EXHIBIT (H)(2)
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AMENDMENTS TO TRANSFER AGENT SERVICING AGREEMENT
EXHIBIT B
U.S. BANCORP FUND SERVICES, LLC AS OF PROCESSING POLICY
U.S. Bancorp Fund Services, LLC (USBFS) will reimburse the Fund(s) for any
net material loss that may exist on the Fund(s) books and for which USBFS is
responsible, at the end of each calendar month. "Net Material Loss" shall be
defined as any remaining loss, after netting losses against any gains, which
impacts a Fund's net asset value per share by more than 1/2 cent. Gains and
losses will be reflected on the Fund's daily share sheet, and the Fund will be
reimbursed for any net material loss on a monthly basis. USBFS will reset the
as of ledger each calendar month so that any losses which do not exceed the
materiality threshold of 1/2 cent will not be carried forward to the next
succeeding month. USBFS will notify the advisor to the Fund(s) on the daily
share sheet of any losses for which the advisor may be held accountable.
AMENDMENT NO. 2 TO
TRANSFER AGENT SERVICING AGREEMENT
The Annual Fee Schedule attached as Exhibit A to the Transfer Agent
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Servicing Agreement dated April 30, 1999 by and between The Catholic Funds, Inc.
and Firstar Mutual Services, LLC shall be, and hereby is, amended as follows:
o The minimum annual fees provided under the subheading "Annual
Fee" of said Exhibit A are modified to provide that, for account
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ing/billing purposes, the aggregate of the minimum annual fees
for all Funds covered by the Transfer Agent Servicing Agreement
will be allocated equally among the Funds subject to the minimum
fee.
o Under the subheading "ACH Shareholder Services" the per account
set up and/or change fee shall be reduced from $.50 to $.35.
To incorporate these changes and changes effected with the August 31, 1999
amendment to the Transfer Agent Servicing Agreement, Exhibit A to that Agreement
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is hereby amended and restated in its entirety in the form attached hereto.
IN WITNESS WHEREOF, each of the parties to the Transfer Agent Servicing
Agreement has caused this Amendment No. 2 to be executed by its duly authorized
officer effective as of this 1st day of October, 2000.
THE CATHOLIC FUNDS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇, President
FIRSTAR MUTUAL SERVICES, LLC
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: President
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
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(Please print or type)
THE CATHOLIC FUNDS, INC.
AMENDMENT TO THE TRANSFER AGENT SERVICING AGREEMENT
THIS AMENDMENT dated as of January 1, 2002 to the Transfer Agent Servicing
Agreement dated as of April 30, 1999, by and between The Catholic Funds, Inc., a
Maryland corporation and Firstar Mutual Fund Services, LLC, a Wisconsin limited
liability company shall be as follows:
Effective January 1, 2002, the name Firstar Mutual Fund Services, LLC has
been changed to U.S. Bancorp Fund Services, LLC. Accordingly, all references to
Firstar Mutual Fund Services, LLC in this Agreement should be replaced with U.S.
Bancorp Fund Services, LLC. Similarly, any references to Firstar Bank, N.A.
should be replaced with U.S. Bank, N.A.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by a duly authorized officer on one or more counterparts as of the day
and year first written above.
THE CATHOLIC FUNDS, INC. U.S. BANCORP FUND SERVICES, LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ unintelligable
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Amendment to Transfer Agency Servicing Agreement
The Transfer Agency Servicing Agreement dated April 30, 1999 between The
Catholic Funds and US Bancorp Fund Services; LLC is amended as follows based
upon the dissolution of the three equity funds and the creation of The Catholic
Equity Fund with three classes.
Please see attached Fee Schedule.
All other provisions of the agreement remain in full force and effect.
Dated this 15th day of April, 2002
THE CATHOLIC FUNDS
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Title: President
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US BANCORP FUND SERVICES, LLC
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇ Title: President
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U.S. BANCORP FUND SERVICES, LLC
TRANSFER AGENT SERVICES
ANNUAL FEE SCHEDULE
Shareholder Account Fee Extraordinary services -
(Subject to Minimum) quoted separately
No-Load - $15.00 per account
Load Fund - $16.00 per account Conversion Estimate - $1.00-$4.00 per
Money Market - $21.00 per account shareholder account, minimum $8,000 (if
necessary)
Annual Minimum
$24,000 fast no-load fund Service Charges to Investors
$28,000 fast load or money ----------------------------
market fund
$15,000 each additional fund or class Qualified Plan Fees (Billed
to Investors)
Equity - $28,000 first class $12.50/qualified plan acct
$10,000 each additional class (Cap at $25.00 per SSN)
$ 5.00/education ▇▇▇ acct
Money Market - $28,000 first class (Cap at $25.00 per SSN)
$10,000 each additional class $15.00/transfer to successor trustee
$15.00/distribution to participant
Plus; 1 basis point per year (Excluding SWPs)
$15.00 /refund of excess contribution
Activity Charges
Telephone Call - $1.00 per call Additional Shareholder Fees
Draft Check Processing - (Billed to investors)
$1.00 per draft $15.00/outgoing wire transfer
Daily Valuation Trades - $15.00/overnight delivery
$6.75 per trade $ 5.00/telephone exchange
ACH Shareholder Services: $25.00/return check or ACH
$125.00 per month per fund group $25.00/stop payment
$.35 per ACH Item, setup $ 5.00/research request (For
and/or charge requested items of the second
$5.00 per correction, reversal, calendar year (or previous]; to
return item the request) (Cap at $25.00)
Plus out-of-pocket expenses, including Fees and out-of-pocket expenses are
but not limited to: billed monthly.
