Form 485BPOS AMERICAN FUNDS TAX-EXEMP
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DEFERRED COMPENSATION PLAN
(Amended and restated, effective as of January 1, 2020)
TABLE OF CONTENTS
| Paragraph Title | Page No | ||
| 1. | Definitions | 2 | |
| 2. | Introduction | 5 | |
| 3. | Plan Oversight; Administration and Amendment | 5 | |
| 3.1. | Plan Oversight and Operation | 5 | |
| 3.2. | Plan Interpretation and Administration | 5 | |
| 3.3. | Plan Amendment | 5 | |
| 3.4. | Plan Termination | 6 | |
| 4. | Election to Defer Payments | 6 | |
| 4.1. | Election to Defer | 6 | |
| 4.2. | Current Independent Board Members | 6 | |
| 4.2.a. Newly Elected or Appointed Independent Board Members | 6 | ||
| 4.3. | Modification or Revocation of Election to Defer | 6 | |
| 5. | Beneficiary Designation | 6 | |
| 6. | Deferred Payment Account | 7 | |
| 6.1. | Crediting Amounts | 7 | |
| 6.2. | Change of Investment Designation | 7 | |
| 6.3. | Exchange Requests | 7 | |
| 6.4. | Plan Participants Serving on Money Market Fund Boards | 8 | |
| 6.5. | Plan Participant Electing Installment Payout Option under Section 7.4.a | 8 | |
| 6.5a Alternative Instructions under Section 6.5 | 8 | ||
| 7. | Timing and Manner of Payments | 8 | |
| 7.1. | Timing of Payments | 8 | |
| 7.2. | Manner of Payment – Lump Sum | 8 | |
| 7.3. | Alternative Payment Methods | 9 | |
| 7.4. | Death of Plan Participant | 9 | |
| 7.4.a Optional Payment Method upon Death for Post-2004 Deferrals | 9 | ||
| 7.5. | Disability of Plan Participant | 10 | |
| 7.6. | Unforeseeable Emergency | 10 | |
| 7.7. | Modification or Revocation for Post-2004 Deferrals | 10 | |
| 7.7.a. Special Transition Rule | 11 | ||
| 7.8. | Modification or Revocation for Pre-2005 Deferrals | 11 | |
| 8. | Miscellaneous | 11 | |
| 1. DEFINITIONS |
1.1. Administrator. An individual designated by CRMC to process forms and receive Plan related communications from Plan Participants and otherwise assist the Committee in the administration of the Plan.
1.2. Beneficiary(ies). The person or persons last designated in writing by a Plan Participant in accordance with procedures established by the Committee to receive the amounts payable under the Plan in the event of the Plan Participant’s death. A Plan Participant may designate a Primary Beneficiary(ies) to receive amounts payable under the Plan upon the Plan Participant’s death. A Plan Participant may also name a Contingent Beneficiary(ies) to receive amounts payable under the Plan upon the Participant’s death if there is no surviving Primary Beneficiary(ies).
1.3. Board(s). The Board of Directors or Trustees of a Fund(s).
1.4. Committee. A group of Independent Board Members responsible for oversight and operation of the Plan. The Committee must consist of a minimum of three members, each currently serving as an Independent Board Member of at least one Fund. Each Fund, by the affirmative vote of at least a majority of its Board (including a majority of the Fund’s Independent Board Members) shall appoint the initial members of the Committee. Thereafter, the Committee shall determine its membership by majority vote.
1.5. CRMC. Capital Research and Management Company.
1.6. Date of Crediting. The Date of Crediting for compensation deferred by a Plan Participant will be as soon as administratively practicable after the date such compensation would otherwise be paid.
1.7. Deferred Payment Account(s). An account established in the name of the Plan Participant on the books of each Fund serviced by the Plan Participant. Such account shall reflect the number of Phantom Shares credited to the Plan Participant under the Plan.
| (i) | A Deferred Payment Account will be divided into two separate Deferred Payment Accounts. One account will contain deferrals made prior to January 1, 2005, including any earnings thereon (“pre-2005 deferrals”). The other account will contain deferrals made on or after January 1, 2005, including any earnings thereon (“post-2004 deferrals”). |
| (ii) | For those participants residing outside the U.S., Deferred Payment Accounts will further be divided into two separate accounts, “U.S.” and “Non-U.S.,” to provide appropriate tax reporting. |
1.8. Disabled or Disability. A Plan Participant is disabled when he or she is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.
1.9. Election Forms. The three forms listed below as prescribed by the Administrator:
| (i) | Beneficiary Designation Form. A form indicating the beneficiary designations of a Plan Participant. |
| (ii) | Deferral Election Form. A form indicating the compensation to be deferred under the Plan and the timing and manner of distribution. This form must be filed with the Administrator prior to the first day of the calendar year to which it first applies. Notwithstanding the foregoing, any person who is first elected or appointed an Independent Board Member of the Fund may file this form before or within 30 days after first becoming an Independent Board Member. |
| (iii) | Rate of Return Election Form. A form indicating the percentages of deferrals allocated to each Fund. |
1.10. Fixed Dollar Installment Method. One of the two alternative methods to a lump-sum available for payments under the Plan other than for reasons of death, Disability or Unforeseeable Emergency. The amount of each installment shall equal the fixed dollar amount previously selected by the Plan Participant on the Deferral Election Form. A Plan Participant’s Deferred Payment Account subject to the Fixed Dollar Installment method shall be adjusted by the amount of each such installment payment by reducing the number of Phantom Shares of each Fund credited to the Deferred Payment Account using the net asset values per Class F-2 share as of the last day of the calendar quarter immediately preceding the date of payment. These reductions shall occur proportionately so that, with respect to each such Fund, the ratio of the value of all Phantom Shares of the Fund to the value of the Deferred Payment Account shall remain the same before and after each installment payment.
1.11. Fund(s). A mutual fund advised by CRMC, collectively the “Funds.”
1.12. Independent Board Member(s). Directors or trustees, and as applicable, advisory board members and director or trustee emeriti who are not considered “interested persons” of any Participating Fund.
1.13 Money Market Fund. A mutual fund managed by CRMC that invests solely in money market instruments.
1.14. Participating Funds. Mutual funds managed by CRMC that have adopted the Plan.
1.15. Permissible Payment Event. A Permissible Payment Event is any one of the following:
| (i) | The date specified on the Deferral Election Form by the Plan Participant that is objectively determinable at the time compensation is deferred under the Plan and is at least twenty-four months past the date of the first deferral election made by the Plan Participant; or |
| (ii) | The date on which the Plan Participant is no longer an Independent Board Member of any Fund; or |
| (iii) | The date the Plan Participant dies; or |
| (iv) | The date the Administrator receives notification that the Plan Participant is Disabled; or |
| (v) | The date the Committee determines that the Plan Participant has an Unforeseeable Emergency; or |
| (vi) | For pre-2005 deferrals only, a distribution event permissible under the terms of the Plan in effect on January 1, 2004. |
1.16. Phantom Shares. Fictional shares of the Fund(s) that a Plan Participant has selected on the Rate of Return Election Form that have been credited to his or her Deferred Payment Account(s). Phantom Shares shall have the same economic characteristics as actual Class F-2 shares in terms of mirroring changes in net asset value and reflecting corporate actions (including, without limitation, receipt of dividends and capital gains distributions). However, because Phantom Shares are fictional, they shall not entitle any Plan Participant to vote on matters of any sort, including those affecting the Funds.
1.17. Plan or Deferred Compensation Plan. The deferred compensation plan adopted by the Participating Funds.
1.18. Plan Participant(s). An Independent Board Member who has elected to defer compensation under the Plan, or is receiving payments under the Plan in respect of prior service as an Independent Board Member.
1.19. Unforeseeable Emergency. The following events may constitute an Unforeseeable Emergency under the Plan: (i) severe financial hardship of the Plan Participant or his or her Beneficiary(ies) resulting from illness or accident of the Plan Participant or Beneficiary(ies) and such spouses or dependents of the Plan Participant or Beneficiary(ies); (ii) loss of the Plan Participant’s or Beneficiary(ies)’ property due to casualty or (iii) similar extraordinary unforeseeable circumstances beyond the control of the Plan Participant or the Beneficiary(ies). The Committee, in its sole discretion, will determine if the Plan Participant has an Unforeseeable Emergency, after taking into account the extent to which such Unforeseeable Emergency is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Plan Participant's assets (to the extent the liquidation of such assets would not itself cause an Unforeseeable Emergency).
1.20. Variable Dollar Installment Method. One of the two alternative methods to a lump-sum available for payments under the Plan other than for reasons of death, Disability or Unforeseeable Emergency. The amount of each installment shall be determined for a Deferred Payment Account by multiplying the number of Phantom Shares of a Fund(s) allocated to the Deferred Payment Account by a fraction, the numerator of which shall be one and the denominator of which shall be the then remaining number of unpaid installments (including the installment then to be paid), and multiplying the resulting number of Phantom Shares by the net asset value per
Class F-2 share of such Fund(s) as of the last day of the calendar quarter immediately preceding the date of payment. A Plan Participant’s Deferred Payment Account subject to the Variable Dollar Installment method shall be adjusted by the amount of each such installment payment by reducing the number of Phantom Shares of each Fund credited to the Deferred Payment Account. These reductions shall occur proportionately so that, with respect to each such Fund, the ratio of the value of all Phantom Shares of the Fund to the value of the Deferred Payment Account shall remain the same before and after each installment payment. For this purpose, net asset values per Class F-2 share as of the last day of the calendar quarter immediately preceding the date of payment shall be used in calculating pre- and post-payment values.
| 2. INTRODUCTION |
With effect on January 1, 2005, each Participating Fund has adopted, by the affirmative vote of at least a majority of its Board (including a majority of its Board members who are not interested persons of the mutual fund), this Plan for Independent Board Members.
| 3. PLAN OVERSIGHT; ADMINISTRATION AND AMENDMENT |
3.1. Plan Oversight and Operation. The Committee shall enforce the Plan in accordance with its terms, shall be charged with the general administration of the Plan, and shall have all powers necessary to accomplish its purposes. The Committee may utilize the services of the Administrator to conduct routine Plan administration.
3.2. Plan Interpretation and Administration. The Committee shall have full discretion to construe and interpret the terms and provisions of the Plan, which interpretation or construction shall be final and binding on all parties, including, but not limited to, the Funds and any Plan Participant or Beneficiary. The Committee shall administer such terms and provisions in a uniform and non-discriminatory manner and in full accordance with any and all laws and regulations applicable to the Plan.
3.3. Plan Amendment. The Committee may approve any amendment to the Plan; provided, however, (i) that no such amendment shall adversely affect the right of Plan Participants to receive amounts previously credited to their Deferred Payment Accounts; and (ii) each Independent Board Member shall receive notification of any such proposed amendment to the Plan at least ten (10) days prior to the Committee’s consideration of such amendment. Upon receipt of such notification, an Independent Board Member may communicate to the Committee for its consideration any concern or objection to the proposed amendment.
3.4. Plan Termination. The Committee may recommend to the Boards the termination of the Plan; provided, however, that no such termination shall adversely affect the right of Plan Participants to receive amounts previously credited to their Deferred Payment Accounts.
| 4. ELECTION TO DEFER PAYMENTS |
4.1. Election to Defer. Pursuant to the Plan, Independent Board Members may elect to have all or any portion of payment of their compensation deferred as provided herein. An Independent Board Member who elects to participate in the Plan shall file copies of the Election Forms with the Administrator. An Independent Board Member will not be treated as a Plan Participant and no amount will be deferred under the Plan until the Election Forms are received by the Administrator and determined by the Administrator to be complete and in good order.
4.2. Current Independent Board Members. A deferral election made by a Plan Participant who timely files the Election Forms with the Administrator shall become effective and apply with respect to compensation earned during the calendar year following the filing of the deferral election, and each subsequent calendar year, unless modified or revoked in accordance with the terms of this Plan. During the period from such filing and prior to the effectiveness of such election, the most recently filed and effective Deferral Election Form shall apply to all amounts payable to the Plan Participant under the Plan.
4.2.a. Newly Elected or Appointed Independent Board Members. Any person who is first elected or appointed an Independent Board Member of the Fund during a calendar year and who timely files the Election Forms with the Administrator may elect to defer any unpaid and future compensation during such calendar year. Unless revoked or modified in accordance with the terms of this Plan, a deferral election made pursuant to this paragraph will apply for each subsequent calendar year after the year of the deferral election.
4.3. Modification or Revocation of an Election to Defer. A Plan Participant may modify or revoke an election to defer, as to future compensation, effective on the first day of the next calendar year, which modification or revocation shall remain in effect for each subsequent calendar year (until modified or revoked in accordance with the Plan), by filing a new Deferral Election Form with the Administrator prior to the beginning of such next calendar year.
| 5. BENEFICIARY DESIGNATION |
Each Plan Participant shall designate on the Beneficiary Election Form the Primary and, if applicable, Contingent Beneficiary(ies) he or she desires to receive
amounts payable under the Plan in the event of the Plan Participant’s death. A Plan Participant may from time to time change his or her designated Primary or Contingent Beneficiary(ies) without the consent of such Beneficiary(ies) by filing a new Beneficiary Election Form with the Administrator.
At the time of death of a Plan Participant, if there is no living designated Primary Beneficiary(ies), the designated Contingent Beneficiary(ies), if any, shall be the Beneficiary. If there are no living Primary or Contingent Beneficiary(ies), the Plan Participant’s surviving spouse shall be the Beneficiary. If there is no surviving spouse, the Plan Participant’s estate shall be the Beneficiary.
| 6. DEFERRED PAYMENT ACCOUNT |
6.1. Crediting Amounts. A Plan Participant may select one or more Funds in which his or her deferred compensation is invested for purposes of crediting earnings, by filing the Rate of Return Election Form with the Administrator. Any compensation deferred by a Plan Participant shall be credited to his or her Deferred Payment Account on the books of each Fund served by the Plan Participant in the form of Phantom Shares of the Fund(s) that the Plan Participant has selected.
The number of Phantom Shares credited to a Plan Participant’s Deferred Payment Account shall be the number of whole and fractional Phantom Shares determined by dividing the amount of the deferred compensation invested in the particular Fund(s) by the net asset value per Class F-2 share of such Fund(s) as of the Date of Crediting.
6.2. Change of Investment Designation. A Plan Participant may change the designation of the Fund(s) in which his or her future deferred compensation is invested through the participant website or by filing a revised Rate of Return Election Form with, or by telephoning, the Administrator. The Administrator will confirm promptly in writing to the Plan Participant any change of investment designation accomplished by telephone. Any change of investment designation shall be effective only with respect to compensation deferred after receipt of such request. If a request is received after 1:00pm PT, the change in investment designation will be effective the next business day.
