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EXHIBIT 5(j)
FOREIGN COUNTRY SELECTION
AND MANDATORY SECURITIES DEPOSITORY RESPONSIBILITIES
DELEGATION AGREEMENT
This FOREIGN COUNTRY SELECTION AND MANDATORY SECURITIES DEPOSITORY
RESPONSIBILITIES DELEGATION AGREEMENT (the "Agreement") is made this 9th day of
September, 1998 by and between A I M ADVISORS, INC., a Delaware corporation
("AIM") and each registered investment company (the "Investment Companies") and
its respective portfolios (the "Funds") listed on the signature page hereof.
W I T N E S S E T H:
WHEREAS, AIM has agreed to accept responsibility for selecting and
monitoring relationships with compulsory depositories; and
WHEREAS, AIM has agreed to accept responsibility for the selection of
foreign countries in which the Funds may invest;
NOW, THEREFORE, AIM hereby agrees to exercise reasonable care, prudence
and diligence such as a person having safekeeping of fund assets would exercise
in performing the following responsibilities:
1. DEFINITIONS.
A. "FOREIGN ASSETS" means any of a Fund's investments (including
foreign currencies) for which the primary market is outside
the United States, currency contracts that are settled outside
the United States, and such cash and cash equivalents as are
reasonably necessary to effect the Fund's transactions in such
investments.
B. "FOREIGN CUSTODY MANAGER" means State Street Bank and Trust
Company.
C. "MANDATORY SECURITIES DEPOSITORY" means a foreign securities
depository or clearing agency that, either as a legal or
practical matter, must be used if a Fund determines to place
Foreign Assets in a country outside the United States (i)
because required by law or regulation; (ii) because securities
cannot be withdrawn from such foreign securities depository or
clearing agency; or (iii) because maintaining or effecting
trades in securities outside the foreign securities depository
or clearing agency is not consistent with prevailing or
developing custodial or market practices.
D. "PREVAILING COUNTRY RISKS" 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 Mandatory Securities
Depositories operating in the country); prevailing or
developing custody and settlement practices; laws and
regulations applicable to the safekeeping and recovery of
Foreign Assets held in custody in that country; and factors
comprising "prevailing country risk", including the effects of
foreign law on the safekeeping of Fund assets, the likelihood
of expropriation, nationalization, freezing or confiscation of
the Fund's assets and any reasonably foreseeable difficulties
in repatriating the Fund's assets.
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E. "SECURITIES DEPOSITORY" means a system for the central
handling of securities where all securities of any particular
class or series of any issuer deposited within the system are
treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of the securities.
A Securities Depository includes a Mandatory Securities
Depository.
2. FOREIGN COUNTRY SELECTION. Selection of foreign countries in which
a Fund invests. AIM may determine that an issuer is located in a
particular country based on various factors, including the following:
(i) the issuer is organized under the laws of and maintains a principal
office in that country; (ii) the issuer derives 50% or more of its
total revenues from business in that country; or (iii) the primary
market for the issuer's securities is in that country. In addition, in
determining whether to maintain assets of a Fund in a foreign country,
AIM shall consider Prevailing Country Risks. AIM may rely on
information provided by computerized information services, such as
Bloomberg terminals, in making the foregoing determinations. AIM may
also rely on information and opinions provided by the Foreign Custody
Manager in making such determinations. AIM may add or delete foreign
countries to or from the list of approved foreign countries from time
to time, as determined by the AIM employees who are portfolio managers
of the Funds.
3. MANDATORY SECURITIES DEPOSITORIES SELECTION. Selection of Mandatory
Securities Depositories for the placement and maintenance of Foreign
Assets. AIM shall not make any such selection unless and until it has
complied with the terms of paragraphs 4 through 6 of this Agreement.
4. DETERMINATION OF REASONABLE CARE. Determinations by AIM that the
Foreign Assets will be subject to reasonable care, based on the
standards applicable to custodians in the relevant market, if such
Assets are held with a Mandatory Securities Depository. In making such
determinations, AIM shall consider all factors relevant to the
safekeeping of such Foreign Assets, including without limitation:
A. The practices, procedures, and internal controls of the
Mandatory Securities Depository, including, but not limited
to, the physical protections available for certificated
securities (if applicable), the method of keeping custodial
records, and the security and data protection practices;
B. Whether the Mandatory Securities Depository has the requisite
financial strength to provide reasonable care for the Foreign
Assets;
C. The general reputation and standing of the Mandatory
Securities Depository and its operating history and number
of participants; and
D. Whether the Fund will have jurisdiction over and be able to
enforce judgments against the Mandatory Securities Depository,
such as by virtue of the existence of any offices of the
Mandatory Securities Depository in the United States or the
consent by the Mandatory Securities Depository to service of
process in the United States.