Telephone - toll-free lines
Postage
Stationery; Envelopes
Programming, Special Reports
Insurance
Record Retention
Microfilm/fiche of records
Proxies, Proxy Services
ACH fees
NSCC charges
All other out-of-pocket expenses
U.S. BANCORP FUND SERVICES, LLC
SAMPLE OUT-OF-POCKET EXPENSE ITEMS*
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PER ITEM ESTIMATES
Forms Costs
Statement Paper $.038/item
#9, #10 Envelopes $.043/item
Check/Statement Paper $ .25/item
Certificates $1.00/item
Wire Order Confirm (non-NSCC) $ .22/item
US Bancorp Fulfillment Envelopes $ .25/item
Presort Postage (one ounce) $ .35/item
VRU Services - Port Allocation $14.00 per port per month
VRU Modifications - Per Project $200.00/hour
Shareholder System Select Request $250.00/request
Systems Development/Programming
$150.00/hour
Fund Group Addition
Fund Additions $2,000.00/fund group
Fund Group Restore $1,000.00/fund or class
Lost Shareholder Search (▇▇▇▇▇ Tracers)
$1,000.00/occurrence
DAZL
Installation
Monthly $3.00/search
Price record transmission
Other record $5,000 installation
NSCC Setup (Fund/SERV, Networking, $1,000.00/month
Exchanges, ACATS, MF Profile, DCCS, $ .015/price record
TORA, Commission Settlement) $ .025/record - other records
* This is a sample list only.
Plus additional out-of-pocket items as $5,000.00/fund group installation
required by the client. Plus NSCC Transaction and Networking
Charges
AMENDMENT TO TRANSFER AGENT SERVICING AGREEMENT
THIS AMENDMENT, dated as of July 24, 2002, modifies the Transfer Agent Servicing
Agreement by and between U.S. Bancorp Fund Services, LLC (the "Transfer Agent")
and The Catholic Funds, Inc. (the "Funds"), such Agreement being hereinafter
referred to as the "Agreement."
WHEREAS, Section 352 of the USA Patriot Act (the "Act") and the Interim Final
Rule (Section 103.130) adopted by the Department of the Treasury's Financial
Crimes Enforcement Network (the "Rule") require the Funds to develop and
implement an anti-money laundering program and monitor the operation of the
program and assess the effectiveness; and
WHEREAS, Section 326 of the Act, as proposed, requires the Funds to develop and
implement a Customer Identification Program ("CIP") as part of the Funds'
overall anti-money laundering program to ensure, among other things, that the
Funds obtain certain information from each of its customers and to be reasonably
sure it knows each of its customers; and
WHEREAS, in order to assist its transfer agent clients with their anti-money
laundering compliance responsibilities under the Act and the Rule, the Transfer
Agent has provided to the Funds for their consideration and approval written
procedures describing various tools designed to promote the detection and
reporting of potential money laundering activity by monitoring certain aspects
of shareholder activity (the "Monitoring Procedures") as well as written
procedures for verifying a customer's identity (the "Customer Identification
Procedures"), together referred to as the "Procedures"; and
WHEREAS, the Funds desire to implement the Procedures as part of their overall
anti-money laundering program and, subject to the terms of the Act and the Rule,
delegate to the Transfer Agent the day-to-day operation of the Procedures on
behalf of the Funds.
NOW THEREFORE, the parties agree, and the Agreement is hereby modified, as
follows:
1. The Funds acknowledge that they have had an opportunity to review, consider
and comment upon the Procedures provided by the Transfer Agent and the
Funds have determined that the Procedures, as part of the Funds' overall
anti-money laundering program, are reasonably designed to prevent the Funds
from being used for money laundering or the financing of terrorist
activities and to achieve compliance with the applicable provision of the
Bank Secrecy Act and the implementing regulations thereunder.
2. Based on this determination, the Funds hereby instruct and direct the
Transfer Agent to implement the Procedures on the Funds' behalf, as such
may be amended or revised from time to time.
3. It is contemplated that these Procedures will be amended from time to time
by the parties as additional regulations are adopted and/or regulatory
guidance is provided relating to the Funds' anti-money laundering
responsibilities.