6.3. Exchange Requests. By contacting the Administrator or using the participant website, a Plan Participant may request to exchange Phantom Shares of one or more Funds previously credited to a Deferred Payment Account for Phantom Shares of another Fund(s) based on their relative net asset values per Class F-2 share next determined. The Administrator will confirm promptly in writing to the Plan Participant any exchange request made by telephone. An exchange request will be effective after receipt of such request. If a request is received after the close of the New York Stock Exchange, the exchange will be effective on the next business day. An exchange request may relate to one or more Deferred Payment Accounts; however, no more than 12 exchange requests will be processed each calendar year
for all amounts credited under this Plan to any one Plan Participant. For purposes of this limitation, all exchange requests received in one day shall be treated as one exchange request.
6.4. Plan Participants Serving on Money Market Fund Boards. Notwithstanding the other provisions of Section 6, a Plan Participant serving on the Board of a Money Market Fund may select only that Money Market Fund in which his or her compensation is invested for purposes of crediting earnings. In addition, no exchanges will be permitted in a Deferred Payment Account on the books of a Money Market Fund.
6.5. Plan Participant Electing Installment Payout Option under Section 7.4.a. When a Plan Participant elects the limited installment payout option described in Section 7.4.a, all post-2004 deferrals will be exchanged into the appropriate American Funds Target Date Retirement Fund based upon the age of the surviving spouse Beneficiary at the time of the Participant’s death unless alternative instructions are provided in accordance with Section 6.5.a. Such exchange will occur as soon as administratively practicable, but in no event later than thirty (30) days from the date that the Plan Administrator is notified of the Plan Participant’s death. Once this exchange occurs, no further exchanges will be permitted for post-2004 deferrals.
6.5.a. Alternative Instructions under Section 6.5. A Plan Participant electing the limited installment payout option described in Section 7.4.a. may instruct the Administrator to exchange all post-2004 deferrals into one or more Funds, rather than the appropriate American Funds Target Date Retirement Fund as provided for in Section 6.5. A Plan Participant may change instructions provided under this Section 6.5.a. no more than 12 times each calendar year. To be effective, such instructions must be received by the Administrator prior to the Plan Participant’s death.
| 7. TIMING AND MANNER OF PAYMENTS |
7.1. Timing of Payments. Amounts credited to a Deferred Payment Account under the Plan to a Plan Participant shall be paid to the Plan Participant in accordance with the terms of the Plan only upon the occurrence of a Permissible Payment Event.
7.2. Manner of Payment – Lump Sum. Upon the occurrence of a Permissible Payment Event, the amount of payment to a Participant shall be determined by multiplying the number of Phantom Shares of a Fund(s) that have been allocated to the Plan Participant’s Deferred Payment Account subject to the Permissible Payment Event, by the net asset value per Class F-2 share of such Fund(s) as of the date of the Permissible Payment Event.
The payment shall be made to the Plan Participant as soon as administratively practicable, but in no event later than thirty (30) days from the date of the Permissible
Payment Event.
7.3. Alternative Payment Methods. A Plan Participant entitled to payment for reasons other than death, Disability or Unforeseeable Emergency, may elect, instead of a lump-sum payment, to receive annual or quarterly installment payments as specified by the Plan Participant on the Deferral Election Form.
The Plan Participant may elect either the Variable Dollar Installment Method or the Fixed Dollar Installment Method for a period not to exceed thirty (30) years. Once installment payments begin under either method, they cannot be stopped, except in case of death, Disability or Unforeseeable Emergency. Under either method, the first payment to a Plan Participant shall be calculated as of last day of the calendar quarter that contains the Permissible Payment Event. This first payment shall be made to the Plan Participant as soon as administratively practicable thereafter, but in no event later than thirty (30) days after the end of the calendar quarter that contains the Permissible Payment Event. Subsequent payments shall be made within thirty (30) days of the close of future calendar quarters or years, consistent with the Plan Participant’s election of either quarterly or annual installments. As of December 31, 2006, Plan Participants receiving payments under either one of the alternative payment methods will continue to receive payments under the payment schedule existing on that date.
In no event shall a payment under the Fixed Dollar Installment Method relating to a Deferred Payment Account exceed the value of the Deferred Payment Account as of the last day of the calendar quarter immediately preceding the date of payment. If any balance credited to a Plan Participant’s Deferred Payment Account remains positive on the date 30 years from the date of the initial payment to the Plan Participant, then such remaining balance shall be paid to the Plan Participant as soon as practicable thereafter in a single lump sum payment.
The right to a series of installment payments with respect to post-2004 deferrals under the Plan shall be treated as a right to a series of separate payments.
7.4. Death of Plan Participant. If the Plan Participant dies at any time before all amounts in his or her Deferred Payment Accounts have been paid, such remaining amounts shall be paid in a lump-sum to the Plan Participant’s Beneficiary(ies).
7.4.a. Optional Payment Method upon Death for Post-2004 Deferrals. With respect to post-2004 deferrals under the Plan, a Plan Participant may elect for his or her spouse Beneficiary to receive any remaining installment payments due the Plan Participant at his or her death if all four of the following conditions are met:
| (i) | The spouse was married to the Plan Participant at the time of the Plan Participant’s death. |
| (ii) | The spouse was designated as the sole Beneficiary under the |
Plan.
| (iii) | At the time of the Plan Participant’s death, the timing and manner of distribution election in effect for such Plan Participant was one of the alternative payment methods described in Section 7.3 of the Plan. |
| (iv) | The Plan Participant had begun receiving installment payments described under Section 7.3 of the Plan at the time of his or her death. |
An election under this Section 7.4.a must be made at least 12 months before the first scheduled payment under the Plan Participant’s current timing and manner of payment designation.
All installment payments made to a spouse Beneficiary under this section will be made under the same timing and manner of payment election made by the Plan Participant and in effect at the time of the Plan Participant’s death. No changes to the timing or manner of payment will be permitted.
If the spouse Beneficiary dies while there are still post-2004 account balances in the Plan, all remaining post-2004 account balances will be paid to the estate of the spouse Beneficiary as soon as administratively practicable, but in no event later than thirty (30) days from the date of the spouse Beneficiary’s death.
7.5. Disability of Plan Participant. In the event the Plan Participant shall become Disabled before all amounts credited to the Plan Participant’s Deferred Payment Accounts have been paid to him or her, such remaining amounts shall be paid in a lump sum to the Plan Participant.
7.6. Unforeseeable Emergency. If the Committee determines that the Plan Participant has an Unforeseeable Emergency, the Committee may make a lump sum payment to the Plan Participant from his or her Deferred Payment Account(s) in an amount not to exceed the amount necessary to satisfy the emergency need plus any taxes that may be owed on the payment. In the event the payment is less than the value of all of the Plan Participant’s Deferred Payment Accounts, the Deferred Payment Accounts shall be reduced proportionately so that, with respect to each such Fund, the ratio of the value of all Phantom Shares of the Fund to the value of the Deferred Payment Account shall remain the same before and after payment.
7.7. Modification or Revocation for Post-2004 Deferrals. A Plan Participant’s designation as to timing and manner of payments of post-2004 deferrals under the Plan may be modified or revoked by filing a written election with the Administrator. Such designation will not be effective for at least 12 months. To be valid the new designation must (i) be made at least 12 months before the first scheduled payment under the current designation and (ii) delay the first payment by at least 5 years from the date the first payment would otherwise have been made under the current designation. No other modification of the designation as to the timing or manner of
payment will be valid.
7.7.a. Special Transition Rule. Under U.S. Treasury transition relief that extends through December 31, 2008 (or such later date as may be included in further Treasury guidance) a Plan Participant may change the timing or manner of payment of post-2004 deferrals without regard to the limitations described in paragraph 7.7. A Plan Participant may not, however, change the timing of payment with respect to deferrals that would have been paid in the year that he or she uses the transition relief. Furthermore, a Plan Participant may not accelerate post-2004 deferrals into the year that he or she takes advantage of the transition relief.
7.8. Modification or Revocation for Pre-2005 Deferrals. A Plan Participant’s designation as to timing and manner of payments of pre-2005 deferrals under the Plan may be modified or revoked by filing a written election with the Administrator. However, any subsequent designation that would result in a change in the timing of a payment under the Plan or a change in the manner of payments under the Plan shall not be effective unless such subsequent designation is made not less than 12 months prior to the date of the first scheduled payment under the Plan. With respect to such pre-2005 deferrals, the Committee may, in its sole discretion, accelerate the payment of any pre-2005 deferral.
| 8. MISCELLANEOUS |
8.1. Purchase of Underlying Shares. To the extent a Plan Participant’s Deferred Payment Account has been credited with Phantom Shares of a Fund other than the Fund responsible for payment of the compensation being deferred, a Fund may, but shall not be obligated to, purchase and maintain Class F-2 shares of such other Fund in amounts equal in value to such Phantom Shares.
8.2. Unsecured Promise to Pay. Amounts credited to a Plan Participant’s Deferred Payment Account under this Plan shall not be evidenced by any note or other security, funded or secured in any way. No assets of a Fund (including, without limitation, shares of other Funds) shall be segregated for the account of any Plan Participant (or Beneficiary), and Plan Participants (and Beneficiaries) shall be general unsecured creditors for payments due under the Plan.
8.3. Withholding Taxes. The Administrator shall deduct, any federal, state or local taxes and other charges required by law to be withheld.
8.4. Statements. The Administrator, on behalf of each Fund, shall furnish to each Plan Participant a statement showing the balance credited to his or her Deferred Payment Account at least annually.
8.5. Assignment. No amount in a Plan Participant’s Deferred Payment Account may be assigned or transferred by the Plan Participant except by will or the law of descent and distribution.
8.6. Governing Law; Severability. The Plan shall be construed, governed and administered in accordance with the laws and regulations of the United States Treasury Department and the State of California. The Plan is subject to applicable law and regulation and, in the event of changes in such law or regulation, shall be construed and applied in a manner in which the intent of its terms and provisions are best preserved. In the event that one or more provisions of the Plan are held invalid, illegal or unenforceable in any respect on the basis of any particular circumstances or in any jurisdiction, the validity, legality and enforceability of such provision or provisions under other circumstances or in other jurisdictions and of the remaining provisions shall not in any way be affected or impaired.
8.7. Washington Management Corporation. Washington Management Corporation (“WMC”) provided services to the Washington Mutual Investors Fund, The Tax Exempt Fund of Maryland, and The Tax Exempt Fund of Virginia (collectively, the “WMC Funds”). WMC became a wholly-owned subsidiary of CRMC, effective as of December 21, 2012, and ceased to provide services to the WMC Funds after September 1, 2014.
The WMC Funds maintained the Deferred Compensation Plan for Independent Board Members of the WMC Funds (the “WMC Plan”). Effective as of March 21, 2013, each WMC Fund, by the affirmative vote of at least a majority of its Board (including a majority of its Board members who are not interested persons of the mutual fund), merged the WMC Plan into, and adopted, the Plan.
The terms of the Plan shall govern amounts deferred under the WMC Plan, provided that, in the case of a former participant in the WMC Plan, a reference to the terms of the Plan in effect on January 1, 2004 shall be deemed a reference to the terms of the WMC Plan in effect on January 1, 2004. The timing and form of payments of amounts deferred under the WMC Plan as well as elections to defer made under the terms of the WMC Plan shall not be affected by the merger. The terms of this Plan and the merger of the WMC Plan into the Plan are intended to comply with section 409A of the Code.
I am a participant in the Deferred Compensation Plan and I wish my compensation from Board service to all funds deferred as follows:
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I elect to defer the following portion of my compensation from the Participating Funds and designated above:[1] |
· Compensation as an Independent Board Member: _______% or · Compensation as an Independent Board Member excluding money market funds (MMF and CCF): _______%
I understand that, to be effective, this election must be filed with the Administrator of the Plan prior to the first day of the first calendar year to which it applies, except as provided in Section 4.2.a. of the Plan. Once effective, this election will continue until revoked or modified in accordance with the terms of the Plan. |
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I hereby specify that I shall be entitled to payment of my deferred compensation upon the occurrence of either Permissible Payment Event indicated in the corresponding box (check one), or any other Permissible Payment Event: |
q The date on which I am no longer an Independent Board Member of any fund managed by CRMC; or
q The following date which is objectively determinable at the time my compensation is deferred and is at least twenty-four months past the date of the first deferral election made by me (cannot be an “event”):
________________________________________________________
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I hereby specify that payments from my Deferred Payment Account(s) for the fund(s) listed above be made beginning within thirty (30) days of the close of the calendar quarter containing the Permissible Payment Event (outlined above): |
q In a single lump sum payment;
OR
q In annual q In quarterly variable dollar installment payments over a period of q 5 years q 10 years q 15 years q years (not to exceed 30);
OR
q In annual q In quarterly fixed dollar payments of $___________each; however, in no event shall any installment payment exceed the balance credited to my Deferred Payment Account on the date immediately preceding the date of payment.
AND (for multiple payments)
q Applicable to Post-2004 deferrals only; continue any remaining installment payments due at my death to my surviving spouse beneficiary per the conditions stated in section 7.4.a of the Plan. Absent this election, post-2004 deferrals will be paid in a lump sum at death. |
________________________________________________________________
Name (please print)
___________________________
Date
______________________________________________________________________
Signature
___________________________
SSN or ITIN
I hereby designate the following beneficiary(ies) to receive any death benefit payable on account of my participation in the Deferred Compensation Plan.
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Primary Beneficiary(ies): |
1. Name:______________________________________ % Share:_____________________ Address:__________________________________________________________________ Relationship:______________________________________________________________ Date of Birth:___________________ Social Security #:_____________________ Trust Name and Date (if beneficiary is a trust):_________________________________ Trustee of Trust:____________________________________________________________
2. Name:______________________________________ % Share:_____________________ Address:__________________________________________________________________ Relationship:______________________________________________________________ Date of Birth:___________________ Social Security #:_____________________ Trust Name and Date (if beneficiary is a trust):_________________________________ Trustee of Trust:____________________________________________________________ |
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Contingent Beneficiary(ies): |
1. Name:______________________________________ % Share:_____________________ Address:__________________________________________________________________ Relationship:______________________________________________________________ Date of Birth:___________________ Social Security #:_____________________ Trust Name and Date (if beneficiary is a trust):_________________________________ Trustee of Trust:____________________________________________________________
2. Name:______________________________________ % Share:_____________________ Address:__________________________________________________________________ Relationship:______________________________________________________________ Date of Birth:____________________ Social Security #:_____________________ Trust Name and Date (if beneficiary is a trust):_________________________________ Trustee of Trust:____________________________________________________________ |
I understand that payment will be made to my Contingent Beneficiary(ies) only if there is no surviving Primary
Beneficiary(ies).
