Trust's AML Compliance Officer,
(ii) any auditor of the Trust's AML Program or related procedures,
policies or controls that has been designated by the Trust in writing,
or (iii) regulatory or law enforcement authorities, and otherwise make
said records or other documents available at the direction of the
Trust's AML Compliance Officer.
f. Arrange for periodic reviews, at least annually, to be performed by
internal auditors or other auditors chosen by BISYS concerning the
BISYS operations related to the AML Services.
g. Perform such other related services as are required by the AML
Program.
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SCHEDULE C
TO THE AMENDMENT TO THE
TRANSFER AGENCY AGREEMENT
BETWEEN
PROFUNDS
AND
BISYS FUND SERVICES, INC.
CHARGES FOR THE SERVICES SET FORTH
UNDER SCHEDULE B OF THIS AMENDMENT
One-time set up program cost $ 0.00
Annual program servicing $ 7,000.00
(to be billed in equal monthly amounts of $583.33)
Systems costs
Early Warning annual fee $ 575.00
Early Warning per record cost $ 0.17
for new account* registration review - does not apply to Network Level
III accounts
Equifax - per request cost $ 5.00
* Changes to account registration information or other
account-related information may result in characterizing the account as
a "new account" for these purposes.
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SCHEDULE D
TO THE AMENDMENT TO THE
TRANSFER AGENCY AGREEMENT
BETWEEN
PROFUNDS
AND
BISYS FUND SERVICES, INC.
REPORTS
Following each quarterly period, BISYS will provide a report to the following
effect pertaining to the AML Services rendered by BISYS hereunder during such
quarterly period:
.. performed good order review for all new and reregistered accounts;
.. performed acceptance review for all monetary instruments received;
.. administered signature guarantee policy in accordance with prospectus
requirements;
.. administered escrow hold policy in accordance with prospectus
requirements;
.. verified customer address changes;
.. verified customer identification for all new accounts and all name changes
on existing accounts;
.. monitored all purchase transactions made with cash equivalents totaling in
excess of $10,000, resulting in the filing of [x] Form 8300 reports during
the period. The Fund does not accept cash or currency;
.. monitored all accounts for suspicious activity resulting in the filing of
[x] Form SAR reports during the period;
.. reviewed shareholder names against lists of suspected terrorist and
terrorist organizations supplied by various governmental organizations,
such as the Office of Foreign Asset Control resulting in the freezing and
reporting of [x] accounts during the period;
.. created the documentation necessary to provide a basis for law enforcement
authorities to trace illicit funds;
.. maintained all records and other documentation related to shareholder
accounts and transactions required to be prepared and maintained pursuant
to the Fund's anti-money laundering program for all BISYS transfer agent
services;
[The following items will be provided if the Trust falls under the related USA
PATRIOT Act provisions:]
.. performed the required due diligence to help prevent the opening of any
accounts for foreign shell banks during the period either directly or
through correspondent accounts; and
.. performed required due diligence on any new correspondent accounts opened
during the period.
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