4. The Transfer Agent agrees to provide to the Funds (a) prompt written
notification of any transaction or combination of transactions that the
Transfer Agent believes, based on the Procedures, evidence money laundering
activity in connection with the Funds or any shareholder of the Funds, (b)
prompt written notification of any customer(s) that the Transfer Agent
reasonably believes, based upon the Procedures, to be engaged in money
laundering activity, provided that the Funds agree not to communicate this
information to the customer, (c) any reports received by the Transfer Agent
from any government agency or applicable industry self-regulatory organi-
zation pertaining to the Transfer Agent's anti-money laundering monitoring
on behalf of the Funds as provided in this Amendment, (d) prompt written
notification of any action taken in response to anti-money laundering
violations as described in (a), (b) or (c), and (e) an annual report of its
monitoring and customer identification activities on behalf of the Funds.
The Transfer Agent shall provide such other reports on the monitoring and
customer identification activities conducted at the direction of the Funds
as may be agreed to from time to time by the Transfer Agent and the Funds.
5. The Funds hereby direct, and the Transfer Agent acknowledges, that the
Transfer Agent shall (a) permit federal regulators access to such
information and records maintained by the Transfer Agent and relating to
the Transfer Agent's implementation of the Procedures on behalf of the
Funds, as they may request, and (b) permit such federal regulators to
inspect the Transfer Agent's implementation of the Procedures on behalf of
the Funds.
6. Fees and expenses (other than those already set forth in the Agreement) for
services to be provided by the Transfer Agent hereunder shall be set forth
in a fee schedule agreed upon by the Funds and the Transfer Agent from time
to time. A copy of the initial fee schedule is attached hereto as Exhibit
A.
7. This Amendment constitutes the written instructions of the Funds pursuant
to the terms of the Agreement. Except to the extent supplemented hereby,
the Agreement shall remain in full force and effect.
IN WITNESS HEREOF, the undersigned have executed this Amendment as of the date
and year first above written.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇ ▇▇▇▇▇▇▇
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The Catholic Funds, Inc. U.S. Bancorp Fund Services, LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
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Authorized Officer Authorized Officer
ANTI-MONEY LAUNDERING FEE SCHEDULE
The fees associated with USBFS's assigned duties and responsibilities are
threefold: a base annual fee based on the number of shareholder accounts, a new
account fee, and out-of-pocket fees for required database searches on both new
and existing accounts. These fees are set forth below:
AML Base Service (excluding network level three accounts)
0-999 accounts - $500.00 per year
1,000-4,999 accounts - $1,000 per year
5,000-9,999 accounts - $2,500 per year
10,000 + accounts - $5,000 per year
AML New Account Service - $1.00 per new domestic account
$2.00 per new foreign account
Out-of-pocket expenses - at cost of database search engine used
- all other out-of-pocket expenses
ADDENDUM TO TRANSFER AGENT AGREEMENT
THIS ADDENDUM, dated as of July 24, 2002, modifies the Transfer Agent Agreement
by and between U.S. Bancorp Fund Services, LLC (the "Transfer Agent") and The
Catholic Funds, Inc. (the "Funds"), such Agreement being hereinafter referred to
as the "Agreement."
WHEREAS, Section 352 of the USA Patriot Act (the "Act") and the Interim Final
Rule (Section 103.130) adopted by the Department of the Treasury's Financial
Crimes Enforcement Network (the "Rule") require the Funds to develop and
implement an anti-money laundering program and monitor the operation of the
program and assess the effectiveness; and
WHEREAS, Section 326 of the Act, as proposed, requires the Funds to develop and
implement a Customer Identification Program ("CIP') as part of the Funds'
overall anti money laundering program to ensure, among other things, that the
Funds obtain certain information from each of its customers and to be reasonably
sure it knows each of its customers; and
WHEREAS, in order to assist its transfer agent clients with their anti-money
laundering compliance responsibilities under the Act and the Rule, the Transfer
Agent. has provided to the Funds for their consideration and approval written
procedures describing various tools designed to promote the detection and
reporting of potential money laundering activity by monitoring certain aspects
of shareholder activity (the "Monitoring Procedures") as well as written
procedures for verifying a customer's identity (the Customer Identification
Procedures"), together referred to as the "Procedures"; and
WHEREAS, the Funds desire to implement the Procedures as part of their overall
anti-money laundering program and, subject to the terms of the Act and the Rule,
delegate to the Transfer Agent the day-to-day operation of the Procedures on
behalf of the Funds.
NOW THEREFORE, the parties agree, and the Agreement is hereby modified, as
follows:
1. The Funds acknowledge that they have had an opportunity to review, consider
and comment upon the Procedures provided by the Transfer Agent and the
Funds have determined that the Procedures, as part of the Funds' overall
anti-money laundering program, are reasonably designed to prevent the Funds
from being used for money laundering or the financing of terrorist
activities and to achieve compliance with the applicable provision of the
Bank Secrecy Act and the implementing regulations thereunder.
2. Based on this determination, the Funds hereby instruct and direct the
Transfer Agent to implement the Procedures on the Funds' behalf, as such
may be amended or revised from time to time.
3. It is contemplated that these Procedures will be amended from time to time
by the parties as additional regulations are adopted and/or regulatory
guidance is provided relating to the Funds' anti-money laundering
responsibilities.