__________________________________________________________________
Participant’s Name (please print)
______________________
Date
__________________________________________________________________
Participant’s Signature
I am a participant in the Deferred Compensation Plan and I wish my compensation from Board service to all funds invested as follows:
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With respect to future earnings, I hereby elect to have amounts credited to my Deferred Payment Account(s) for the fund(s) listed above invested in Class F-2 shares of the specified funds:
*I understand that if I serve on the Board of a money market fund, I may only have amounts credited to my Deferred Payment Account for that money market fund with respect to future earnings invested in the applicable Class F-2 or M shares of that particular money market fund.
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FUNDS AMCAP Fund (AMCAP) American Balanced Fund (AMBAL) American Funds Corporate Bond Fund (CBF) American Funds Developing World Growth and Income Fund (DWGI) American Funds Emerging Markets Bond Fund (EMBF) American Funds Fundamental Investors (FI) American Funds Global Insight Fund (GIF) American Funds Global Balanced Fund (GBAL) American Funds Inflation Linked Bond Fund (ILBF) American Funds International Vantage Fund (IVE) American Funds U.S. Government Money Market Fund* (MMF) American Funds Mortgage Fund (AFMF) American Funds Short-Term Tax-Exempt Bond Fund (STEX) American Funds Strategic Bond Fund (SBF) American Funds Tax-Exempt Fund of New York (TEFNY) American High-Income Municipal Bond Fund (AHIM) American High-Income Trust (AHIT) American Mutual Fund (AMF) The Bond Fund of America (BFA) Capital Group Central Cash Fund* (CCF) Capital Income Builder (CIB) Capital World Bond Fund (WBF) Capital World Growth and Income Fund (WGI) EuroPacific Growth Fund (EUPAC) The Growth Fund of America (GFA) The Income Fund of America (IFA) Intermediate Bond Fund of America (IBFA) International Growth and Income Fund (IGI) The Investment Company of America (ICA) Limited Term Tax-Exempt Bond Fund of America (LTEX) The New Economy Fund (NEF) New Perspective Fund (NPF) New World Fund, Inc. (NWF) Short-Term Bond Fund of America (STBF) SMALLCAP World Fund, Inc. (SCWF) The Tax-Exempt Bond Fund of America (TEBF) The Tax-Exempt Fund of California (TEFCA) U.S. Government Securities Fund (GVT) |
% ALLOCATION ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % |
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With respect to future earnings, I hereby elect to have amounts credited to my Deferred Payment Account(s) for the fund(s) listed above invested in Class F-2 shares of the specified funds:
*I understand that if I serve on the Board of a money market fund, I may only have amounts credited to my Deferred Payment Account for that money market fund with respect to future earnings invested in the applicable Class F-2 or M shares of that particular money market fund. |
FUNDS Washington Mutual Investors Fund (WMIF) American Funds 2060 Target Date Retirement Fund (AFTD60) American Funds 2055 Target Date Retirement Fund (AFTD55) American Funds 2050 Target Date Retirement Fund (AFTD50) American Funds 2045 Target Date Retirement Fund (AFTD45) American Funds 2040 Target Date Retirement Fund (AFTD40) American Funds 2035 Target Date Retirement Fund (AFTD35) American Funds 2030 Target Date Retirement Fund (AFTD30) American Funds 2025 Target Date Retirement Fund (AFTD25) American Funds 2020 Target Date Retirement Fund (AFTD20) American Funds 2015 Target Date Retirement Fund (AFTD15) American Funds 2010 Target Date Retirement Fund (AFTD10) American Funds Global Growth Portfolio (PSGG) American Funds Growth Portfolio (PSG) American Funds Growth and Income Portfolio (PSGI) American Funds Moderate Growth and Income Portfolio (PSMGI) American Funds Multi-Sector Income Fund (MSI) American Funds Conservative Growth and Income Portfolio (PSCGI) American Funds Tax-Aware Conservative Growth and Income Portfolio (PSTACGI) American Funds Preservation Portfolio (PSP) American Funds Tax-Exempt Preservation Portfolio (PSTEP) American Funds Retirement Income Portfolio Series – Conservative (RIC) American Funds Retirement Income Portfolio Series – Moderate (RIM) American Funds Retirement Income Portfolio Series – Enhanced (RIE) |
% ALLOCATION ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ % ____ %
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I have read and understand this Rate of Return Election Form. I understand that earnings credited to my Deferred Payment Account(s) under the Plan in accordance with this Form shall be credited in the form of Phantom Shares rather than actual shares. I further state that I have reviewed the prospectus for each designated mutual fund.
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Name (please print)
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Date
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Signature
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective as of December 14, 2006, and is between STATE STREET BANK AND TRUST COMPANY ("Bank") and each of the investment companies and other pooled investment vehicles (which may be organized as corporations, business or other trusts, limited liability companies, partnerships or other entities) managed by Capital Research and Management Company and listed on Appendix A hereto, as such Appendix may be amended from time to time (each a "Customer").
WHEREAS, each Customer is or may be organized with one or more series of shares, each of which shall represent an interest in a separate investment portfolio of cash, securities and other assets;
WHEREAS, each Customer desires to appoint, in accordance with the provisions of the Investment Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations thereunder, Bank as custodian on behalf of itself or those of its existing or additional series of shares that are also listed on Appendix A hereto (each such listed investment portfolio being referred to hereinafter as a “Portfolio”), and Bank has agreed to act as custodian for the Portfolios under the terms and conditions hereinafter set forth;
WHEREAS, for administrative purposes only, each Customer wishes to evidence its individual agreement with Bank in a single instrument, notwithstanding each Customer’s intention to be separately bound;
NOW THEREFORE, Bank and each Customer agree as follows:
| 1. | Appointment of Custodian; Customer Accounts. |
Customer hereby appoints Bank as its custodian for each Portfolio. Bank hereby accepts such appointment. Bank, acting as “Securities Intermediary” (as defined in Section 2 hereof) shall establish and maintain the following accounts in the name of Customer on behalf of each Portfolio:
(a) a Custody Account for Securities and other Financial Assets (as such terms are defined in Section 2 hereof); and
(b) an account (“Deposit Account”) for any and all cash in any currency received by Bank or its Subcustodian for the account of the Portfolio, which cash shall not be subject to withdrawal by draft or check.
Customer warrants its authority on behalf of each Portfolio to: (i) deposit the Financial Assets and cash (collectively, "Assets") received in the Custody Account or the Deposit Account, as the case may be (collectively, “Accounts”) and (ii) give Instructions concerning the Accounts and such Instructions shall be clear as to which Portfolio they relate. Bank may deliver Financial Assets with different certificate number(s) but which are otherwise identical in all respects (including, without limitation, any related CUSIP, ISN, rights and privileges) to Financial Assets deposited in the Custody Account.
Bank shall be accountable under the terms of this agreement to the Customer for all Assets held in the Accounts and shall take prompt and appropriate action to remedy any discrepancies with respect to such Assets. Upon written agreement between Bank and Customer, additional Accounts may be established and separately accounted for as additional Accounts hereunder.
2. Definitions.
As used herein, the following terms shall have the following respective meanings:
(a) “Affiliate” shall mean an entity controlling, controlled by, or under common control with, another entity.
(b) “Authorized Person" shall mean an employee or agent (including an investment manager) designated by prior written notice from Customer or its designated agent to act on behalf of Customer hereunder. Such persons shall continue to be Authorized Persons until such time as Bank receives Instructions from Customer or its designated agent that any such employee or agent is no longer an Authorized Person.
(c) “Certificated Security” shall mean a Security that is represented by a certificate.
(d) “Custody Account” shall mean each custody account on Bank’s records to which Financial Assets are or may be credited pursuant hereto.
(e) “Eligible Foreign Custodian” shall have the meaning assigned thereto in Rule 17f-5 (and shall include any entity qualifying as such pursuant to an exemp-tion, rule or other appropriate action of the U.S. Securities and Exchange Commission).
(f) “Eligible Securities Depository” shall have the meaning assigned thereto in Rule 17f-7 (and shall include any entity qualifying as such pursuant to an exemption, rule or other appropriate action of the U.S. Securities and Exchange Commission).
(g) “Eligible Contract” shall mean a currently effective written contract between Bank and a Subcustodian satisfying the requirements of paragraph (c)(2) of Rule 17f-5 (including any amendments thereto or successor provisions).
(h) “Entitlement Holder” shall mean the person on the records of a Securities Intermediary as the person having a Securities Entitlement against the Securities Intermediary.
(i) “Financial Asset” shall have the meaning assigned thereto in Article 8 of the Uniform Commercial Code, which, as of the date hereof, generally means:
(i) a Security;
(ii) an obligation of a person or a share, participation or other interest in a person or property or enterprise of a person, which is, or is of a type, dealt in or traded on financial markets, or which is recognized in any area in which it is issued or dealt in as a medium for investment; or
(iii) any property that is held by a Securities Intermediary for another person in a Securities account if the Securities Intermediary has expressly agreed with the other person that the property is to be treated as a financial asset under Article 8 of the Uniform Commercial Code. As the context requires, the term means either the interest itself or the means by which a person’s claim to it is evidenced, including a Certificated Security or an Uncertificated Security, a Security certificate, or a Security Entitlement. Financial Asset shall in no event mean cash.
(j) “Foreign Assets” shall have the meaning assigned thereto under Rule 17f-5, which, as of the date hereof, means any investments (including foreign currencies) for which the primary market is outside the United States, and any cash and cash equivalents that are reasonably necessary to effect Customer’s transactions in those investments.
(k) “Instructions" shall mean instructions of any Authorized Person received by Bank, via telephone, telex, facsimile transmission, bank wire or other teleprocess or electronic instruction or trade information system (which may include Internet-based systems involving appropriate testing and authentication) acceptable to Bank which Bank believes in good faith to have been given by, or under the direction of, Authorized Persons. The term "Instructions" includes, without limitation, instructions to sell, assign, transfer, deliver, purchase or receive for the Custody Account, any and all stocks, bonds and other Financial Assets or to transfer funds in the Deposit Account.
(l) “Local Practice” shall mean the customary securities trading or securities processing practices and procedures generally accepted by Institutional Investors in the jurisdiction or market in which the transaction occurs, including, without limitation:
(i) delivering Financial Assets to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) with the expectation of receiving later payment for such securities from such purchaser or dealer;
(ii) delivering cash to a seller or a dealer (or an agent for such seller or dealer) against expectation of receiving later delivery of purchased Financial Assets; or
(iii) in the case of a purchase or sale effected through a securities system, in accordance with the rules governing the operation of such system.
(m) “Institutional Investor” shall mean a major commercial bank, corporation, insurance company, or substantially similar institution, which, as a substantial part of its business operations, purchases and sells Financial Assets and makes use of global custodial services.
(n) “Intermediary Custodian” shall mean any Subcustodian that is a Securities Intermediary and is qualified to act as a custodian.
(o) “Riders” shall have the meaning assigned thereto in Section 16(f) of this Agreement.
(p) “Rule 17f-5” shall mean rule 17f-5 under the 1940 Act, including any amendments thereto or successor rules.
(q) “Rule 17f-7” shall mean rule 17f-7 under the 1940 Act, including any amendments thereto or successor rules.
(r) “Security” shall have the meaning assigned thereto in Article 8 of the Uniform Commercial Code, which, as of the date hereof, generally means an obligation of an issuer or a share, participation, or other interest in an issuer or in property or an enterprise of an issuer:
(i) which is represented by a security certificate in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of the issuer;
(ii) which is one of a class or series or by its terms is divisible into a class or series of shares, participations, interests, or obligations; and
(iii) which:
(A) is, or is of a type, dealt in or traded on securities exchanges or securities markets; or
(B) is a medium for investment and by its terms expressly provides that it is a security governed by Article 8 of the Uniform Commercial Code.
(s) “Securities Depository” means a clearing corporation that is registered with the U.S. Securities and Exchange Commission as a clearing agency under section 17A of the Securities Exchange Act of 1934; or a Federal Reserve Bank or other person authorized to operate the federal book entry system described in the regulations of the Department of Treasury codified at 31 CFR 357, Subpart B, or book-entry systems operated pursuant to comparable regulations of other federal agencies.
(t) “Securities Entitlement” shall mean the rights and property interest of an Entitlement Holder with respect to a Financial Asset as set forth in Part 5 of Article 8 of the Uniform Commercial Code.
(u) “Securities Intermediary” shall have the meaning assigned thereto in Article 8 of the Uniform Commercial Code, which, as of the date hereof, means Bank, a Subcustodian, a securities depository, clearing corporation or any other person, including a bank or broker, that in the ordinary course of its business maintains securities accounts for others and is acting in that capacity.
(v) “Uncertificated Security” shall mean a Security that is not represented by a certificate.
(w) “Uniform Commercial Code” shall mean the Uniform Commercial Code of the State of New York, as amended from time to time.
| 3. | Maintenance of Financial Assets and Cash at Bank and Subcustodian Locations. |
Unless Instructions specifically require another location reasonably acceptable to Bank:
(a) Financial Assets shall be held in the country or other jurisdiction in which the principal trading market for such Financial Assets is located, where such Financial Assets are to be presented for payment or where such Financial Assets are acquired; and
(b) Cash shall be credited to an account in a country or other jurisdiction in which such cash may be legally deposited or is the legal currency for the payment of public or private debts.
Cash may be held pursuant to Instructions in such accounts as may be available for the particular currency, recognizing that accounts bearing commercially reasonable interest will be used to the extent such use does not violate applicable law. To the extent Instructions are issued and Bank can comply with such Instructions, Bank is authorized to maintain cash balances on deposit for Customer with itself (or its Affiliates, in accordance with applicable law and regulation), at such commercially reasonable rates of interest as may from time to time be paid on such accounts, or in non-interest bearing accounts as Customer may direct, if acceptable to Bank.
If Customer wishes to have any Foreign Assets belonging to one or more Portfolios held in the custody of an institution other than the established Subcustodians as defined in Section 4 (or an Eligible Securities Depository listed on Schedule B hereto), such arrangement must be authorized by a written agreement, signed by Bank and Customer.
If Bank places and maintains Customer’s Financial Assets, corresponding to a Securities Entitlement, with a Securities Depository or Intermediary Custodian, Bank must:
(x) at a minimum exercise due care in accordance with reasonable commercial standards in discharging its duty as a Securities Intermediary to obtain and thereafter maintain such Financial Assets;
(y) provide, promptly upon request by Customer, such reports as are available concerning the internal accounting controls and financial strength of Bank; and
(z) require any Intermediary Custodian at a minimum to exercise due care in accordance with reasonable commercial standards in discharging its duty as a Securities Intermediary to obtain and thereafter maintain Financial Assets corresponding to the Securities Entitlements of its Entitlement Holders.
