Exhibit 99.7(b)
AMENDMENT, dated June 1, 2001, to the Domestic and Global Custody
Agreement, dated March 25, 1996 ("Agreement"), between Mutual of America
Investment Corporation ("Customer"), having a place of business at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and The Chase Manhattan Bank ("Bank"), having
a place of business at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000.
Bank and Customer hereby agree as follows:
Section 1. Except as modified hereby, the Agreement is confirmed in all
respects. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.
Section 2. The Agreement is amended by deleting the Mutual Fund Rider
thereto and inserting, in lieu thereof, the following Rider:
I. Add the following after the first sentence of Section 3 of the
Agreement:
At the request of Customer, Bank may, but need not, add to Schedule A an
Eligible Foreign Custodian where Bank has not acted as Foreign Custody
Manager with respect to the selection thereof. Bank shall notify Customer
in the event that it elects to add any such entity.
II. Add the following language to the end of Section 3 of the Agreement:
(a) The term Subcustodian as used herein shall mean the following:
(i) a "U.S. Bank," which shall mean a U.S. bank as defined in rule
17f-5(a)(7); and
(ii) an "Eligible Foreign Custodian," which, as defined in rule
17f-5(a)(1) and (5) as the same may be amended from time to time,
shall mean (A) a banking institution or trust company, incorporated
or organized under the laws of a country other than the United
States, that is regulated as such by that country's government or an
agency thereof, and (B) a majority-owned direct or indirect
subsidiary of a U.S. Bank or bank holding company which subsidiary
is incorporated or organized under the laws of a country other than
the United States. In addition, an Eligible Foreign Custodian shall
also mean any other entity that shall have been so qualified by
exemptive order, rule or other appropriate action of the SEC.
(b) The term "securities depository" as used herein shall mean the
following when referring to a securities depository located:
(i) outside the U.S., an "Eligible Securities Depository" which, in
turn, shall have the same meaning as in rule 17f-7(b)(1)(i)-(vi) as
the same may be amended from time to time, or that has otherwise
been made exempt by an SEC exemptive order, rule other appropriate
SEC action.
(ii) in the U.S., a "securities depository" as defined in SEC rule
17f-4(a).
(c) For purposes of clarity, it is understood and agreed that the term
Subcustodian shall not include any securities depository. For
purposes of the provisions of the Agreement imposing liability on
Bank, the term Subcustodian shall not include any Eligible Foreign
Custodian as to which Bank has not acted as Foreign Custody Manager.
III. "Add new Section 16 to the Agreement as follows:
16. Compliance with Securities and Exchange Commission rule 17f-5 ("rule
17f-5").
(a) Customer's board of directors (hereinafter "Board") hereby delegates
to Bank, and Bank hereby accepts the delegation to it of, the obligation to
perform as Customer's "Foreign Custody Manager" (as that term is defined in rule
17f-5(a)(2)), including for the purposes of: (i) selecting Eligible Foreign
Custodians (as previously defined herein) to hold Customer's Foreign Assets (as
set forth in rule 17f-5(c)(1)); (ii) evaluating the contractual arrangements
with such Eligible Foreign Custodians (as set forth in rule 17f-5(c)(2)); and
(iii) monitoring such foreign custody arrangements (as set forth in rule
17f-5(c)(3)).
(b) In connection with the foregoing, Bank shall:
(i) provide written reports notifying Customer's Board of the placement
of Foreign Assets with particular Eligible Foreign Custodians and of
any material change in the arrangements with such Eligible Foreign
Custodians, with such reports to be provided to Customer's Board at
such times as the Board deems reasonable and appropriate based on
the circumstances of Customer's foreign custody arrangements but
until further notice from Customer requesting a different schedule,
such reports shall be provided not less than quarterly in summary
form, with a more detailed report annually;
(ii) exercise such reasonable care, prudence and diligence in performing
as Customer's Foreign Custody Manager as a person having
responsibility for the safekeeping of Foreign Assets would exercise;
(iii) in selecting an Eligible Foreign Custodian, first have determined
that Foreign Assets placed and maintained in the safekeeping of such
Eligible Foreign Custodian shall be subject to reasonable care,
based on the standards applicable to custodians in the relevant
market, after having considered all factors relevant to the
safekeeping of such Assets, including, without limitation, those
factors set forth in rule 17f-5(c)(1)(i)-(iv);
(iv) determine that the written contract with the Eligible Foreign
Custodian requires that the Eligible Foreign Custodian will provide
reasonable care for Foreign Assets based on the standards applicable
to custodians in the relevant market as provided in rule
17f-5(c)(2); and
(v) have established a system to monitor the continued appropriateness
of maintaining Foreign Assets with particular Eligible Foreign
Custodians and performance of the governing contractual
arrangements; it being understood, however, that in the event that
Bank shall have determined that the existing Eligible Foreign
Custodian in a given country would no longer afford Foreign Assets
reasonable care and that no other Eligible Foreign Custodian in that
country would afford reasonable care, Bank shall promptly so advise
Customer and
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shall then act in accordance with the Instructions of Customer with
respect to the disposition of the affected Foreign Assets.
Subject to (b)(i)-(v) above, Bank is hereby authorized to place and maintain
Foreign Assets on behalf of Customer with Eligible Foreign Custodians pursuant
to a written contract deemed appropriate by Bank.