4. The Transfer Agent agrees to provide to the Funds (a) prompt written
notification of any transaction or combination of transactions that the
Transfer Agent believes, based on the Procedures, evidence money laundering
activity in connection with the Funds or any shareholder of the Funds, (b)
prompt written notification of any customer(s) that the Transfer Agent
reasonably believes, based upon the Procedures, to be engaged in money
laundering activity, provided that the Funds agree not to communicate this
information to the customer, (c) any reports received by the Transfer Agent
from any government agency or applicable industry self-regulatory organi-
zation pertaining to the Transfer Agent's anti-money laundering monitoring
on behalf of the Funds as provided in this Addendum, (d) prompt written
notification of any action taken in response to anti-money laundering
violations as described in (a), (b) or (c), and (e) an annual report of its
monitoring and customer identification activities on behalf of the Funds.
The Transfer Agent shall provide such other reports on the monitoring and
customer identification activities conducted at the direction of the Funds
as may be agreed to from time to time by the Transfer Agent and the Funds.
5. The Funds hereby direct., and the Transfer Agent acknowledges, that the
Transfer Agent shall (a) permit federal regulators access to such
information and records maintained by the Transfer Agent and relating to
the Transfer Agent's implementation of the Procedures on behalf of the
Funds, as they may request, and (b) permit such -federal regulators to
inspect the Transfer Agent's implementation of the Procedures on behalf of
the Funds.
6. Fees and expenses (other than those already set forth in the Agreement) for
services to be provided by the Transfer Agent hereunder shall be set forth
in a fee schedule agreed upon by the Funds and the Transfer Agent from time
to time. A copy of the initial fee schedule is attached hereto as Exhibit
A.
7. This Addendum constitutes the written instructions of the Funds pursuant to
the-terms of the Agreement. Except to the extent supplemented hereby, the
Agreement shall remain in full force and effect.
IN WITNESS HEREOF, the undersigned have executed this Addendum as of the date
and year first above written.
The Catholic Funds, Inc.
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(the "Funds")
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Authorized Officer
U.S. Bancorp Fund Services. LLC
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(the "Transfer Agent")
By:
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Authorized Officer
CUSTOMER IDENTIFICATION PROGRAM
U.S. Bancorp Fund Services ("USBFS") has adopted the following Customer
Identification Program ("CIP") pursuant to the final rules under Section 326 of
the USA PATRIOT Act. This CIP is part of our overall AML program and is
designed to ensure that we are complying with each of the requirements that are
set forth in this document. This Program will be fully implemented on October
1, 2003.
DEFINITIONS:
ACCOUNT: Any contractual or other business relationship between a person and a
mutual fund established to effect transactions in securities issued by the
mutual fund, including the purchase or sale of securities. Excluded from this
definition are accounts acquired through acquisition, merger, purchase of assets
or assumption of liabilities, as well as accounts opened for the purpose of
participating in an employee benefit plan established under the Employer
Retirement Income Security Act of 1974. (ERISA).
DOMESTIC ACCOUNT: Any account for a U.S. citizen or an entity established under
United States law with a United States address.
FOREIGN ACCOUNT: Any account established for a resident or non-resident alien,
including an entity established under the laws of a foreign country and having
either a United States or foreign country address. A foreign account would also
include a U.S. citizen living abroad.
CUSTOMER: Means a person that opens a new account (this would include all
owners, such as both joint tenants); and an individual who opens a new account
for:
1. an individual who lacks legal capacity, such as a minor, or
2. an entity that is not a legal person, such as a civic club
A customer does not include:
1. A financial institution regulated by a federal functional regulator or
a bank regulated by a state bank regulator
2. Certain readily identifiable entities, including: (a) financial
institutions regulated by a federal functional regulator, (b) banks
regulated by a state bank regulator; and (c) governmental agencies and
instrumentalities and companies that are publicly traded; and
3. A person that has an existing account (prior to October 1, 2003) with
the mutual fund, provided that the mutual fund has a reasonable belief
that it knows the true identity of the person.
PERSON: includes natural persons, corporations, trusts, partnerships,
associations, syndicates, joint ventures, estates, joint stock companies, any
unincorporated organizations or groups, Indian Tribes, and all entities
cognizable as legal entities.
CIP: Customer Identification Program. The CIP must be incorporated into the
Fund's overall AML Program and approved by the Fund's Board. Further, the CIP
must adopt and implement "reasonable procedures" for verifying the identity of
customers "to the extent reasonable and practicable," maintain records
associated with such verification, and consulting lists of known terrorists.
FACTORS USED TO DETERMINE REASONABLE BELIEF
o Customer information can be independently verified by using database
search engines;
o Customer information can be validated or corroborated by fund
personnel or other financial institution intermediary;
o Customer has other accounts with the Fund family;
o Customer documentation is internally consistent (i.e., information on
application matches information on check);
o Customer documentation for entity account appears genuine
o Customer is known to Fund agent from having one or more accounts in an
unrelated Fund family
USBFS may use one or more of the above factors in determining whether it has a
reasonable belief that it knows the Customer. If USBFS cannot conclude that it
reasonably knows the Customer, it will either not open the account or will close
the account pursuant to the Lack of Verification Procedures. See page 11.