4. Subcustodians.
(a) Bank may act under the Agreement through the subcustodians with which Bank has entered into Eligible Contracts and which are listed on Schedule A attached hereto (“Subcustodians”). Bank reserves the right, exercising reasonable care, prudence and diligence, to amend Schedule A from time to time. Any such amendment shall be effective upon 45 calendar days’ written notice to Customer in accordance with the Agreement, or such shorter period as Bank reasonably believes is necessary, with due regard to the continuing reasonable care of the Customer’s Foreign Assets in accordance with Rule 17f-5.
(b) Bank hereby represents to Customer that each Subcustodian is an Eligible Foreign Custodian. If Schedule A is amended to add one or more Subcustodians, this representation shall be effective as to the amended Schedule on the date of such amendment. Bank shall promptly advise Customer if any Subcustodian ceases to be an Eligible Foreign Custodian.
(c) Customer authorizes Bank to hold Assets belonging to each Portfolio in accounts that Bank has established with one or more of its branches or such Subcusto-dians, provided that, in the case of an Eligible Foreign Custodian, Customer’s Foreign Custody Manager has made the determinations required by Rule 17f-5 with respect to the Portfolio’s Foreign Assets to be held by such Subcustodian. If Bank is not acting as Foreign Custody Manager for the relevant Portfolio at such time, Customer shall give Bank appropriate notice of such determinations.
| 5. | Appointment as Foreign Custody Manager. |
Customer hereby appoints Bank as its Foreign Custody Manager for each Portfolio in accordance with Rule 17f-5. Bank hereby accepts such appointment. Customer and Bank shall act in conformity with such rule (including any amendments thereto or successor provisions) for as long as Bank acts as Customer’s Foreign Custody Manager. Bank’s appointment as Foreign Custody Manager for a Portfolio (or for a particular country or other political or geographical jurisdiction) may be terminated at any time by Customer or Bank, regardless of whether Bank serves as custodian for such Portfolio hereunder. Any such termination as to one or more Portfolios (or jurisdictions) shall be effected in a manner consistent with the provisions for notice and termination set forth elsewhere in this Agreement. Bank shall not be obligated to serve in this capacity for a Portfolio if Bank no longer acts as Customer’s custodian for such Portfolio.
As of the date hereof, Rule 17f-5 provides that Customer may from time to time place or maintain in the care of an Eligible Foreign Custodian any of Customer’s Foreign Assets, provided that:
(a) Customer’s Foreign Custody Manager determines that Customer’s assets will be subject to reasonable care, based on the standards applicable to custodians in the relevant market, if maintained with the Eligible Foreign Custodian, after considering all factors relevant to the safekeeping of such assets, including, without limitation:
| (i) | The Eligible Foreign Custodian’s practices, procedures, and internal controls, 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; |
| (ii) | Whether the Eligible Foreign Custodian has the requisite financial strength to provide reasonable care for Foreign Assets; |
| (iii) | The Eligible Foreign Custodian’s general reputation and standing; and |
| (iv) | Whether Customer will have jurisdiction over and be able to enforce judgments against the Eligible Foreign Custodian, such as by virtue of the existence of any offices of the custodian in the United States or the custodian’s consent to service of process in the United States. |
(b) The arrangement with the Eligible Foreign Custodian is governed by a written contract that Customer’s Foreign Custody Manager, has determined will provide reasonable care for Customer’s assets based on the standards set forth in paragraph (a) above.
| (i) | Such contract must provide: |
(A) For indemnification or insurance arrangements (or any combination of the foregoing) that will adequately protect Customer against the risk of loss of Foreign Assets held in accordance with such contract;
(B) That Foreign Assets will not be subject to any right, charge, security interest, lien or claim of any kind in favor of the Eligible Foreign 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 of the 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 assets as belonging to Customer or as being held by a third party for the benefit of Customer; |
(E) That Customer’s independent public accountants will be given access to those records or confirmation of the contents of those records; and
(F) That Customer will receive periodic reports with respect to the safekeeping of Customer’s assets, including, but not limited to, notification of any transfer to or from Customer’s account or a third party account containing assets held for the benefit of Customer.
| (ii) | Such contract may contain, in lieu of any or all of the provisions specified in paragraph (b)(i) above, such other provisions that Customer’s Foreign Custody Manager, reasonably determines will provide, in their entirety, the same or a greater level of care and protection for the Foreign Assets as the specified provisions, in their entirety. |
| (c) | (i) | Customer’s Foreign Custody Manager, has established a system to monitor the appropriateness of maintaining Customer’s assets with a particular custodian under paragraph (a) above, and to monitor performance of the contract under paragraph (b) above. |
| (ii) | If an arrangement no longer meets these requirements, Customer must withdraw its assets from the Eligible Foreign Custodian as soon as reasonably practicable. |
Customer’s Foreign Custody Manager will provide written reports in a form reasonably acceptable to Customer (or an Authorized Person) notifying Customer’s Board of Directors (or equivalent body; hereinafter, “Board”) of the placement of Customer’s Foreign Assets with a particular custodian and of any material change in Customer’s non-U.S. custody arrangements, with the reports to be provided to the Board at such times as the Board deems reasonable and appropriate based on the circumstances of Customer’s non-U.S. custody arrangements.
Customer hereby confirms that Customer will withdraw its Foreign Assets from any non-U.S. custodian as soon as reasonably practicable upon written notification from Customer’s Foreign Custody Manager that custody arrangements with such custodian no longer meet the requirements of Rule 17f-5 (an “Adverse Notification”). Customer also confirms that, if Bank is acting as Customer’s Foreign Custody Manager and has delivered an Adverse Notification to Customer, Bank, as Foreign Custody Manager, shall have no further responsibility under this Agreement in relation to Customer’s Foreign Assets held under any custody arrangement covered by such Adverse Notification following the Adverse Notification. (However, the existence of an Adverse Notification shall not affect the scope of responsibilities, or the standard of care, applicable to Bank in relation to such Assets under other provisions of this Agreement.)
6. Securities Depositories.
(a) Bank hereby represents to Customer that each securities depository listed on Schedule B is an Eligible Securities Depository. If Schedule B is amended, this representation shall be effective as to the amended Schedule on the date of such amendment. Bank shall promptly advise Customer if any securities depository listed on Schedule B ceases to be an Eligible Securities Depository.
(b) Bank shall provide Customer an analysis of the custody risks (which analyses may be provided to Customer electronically) associated with maintaining Customer’s Foreign Assets with each Eligible Securities Depository used by Bank and at which any Foreign Assets of Customer are held or are expected to be held. Bank shall use reasonable efforts to provide such analysis at least annually on March 31st of each calendar year (or, in the case of an Eligible Securities Depository not used by Bank as of the agreed upon date, prior to the initial placement of Customer’s Foreign Assets at such Depository after such date). Bank shall monitor the custody risks associated with maintaining Custo-mer’s Foreign Assets at each such Eligible Securities Depository on a continuing basis, and shall promptly notify Customer or its investment adviser of any material changes in such risks.
(c) Bank shall, upon Customer’s reasonable request from time to time, provide certain additional information (“Additional Information”) to Customer beyond the scope of the information Bank is otherwise obligated to provide to Customer under this Agreement, or any other agreement between the parties relating to Customer’s Foreign Assets. For example, Additional Information may relate 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 similar risks, but shall not include information required to be provided under this Agreement or any other agreement between the parties relating to Customer’s Foreign Assets.
(d) Bank’s obligation to provide Customer with Additional Information shall be limited to the extent Additional Information is (i) already in the possession of Bank, or (ii) available to Bank using commercially reasonable means. Customer hereby acknowledges that: (i) Additional Information is designed solely to inform Customer of certain 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 does not assume responsibility for inaccuracies or incomplete information attributable to actions or omissions of third parties. (For this purpose, “third parties” shall not include any of the Subcustodians listed on Schedule A, except to the extent that, in a given case, a Subcustodian accurately transmitted information it had itself received from a third party (such as from a regulator or securities depository) rather than information it had generated itself.)
(e) Customer and Bank hereby acknowledge and agree that the decision to place Customer's Foreign Assets with an Eligible Securities Depository shall be made by Customer's investment adviser (subject to the Board's oversight) or the Customer, after consideration of the information provided by Bank and other information Customer deems relevant, and based on standards of care that are generally applicable to investment advisers and the Board. Further, the parties understand that the decision to place Customer’s Foreign Assets with an Eligible Securities Depository does not have to be made separately, but may be made in the overall context of the decision to invest in a particular country.
| 7. | Use of Subcustodians and Securities Depositories. |
(a) Bank shall identify the Assets on its books as belonging to Customer and identify the Portfolio to which such Assets belong.
(b) A Subcustodian shall hold such Assets together with assets belonging to other customers of Bank in accounts identified on such Subcustodian's books as custody accounts for the exclusive benefit of customers of Bank, such that it is readily apparent that the Assets do not belong to Bank or the Subcustodian.
(c) Any Financial Assets in the Accounts held by a Subcustodian shall be subject only to the instructions of Bank or its agent. Any Financial Assets held in a securities depository for the account of a Subcustodian shall be subject only to the instructions of such Subcustodian or its agent.
(d) Where Securities are deposited by a Subcustodian with a securities depository, Bank shall cause the Subcustodian to identify on its books as belonging to Bank, as agent, the Securities shown on the Subcustodian’s account on the books of such securities depository, such that it is readily apparent that the Securities do not belong to Bank or the Subcustodian.
(e) Bank shall supply periodically, as mutually agreed upon, a statement in respect of any Securities and cash, including identification of the foreign entities having custody of the Securities and cash and descriptions thereof.
8. Deposit Account Transactions.
(a) Bank (or the applicable Subcustodian) shall make payments from the Deposit Account upon receipt of Instructions which include all information reasonably required by Bank.
(b) In the event that any payment to be made under this Section 8 exceeds the funds available in the Deposit Account, Bank, in its discretion, may advance Customer such excess amount which shall be deemed a loan payable on demand, bearing interest at the rate customarily charged by Bank on similar loans.
(c) Bank shall, or shall cause the applicable Subcustodian to: (i) subject to the last sentence hereof, collect all amounts due and payable to Customer with respect to Financial Assets and other assets held in the Accounts; (ii) promptly notify Customer of the collection of income or other payments in a currency other than US dollars that relate to Financial Assets or other Assets held by Bank (or the applicable Subcustodian’s receipt) in a manner mutually agreeable to Bank and Customer; (iii) promptly credit to the account of Customer all income and other payments relating to Financial Assets or other Assets held by Bank hereunder upon Bank’s receipt (or the applicable Subcustodian’s receipt) of such income or payments or as otherwise agreed in writing by Customer and Bank; and (iv) promptly endorse and deliver instruments required to effect such collections. If Bank credits the Deposit Account on a payable date, or at any time prior to actual collec-tion and reconciliation to the Deposit Account, with interest, dividends, redemptions or any other amount due, Customer shall promptly return any such amount upon oral or written notification: (i) that such amount has not been received in the ordinary course of business or (ii) that such amount was incorrectly credited. If Customer does not promptly return any amount upon such notification, Bank shall be entitled, upon oral or written notification to Customer, to reverse such credit by debiting the Deposit Account for the amount pre-viously credited. Bank shall furnish regular overdue income reports to Customer in writing (or by any means by which Instructions may be transmitted hereunder, other than by telephone) of any amounts payable with respect to Financial Assets or other Assets of Customer if such amounts are not received by Bank (or the applicable Subcustodian) when due (or otherwise in accordance with Local Practice). Bank or its Subcustodian shall have no duty or obligation to institute legal proceedings, file a claim or a proof of claim in any insolvency proceeding or take any other action with respect to the collection of such amount, but will reasonably notify Customer of any such proceedings known to Bank and may act for Customer upon Instructions after consultation with Customer.
9. Custody Account Transactions.
(a) Financial Assets shall be transferred, exchanged or delivered by Bank or its Subcustodian upon receipt by Bank of Instructions which include all information reasonably required by Bank. Settlement and payment for Financial Assets received for, and delivery of Financial Assets out of, the Custody Account shall be made in accordance with Local Practice. In connection with the foregoing, where Bank believes in good faith that use of a reasonably available alternative practice to Local Practice would be more protective of Financial Assets than Local Practice, Bank shall advise Customer of such practice and Customer may authorize its use solely in such instance or consent that such practice shall thereafter be deemed to be Local Practice.
(b) Bank shall effect book entries on a contractual settlement date accounting basis with respect to the settlement of trades in those markets where Bank generally offers contractual settlement day accounting and shall notify Customer of these markets from time to time. On the contractual settlement date for a sale, Bank shall credit the Cash Account with the sales proceeds of the sale and transfer the relevant Financial Assets to an account pending settlement of the trade if not already delivered. On the contractual settlement date for the purchase (or earlier if market practice requires delivery of the purchase price before the contractual settlement date), Bank shall debit the Cash Account with the settlement monies and credit a separate account. Bank then shall post the Securities Account as awaiting receipt of the expected Financial Assets. Customer shall not be entitled to the delivery of Financial Assets that are awaiting receipt until Bank or a Subcustodian actually receives them. Bank reserves the right to restrict in good faith the availability of contractual date settlement accounting for credit reasons. Bank, whenever reasonably possible, will notify Customer prior to imposing such restrictions.
(i) Bank may reverse credits or debits made to the Accounts in its discretion if the related transaction fails to settle within a reasonable period, determined by Bank in its discretion, after the contractual settlement date for the related transaction; provided however that prior to taking action, Bank will use every reasonable effort to give Customer written notice of any such reversal which may include back valuation.
(ii) If any Financial Assets delivered pursuant to this Section 9 are returned by the recipient thereof, Bank may reverse the credits and debits of the particular transaction at any time.
10. Actions of Bank.
Bank shall follow Instructions received regarding Assets held in the Accounts. However, until it receives Instructions to the contrary, Bank shall:
(a) Present for payment any Financial Assets which are called, redeemed or retired or other-wise become payable and all coupons and other income items which call for payment upon presentation, to the extent that Bank or Subcustodian is actually aware of such opportunities.
(b) Execute in the name of Customer such ownership and other certificates as may be required to obtain payments in respect of Financial Assets.
(c) Exchange interim receipts or temporary Financial Assets for definitive Financial Assets.
(d) Appoint brokers and agents for any transaction involving the Financial Assets, including, without limitation, Affiliates of Bank or any Subcustodian.
(e) Issue statements to Customer, at times and in a form mutually agreed upon, identifying the Assets in the Accounts.