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5. FOREIGN CUSTODY ARRANGEMENTS. Implementation of the Funds' foreign
custody arrangements pursuant to written contracts, by the rules or
established practices or procedures of the Mandatory Securities
Depository, or by any combination of the foregoing that AIM determines
will provide reasonable care for the Funds' Foreign Assets based on the
standards specified in paragraph A.2. above. Any such contracts shall
include provisions that provide:
A. For indemnification or insurance arrangements (or any
combination of the foregoing) such that the Funds will be
adequately protected against the risk of loss of Foreign
Assets held in accordance with such contracts;
B. That the Funds' Foreign Assets will not be subject to any
right, charge, security interest, lien or claim of any kind in
favor of the custodian or its creditors except a claim of
payment for their safe custody or administration or, in the
case of cash deposits, liens or rights in favor of creditors
of the custodian arising under bankruptcy, insolvency, or
similar laws;
C. That beneficial ownership for the Funds' Foreign Assets will
be freely transferable without the payment of money or value
other than for safe custody or administration;
D. That adequate records will be maintained identifying the
Foreign Assets as belonging to a Fund or as being held by a
third party for the benefit of the Fund;
E. That each Fund's independent public accountants will be given
access to those records or confirmation of the content of
those records; and
F. That a Fund will receive periodic reports with respect to the
safekeeping of the Fund's Foreign Assets, including, but not
limited to, notification of any transfer to or from the Fund's
accounts or a third party account containing Foreign Assets
held for the benefit of the Fund.
In lieu of any or all of the provisions specified in a.
through f. above, such contracts may contain such other
provisions that AIM determines will provide, in their
entirety, the same or a greater level of care and protection
for Fund Foreign Assets as the specified provisions, in their
entirety.
6. MONITORING MANDATORY SECURITIES DEPOSITORIES. Establishment of a system
(a) to monitor the appropriateness of maintaining the Fund's Foreign
Assets with a particular Mandatory Securities Depository under Section
4 above, and the contracts governing the Funds' arrangements under
Section 5 above; and (b) to notify the Funds promptly if an arrangement
no longer meets the requirements of [this section B] and to withdraw
promptly the Funds' Foreign Assets from such Mandatory Securities
Depository in such event.
7. REPORTS AND OTHER INFORMATION.
A. ANNUAL REPORTS AND OTHER INFORMATION. AIM shall furnish
annually to the Boards of Directors/Trustees information
regarding the factors used in its system to monitor Mandatory
Securities Depositories.
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B. QUARTERLY REPORTS. AIM will submit to the Boards of
Directors/Trustees a quarterly report listing all newly
approved countries and all countries in which a Fund invested
for the first time during the preceding quarter. Such report
shall include a revised Appendix 1 to the Foreign Custody and
Country Selection Procedures, if applicable, listing the
approved countries. AIM will submit to the Boards of
Directors/Trustees a quarterly report indicating changes to
Mandatory Securities Depositories to the extent such report is
not provided by the Foreign Custody Manager.
C. OTHER REPORTS. AIM will notify the Boards of
Directors/Trustees in writing of any material change in the
Mandatory Securities Depositories for a Fund that has not been
reported by the Foreign Custody Manager promptly after the
occurrence of the material change.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, as of the day and year first above
written.
A I M ADVISORS, INC.
Attest: /s/ XXXXX X. XXXXXX By: /s/ XXXXXX X. XXXXXX
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Assistant Secretary Name:
Title:
(SEAL)
AIM ADVISOR FUNDS, INC. AIM SUMMIT FUND, INC.
AIM Advisor Flex Fund
AIM Advisor International Value Fund AIM INTERNATIONAL FUNDS, INC.
AIM Advisor Large Cap Value Fund AIM Asian Growth Fund
AIM Advisor MultiFlex Fund AIM European Development Fund
AIM Advisor Real Estate Fund AIM International Equity Fund
AIM Global Aggressive Growth Fund
AIM EQUITY FUNDS, INC. AIM Global Growth Fund
AIM Aggressive Growth Fund AIM Global Income Fund
AIM Blue Chip Fund
AIM Capital Development Fund AIM VARIABLE INSURANCE FUNDS, INC.
AIM Charter Fund AIM V.I. Aggressive Growth Fund
AIM Constellation Fund AIM V.I. Balanced Fund
AIM Xxxxxxxxxx Fund AIM V.I. Capital Appreciation Fund
AIM V.I. Capital Development Fund
AIM FUNDS GROUP AIM V.I. Diversified Income Fund
AIM Balanced Fund AIM V.I. Global Utilities Fund
AIM Global Utilities Fund AIM V.I. Government Securities Fund
AIM High Yield Fund AIM V.I. Growth Fund
AIM Income Fund AIM V.I. Growth & Income Fund
AIM Money Market Fund AIM V.I. High Yield Fund
AIM Select Growth Fund AIM V.I. International Equity Fund
AIM Value Fund AIM V.I. Money Market Fund
AIM V.I. Value Fund
AIM SPECIAL OPPORTUNITIES FUNDS
AIM Small Cap Opportunities Fund
Attest: /s/ P. XXXXXXXX XXXXX By: /s/ XXXX X. XXXXXX
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Assistant Secretary Name: Xxxx X. Xxxxxx
Title: Senior Vice President
(SEAL)
