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EXHIBIT 23(h)(2)(iii)
FORM OF AMENDMENT TO TRANSFER AGENCY AGREEMENT
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AML AMENDMENT TO TRANSFER AGENCY AGREEMENT
CNI Charter Funds (the "Trust") and SEI Investments Fund Management
("SEIFM") are parties to an agreement dated as of April 1, 1999 (the
"Agreement") under which SEIFM performs certain transfer agency and/or
recordkeeping services for the Trust.
In connection with the enactment of the USA PATRIOT Act of 2001 and the
regulations promulgated thereunder (collectively the Act"), the Trust is
required to adopt an Anti-Money Laundering ("AML") Program. The Trust and SEIFM
agree to amend the Agreement to delegate to SEIFM certain responsibilities in
connection with the Act and the Trust' AML Program, as further set forth below.
1. Adoption of Program; Delegation to SEIFM
(a) The Trust acknowledges that it is a financial institution subject to
the Act and the Bank Secrecy Act (collectively, the "AML Acts"). The Trust has
adopted, and agrees to comply with, a written AML Program and has appointed an
AML Compliance Officer, each of which actions have been approved by the Board of
Trustees of the Trust (the "Board"). Subject to delegation of certain
responsibilities to SEIFM, as provided below, the Trust's AML Program is
reasonably designed to ensure compliance in all material respects with the AML
Acts and applicable regulations adopted thereunder (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.
(b) The Trust hereby delegates to SEIFM the performance, on behalf of the
Trust, of the services set forth in SCHEDULE A to this Amendment (the "AML
Services") with respect to the shareholder accounts maintained by SEIFM pursuant
to the Agreement (including, as and to the extent set forth in SCHEDULE A,
direct accounts; accounts maintained through FUND/SERV and Networking; and
omnibus accounts); and, subject to the terms and conditions of the Agreement and
this Amendment, including Section 2(d) below, SEIFM accepts this delegation and
agrees to perform the AML Services in accordance with the Trust's and SEIFM' AML
Program and to cooperate with the Trust's AML Compliance Officer (as defined
below) in the performance of its responsibilities hereunder.
(c) Notwithstanding this delegation, the Trust shall maintain full
responsibility for ensuring that its AML Program is and continues to be
reasonably designed to ensure compliance with the Applicable AML Laws. SEIFM
shall maintain policies, procedures and 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 and the Trust's AML Program.
(d) The Trust recognizes that the performance of the AML Services 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 shareholders). The Trust
authorizes SEIFM to take such actions in the performance of the AML Services as
SEIFM deems appropriate and consistent with the Trust's AML Program and
Applicable AML Laws.
2. Exceptions to Procedures; Amendments
(a) The Trust acknowledges and agrees that any deviation from SEIFM'
written transfer agent compliance procedures (an "Exception") may involve
substantial risk of loss. SEIFM may in its sole discretion refuse to accept any
request by the Trust that SEIFM make an Exception to any written compliance or
transfer agency procedures adopted by SEIFM, or adopted by the Trust and
approved by SEIFM (including any requirements of the Trust's AML Program).
(b) Exception requests may only be made in a writing signed by an
authorized representative of the Trust (other than an employee of SEIFM),
PROVIDED that an exception concerning the requirements of the Trust's AML
Program must be signed by the Trust's anti-money laundering compliance officer
("AML Compliance Officer").
Approved exceptions shall become effective when and only if set forth in a
written acceptance of the Exception signed by SEIFM' AML Compliance Officer. An
Exception is effective only on a transaction by transaction basis.
(c) Notwithstanding any provision of the Agreement or this Amendment to the
contrary, as long as SEIFM acts in good faith and without gross negligence,
SEIFM shall have no liability for any loss, liability, expenses or damages to
the Trust resulting from an Exception.
(d) The Trust's AML Officer shall provide forty-five (45) days prior
written notice of any amendment to the Trust's AML Program that would have a
material impact upon the AML Services to be provided by SEIFM, and any services
required to be provided by SEIFM pursuant to such amendment shall be considered
an Exception until the consent of SEIFM, which shall not be unreasonably
withheld, is obtained.