Bank shall promptly send Customer an advice or notification of any transfers of Assets to or from the Accounts. Such statements, advices or notifications shall indicate the identity of the entity having custody of the Assets.
All collections of funds or other property paid or distributed in respect of Financial Assets in the Custody Account shall be made at the risk of Customer until such funds or other property have been received by Bank (or the applicable Subcustodian). Bank shall have no liability for any loss occasioned by delay (other than its own) in the actual receipt of notice by Bank or by its Subcustodians of any payment, redemption or other trans-action regarding Financial Assets in the Custody Account in respect of which Bank has agreed to take any action hereunder.
11. Corporate Actions; Proxies; Taxes; Class Actions.
(a) Corporate Actions. Bank shall transmit promptly to Customer on behalf of each Portfolio summary notification of corporate action information received on a timely basis by Bank (including, without limitation, pendency of calls and maturities of Financial Assets and expirations of rights in connection therewith and notices of exercise of call and put options written by Customer on behalf of a Portfolio and the maturity of futures contracts (and options thereon) purchased or sold by Customer on behalf of a Portfolio) from issuers of the Financial Assets being held for a Portfolio. Bank shall transmit promptly to Customer on behalf of each Portfolio notice of the filing of any registration statement with respect to Financial Assets held for a Portfolio if such information is received by Bank or Bank’s central corporate actions department has actual knowledge of the filing. With respect to tender or exchange offers, Bank shall transmit promptly to Customer on behalf of each Portfolio notice of corporate action information received on a timely basis by Bank from issuers of the Financial Assets whose tender or exchange is sought and from the party (or its agents) making the tender or exchange offer. If Customer desires to take action with respect to any tender offer, exchange offer or any other similar transaction, Customer shall notify Bank within such period as will give Bank (including any Subcustodian) reasonably sufficient time to take such action. Bank shall inform Customer of pertinent deadlines in each case.
When a rights entitlement or a fractional interest resulting from a rights issue, stock dividend, stock split or similar corporate action is received which bears an expiration date, Bank shall use reasonable efforts to obtain Instructions from Customer or its Authorized Person, even if its own deadlines for receiving instructions have passed; however, if Instructions are not received in time for Bank to take timely action, or actual notice of such corporate action was received too late to seek Instructions, Bank will notify Customer of the corporate action but shall not be required to take further action.
(b) Proxy Voting.
(i) Bank shall, with respect to Financial Assets that are not Foreign Assets, cause to be promptly executed by the registered holder of such Financial Assets, if the Financial Assets are registered otherwise than in the name of Customer on behalf of a Portfolio or a nominee thereof, all proxies, without indication of the manner in which such proxies are to be voted, and shall promptly deliver to Customer such proxies, all proxy soliciting materials and all notices relating to such Financial Assets.
(ii) Bank shall, with respect to Financial Assets that are Foreign Assets, use commercially reasonable efforts (including the use of third party representatives) to facilitate the exercise of voting and other shareholder proxy rights; it being understood and agreed that (A) proxy voting may not be available in all markets (it being understood that Bank shall make proxy voting services available to Customer in a given market where Bank offers such services to any other custody client), and (B) apart from voting, Bank will, upon request and in its discretion, assist customer in exercising other shareholder rights such as attending shareholder meetings, nominating directors and proposing agenda items. In particular, and without limiting the generality of the foregoing, Bank may provide written summaries of proxy materials in lieu of providing original materials (or copies thereof) and while Bank shall attempt to provide accurate summaries, whether or not translated, Bank shall not be liable for any losses or other consequences that may result from reliance by Customer upon the same where Bank prepared the same in good faith and with reasonable efforts. Bank shall use reasonable efforts to notify Customer in cases where, due to various circumstances beyond control of Bank, voting cannot be exercised. Customer acknowledges that local conditions, including lack of regulation, onerous procedural obligations, lack of notice, practical constraints and other facts, may have the effect of severely limiting the ability of Customer to exercise shareholder rights. In addition, Customer acknowledges that: (A) in certain countries Bank may be unable to vote individual proxies but shall only be able to vote proxies on a net basis (e.g., a net yes or no vote given the voting instructions received from all customers); and (B) proxy voting may be precluded or restricted in a variety of circumstances, including, without limitation, where the relevant Financial Assets are: (1) on loan; (2) at registrar for registration or reregistration; (3) the subject of a conversion or other corporate action; (4) not held in a name subject to the control of Bank or its Subcustodian or are otherwise held in a manner which precludes voting; (5) held in a margin or collateral account; and (6) American Depository Receipts.
(iii) Customer and each Authorized Person shall respect the proprietary nature of information developed exclusively through the efforts of Bank (or Subcustodians or other parties acting under Bank’s direction) in relation to proxy voting services.
(c) Taxes.
(i) Customer confirms that Bank is authorized to deduct from any cash received or credited to the Deposit Account any taxes or levies required to be deducted by any revenue or other govern-mental authority for whatever reason in respect of the Custody Account.
(ii) Customer shall provide Bank with all required tax-related documentation and other information relating to Assets held hereunder (“Tax Information”). Tax Information shall include, but shall not be limited to, information necessary for submission to revenue or other governmental authorities to establish taxable amounts or reduce tax burdens that would otherwise be borne by a Portfolio. Upon receipt of Instructions and all required Tax Information from Customer, Bank shall (A) execute ownership and other certificates and affidavits for all tax purposes (within and outside of the United States) in connection with receipt of income and other payments with respect to Assets held hereunder, or in connection with the purchase, sale or transfer of such Assets, and (B) where appropriate, file any certificates or other affidavits for the refund or reclaim of non-U.S. taxes paid with respect to such Assets. Customer warrants that, when given, Tax Information shall be true and correct in all material respects. Customer shall notify Bank promptly if any Tax Infor-mation requires updating or amendment to correct misleading information.
(iii) Bank shall have no responsibility or liability for any tax obligations (including both taxes and any and all penalties, interest or additions to tax) now or hereafter imposed on Customer, its Portfolio, or Bank as Customer’s custodian, by any revenue or governmental authority, or penalties or other costs or expenses arising out of the delivery of, or failure to deliver, Tax Information by Customer
(iv) Bank shall perform tax reclaim services only with respect to taxation levied by the revenue authorities of the countries notified to Customer from time to time and Bank may, by notification in writing, in Bank’s absolute discretion, supplement or amend the markets in which tax reclaim services are offered; provided that, Bank shall make tax reclaim services available to Customer in a given country where Bank offers such services to any other custody client having the same tax status. Other than as expressly provided in this sub-clause, Bank shall have no responsibility with regard to Customer’s tax position or status in any jurisdiction.
(v) Tax reclaim services may be provided by Bank or, in whole or in part, by one or more third parties appointed by Bank (which may be Bank’s affiliates); provided that Bank shall be liable for the performance of any such third party to the same extent as Bank would have been if Bank had performed such services.
(vi) If Bank does not receive appropriate declarations, documentation and informa-tion then any applicable United States withholding tax shall be deducted from income received from Financial Assets.
(d) Class Actions.
(i) Upon receipt of a settled securities class action notification by its corporate actions department, Bank shall research its records for each Custody Account to endeavour to identify Customer’s interest, if any, with respect to any such class action notification. Customer acknowledges that identifying its interest may involve manually researching historic records and that Bank does not warrant that the review will be error free.
(ii) Bank will provide Customer with a summary of each class action notification that it has identified as being pertinent to Customer (together with the information discovered with regard to the applicable securities holding of Customer) and the cut-off time by which Customer is required to inform Bank if it disagrees with Bank’s record of such securities holdings and/or securities transactions or wishes to instruct Bank not to file a claim on Customer’s behalf.
(iii) Unless Customer instructs Bank not to do so by the applicable cut-off time, Bank shall complete and file the required claim forms for the particular class action insofar as they relate to transactions or holdings for which Bank acted as custodian. Bank shall present with the claim any supporting information that it has in its possession and that is required as part of the filing as set out in the class action notification. Bank shall be authorized to disclose such information as may be reasonably required to complete and file such claims. Customer acknowledges that Bank is acting in a clerical capacity in completing and filing such claim forms and that Bank will not be using legal expertise in providing this service.
(iv) Bank's liability with respect to class action filing services described in this section 11(d) shall be limited in amount as Customer and Bank may from time to time agree in writing.
12. Nominees.
Financial Assets which are ordinarily held in registered form may be registered in a nominee name of Bank, Subcustodian or Eligible Securities Depository, as the case may be. Bank may without notice to Customer cause any such Financial Assets to cease to be registered in the name of any such nominee and to be registered in the name of Customer. Bank shall, or shall cause the applicable Subcustodian or Eligible Securities Depository to use commercially reasonable efforts to promptly register such Financial Assets that are or may be subject to ownership limitations. In the event that any Financial Assets registered in a nominee name are called for partial redemption by the issuer, Bank may allot the called portion to the respective beneficial holders of such class of security in any manner Bank deems to be fair and equitable. Customer shall hold Bank, Subcustodians, and their respective nominees harmless from any liability arising directly or indirectly from their status as a mere record holder of Financial Assets in the Custody Account. Financial Assets accepted by Custodian on behalf of a Portfolio under this Agreement shall be in a form and delivered in a manner consistent with Local Practice.
13. Instructions.
Unless otherwise expressly provided, all Instructions shall continue in full force and effect until canceled or superseded. Any Instructions delivered to Bank by telephone shall promptly thereafter be confirmed in writing by an Authorized Person (which confirmation may bear the facsimile signature of such Person), but Cus-tomer shall hold Bank harmless for the failure of an Authorized Person to send such confirmation in writing, the failure of such confirmation to conform to the telephone instructions received or Bank's failure to produce such confirmation at any subsequent time. Bank shall notify Customer as soon as reasonably practicable if Bank does not receive written confirmation or if such written confirmation fails to conform to the telephone Instructions received. Either party may electronically record any Instructions given by telephone, and any other telephone discussions with respect to the Custody Account. Customer shall be responsible for safeguarding any testkeys, identification codes or other security devices which Bank shall make available to Customer or its Authorized Persons.
14. Standard of Care; Liabilities.
(a) Bank shall exercise reasonable care and diligence in carrying out all of its duties and obligations under this Agreement, and shall be liable to Customer for any and all claims, liabilities, losses, damages, fines, penalties, and expenses, including out-of-pocket and incidental expenses and reasonable attorneys’ fees (“Losses”) suffered or incurred by Customer resulting from failure of Bank (including any branch thereof, regardless of location) to exercise such reasonable care and diligence. Bank shall be liable to Customer in respect of such Losses to the same extent that Bank would be liable to Customer if Bank were holding the affected Assets in New York City, but only to the extent of Customer’s direct damages, to be determined based on the market value of the property which is the subject of the Loss at the date of discovery of such Loss by Customer and without reference to any special conditions or circumstances.
(b) Bank shall be liable to Customer for all Losses resulting from the action or inaction of any Subcustodian to the same extent that Bank would be liable to Customer if Bank were holding the affected Assets in New York City, and such action or inaction were that of the Bank or the fraud or willful default of such Subcustodian.
(c) As long as and to the extent that it has exercised reasonable care and acted in good faith, Bank shall not be responsible for:
(i) the title, validity or genuineness of any property or evidence of title thereto received by it or delivered by it pursuant to this Agreement; it being understood that Bank shall be deemed to have exercised reasonable care in respect of this subparagraph (i) if Financial Assets are received by Bank in accordance with Local Practice for the particular Financial Asset in question;
(ii) any act, omission, default or for the solvency of any broker or agent which it or a Subcustodian appoints and which is not a branch or Affiliate of the Bank; it being understood that Bank or a Subcustodian shall be deemed to have exercised reasonable care in respect of this subparagraph (ii) if it exercised reasonable care in the selection and continued retention of any such broker or agent; or
(iii) the insolvency of any Subcustodian which is not a branch or Affiliate of Bank; it being understood that Bank shall be deemed to have exercised reasonable care in respect of this subparagraph (iii) where Bank used reasonable care in the monitoring of a Subcustodian’s financial condition as reflected in its most recently published financial statements and other publicly available financial information.
(d) Neither Bank nor any Subcustodian shall be liable for the acts or omissions of any Eligible Securities Depository (or, for purposes of clarity, any domestic securities depository). In the event Customer incurs a loss due to the negligence, bad faith, willful misconduct or insolvency of an Eligible Securities Depository, Bank shall make reasonable endeavors to seek recovery from the Eligible Securities Depository.
(e) In no event shall Bank incur liability hereunder if Bank or any Subcustodian, or any nominee of Bank or any Subcustodian (each a “Person”), is prevented, forbidden or delayed from performing, or omits to perform, any act or thing which this Agreement provides shall be performed or omitted to be performed, by reason of:
(i) any provision of any present or future law or regulation or order of the United States of America, or any state thereof, or any other country, or political subdivision thereof or of any court of competent jurisdiction; or
(ii) events or circumstances beyond the reasonable control of the applicable Person, including, without limitation, the interruption, suspension or restriction of trading on or the closure of any securities market, power or other mechanical or technological failures or interruptions, computer viruses or communications disruptions, work stoppages, natural disasters, or other similar events or acts, unless, in each case, such delay or nonperformance is caused by (A) the negligence, misfeasance or misconduct of the applicable Person, or (B) a malfunction or failure of equipment operated or utilized by the applicable Person other than a malfunction or failure beyond such Person’s control and which could not be reasonably anticipated or prevented by such Person (each such provision, event or circumstance being a “Force Majeure Event”).
Bank shall notify Customer as soon as reasonably practicable of any material performance delay or non-performance in accordance with this clause (e).
(f) In no event shall Customer incur liability to Bank if it is prevented, forbidden or delayed from performing, or omits to perform, any act or thing which this Agreement provides shall be performed or omitted to be performed, by reason of a Force Majeure Event.
(g) Customer shall indemnify and hold Bank and its directors, officers, agents and employees (collectively the “Indemnitees”) harmless from and against any and all Losses that may be imposed on, incurred by, or asserted against, the Indemnitees or any of them for following any Instructions or other directions upon which Bank is authorized to rely pur-suant to the terms of this Agreement, or for any action taken or omitted by it in good faith, provided that such action or omission is consistent with the standard of care applicable to Bank under this Agreement and the Indemnitees have not acted with negligence or bad faith or engaged in fraud or willful misconduct in connection with the Losses in question.
