Exhibit (g)(2)
SUPPLEMENT TO CUSTODIAN AGREEMENT
FIRST AMERICAN INVESTMENT FUNDS, INC.
FIRST TRUST NATIONAL ASSOCIATION
WHEREAS, First American Investment Funds, Inc., a mutual fund organized
as a Maryland corporation (hereinafter called the "Fund"), and First Trust
National Association, a national banking association organized and existing
under the laws of the United States of America with its principal place of
business at Minneapolis, Minnesota (hereinafter called the "Custodian"),
previously entered into that Custodian Agreement dated September 20, 1993 (the
"Custodian Agreement"); and
WHEREAS, the Fund has organized a new series referred to as
International Fund, and desires to make provision for assets of International
Fund to be custodied outside the United States pursuant to sub-custodian
arrangements between the Custodian and selected sub-custodians; and
WHEREAS, the Fund and the Custodian are entering into this Supplement
to the Custodian Agreement in order to permit and provide for such sub-custodian
arrangements with respect to International Fund.
NOW, THEREFORE, the Fund and the Custodian hereby agree to supplement
the Custodian Agreement as follows:
1. Terms Defined in Custodian Agreement. Capitalized terms which are
used herein and are not otherwise defined herein shall have the meanings
assigned to them in the Custodian Agreement.
2. Appointment of Foreign Sub-Custodians. The Custodian is authorized
and instructed, through Bankers Trust Company, to employ as sub-custodians for
International Fund's securities and other assets maintained outside of the
United States the foreign banking institutions, foreign securities depositories
and foreign clearing agencies designated on Schedule A hereto ("Foreign
Sub-Custodians"). Upon receipt of Written Order from the Fund, together with a
certified resolution of the Fund's Board of Directors, the Custodian and the
Fund may agree to amend Schedule A from time to time to designate additional
foreign banking institutions, foreign securities depositories and foreign
clearing agencies to act as sub-custodians. Each foreign banking institution
shall be authorized to deposit securities in foreign securities depositories and
foreign clearing agencies authorized pursuant to Rule 17f-5 under the Investment
Company Act of 1940, as amended (the "1940 Act"). Upon receipt of Written Order
from the Fund, the Custodian shall cease the employment of any one or more of
such sub-custodians for maintaining custody of International Fund's assets.
3. Assets to be Held. The Custodian shall limit the securities and
other assets maintained in the custody of the Foreign Sub-Custodians to (a)
"foreign securities" as defined in paragraph (c)(1) of Rule 17f-5 under the 1940
Act, and (b) cash and cash equivalents in such amount as the Custodian or the
Fund may determine to be reasonably necessary in order to effect International
Fund's foreign securities transactions.
4. Segregation of Securities. The Custodian shall identify on its books
as belonging to International Fund the foreign securities of International Fund
held by each Foreign Sub-Custodian. Each agreement pursuant to which the
Custodian employs a foreign banking institution as a Foreign Sub-Custodian shall
require that such institution establish a custody account for the Custodian on
behalf of its customers and physically segregate in that account securities and
other assets of the Custodian's customers. Each such agreement also shall
provide that, if a Foreign Sub-Custodian deposits International Fund's
securities in a
foreign securities depository, the Foreign Sub-Custodian shall identify on its
books as belonging to the Custodian, as agent for the Custodian's customers, the
securities so deposited (all collectively referred to as the "Account").
5. Agreements with Foreign Banking Institutions. Each agreement with a
Foreign Sub-Custodian shall provide that (a) International Fund's assets will
not be subject to any right, charge, security interest, lien or claim of any
kind in favor of the foreign banking institution or its creditors, except a
claim of payment for the safe custody or administration of such assets; (b)
beneficial ownership of International Fund's assets will be freely transferable
without the payment of money or value other than for custody or administration,
which may include payment of stamp duties or government taxes; (c) adequate
records will be maintained identifying the assets as belonging to the customers
of the Custodian; (d) officers of or auditors employed by, or other
representatives of, the Custodian, including independent public accountants for
the Fund, will be given access to the books and records of the Foreign
Sub-Custodian relating to its actions under its agreement with the Custodian or
will be given confirmation of the contents of such books and records; and (e)
assets of International Fund held by the Foreign Sub-Custodian will be subject
only to the instructions of the Custodian or its agents.