PROVIDING CUSTOMER NOTICE
The Fund will ensure that all prospective shareholders (and others that may be
acting on their behalf) are aware of the USA PATRIOT Act Section 326
requirements to provide minimum pieces of information before an account can be
established. Further, the Fund will provide notice to all prospective
shareholders (and others that may be acting on their behalf) that this
identification information will be used, along with any additional information
the Fund may require for the type of account being established, to become
reasonably certain that it knows the identity of the shareholder.
It is contemplated that the notice will be provided in the application but may
also be included in the Fund's prospectus, posted on its website and provided
orally in person or telephonically. At a minimum, the notice will contain
language substantially similar to the following:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR
OPENING A NEW ACCOUNT
To help the government fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions
to obtain, verify and record information that identifies each person
who opens an account
What this means for you: When you open an account, we will ask for
your name, address, date of birth, and other information that will
allow us to identify you. We may also ask for other identifying
documents or information.
1. OBTAINING MINIMUM REQUIRED INFORMATION BEFORE OPENING AN ACCOUNT
For a domestic account, we must receive the following pieces of information from
an individual before we can establish the account:
a. Full name of customer
b. Permanent residential or business street address (if different than
mailing address); an alternative address may be provided for those
individuals who do not have a permanent street address (such as
someone in the military who uses an Army Post Office or "APO" address)
c. Social security number
d. Date of birth
For a person other than an individual (such as a corporation, partnership or
trust) we must receive the following pieces of information before we can
establish an account:
a. Name
b. Principal place of business, local office or other physical location
c. Taxpayer identification number
Effective October 1, 2003, we will no longer be accepting or opening foreign
accounts except for U.S. citizens living or working in a foreign country where
such individuals have provided all minimum required information including a U.S.
address and in those few cases where the Fund or its agent has agreed to perform
the appropriate verification checks to be reasonably certain that the foreign
person or entity is who they say they are. Regardless, the following pieces of
information will need to be provided before we can establish the account:
a. Full name of customer.
b. Permanent residential or business address.
c. One or more of the following pieces of identification: a taxpayer
identification number; passport number and country of issuance; alien
identification card number, or number and country of issuance of any
other government-issued document evidencing nationality or residence
and bearing a photograph or similar safeguard. When opening an
account for a foreign business or enterprise that does not have an
identification number, the mutual fund must request alternative
government-issued documentation certifying the existence of the
business or enterprise.
IF THIS MINIMUM REQUIRED INFORMATION IS NOT RECEIVED, THE APPLICATION WILL BE
REJECTED AND RETURNED TO THE CUSTOMER WITH A LETTER EXPLAINING WHY THE
APPLICATION IS BEING RETURNED AND WHAT INFORMATION IS NECESSARY TO ENSURE THE
APPLICATION IS IN GOOD FORM. FOR CIRCUMSTANCES WHEN AN ACCOUNT MAY BE OPENED
SUBJECT TO CERTAIN CONDITIONS PENDING VERIFICATION, SEE PAGE 11.
2. VERIFYING CUSTOMER/CUSTOMER IDENTITY
The Fund, or USBFS, as agent for the investment company clients it services,
must have a reasonable belief that it knows the identity of each investment
company customer. As explained in more detail below, USBFS will use both
documentary as well as non-documentary evidence to verify the identity of every
customer that opens or otherwise has control of an account. Although many tools
will be used to verify a customer's identity, an automated database (currently
USBFS uses the Primary Payment Systems "Identity Chek" non-documentary database)
will be the primary method used to verify the identity of a customer. USBFS
will be reasonably certain that all new customers that do not produce any type
of mismatch using this database are legitimate. Unless a customer's account is
specifically noted to the contrary or is excluded from the verification
requirement by definition, the customer(s) will be presumed verified by the
Identity Chek database software.
In addition, there may be situations in which the Fund or USBFS may rely on 3'd
parties to collect identifying information from customers and perform
verifications and other duties as required under Section 326 of the USA PATRIOT
Act. In order for this reliance to occur, the Fund or its agent must determine:
o Such reliance is reasonable under the circumstances;
o The other financial institution is subject to a rule implementing 31
U.S.C. 5318(h) and is regulated by a federal functional regulator;
and
o The other financial institution enters into a contract requiring it to
certify annually to the mutual fund that it has implemented its anti-
money laundering program, and that it (or its agent) will perform the
specific requirements of the mutual fund's CIP.
3. RECORD RETENTION OF VERIFICATION INFORMATION
USBFS will retain all documents containing identification information for a
period of five (5) years from the date that the account is closed. USBFS will
retain all verification documentation for a period of five (5) years from the
date of verification.
Identification documents that will be retained are:
o Customer application.
o W-9/W-8BEN/IMY.
o Corporate/trust(omnibus/other entity documents.
o Check/wire documents.