(h) In performing its obligations hereunder, Bank may rely on the genuineness of any docu-ment which it believes in good faith to have been validly executed, and, subject to the following sentence, shall be entitled to rely on and may act upon advice of counsel (which may be counsel for Customer) on all matters, and shall be without liability for action reasonably taken or omitted pursuant to such advice. If Customer disputes an action or omission by Bank within 45 days of when Customer became aware or reasonably should have become aware of such action or omission, Bank shall be entitled to rely on and may act upon advice of “independent legal counsel” (as defined by rule 0-1(6) of the Investment Company Act of 1940) to Customer or such other counsel that is mutually acceptable to Customer and Bank and shall be without liability for action reasonably taken or omitted pursuant to such advice.
(i) Customer shall pay for and hold Bank harmless from any liability or loss resulting from the imposition or assessment of any taxes or other governmental charges, and any related expenses (including, without limitation, penalties, interest or additions to tax due), with respect to income from or Assets in the Accounts, provided that Bank has complied with the standard of care set forth in Section 14(a) of this Agreement (it being understood that while Bank’s failure to comply with such standard of care shall constitute a breach of this Agreement, Bank shall have no liability for taxes or governmental charges and related expenses imposed or assessed with respect to such Assets prior to such breach or that would have been imposed or assessed even absent such breach).
(j) Bank need not maintain any insurance for the benefit of Customer.
(k) Without limiting the foregoing, Bank shall not be liable for any Loss which results from (i) the general risk of investing, or (ii) investing or holding Assets in a particular country including, but not limited to, losses resulting from nationalization, expropriation or other governmental actions; regulation of the banking or securities industry; currency restrictions, devaluations or fluctuations; and market conditions which prevent the orderly execution of securities transactions or affect the value of Assets.
(l) Consistent with and without limiting the application of the foregoing paragraphs of this Section 14, it is specifically acknowledged that Bank shall have no duty or responsibility to:
(i) question Instructions or make any suggestions to Customer or an Authorized Person regarding such Instructions that Bank believes in good faith to have been given by Authorized Persons or which are transmitted with proper testing or authentication pursuant to terms and conditions the Bank may specify;
(ii) supervise or make recommendations with respect to investments or the retention of Financial Assets;
(iii) advise Customer or an Authorized Person regarding any default in the payment of principal or income of any security other than as provided in Section 8(c) hereof;
(iv) evaluate or report to Customer or an Authorized Person regarding the financial condition of any broker, agent or other party to which Bank receives an Instruction to deliver Financial Assets;
(v) except for trades settled at DTC where the broker provides DTC trade confirmation and Customer provides for Bank to receive the trade instruction, review or reconcile trade confirmations received from brokers. Customer or its Authorized Persons issuing Instructions shall bear any responsibility to review such confirmations against Instructions issued to and statements issued by Bank;
(vi) advise Customer or an Authorized Person regarding information (i) held on a confidential basis by an officer, director or employee of Bank (or any Affiliate of Bank) and (ii) obtained by such person in connection with the provision of services or other activities unrelated to global custody; and
(vii) advise Customer or an Authorized Person promptly regarding corporate action information obtained by an officer, director or employee of Bank (or any Affiliate of Bank) who is not engaged directly in the provision of global custody services.
(m) Customer authorizes Bank to act hereunder notwithstanding that Bank or any of its divisions or Affiliates may have a material interest in a transaction, or circumstances are such that Bank may have a potential conflict of duty or interest including the fact that Bank or any of its Affiliates may provide broker-age services to other customers, act as financial advisor to the issuer of Financial Assets, act as a lender to the issuer of Financial Assets, act in the same transaction as agent for more than one customer, have a material interest in the issue of Financial Assets, or earn profits from any of the activities listed herein; provided that none of such services or actions would violate applicable laws or regulations.
(n) Upon the occurrence of any event which causes or may cause any Loss to the other party, each of Customer and Bank shall (and Bank shall cause each applicable Subcustodian to) use all commercially reasonable efforts and take all reasonable steps under the circumstances to mitigate the effects of such event and to avoid continuing harm to the other party. For this purpose, the obligations of Customer and Bank to mitigate Losses (or potential Losses) hereunder shall include (but shall not be limited to) the periodic review and reconciliation by Bank and Customer (or Authorized Persons) of statements provided to Customer under Section 10 of this Agreement; provided, however, that Bank's obligations to Customer with respect to any transaction covered by a given statement shall be reduced to the extent that Bank's ability to mitigate damages related to such transaction has been compromised by Customer’s failure to object to such statement within 180 days of Customer’s receipt thereof.
15. Bank Fees and Expenses.
Customer agrees to pay Bank for its services under this Agreement such amount as may be mutually agreed upon in writing. Customer agrees to reimburse Bank for its reasonable out-of-pocket or incidental expenses (including, without limitation, legal fees) incurred on behalf of Customer, provided that, in respect of such expenses, Bank has acted in conformity with the standard of care set forth in Section 14 hereof. Bank shall obtain Customer’s prior approval, which approval shall not be unreasonably withheld, of out-of-pocket or incidental expenses that Bank reasonably expects to exceed $10,000 or that approaches $10,000 during the process of incurring such expenses. In the latter case, Customer shall not withhold its approval on the ground that Bank had not obtained Customer’s approval prior to beginning to incur such expenses if Bank believed in good faith that the subject expenses would not exceed $10,000. Subject to the foregoing, Bank shall have a lien on and is authorized to charge or otherwise enforce its rights as lienholder against Assets in any Account of the Customer for any amount owing in respect of such Account by the Customer to the Bank under any provision of this Agreement.
16. Miscellaneous.
(a) Foreign Exchange Transactions Other Than as Principal. Upon receipt of Instructions, Bank shall settle foreign exchange contracts or options to purchase and sell foreign currencies for spot and future delivery on behalf of and for the account of a Portfolio with such currency brokers or banking institutions as Customer may determine and direct pursuant to Instructions. Bank shall be responsible for the transmission of cash and instructions to and from the currency broker or banking institution with which the contract or option is made, the safekeeping of all certificates and other documents and agreements evidencing or relating to such foreign exchange transactions and the maintenance of proper records in accordance with this Agreement. Bank shall have no duty with respect to the selection of currency brokers or banking institutions with which Customer deals on behalf of its Portfolio or, as long as Bank acts in accordance with the standard of care set forth in this Agreement, for the failure of such brokers or banking institutions to comply with the terms of any contract or option; provided, however, that Bank shall not be responsible for the insolvency of any such broker or banking institution which is not a branch or Affiliate of Bank.
(b) Foreign Exchange Transactions as Principal. Bank shall not be obligated to enter into foreign exchange transactions as principal. However, if and to the extent that Bank makes available to Customer its services as principal in foreign exchange transactions, upon receipt of Instructions, Bank shall enter into foreign exchange contracts or options to purchase and sell foreign currencies for spot and future delivery on behalf of and for the account of Customer on behalf of its Portfolio with Bank as principal. Instructions may be issued with respect to such contracts but Bank may establish rules or limitations concerning any foreign exchange facility made available. Bank shall be responsible for the selection of currency brokers or banking institutions (which may include Affiliates of Bank and Subcustodians) and the failure of such currency brokers or banking institutions to comply with the terms of any contract or option.
(c) Certification of Residency, etc. Customer certifies that it is a resident of the United States and shall notify Bank of any changes in residency. Bank may rely upon this certification or the certification of such other facts as may be required to administer Bank's obligations hereunder. Customer shall indemnify Bank against all losses, liability, claims or demands arising directly or indirectly from any such certifications.
(d) Custodian’s Records; Access to Records. Bank shall provide any assistance reasonably requested by Customer in the preparation of reports to Customer’s shareholders and others, audits of accounts, and other ministerial matters of like nature. Bank shall maintain complete and accurate records with respect to Financial Assets and other Assets held for the account of Customer as required by the rules and regulations of the U.S. Securities and Exchange Commission applicable to investment companies registered under the 1940 Act. All such books and records maintained by Bank shall be made available to Customer upon request and shall, where required to be maintained by Rule 31a-1 under the 1940 Act, be preserved for the periods prescribed in Rule 31a-2 under the 1940 Act. Bank shall allow Customer's independent public accountant reasonable access to the records of Bank relating to Financial Assets as is required in connection with their examination of books and records pertaining to Customer's affairs. Subject to restrictions under applicable law, Bank shall also obtain an undertaking to permit Customer's independent public accountants reasonable access to the records of any Subcustodian which has physical possession of any Financial Assets as may be required in connection with the examination of Customer's books and records. Upon reasonable request of Customer, Bank shall provide Customer with a copy of Bank’s reports prepared in compliance with the requirements of Statement of Auditing Standards No. 70 issued by the American Institute of Certified Public Accountants, as it may be amended from time to time (commonly referred to as a “SAS 70 report”). Bank shall use commercially reasonable efforts to obtain and furnish Customer with such similar reports as Customer may reasonably request with respect to each Subcustodian holding Assets of Customer. Except as respects Bank’s SAS 70 Report, as to which there shall be no charge, the Customer shall pay reasonable expenses of the Bank and any Subcustodians under this provision. Bank shall use commercially reasonable efforts to provide Customer and agents with such reports as the Customer may reasonably request or otherwise reasonably require to fulfill its duties under rule 38a-1 of the 1940 Act, and, in any case, provide Customer with at least the same level of such reporting as Bank furnishes to its other mutual fund clients.
(e) Confidential Information. The parties hereto agree that each shall treat confidentially all confidential information provided by each party to the other regarding its business and operations in accordance with this Agreement and represent that each has implemented controls that are reasonably designed to achieve the purposes of this section. All confidential information provided by a party hereto shall be used by the other party hereto solely for the purpose of rendering services pursuant to this Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to any affiliated division or entity or third party in any form without the prior written consent of such providing party. Confidential information for purposes hereof shall include information traditionally recognized as confidential, such as financial information, strategies, security practices, portfolio holdings, portfolio trades, product and business proposals, business plans, and the like. The foregoing shall not be applicable to any information that is publicly available when provided or thereafter becomes publicly available other than through a breach of this Agreement, that is generally furnished to third parties by the providing party without confidentiality restriction, or that is required to be disclosed by any bank examiner of Bank or any Subcustodian, any auditor of the parties hereto, by judicial or administrative process or otherwise by applicable law or regulation. For this purpose, Customer and any Authorized Person shall be permitted to disclose any information provided by Bank hereunder to the U.S. Securities and Exchange Commission (or its staff) in connection with any inspection or examination or other action or proceeding. If a party becomes aware that it or its agents have breached the confidentiality obligations under this Section 16(e), it will promptly notify the other party in writing of the nature and extent of such breach.
(f) Governing Law; Successors and Assigns; Immunity; Captions. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN NEW YORK and shall not be assigned by either party, but shall bind the successors in interest of Customer and Bank. To the extent that in any jurisdiction Customer or Bank may now or hereafter be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (before or after judgment) or other legal process, Customer or Bank, as the case may be, irrevocably shall not claim, and it hereby waives, such immunity. The captions given to the sections and subsections of this Agreement are for convenience of reference only and are not to be used to interpret this Agreement.
(g) Entire Agreement. This Agreement consists exclusively of this document (including Appendix A and Schedules A and B hereof). There are no other provisions hereof and this Agreement supersedes any other agreements, whether written or oral, between the parties. Any amendment hereto must be in writing, executed by both parties.
(h) Severability. In the event that one or more provisions hereof are held invalid, illegal or unenforceable in any respect on the basis of any particular circumstances or in any jurisdiction, the validity, legality and enforceability of such provision or provisions under other circumstances or in other jurisdictions and of the remaining provisions shall not in any way be affected or impaired.
(i) Waiver. Except as otherwise provided herein, no failure or delay on the part of either party in exercising any power or right hereunder operates as a waiver, nor does any single or partial exercise of any power or right preclude any other or further exercise, or the exercise of any other power or right. No waiver by a party of any provision hereof, or waiver of any breach or default, is effective unless in writing and signed by the party against whom the waiver is to be enforced.
(j) Representations and Warranties.
(i) Customer hereby represents and warrants to Bank that: (A) it has full power and authority to deposit and control the Financial Assets and cash deposited in the Accounts; (B) it has all necessary authority to use Bank as its custodian; (C) this Agreement constitutes its legal, valid and binding obligation, enforceable in accordance with its terms; (D) it has taken all necessary action to authorize the execution and delivery hereof.
(ii) Bank hereby represents and warrants to Customer that: (A) it has the full power and authority to perform its obligations hereunder, (B) this Agreement constitutes its legal, valid and binding obligation, enforceable in accordance with its terms; and (C) that it has taken all necessary action to authorize the execution and delivery hereof.
(k) Notices. All notices hereunder shall be effective when actually received. Any notices or other communications which may be required hereunder are to be sent to the parties at the following addresses or such other addresses as may subsequently be given to the other party in writing: (a) Bank: State Street Bank and Trust Company, 2 Avenue de Lafayette, LCC-2, Boston, MA 02111, Attention: Virginia M. Meany, Senior Vice President; and (b) Customer: [Name of Customer], c/o Capital Research and Management Company, Attention: Carmelo Spinella, Senior Vice President, 135 South State College Boulevard, Brea, CA 92821-5804; with a copy to: Donald H. Rolfe, Counsel, Capital Research and Management Company, 333 S. Hope Street, 55th Floor, Los Angeles, CA 90071.
(l) Termination. This Agreement may be terminated as to one or more Portfolios by Customer or Bank by giving sixty (60) days’ written notice to the other, provided that such notice to Bank shall specify the names of the persons to whom Bank shall deliver the Assets belonging to the affected Portfolios in the Accounts. If notice of termination is given by Bank, Customer shall, within sixty (60) days following receipt of the notice, deliver to Bank Instructions specifying the names of the persons to whom Bank shall deliver the Assets belonging to the affected Portfolios. In either case Bank shall deliver the Assets belonging to the affected Portfolios to the persons so specified, after deducting any uncontested amounts which Bank determines in good faith to be owed to it under Section 15. Customer shall reimburse Bank promptly for all reasonable out-of-pocket expenses it incurs in delivering Assets upon termination by Customer. Termination shall not affect any of the liabilities either party owes to the other arising under this Agreement prior to such termination. If within sixty (60) days following receipt of a notice of termination by Bank, Bank does not receive Instructions from Customer specifying the names of the persons to whom Bank shall deliver the Assets belonging to the affected Portfolios, Bank, at its election, may deliver such Assets to a bank or trust company doing business in the State of New York to be held and disposed of pursuant to the provisions hereof, or to Authorized Persons, or may continue to hold such Assets until Instructions are provided to Bank. For avoidance of doubt, each Customer, Portfolio or the Bank may terminate this Agreement pursuant to its provisions and the Agreement shall survive such termination in respect of the remaining Customers and Portfolios that have not so terminated or been terminated.