6. Access of Independent Public Accountants of the Fund. Upon request
of the Fund, the Custodian will use its best efforts to arrange for the
independent public accountants for the Fund to be afforded access to the books
and records of any foreign banking institution employed as a Foreign
Sub-Custodian insofar as such books and records relate to the performance of
such foreign banking institutions under their agreements with the Custodian.
7. Reports by the Custodian. The Custodian will supply to the Fund from
time to time, as mutually agreed upon, statements in respect of the securities
and other assets of International Fund held by Foreign Sub-Custodians, including
but not limited to an identification of entities having possession of
International Fund's securities and other assets and advices or notifications of
any transfers of securities to or from each custodian account maintained by a
Foreign Sub-Custodian on behalf of International Fund indicating, as to
securities acquired for International Fund, the identity of the entity having
physical possession of such securities.
8. Foreign Securities Transactions.
(a) Upon receipt of Written Order from the Fund, which may be
continuing instructions when deemed appropriate by the parties, the Custodian
shall make or cause the applicable Foreign Sub-Custodian to make transfers,
exchanges and deliveries of foreign securities of International Fund, but only
(i) in the cases specified in Article 5 of the Custodian Agreement or (ii) as
specifically provided for herein.
(b) Upon receipt of Written Order from the Fund, which may be
continuing instructions when deemed appropriate by the parties, the Custodian
shall pay out or cause the applicable Foreign Sub-Custodian to pay out monies of
International Fund, but only (i) in the cases specified in Article 3 of the
Custodian Agreement or (ii) as specifically provided for herein.
(c) Settlement and payment for securities received for the account of
International Fund and delivery of securities maintained for the account of
International Fund may, upon receipt of Written Order from the Fund, be effected
in accordance with the customary or established securities trading or securities
processing practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering securities to the
purchaser thereof or to a dealer therefor (or an agent for such purchaser or
dealer) against a receipt with the expectation of receiving later payment for
such securities from such purchaser or dealer.
(d) With respect to any transaction involving foreign securities, the
Custodian or any Foreign Sub-Custodian in its discretion may cause International
Fund to be credited on either the contractual settlement date or the actual
settlement date with the proceeds of any sale or exchange of foreign securities
from the account of International Fund and to be debited on either the
contractual settlement date or the actual settlement date for the cost of
foreign securities purchased or acquired for International Fund according to the
Custodian's then current internal policies and procedures pertaining to
securities settlement, which policies and procedures may change from time to
time. The Custodian shall advise the Fund of any changes to such policies and
procedures. The Custodian may reverse any such credit or debit made on the
contractual settlement date if the transaction with respect to which such credit
or debit was made fails to settle within a reasonable period, determined by the
Custodian in its discretion, after the contractual settlement date except that
if any foreign securities delivered pursuant to this section are returned by the
recipient thereof, the Custodian may cause any such credits or debits to be
reversed at any time.
(e) Securities maintained in the custody of a Foreign Sub-Custodian may
be maintained in the name of such entity's nominee to the same extent set forth
in Article 4 of the Custodian Agreement.
(f) Until the Custodian receives written instructions to the contrary,
the Custodian shall collect, or shall cause the applicable Foreign Sub-Custodian
to collect, all interest and dividends paid on securities held in International
Fund's account, unless such payment is in default. Unless otherwise instructed,
the Custodian shall convert interest, dividends and principal received with
respect to securities in International Fund's account into United States dollars
and shall perform foreign currency contracts for the conversion of United States
dollars into foreign currencies for the settlement of trades whenever it is
practicable to do so through customary banking channels. Customary banking
channels may vary based upon industry practice in each jurisdiction, and shall
include the banking facilities of the Custodian's affiliates in accordance with
such affiliates' then prevailing internal policies on funds repatriation. All
risk and expense incident to such foreign collection and conversions is the
responsibility of International Fund's account and the Custodian shall have no
responsibility for fluctuations in exchange rates affecting collections or
conversions.