Verification documentation that will be retained include:
o Database search print-outs.
o Recorded telephone calls.
o Written notes of telephone calls.
o Customer correspondence.
In addition, verification documents (including, but not limited to, facsimile
copies of documents, print outs from database searches, or written notes of
telephone calls with customers) will be retained for this same five year period
in all cases where additional verification is necessary to resolve one or more
discrepancies in the information provided by a customer.
4. CUSTOMER/CUSTOMER DATABASE CHECKS AGAINST GOVERNMENT LISTS
All customers will be systematically compared to all government lists (as these
lists become known), including OFAC, anytime any one of these lists is updated.
Further, all new accounts will be run against the government lists. Any matches
received for new or existing accounts will be reported to the appropriate
federal agency in charge of that list.
USE OF RISK FACTORS
USBFS will use the following risk factors in its Customer Identification
Program:
o Method by which the customer opens the account (i.e. check, wire,
NSCC).
o Type of account maintained (i.e. individual/corporate/trust).
o Type/nature of Fund's customers (i.e. retail/institutional).
o Customer's country of residence (domestic/foreign).
o How shares are distributed, purchased, liquidated or exchanged (i.e.
broker sold/sold directly).
APPLICATION OF RISK FACTORS
All of the risk factors will be considered and applied in determining the
adequacy of the information and documentation provided to verify the
customer/customer's identity. For instance, we will be less concerned about
network level three (3) accounts (type of account) opened by broker-dealers (how
shares are distributed) through the NSCC (method by which the account is
opened), versus a private entity (type of account) account that is opened for a
customer by wire from a non-cooperative foreign country (method by which account
is opened) with instructions to wire the proceeds of any liquidation request to
a bank in another foreign country (how shares may be liquidated). Accounts that
will be considered high risk and maybe subject to further inquiry and analysis
include, but are not limited to:
o Any foreign account opened in a FATF country.
o Accounts opened by wire coming from a FATF country.
Accounts that may be considered high risk and subject to further identification
verification include, but are not limited to:
o Accounts opened by wire coming from a foreign country.
o Accounts opened via the internet.
o Shell accounts opened by individuals, private corporations or other
entities.
o Accounts with no permanent street address.
DOMESTIC ACCOUNT IDENTIFICATION VERIFICATION PROCEDURES
The steps indicated below will be taken to verify the identity of a customer or
customers. It is contemplated that both documentary as well as non-documentary
information will be used for most domestic accounts, although verification will
almost be exclusively conducted through non-documentary methods as customers
generally open their accounts without appearing in person. Documentary
information will include any of the documents, including the application, that
the customer sends to establish an account. Non-documentary information may
include computer-generated printouts from database searches, customer
information supplied by investment advisory firms that may have special
relationships with certain customers, and recordings of customer calls.
Further, additional identification verification steps may be taken if the
account is considered high risk. If we do not have a reasonable belief of the
identity of a customer, the account will be rejected or the customer will not be
allowed to perform a transaction on the account until such information is
received. The Fund may also reserve the right to close the account within 5
business days (or such other time period as disclosed in the Fund's prospectus)
if clarifying information/documentation is not received. This disclaimer will
also be conspicuously disclosed in the Fund's prospectus and/or application.
Please see Lack of Verification Procedures on page 11.
NATURAL PERSON(S)* ACCOUNTS
Identifying Information Required:
1. Customer's full name.
2. Street address or under special circumstances where the customer may
be in the military or does not have a permanent street address, an APO
box or a relative's address may be provided.
3. Social security number.
4. Date of birth.
* Natural Person(s) accounts include any individual, joint tenant, tenant
in common and any other non-institutional or entity type of account.
The following procedures, in addition to those included in USBFS' new account
opening procedures, may be used to verify the identity of the customer (both
documentary and non-documentary) include, but are not necessarily limited to:
1. Signed application with substitute W-9 language containing penalties
of perjury language regarding the person's social security number
being true and accurate.
2. Checking with bank where check or wire originated.
3. Identity "Chek" database comparing person's name and social security
number for reasonableness. This software will indicate, among other
things, whether the SSN matches the name of the shareholder, was
retired or doesn't match the age of the customer.
4. Retrieving birthdate information from internet sources and comparing
to the date of birth provided on the application.
5. Reverse look-up on customer's telephone number (if provided) and
comparing to address provided on application.
6. Call customer to clarify identification information,, if necessary.
7. Checking any other related accounts for additional identification
information.
8. Discussing identifying information provided with Fund personnel and/or
USBFS relationship manager for further clarification and/or obtaining
further identifying information.
CUSTODIAL ACCOUNTS
Identifying Information Required:
1. Custodian's full name.
2. Street address (for both Custodian and minor) or under special
circumstances where the customer may be in the military of does not
have a permanent street address, an APO address or a relative's
address may be provided.
3. Social security number of both Custodian and the minor.
4. Date of birth of both Custodian and minor.
Procedures Used to Verify Identity:
All the same procedures for identifying a natural person will be used to
identify the custodian. The minor will not be independently verified. We may
collect beneficiary information (in this case the minor's information) for other
purposes than for anti-money laundering compliance.