(m) Representative Capacity; Non-recourse Obligations. A COPY OF THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENT OF EACH CUSTOMER IS ON FILE WITH THE SECRETARY OF STATE OF THE STATE OF THE CUSTOMER’S FORMATION, AND NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT IS NOT EXECUTED ON BEHALF OF THE TRUSTEES OF ANY CUSTOMER AS INDIVIDUALS, AND THE OBLIGATIONS OF THIS AGREEMENT ARE NOT BINDING UPON ANY OF THE TRUSTEES, OFFICERS, SHAREHOLDERS OR PARTNERS OF ANY FUND INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE ASSETS AND PROPERTY OF EACH CUSTOMER’S RESPECTIVE PORTFOLIOS. BANK AGREES THAT NO SHAREHOLDER, TRUSTEE, OFFICER OR PARTNER OF ANY FUND MAY BE HELD PERSONALLY LIABLE OR RESPONSIBLE FOR ANY OBLIGATIONS OF ANY CUSTOMER ARISING OUT OF THIS AGREEMENT.
(n) Several Obligations of each Customer and Portfolio. WITH RESPECT TO ANY OBLIGATIONS OF A CUSTOMER ON BEHALF OF ANY OF ITS PORTFOLIOS ARISING OUT OF THIS AGREEMENT, BANK SHALL LOOK FOR PAYMENT OR SATISFACTION OF ANY SUCH OBLIGATION SOLELY TO THE ASSETS AND PROPERTY OF THE PORTFOLIO TO WHICH SUCH OBLIGATION RELATES AS THOUGH THAT CUSTOMER HAD SEPARATELY CONTRACTED WITH BANK BY SEPARATE WRITTEN AGREEMENT WITH RESPECT TO EACH OF ITS PORTFOLIOS. THE RIGHTS AND BENEFITS TO WHICH A GIVEN PORTFOLIO IS ENTITLED HEREUNDER SHALL BE SOLELY THOSE OF SUCH PORTFOLIO AND NO OTHER PORTFOLIO HEREUNDER SHALL RECEIVE SUCH BENEFITS.
(o) Information Relating to Divisions. Upon written request by Customer, the Bank shall use commercially reasonable efforts to provide information regarding portfolio holdings, portfolio trades and proxy voting in a format that is both technically practicable and reasonably acceptable to Customer so as to allow each investment division of Capital Research and Management Company to receive solely such information as is relevant to its own operations. Customer shall pay reasonable expenses of Bank arising from this section, provided that estimates of such expenses are approved by the Customer before the expenses are incurred.
IN WITNESS WHEREOF, each of the Customers and Bank have executed this Agreement as of the date first-written above. Execution of this Agreement by more than one Customer shall not create a contractual or other obligation between or among such Customers (or between or among their respective Portfolios) and this Agreement shall constitute a separate agreement between Bank and each Customer on behalf of itself or each of its Portfolios.
EACH OF THE CUSTOMERS LISTED ON
APPENDIX A ATTACHED HERETO, ON
BEHALF OF ITSELF OR ITS LISTED PORTFOLIOS
By: CAPITAL RESEARCH AND MANAGEMENT COMPANY
By:____________________________________
Name: Carmelo Spinella
Title: Senior Vice President
STATE STREET BANK AND TRUST COMPANY
By:________________________________________
Name: Joseph L. Hooley
Title: Executive Vice President
AMENDMENT TO CUSTODIAN AGREEMENT
This Amendment, dated as of August 18, 2020, amends the Global Custody Agreement, dated as of December 14, 2006 as amended to date (the “Custodian Agreement”), by and between State Street Bank and Trust Company (the “Bank”) and each of the investment companies and other pooled investment vehicles (which may be organized as corporations, business or other trusts, limited liability companies, partnerships or other entities) managed by Capital Research and Management Company and listed on Appendix A thereto, as amended from time to time (each, a “Customer”).
The Bank and each Customer hereby agree to replace the existing Appendix A to the Custodian Agreement with the updated appendix below, to reflect all Customers who are parties to the Custodian Agreement as of such date.
APPENDIX A
CUSTOMERS AND PORTFOLIOS
Dated as of August 18, 2020
The following is a list of Customers and their respective Portfolios for which the Bank shall serve under this Agreement.
| CUSTOMER PORTFOLIO: | EFFECTIVE AS OF: |
|
American Funds Fundamental Investors d.b.a Fundamental Investors |
December 14, 2006 |
| The Growth Fund of America | December 14, 2006 |
| The New Economy Fund | December 14, 2006 |
| SMALLCAP World Fund, Inc. | December 14, 2006 |
| American Funds Multi-Sector Income Fund | February 15, 2019 |
| American Funds International Vantage Fund | November 8, 2019 |
| American Funds Global Insight Fund | November 8, 2019 |
| American Funds Corporate Bond Fund | September 28, 2020 |
| American Funds Tax-Exempt Fund of New York | September 28, 2020 |
| American Funds Mortgage Fund | September 28, 2020 |
| American Funds Inflation Linked Bond Fund | December 7, 2020 |
| American Funds Developing World Growth and Income Fund | December 7, 2020 |
|
American Funds Insurance Series - Blue Chip Income and Growth Fund |
December 14, 2006 |
| Global Growth Fund | December 14, 2006 |
| Global Small Capitalization Fund | December 14, 2006 |
| Growth Fund | December 14, 2006 |
| International Fund | December 14, 2006 |
| Growth-Income Fund | December 14, 2006 |
| Asset Allocation Fund | December 14, 2006 |
| Bond Fund | December 14, 2006 |
| Ultra-Short Bond Fund (formerly Cash Management Fund) | May 1, 2016 (December 14, 2006) |
| Global Growth and Income Fund | December 14, 2006 |
| New World Fund | December 14, 2006 |
| Capital World Bond Fund (formerly Global Bond Fund) | May 1, 2020 (December 14, 2006) |
| International Growth and Income Fund | October 1, 2008 |
| Global Balanced Fund | May 2, 2011 |
| American Funds Mortgage Fund (formerly Mortgage Fund) | May 1, 2020 (May 2, 2011) |
| Capital Income Builder | May 1, 2014 |
| Portfolio Series - American Funds Global Growth Portfolio | May 1, 2015 |
| Portfolio Series- American Funds Growth and Income Portfolio | May 1, 2015 |
| Portfolio Series-American Funds Managed Risk Growth Portfolio | June 19, 2020 |
| Portfolio Series-American Funds Managed Risk Growth and Income Portfolio | June 19, 2020 |
| Portfolio Series-American Funds Managed Risk Global Allocation Portfolio | June 19, 2020 |
| Managed Risk Asset Allocation Fund | June 19, 2020 |
| Managed Risk Growth Fund | June 19, 2020 |
| Managed Risk Growth-Income Fund | June 19, 2020 |
| Managed Risk International Fund | June 19, 2020 |
| Managed Risk Blue Chip Income and Growth Fund | June 19, 2020 |
| American Funds IS 2010 Target Date Fund | December 6, 2019 |
| American Funds IS 2015 Target Date Fund | December 6, 2019 |
| American Funds IS 2020 Target Date Fund | December 6, 2019 |
| American Funds IS 2025 Target Date Fund | December 6, 2019 |
| American Funds IS 2030 Target Date Fund | December 6, 2019 |
| American Funds IS 2035 Target Date Fund | December 6, 2019 |
| American Funds College Target Date Series | |
| American Funds College Enrollment Fund | September 14, 2012 |
| American Funds College 2021 Fund | September 14, 2012 |
| American Funds College 2024 Fund | September 14, 2012 |
| American Funds College 2027 Fund | September 14, 2012 |
| American Funds College 2030 Fund | September 14, 2012 |
| American Funds College 2033 Fund | March 27, 2015 |
| American Funds College 2036 Fund | February 9, 2018 |
| American Funds Retirement Income Portfolio Series - | |
| American Funds Retirement Income Portfolio Series - Conservative | September 21, 2020 |
| American Funds Retirement Income Portfolio Series - Moderate | September 21, 2020 |
| American Funds Retirement Income Portfolio Series - Enhanced | September 21, 2020 |
| Capital Group Global Growth Common Trust (US) | February 1, 2020 |
| Capital Group International Growth Common Trust (US) | February 1, 2020 |
| Capital Group US Conservative Growth and Income Common Trust (US) | February 1, 2020 |
| Capital Group US Growth Common Trust (US) | February 1, 2020 |
| Capital Group US Growth and Income Common Trust (US) | February 1, 2020 |
[Signature page follows]
IN WITNESS WHEREOF, each of the Customers and the Bank has executed this Appendix A as of the date first-written above. Execution of this Appendix A by more than one Customer shall not create a contractual or other obligation between or among such Customers (or between or among their respective Portfolios) and this Appendix shall constitute a separate agreement between the Bank and each Customer on behalf of itself or each of its Portfolios.
Each of the Customers Listed on Appendix A
Attached Hereto, on behalf of Itself or
its Listed Portfolios
| By: Capital Research and Management Company* | State Street Bank and Trust Company |
| By: /s/ Kristine M. Nishiyama | By: /s/ Louis Abruzzi |
| Name: Kristine M. Nishiyama | Name: Louis Abruzzi |
| Title: Authorized Signatory | Title: SeniorVice President |
* Pursuant to delegated authority.
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form N-1A of American Funds Short-Term Tax-Exempt Bond Fund, Limited Term Tax-Exempt Bond Fund of America, The Tax-Exempt Bond Fund of America, American High-Income Municipal Bond Fund, The American Funds Tax-Exempt Series II, and American Funds Tax-Exempt Fund of New York of our reports dated September 14, 2020, relating to the financial statements and financial highlights of American Funds Short-Term Tax-Exempt Bond Fund, Limited Term Tax-Exempt Bond Fund of America, The Tax-Exempt Bond Fund of America, American High-Income Municipal Bond Fund, The Tax-Exempt Fund of California (the sole fund constituting The American Funds Tax-Exempt Series II), and American Funds Tax-Exempt Fund of New York, which appears in such Registration Statement. We also consent to the references to us under the headings “Financial highlights”, “Independent registered public accounting firm” and “Prospectuses, reports to shareholders and proxy statements” in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Los Angeles, California
September 25, 2020
American Funds Tax-Exempt Fund of New York
AMENDED AND RESTATED MULTIPLE CLASS PLAN
WHEREAS, American Funds Tax-Exempt Fund of New York (the “Fund”), a Delaware statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company that offers shares of beneficial interest;
WHEREAS, American Funds Distributors, Inc. (the “Distributor”) serves as the principal underwriter for the Fund;
WHEREAS, the Fund has adopted Plans of Distribution (each a “12b-1 Plan”) under which the Fund may bear expenses of distribution and servicing of its shares, including payments to and/or reimbursement of certain expenses incurred by the Distributor in connection with its distribution of the Fund’s shares;
WHEREAS, the Fund has entered into an Amended and Restated Administrative Services Agreement with Capital Research and Management Company under which the Fund may bear certain administrative expenses for certain classes of shares;
WHEREAS, the Fund has entered into an Amended and Restated Shareholder Services Agreement with American Funds Service Company under which the Fund may bear certain transfer agency expenses for its shares;
WHEREAS, the Fund is authorized to issue the following classes of shares of beneficial interest: Class A shares; Class C shares; Class T shares; as well as Class F-1 shares, Class F-2 shares and Class F-3 shares (“Class F shares”);
WHEREAS, Rule 18f-3 under the 1940 Act permits open-end management investment companies to issue multiple classes of voting shares representing interests in the same portfolio if, among other things, an investment company adopts a written Multiple Class Plan setting forth the separate arrangement and expense allocation of each class and any related conversion features or exchange privileges; and
WHEREAS, the Board of Trustees of the Fund has determined, that it is in the best interest of each class of shares of the Fund individually, and the Fund as a whole, to adopt this Amended and Restated Multiple Class Plan (the “Plan”) effective June 30, 2020;
NOW THEREFORE, the Fund adopts the Plan as follows:
1. Each class of shares will represent interests in the same portfolio of investments of the Fund, and be identical in all respects to each other class, except as set forth below. The differences among the various classes of shares of the Fund will relate to: (i) distribution, service and other charges and expenses as provided for in paragraph 3 of this Plan; (ii) the exclusive right of each class of shares to vote on matters submitted to shareholders that relate solely to that class or the separate voting right of each class on matters for which the interests of one class differ from the interests of another class; and (iii) such differences relating to (a) eligible investors, (b) the designation of each class of shares, (c) conversion features, and (d) exchange privileges each as may be set forth in the Fund’s prospectus and statement of additional information (“SAI”), as the same may be amended or supplemented from time to time.
2. (a) Certain expenses may be attributable to the Fund, but not a particular class of shares thereof. All such expenses will be borne by each class on the basis of the relative aggregate net assets of the classes. Notwithstanding the foregoing, the Distributor, the investment adviser or other provider of services to the Fund may waive or reimburse the expenses of a specific class or classes to the extent permitted by Rule 18f-3 under the 1940 Act and any other applicable law.
(b) A class of shares may be permitted to bear expenses that are directly attributable to that class, including: (i) any distribution service fees associated with any rule 12b-1 Plan for a particular class and any other costs relating to implementing or amending such rule 12b-1 Plan; (ii) any administrative service fees attributable to such class; and (iii) any transfer agency, sub-transfer agency and shareholder servicing fees attributable to such class.
(c) Any additional incremental expenses not specifically identified above that are subsequently identified and determined to be applied properly to one class of shares of the Fund shall be so applied upon approval by votes of the majority of both (i) the Board of Trustees of the Fund; and (ii) those Trustees of the Fund who are not “interested persons” of the Fund (as defined in the 1940 Act) (“Independent Trustees”).