(c) Except as expressly provided herein and in Section 17 hereof, Customer
shall be solely responsible to assure that the maintenance of Foreign Assets
hereunder complies with the rules, regulations, interpretations and exemptive
orders promulgated by or under the authority of the SEC.
(d) Bank represents to Customer that it is a U.S. Bank as defined in rule
17f-5(a)(7). Customer represents to Bank that: (i) the Assets being placed and
maintained in Bank's custody are subject to the Investment Company Act of 1940,
as amended (the "1940 Act") as the same may be amended from time to time; (ii)
its Board has determined that it is reasonable to rely on Bank to perform as
Customer's Foreign Custody Manager; and (iii) its Board or its investment
adviser shall have determined that Customer may maintain Foreign Assets in each
country in which Customer's Foreign Assets shall be held hereunder and
determined to accept the risks arising therefrom (including, but not limited to,
a country's financial infrastructure, prevailing custody and settlement
practices, laws applicable to the safekeeping and recovery of Foreign Assets
held in custody, and the likelihood of nationalization, currency controls and
the like) (collectively ("Country Risk")). Nothing contained herein shall
require Bank to make any selection on behalf of Customer that would entail
consideration of Country Risk and, except as may be provided in (e) below, to
engage in any monitoring of Country Risk.
(e) Bank shall provide to Customer such information relating to Country
Risk as is specified in Appendix 1-A hereto. Customer hereby acknowledges that:
(i) such information is solely designed to inform Customer of market conditions
and procedures and is not intended as a recommendation to invest or not invest
in particular markets; and (ii) Bank has gathered the information from sources
it considers reliable, but that Bank shall have no responsibility for
inaccuracies or incomplete information.
IV. Add the following language to the end of the first sentence of Section
4(d) of the Agreement: "or, in the case of cash deposits, except for liens or
rights in favor of creditors of the Subcustodian arising under bankruptcy,
insolvency or similar laws."
V. Add a new Section 17 to the Agreement as follows:
17. Compliance with Securities and Exchange Commission rule 17f-7 ("rule
17f-7").
(a) Bank shall, for consideration by Customer or its adviser, provide an
analysis in accordance with rule 17f-7(a)(1)(i)(A) of the custody risks
associated with maintaining Customer's Foreign Assets with each Eligible
Securities Depository used by Bank as of the date hereof (or, in the case of an
Eligible Securities Depository not used by Bank as of the date hereof, prior to
the initial placement of Customer's Foreign Assets at such Depository) and at
which any Foreign Assets of Customer are held or are expected to be held. The
foregoing analysis will be provided to Customer or its adviser at Bank's
Website. In connection with the foregoing, Customer or its adviser shall notify
Bank of any Eligible Securities Depositories at which it does not choose to have
its Foreign Assets held. Bank
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shall monitor the custody risks associated with maintaining Customer's Foreign
Assets at each such Eligible Securities Depository on a continuing basis and
shall promptly notify Customer or its adviser of any material changes in such
risks.
(b) Bank shall exercise reasonable care, prudence and diligence in
performing the requirements set forth in Section 17(a) above.
(c) Based on the information available to it in the exercise of diligence,
Bank shall determine the eligibility under rule 17f-7 of each depository before
including it on Appendix 1-B hereto and shall promptly advise Customer or its
adviser if any Eligible Securities Depository ceases to be eligible. (Eligible
Securities Depositories used by Bank as of the date hereof are set forth in
Appendix 1-B hereto, and as the same may be amended on notice to Customer or its
adviser from time to time.)
(d) Customer instructs Bank to deliver the analyses and advice provided
for in Section 17(a) and (c) above to Customer's adviser until Customer delivers
Bank written notice otherwise.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
MUTUAL OF AMERICA THE CHASE MANHATTAN BANK
INVESTMENT CORPORATION
By: ____________________________ By: ____________________________
Xxxxxxx X. Xxxxxxxxx Name:
President and CEO Title:
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Appendix 1-A
Information Regarding Country Risk
1. To aid Customer in its determinations regarding Country Risk, Bank
shall furnish annually and upon the initial placing of Foreign Assets into a
country the following information (check items applicable):
A Opinions of local counsel concerning:
___ i. Whether applicable foreign law would restrict the access afforded
Customer's independent public accountants to books and records kept
by an Eligible Foreign Custodian located in that country.
___ ii. Whether applicable foreign law would restrict the Customer's ability
to recover its assets in the event of the bankruptcy of an Eligible
Foreign Custodian located in that country.
___ iii. Whether applicable foreign law would restrict the Customer's ability
to recover assets that are lost while under the control of an
Eligible Foreign Custodian located in the country.
B. Written information concerning:
___ i. The likelihood of expropriation, nationalization, freezes, or
confiscation of Customer's assets.
___ ii. Whether difficulties in converting Customer's cash and cash
equivalents to U.S. dollars are reasonably foreseeable.
C. A market report with respect to the following topics:
(i) securities regulatory environment, (ii) foreign ownership
restrictions, (iii) foreign exchange, (iv) securities settlement and
registration, (v) taxation, (vi) market settlement risk, (vii) Eligible
Securities Depositories (including Depository evaluation), if any.
2. Bank shall furnish the following additional information:
Market flashes, including with respect to changes in the information in
market reports.
Appendix 1-B
ELIGIBLE SECURITIES DEPOSITORIES