9. Foreign Securities Lending. Notwithstanding any other provisions
contained herein or in the Custodian Agreement, the Custodian or any Foreign
Sub-Custodian shall deliver and receive securities loaned or returned in
connection with securities lending transactions only upon and in accordance with
Written Order from the Fund; provided, that if the Custodian is not the lending
agent in connection with such securities lending, then neither the Custodian nor
any Foreign Sub-Custodian shall undertake or otherwise be responsible for (a)
marking to market values for such loaned securities, (b) collection of
dividends, interest or other disbursements or distributions made with respect to
such loaned securities, (c) receipt of corporate action notices, communications,
proxies or instruments with respect to such loaned securities, or (d) custody,
safekeeping, valuation or any other actions or services with respect to any
collateral securing any such securities lending transactions. In the event that
the Custodian is the Fund's lending agent in connection with a specific
securities loan from International Fund, the Custodian shall undertake to
perform all of the duties set forth in the preceding sentence with respect to
such loan, except that the Fund shall not receive, nor be entitled to vote,
proxies in connection with such loaned security.
10. Liability of Foreign Sub-Custodians. Each agreement pursuant to
which the Custodian employs a foreign banking institution as a Foreign
Sub-Custodian shall require the institution to exercise reasonable care in the
performance of its duties and to indemnify and hold harmless the Custodian and
the Custodian's customers from and against any loss, damage, cost, expense,
liability or claim arising out of such institution's negligence, fraud, bad
faith, willful misconduct or reckless disregard of its duties. At the election
of the Fund, it shall be entitled to be subrogated to the right of the Custodian
with respect to any
claims against a foreign banking institution as a consequence of any such loss,
damage, cost, expense, liability or claim if and to the extent that
International Fund has not been made whole for any such loss, damage, cost,
expense, liability or claim.
11. Monitoring Responsibilities. The Custodian shall furnish annually
to the Fund information concerning the Foreign Sub-Custodians employed by the
Custodian. Such information shall be similar in kind and scope to that furnished
to the Fund in connection with the initial approval hereof. In addition, the
Custodian will promptly inform the Fund in the event that the Custodian learns
of a material adverse change in the financial condition of a Foreign
Sub-Custodian or is notified by a foreign banking institution employed as a
Foreign Sub-Custodian that its shareholders' equity has declined, or that there
is a substantial likelihood that it will decline, to less than $200 million in
United States dollars or the foreign equivalent thereof.
12. Branches of United States Banks. Except as otherwise set forth
herein, the provisions hereof shall not apply where the custody of International
Fund's assets maintained in a foreign branch of a banking institution which is a
"bank" as defined in Section 2(a)(5) of the 1940 Act which meets the
qualification set forth in Section 26(a) of the 1940 Act.
13. Expropriation Insurance. The Custodian represents that it does not
intend to obtain any insurance for the benefit of International Fund which
protects against the imposition of exchange control restrictions or the transfer
from any foreign jurisdiction of the proceeds of sale of any securities or
against confiscation, expropriation or nationalization of any securities or the
assets of the issuer of such securities by a government of any foreign country
in which the issuer of such securities is organized or in which securities are
held for safekeeping either by the Custodian or any Foreign Sub-Custodian in
such country. The Custodian represents that its understanding of the position of
the Staff of the Securities and Exchange Commission is that any investment
company investing in securities of foreign issuers has the responsibility for
reviewing the possibility of the imposition of exchange control restrictions
which would affect the liquidity of such investment company's assets and the
possibility of exposure to political risk, including the appropriateness of
insuring against such risk.
14. Custodian Agreement. The Custodian Agreement, as supplemented
hereby, is hereby ratified and confirmed in all respects.
IN WITNESS WHEREOF, the Fund and the Custodian have caused this
Supplement to be executed by their duly authorized officers.
March 15, 1994. FIRST AMERICAN INVESTMENT FUNDS, INC.