TRUST ACCOUNTS
Identifying Information Required:
1. Name of Trust.
2. Address of Trust.
3. Document evidencing the existence of the Trust.
If USBFS cannot verify the identity of the Trust or is not comfortable with the
documentation received, it may also elect to verify the trustee or trustees who
have authority over the Trust. The trustee will need to provide:
1. Trustee(s) full name.
2. Street address.
3. Social Security Number.
4. Date of birth.
Procedures Used to Verify the Identity of the Trustee:
All the same procedures identified above for natural persons will be used to
verify the identity of each trustee. In addition, documentary evidence of the
trust instrument must be provided including that portion that identifies the
trustee(s).
CORPORATE ACCOUNTS
Identifying Information Required:
1. Corporation's full name
▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ address: principal place of business, local office or
other physical location
3. Tax identification number
4. Certified articles of incorporation
5. Individuals authorized to transact business on behalf of the
corporation along with these individual's identifying information
(name, permanent residential street address, social security number
and date of birth)
Procedures Used to Verify Identity:
All the same procedures for identifying a natural person may be used to identify
the authorized person(s) in #5 above if USBFS is not comfortable with the
documentation received The following additional procedures (documentary and non-
documentary) may also be taken:
1. Verifying the existence of the corporation either by checking the
corporate directory listing of public companies provided by Commerce
Clearing House or other similar means, or, in the case of a privately
held corporation, checking with the specific state agency responsible
for registering and authorizing the corporation's ability to do
business within that state.
2. Contacting bank where check or wire originated
3. Obtaining corporate resolutions and by-laws.
4. Obtaining certificates of incumbency and/or other corporate documents
indicating who is authorized to conduct business on behalf of the
corporation.
OMNIBUS ACCOUNTS
Identifying Information Required:
1. Full name of omnibus account holder.
2. Business street address.
3. Employer Identification Number.
Procedures Used to Verify Identity:
Same procedures for identifying a natural person will be used to identify the
authorized person if USBFS is not comfortable with the documentation received
The following additional procedures may be taken:
1. Verify the existence of the broker dealer or nominee by checking that
entity's registration with the NASD or similar agency for corporate
nominees.
2. Obtaining corporate resolutions and by-laws.
3. Obtaining certificates of incumbency and/or other corporate documents
indicating who is authorized to conduct business on behalf of the
corporation.
NOTE: This customer may be exempt and not subject to verification. However, the
customer will be analyzed, to the extent reasonable and practicable, to
determine its status as an exempt customer. If USBFS is unable to determine its
status as an exempt customer, it will treat the entity as a customer and will
attempt to verify its identity or reject the account in accordance with the
procedures outlined on page 11.
BANKS/TRUST COMPANIES
Identifying Information Required
1. Full name of Bank or Trust Company.
2. Business street address.
3. Employer Identification Number.
Procedures Used to Verify Identity:
Same procedures for identifying a natural person will be used to identify the
authorized person if USBFS is not comfortable with the documentation received.
The following additional procedures may be taken:
1. Verify the existence of the Bank/Trust Co./Credit Union/Savings and
Loan through banking or other federal/state regulatory agencies.
2. Obtaining appropriate resolutions.
3. Obtaining certificates of incumbency and/or other documents indicating
who is authorized to conduct business on behalf of the banking
institution.
NOTE: This customer may be exempt and not subject to verification. However, the
customer will be analyzed, to the extent reasonable and practicable, to
determine its status as an exempt customer. If USBFS is unable to determine its
status as an exempt customer, it will treat the entity as a customer and will
attempt to verify its identity or reject the account in accordance with the
procedures outlined on page 11.
PARTNERSHIP/CLUBS/LODGES/ASSOCIATIONS
Identifying Information Required:
Same information as for corporate accounts
Procedures Used to Verify Identity:
Same procedures for identifying a natural persons will be used to identify the
authorized person for any entity that is not a "legal" entity such as a civic
club. For a partnership or other legally recognized entity, USBFS may verify
the authorized person(s) if it cannot otherwise verify the existence of the
entity. The following additional procedures may be taken:
1. Verify the existence of the partnership/club/lodge/association by
checking with appropriate federal or state authorities, if applicable.
2. Obtain partnership agreement or other appropriate documentation to
indicate official existence of the organization.
3. Obtain authorized person resolutions or other documentation evidencing
who has the authority to act on behalf of the partnership/club/lodge/
association.
OTHER ENTITIES
Identifying Information Required:
Same information as for Partnerships/Clubs/Lodges/Associations
Procedures Used to Verify Identity:
Same procedures for identifying a natural person will be used to identify the
authorized person if USBFS is not comfortable with the documentation on the
other entity. The following additional procedures may be taken:
1. Verify the existence of the entity through appropriate governmental
authority, if applicable.
2. Obtain documentation indicating the nature and purpose of the entity.
3. Obtain documentation evidencing who has the authority to act on behalf
of the entity.