3. Representations and Warranties; Documents and Information; Access
(a) The Trust represents and warrants that (i) the Trust has adopted a
written AML Program, and has appointed the Trust's AML Compliance Officer; (ii)
the AML Program and the designation of the AML Officer have been approved by the
Board of Trustees of the Trust (the "Board"); and (iii) the delegation to SEIFM
of the AML Services has been approved by the Board.
(b) SEIFM represents and warrants to the Trust that (1) it has adopted and
will maintain a written program concerning the anti-money laundering services it
provides to its various clients; (2) its policies and procedures are reasonably
adequate for it to provide the AML Services and comply with its obligations
under this Amendment; (3) it shall conduct (or have a third party conduct) an
independent review of its AML Program at least annually and provide the report
of such independent review to the Trust; (4) it shall maintain an ongoing
training program with respect to its own personnel; and (5) it shall maintain an
AML compliance officer to administer the servicing of those aspects of the
Trust's AML Program that have been expressly delegated to SEIFM.
(c) The Trust agrees to furnish SEIFM with such information and documents
as may be reasonably requested by SEIFM from time to time to provide the AML
Services. The Trust agrees to notify SEIFM promptly about any known suspicious
activities related to open accounts.
(d) SEIFM agrees to furnish the Trust its written program concerning
anti-money laundering services rendered by SEIFM to its various clients. SEIFM
agrees to notify the Trust of any change to its anti-money laundering program
that would materially impact the Trust's AML Program.
(e) SEIFM 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 SEIFM and related to the AML Services, and shall
permit federal examiners to inspect SEIFM for purposes of the Trust's AML
Program. Records may be edited or redacted to maintain confidentiality of
materials related to other clients of SEIFM. SEIFM shall make its relevant
personnel available to meet or speak with the Board concerning the AML Services
at least annually or at such other intervals as may be reasonably necessary or
appropriate.
4. Expenses
In consideration of the performance of the foregoing duties, the Trust agrees to
pay SEIFM for the reasonable administrative expense and out of pocket costs that
may be associated with such additional duties. The terms of the Agreement shall
apply with respect to the payment of such expense in the same manner and to the
same extent as any other expenses incurred under the Agreement.
5. 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 amendment or modification to
this Amendment shall be valid unless made in writing and executed by both
parties hereto.
(c) Section and 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.
CNI CHARTER FUNDS SEI Investments Fund Management
By: /s/ XXXX XXXXX By: /s/ XXXXXXX X. XXXXX
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Title: VP Title: VP
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SCHEDULE A
AML SERVICES
With respect to the beneficial ownership of, and transactions in, shares in the
Fund for which the Transfer Agent maintains the applicable shareholder
information, the Transfer Agent shall:
(a) Review and submit all shareholder financial and non-financial
transactions through the Office of Foreign Assets Control Database (and such
other lists or databases as may be required from time to time by applicable
regulatory authorities), including screening of all shareholder accounts upon
changes to such database.
(b) Screen all shareholder accounts at the request of Financial Crimes
Enforcement Network ("FinCEN") pursuant to Section 314(a) of the PATRIOT Act and
report any positive "hits" to FinCEN.
(c) Monitor shareholder accounts and identify and report suspicious
activities that are required to be so identified and reported, in each case
consistent with the Trust's and SEIFM' AML Programs.
(d) Place holds on transactions in shareholder accounts or freeze assets in
shareholder accounts, as provided in the Trusts' and SEIFM' AML Programs and in
accordance with the Act and OFAC.
(e) If and to the extent required by applicable law, ensure that
shareholder accounts are not opened until shareholders have been properly
identified, their identifying information has been verified, and all reasonable
and practicable steps have been taken in accordance with applicable law to
ensure that such shareholder's funds are not derived from any illicit activity.
(f) Follow the Funds' policy, which may change from time to time, with
respect to the acceptance of cash equivalents, including 3rd party checks.
(g) Follow the Funds' policy on accounts held by non-US persons.
(h) 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 and SEIFM' AML Programs, 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.
NOTES: As concerns Networking Level III accounts and omnibus account, the AML
Services performed by SEIFM 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").
In the event that SEIFM detects suspicious activity or a "positive" hit as a
result of the foregoing procedures, which necessitates the filing by SEIFM of a
suspicious activity report, or other similar report or notice to FinCEN or to
OFAC, then SEIFM shall also immediately notify the Trust's AML Compliance
Officer, unless prohibited by applicable law.