By /s/
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Its Assistant Secretary
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FIRST TRUST NATIONAL ASSOCIATION
By /s/
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Its Senior Vice President
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SCHEDULE A TO SUPPLEMENT
TO CUSTODIAN AGREEMENT
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COUNTRY SUB-CUSTODIAN DEPOSITORY (IF ANY)
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Argentina Citibank, N.A., Buenos Aires Caja de Valores
Branch
Australia Australia and New Zealand Reserve Bank Information and
Banking Group Transfer System
Austria Creditanstalt-Bankverein Oesterreichische Kontrollbank
Bangladesh Standard Chartered Bank,
Dhaka Branch
Belgium Generale Bank Caisse Interprofessionnelle de
Depots et de Virements de Titres S.A.
Brazil Citibank, N.A., Sao Paulo Branch Camera de Liquidacao e Custodia S/A
Canada The Toronto-Dominion Bank Canadian Depository for Securities
Limited
Chile Citibank, N.A., Xxxxxxxx Xxxxxx
Peoples Republic Standard Chartered Bank, Shenzhen Securities Registrars Co., Ltd.
of China (Shenzhen) Shenzhen Branch
Colombia Cititrust Colombia, S.A. Sociedad
Fiduciaria
Denmark Den Danske Bank Vaerdipapircentralen
Finland Kansallis-Osake-Pankii The Central Share Register of Finland
France Bank Paribas Societe Interprofessionelle de
Compensation de Valeurs Mobilieres
Germany Dresdner Bank, XX Xxxxxxxxx Kassenverein
Greece National Bank of Greece S.A. Apothetirio Titlon
Hong Kong Standard Chartered Bank, Hong Central Clearing and Settlement System
Kong Branch
India The Hongkong and Shanghai
Banking Corporation Limited,
Bombay Branch
Indonesia Standard Chartered Bank, Jakarta
Branch
COUNTRY SUB-CUSTODIAN DEPOSITORY (IF ANY)
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Italy Citibank, N.A., Milan Branch Monte Titoli, S.p.A.
Japan The Bank of Tokyo, Ltd. Japan Securities Depository Center
Korea Standard Chartered Bank, Seoul Korea Securities Settlement Corporation
Branch
Luxembourg Cedel
Malaysia Xxxxx Xxxxx Bank, Ltd., Malaysian Depository Sdn Bhd
Kuala Lumpur Branch
Mexico (equity) Instituto para el Deposito de
Valores (S.D. Indeval)
Mexico (fixed Citibank, N.A., Mexico City
income) Branch
Netherlands ABN-AMRO Bank Nederlands Centraal Institut voor Giraal
Effectenverkeer B.V.
New Zealand Australia and New Zealand Austraclear NZ
Banking Group Ltd.
Norway Euroclear
Pakistan Standard Chartered Bank,
Karachi Branch
Peru Citibank, N.A., Lima Branch Caja de Valores
Philippines Standard Chartered Bank, Manila
Branch
Poland Citibank (Poland), S.A. National Depository of Securities; The
National Bank of Poland
Portugal Banco Espirito Santo e Comercial Central de Valores Mobiliarios
de Lisboa, SA
Singapore United Overseas Bank, Ltd. The Central Depository (PTE) Ltd.
South Africa First National Bank of Southern
Africa, Ltd.
Spain Banco Santander Servicio de Compensacion y Xxxxxxxxxxx
xx Xxxxxxx
Xxx Xxxxx Standard Chartered Bank, Central Depository System
Colombo Branch
Sweden Svenska Handelsbanken Vardepappercentralen
COUNTRY SUB-CUSTODIAN DEPOSITORY (IF ANY)
------- ------------- -------------------
Switzerland Bankers Trust AG Schweizerische Effekten Giro AG
Thailand Standard Chartered Bank, The Share Depository Center
Bangkok Branch
Turkey Osmanli Bankasi A.S. (Ottoman
Bank)
United Kingdom/ Bankers Trust Company, London Gilt Settlement Office (Ireland); Central
Ireland Branch Gilts Office (United Kingdon)
Venezuela Citibank, N.A., Caracas Branch
TRANSNATIONAL DEPOSITORIES
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Cedel
Euroclear