LACK OF VERIFICATION PROCEDURES
1. WHEN AN ACCOUNT WILL NOT BE OPENED: Generally, whenever the customer fails
to include all identification information as instructed on the Fund's
application. This lack of identifying information may include any
documentation, such as a trust instrument or certified articles of
incorporation that may be required by the type of account being
established. However, the Fund or its agent may reject any account if, in
accordance with the Fund's prospectus, and in the opinion of the Fund or
its agent, the account is suspected of being opened for fraud or money
laundering purposes.
USBFS, as agent for the Fund will correspond with the prospective customer
advising them of the reasons (including, if applicable the identification
and verification requirements under the USA PATRIOT Act) their account has
been rejected and what, if any, information is required to allow the
application to be accepted.
2. WHEN AN ACCOUNT MAY BE CONDITIONALLY ESTABLISHED: All accounts that are
required to be verified are run through a fraud software database
("Identity Chek") and the account owners are presumed to be verified as
long as there is no mismatching or other information that appears as a
warning for that account. Further, the Fund or its agent may elect to open
an account that may lack one or more pieces of documentation (such as a
trust instrument or partnership agreement) but may not allow any additional
transactions to occur (or may not allow the account to liquidate shares)
until such missing documentation is received. USBFS; as agent for the
Funds will correspond with the customer advising them of the conditional
acceptance of their purchase and what additional information is necessary
to remove the condition(s).
3. WHEN THE FUND SHOULD FILE A SUSPICIOUS ACTIVITY REPORT: The Funds or its
agent may file a Suspicious Activity Report ("SAW") with FinCEN whenever it
reasonably believes that criminal activity, including money laundering, may
be taking place. USBFS, on behalf of its Fund clients, will review the
totality of circumstances surrounding the opening of an account in reaching
a determination as to whether a SAR should be filed. Instances which may
rise to the level of triggering a SAR filing would be:
a. A wire is received from a bank in a non-cooperative foreign country to
establish the account.
b. The individual/person establishing the account is on the OFAC list.
c. The individual seeking to open the account is asking questions about
our SAR reporting obligations.
These are only very general examples of several potential SAR generating
circumstances. and other facts surrounding the account opening request would be
analyzed before deciding to file a SAR.
4. WHEN THE FUND SHOULD CLOSE AN ACCOUNT AFTER VERIFICATION ATTEMPTS HAVE
FAILED: The Fund will close an account within 5 business days of account
opening (or such other period as may be disclosed in its prospectus) at the
net asset value of the Fund on the day the account is closed if it cannot
be reasonably certain of the customer's identity. USBFS, as agent for the
Fund, will correspond with the customer to advise them, if appropriate, of
why their account is being closed and the efforts conducted to attempt to
verify their identity.
FOREIGN ACCOUNT IDENTIFICATION PROCEDURES
NOTE: This section will only apply to those Funds who have contractually agreed
to perform, either through an agent or otherwise, the verification required by
these final Section 326 rules.
While many of the same pieces of identifying information and documentation that
is required for domestic accounts will be required for foreign accounts, some of
the information will be different and some others may not be obtainable or
capable of verification. This may be especially true of foreign entities where
other types of verification measures may have to be utilized to be reasonably
sure we are dealing with a legitimate entity. To the extent the Fund or its
agent is unsure of the identity of the foreign person or entity, the Fund or its
agent will either reject the application if the required information is missing,
or the account will be flagged as being a high risk account until the clarifying
information/documentation is obtained. (See Lack of Verification Procedures
above) If the additional information/documentation is not received upon request
(within 5 business days or such other time as disclosed in the Fund's
prospectus), the foreign account will be closed and proceeds sent back to the
sender at the net asset value on the day of liquidation.
NATURAL PERSON(S)
Identifying Information Required
1. Customer's full name.
2. Permanent residential street address.
3. One or more of the following pieces of identification:
a. a taxpayer identification number.
b. passport number and country of issuance.
c. alien identification card number.
d. number and country of issuance of any other government-issued
document evidencing nationality or residence and bearing a photo-
graph or similar safeguard.
Procedures Used to Verify Identity: to be provided by Fund or its agent
FOREIGN ENTITIES
Identifying Information Required
1. Entity's full name.
2. Business street address: principal place of business, local office or
other physical location.
3. Foreign country's identification number issued to that entity.*
* When opening an account for foreign business or enterprise that does
not have an identification number, the mutual fund must request
alternative government-issued documentation certifying the existence of
the business or enterprise.
Procedures Used to Verify Identity (to the extent this is possible):
All the same procedures for identifying a natural person will be used to
identify the authorized person, if the Funds or its agent is not comfortable
with the documentation of the foreign entity. The following additional
procedures (documentary and non-documentary) may be taken:
1. Verifying the existence of the foreign entity by contacting the
appropriate foreign governmental agency responsible for the entity
2. Obtaining documentation from the foreign entity that indicates its
purpose (such as copy of foreign partnership agreement, corporate
resolution, by-laws, etc.)
3. Obtaining documentation indicating who has the authority to act on
behalf of the entity.
4. Checking with foreign bank where check or wire originated.