3. Consistent with the general provisions of section 2(b), above, each class of shares of the Fund shall differ in the amount of, and the manner in which costs are borne by shareholders as follows:
(a) Class A shares
| (i) | Class A shares shall be sold at net asset value plus a front-end sales charge, at net asset value without a front-end sales charge but subject to a contingent deferred sales charge (“CDSC”), and at net asset value without any sales charge, as set forth in the Fund’s prospectus and SAI. |
| (ii) | Class A shares shall be subject to an annual distribution expense under the Fund’s Class A Plan of Distribution of up to 0.30% of average daily net assets, as set forth in the Fund’s prospectus, SAI, and Plan of Distribution. This expense consists of a service fee of up to 0.25%. The amount remaining, if any, may be used for distribution expenses. |
| (iii) | Class A shares shall be subject to a transfer agent fee (including sub-transfer agent fees) according to the Shareholder Services Agreement between the Fund and its transfer agent. In calculating transfer agent fees allocable to Class A shares, the fees generated shall be charged to the Fund and allocated to Class A shares based on their aggregate net assets relative to those of Class C shares. |
| (iv) | Class A shares shall be subject to an administrative services fee of 0.05% of average daily net assets, as set forth in the Fund’s prospectus, SAI, and its Administrative Services Agreement. |
(b) Class C shares
| (i) | Class C shares shall be sold at net asset value without a front-end sales charge, but subject to a CDSC and maximum purchase limits as set forth in the Fund’s prospectus and SAI. |
| (ii) | Class C shares shall be subject to an annual 12b-1 expense under the Fund’s Class C Plan of Distribution of up to 1.00% of average daily net assets, as set forth in the Fund’s prospectus, SAI, and Class C Plan of Distribution. This expense shall consist of a distribution fee of up to 0.75% and a service fee of up to 0.25% of such average daily net assets. |
| (iii) | Class C shares shall be subject to a transfer agent fee (including sub-transfer agent fees) according to the Shareholder Services Agreement between the Fund and its transfer agent. In calculating transfer agent fees allocable to Class C shares, the fees generated shall be charged to the Fund and allocated to Class C shares based on their aggregate net assets relative to those of Class A shares. |
| (iv) | Class C shares shall be subject to an administrative services fee of 0.05% of average daily net assets, as set forth in the Fund’s prospectus, SAI, and its Administrative Services Agreement. |
| (v) | Class C shares will automatically convert to Class A shares of the Fund approximately eight years after purchase, subject to the limitations described in the Fund’s prospectus and SAI. All conversions shall be effected on the basis of the relative net asset values of the two classes of shares without the imposition of any sales load or other charge. |
| (vi) | Class C shares shall be subject to a fee, if any, (included within the transfer agency expense) for additional costs associated with tracking the age of each Class C share. |
| (c) | Class T shares |
| (i) | Class T shares shall be sold at net asset value plus a front-end sales charge, as set forth in the Fund’s prospectus and SAI. |
| (ii) | Class T shares shall be subject to an annual 12b-1 expense under the Fund’s Class T Plan of Distribution of up to 0.50% of average daily net assets, as set forth in the Fund’s prospectus, SAI, and Class T Plan of Distribution. This expense shall consist of a distribution fee of up to 0.25% and a service fee of up to 0.25% of such average daily net assets. |
| (iii) | Class T shares shall be subject to a transfer agent fee (including sub-transfer agent fees) according to the Shareholder Services Agreement between the Fund and its transfer agent. Class T shares will pay only those transfer |
agent fees and third party pass-through fees (e.g., DST Systems, Inc. (DST) and National Securities Clearing Corporation (NSCC) fees) that are directly attributed to accounts of and activities generated by Class T shares.
| (iv) | Class T shares shall be subject to an administrative services fee of 0.05% of average daily net assets, as set forth in the Fund’s prospectus, SAI, and its Administrative Services Agreement. |
| (d) | Class F shares consisting of Class F-1 shares, Class F-2 shares and Class F-3 shares |
| (i) | Class F shares shall be sold at net asset value without a front-end or back-end sales charge. |
| (ii) | Class F-1 shares shall be subject to an annual 12b-1 expense under the Fund’s Class F-1 Plan of Distribution of up to 0.50% of average daily net assets, as set forth in the Fund’s prospectus, SAI, and Class F-1 Plan of Distribution. This expense shall consist of a distribution fee of up to 0.25% and a service fee of up to 0.25% of such average daily net assets. |
| (iii) | Class F-2 shares and Class F-3 shares shall not be subject to an annual 12b-1 expense. |
| (iv) | Class F shares shall be subject to a transfer agent fee (including sub-transfer agent fees, except for Class F-3 shares) according to the Shareholder Services Agreement between the Fund and its transfer agent. Class F shares will pay only those transfer agent fees and third party pass-through fees (e.g., DST and NSCC fees) that are directly attributed to accounts of and activities generated by Class F shares. |
| (v) | Class F shares shall be subject to an administrative services fee of 0.05% of average daily net assets, as set forth in the Fund’s prospectus, SAI, and its Administrative Services Agreement. |
All other rights and privileges of Fund shareholders are identical regardless of which class of shares is held.
4. This Plan shall not take effect until it has been approved by votes of the majority of both (i) the Board of Trustees of the Fund and (ii) the Independent Trustees.
5. This Plan shall become effective with respect to any class of shares of the Fund, other than Class A shares, Class C shares, Class T shares or Class F shares, upon the commencement of the initial public offering thereof (provided that the Plan has previously been approved with respect to such additional class by votes of the majority of both (i) the Board of Trustees of the Fund; and (ii) Independent Trustees prior to the offering of such additional class of shares), and shall continue in effect with respect to such additional class or classes until terminated in accordance with paragraph 7. An addendum setting forth such specific and different terms of such additional class or classes shall be attached to and made part of this Plan.
6. No material amendment to the Plan shall be effective unless it is approved by the votes of the majority of both (i) the Board of Trustees of the Fund and (ii) Independent Trustees.
7. This Plan may be terminated at any time with respect to the Fund as a whole or any class of shares individually, by the votes of the majority of both (i) the Board of Trustees of the Fund and (ii) Independent Trustees. This Plan may remain in effect with respect to a particular class or classes of shares of the Fund even if it has been terminated in accordance with this paragraph with respect to any other class of shares.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the Fund has caused this Plan to be executed by its officer(s) thereunto duly authorized, as of June 30, 2020.
American Funds Tax-Exempt Fund of New York
By: /s/ Steven I. Koszalka
Steven I. Koszalka
Secretary
[logo - The Capital Group]
Code of Ethics
April 2020
Guidelines
Capital Group associates are responsible for maintaining the highest ethical standards. The Code of Ethics is intended to help associates observe exemplary standards of integrity, honesty and trust. It sets out standards for our personal conduct, including personal investing, gifts and entertainment, outside business interests and affiliations, political contributions, insider trading, and client confidentiality.
Our fund shareholders and clients have placed their trust in Capital to manage their assets. As investment advisers, we act as fiduciaries to our clients. This means we owe them both a duty of care and a duty of loyalty.
Capital has earned a reputation over many years for acting with the highest integrity and ethics. Reputations are fragile, however, and Capital’s reputation can be harmed if any of us fails to act ethically and in the best interests of our clients. We each must hold ourselves to the highest standards of behavior, regardless of business custom, and strive to avoid even the appearance of impropriety. We all share this responsibility — if you have any doubt whether an action or circumstance is consistent with our standards, raise it.
Associates should be aware that their actions outside of the workplace can reflect on the ethics of our organization and potentially harm our reputation. For this reason, associates should exercise caution and good judgment in order to avoid having their actions outside of the workplace impact Capital, our workplace or our associates.
No set of rules can anticipate every possible situation, so it is essential that associates adhere to the spirit as well as the letter of the Code of Ethics. Any activity that compromises the trust our clients have placed in us, even if it does not expressly violate a rule, has the potential to harm our reputation. Associates are reminded of one of Capital’s core principles: that we must do the right thing as a matter of principle, not just in observance of policy.
In addition to the specific policies described below, associates have the following fundamental obligations under the Code of Ethics:
| · Associates must avoid those situations that might place, or appear to place, their personal interests in conflict with the interests of Capital, our clients or fund shareholders. |
| · Associates must not take advantage of their role with Capital to benefit themselves or another party. |
| · Associates must comply with the laws, rules and regulations that apply to us in the conduct of our business. |
| · Associates must promptly report violations of the Code of Ethics. |
It is important that all associates comply with the Code of Ethics, including its related guidelines and policies. Failure to do so could result in disciplinary action, including termination.
Questions regarding the Code of Ethics may be directed to the Code of Ethics Team.
Protecting sensitive information
Antifraud provisions of U.S. securities laws as well as the laws of other countries generally prohibit persons in possession of material non-public information from trading on or communicating the information to others. Associates who believe they may have material non-public information should contact a member of the Legal staff.
Capital Group regularly creates, collects and maintains valuable proprietary information, which is essential to our business operations and the performance of services for our clients. This information derives its value, in part, from not being generally known outside of Capital (hereinafter “Confidential Information”). It includes confidential electronic information in any medium, hard-copy information, and information shared orally or visually (such as by telephone or video conference). The confidentiality, integrity and limited availability of such information is regarded as fundamental to the successful business operations of Capital Group. The purpose of this Confidential Information Policy is to protect our information from disclosure – intentional or inadvertent – and to ensure that associates understand their obligation to protect and maintain its confidentiality.
Extravagant or excessive gifts and entertainment
Associates should not accept extravagant or excessive gifts or entertainment from persons or companies that conduct or may conduct business with Capital. Please see below for a summary of the Gifts and Entertainment Policy.
No special treatment from broker-dealers
Associates may not accept negotiated commission rates or any other terms they believe may be more favorable than the broker-dealer grants to accounts with similar characteristics. U.S. broker-dealers are subject to certain rules designed to prevent favoritism toward such accounts. Favors or preferential treatment from broker-dealers may not be accepted. This rule applies to the associate’s spouse/spouse equivalent and any immediate family member residing in the same household.
No excessive trading of Capital-affiliated funds
Associates should not engage in excessive trading of the American Funds or other Capital-managed investment vehicles worldwide in order to take advantage of short-term market movements. Excessive activity, such as a frequent pattern of exchanges, could involve actual or
potential harm to shareholders or clients. This rule applies to the associate’s spouse/spouse equivalent and any immediate family member residing in the same household.
Ban on Initial Public Offerings (IPOs) and Initial Coin Offerings (ICOs)
All associates and immediate family members residing in the same household may not participate in IPOs or ICOs.
Exceptions for participation in IPOs are rarely granted; however, they will be considered on a case-by-case basis (for example, where a family member is employed by the IPO company and IPO shares are considered part of that family member’s compensation).
Avoiding conflicts
Associates must avoid conflicts of interest that can occur when their business, financial or other interests interfere, or reasonably appear to interfere, with their duty to serve the interests of Capital and our clients. Conflicts of interest include any situation where financial or other personal factors compromise objectivity or professional judgment. Even the appearance of conflict could negatively impact Capital and harm our reputation.
Portfolio managers and investment analysts should be aware of the potential conflicts that can arise when they invest on behalf of fund shareholders and clients. The investments we make for our clients must be based on their best interests, and should not be, or appear to be, based on the self-interest of our associates. Accordingly, members of the investment group must disclose to the Code of Ethics Team if they or any of their family members, such as parents, children, siblings, in-laws or other family members with whom they have a close relationship, has a material business, financial or personal relationship with a company that they hold or are eligible to purchase professionally. Examples of a material relationship include: (1) a family member serving as a senior officer or executive of a portfolio company, (2) significant beneficial ownership of a portfolio company by the associate or their family members, and (3) involvement by the associate or a family member in a significant transaction or business opportunity with a portfolio company.
In addition, associates should avoid conflicts related to Capital’s business, and therefore must not:
| · Engage in a business that competes, directly or indirectly, with the interests of Capital, or is related to their role or responsibilities at Capital; |
| · Act for Capital in any transaction or business relationship that involves the associate, members of their family or other people or organizations with whom the associate or their family member(s) have a significant personal connection or financial interest; |
| · Negotiate with Capital on behalf of any such people or organizations; or |
| · Use or attempt to use their position at Capital to obtain any improper personal benefit for themselves, family member(s) or any other party. |
No policy can anticipate every possible conflict of interest and all associates must be vigilant in guarding against anything that could color our judgment. Any associate who is aware of a transaction or relationship that could reasonably be expected to give rise to a conflict of interest or perceived conflict of interest must disclose the matter promptly to a member of the Code of Ethics Team. If there is any doubt or if something does not feel consistent with our standards, raise the issue.
Any changes in a previously disclosed potential conflict, outside business interest or affiliation that could be relevant to an evaluation of a potential conflict must also be promptly disclosed. Examples of changes to disclose include: (1) a change in research coverage of an investment analyst to include a company with a family member serving as a senior executive (even if the senior executive relationship had previously been disclosed) and (2) a change in an associate’s role to trader if the associate had previously disclosed a sibling who works as a sell-side trader.
Outside business interests/affiliations
Associates must obtain approval from the Code of Ethics Team to serve on the board of directors or as an advisory board member of any public or private company. This rule does not apply to: (1) boards of Capital companies or funds; (2) board service that is a direct result of the associate’s responsibilities at Capital, such as for portfolio companies of private equity funds managed by Capital; or (3) boards of non-profit and charitable organizations.
In addition, associates must disclose to the Code of Ethics Team if they or any of their family members, such as parents, children, siblings, in-laws or other family members with whom they have a close relationship:
| · serves as a board director or as an advisory board member of, |
| · holds a senior officer position, such as CEO, CFO or Treasurer with, or |
| · owns 5% or more, individually or together with other such family members, of any public company or any private company that may be reasonably expected to go public. |
Family members employed by a financial institution
Associates who are “Covered Associates” (as defined below) must disclose if any of their family members, such as parents, children, siblings, in-laws or other family members with whom they have a close relationship, is employed by a broker-dealer, investment adviser or other firm that provides investment research or trade execution services to Capital.
Requests for approval or questions may be directed to the Code of Ethics Team.
Other guidelines
Statements and disclosures about Capital, including those made to fund shareholders and clients and in regulatory filings, should be accurate and not misleading.
Reporting requirements
Annual certification of the Code of Ethics
All associates are required to certify at least annually that they have read and understand the Code of Ethics. Questions or issues relating to the Code of Ethics should be directed to the associate’s manager or the Code of Ethics Team.
Reporting violations
All associates are responsible for complying with the Code of Ethics. As part of that responsibility, associates are obligated to report violations of the Code of Ethics promptly, including: (1) fraud or illegal acts involving any aspect of Capital’s business; (2) noncompliance with applicable laws, rules and regulations; (3) intentional or material misstatements in regulatory filings, internal books and records, or client records and reports; or (4) activity that is harmful to fund shareholders or clients. Deviations from controls or procedures that safeguard Capital, including the assets of shareholders and clients, should also be reported. Reported violations of the Code of Ethics will be investigated and appropriate action will be taken, which may include reporting the matter to the firm’s regulator if determined to be appropriate by legal counsel. Once a violation has been reported, all associates are required to cooperate with Capital in the internal investigation of any matter by providing honest, truthful and complete information.
Associates may report confidentially to a manager/department head or to the Open Line Committee.
Associates may also contact the Chief Compliance Officers of CB&T, CIInc, CRC, or CRMC, or legal counsel employed with Capital.
Capital strictly prohibits retaliation against any associate who in good faith makes a complaint, raises a concern, provides information or otherwise assists in an investigation regarding any conduct that he or she reasonably believes to be in violation of the Code of Ethics. This policy is designed to ensure that associates comply with their obligations to report violations without fear of retaliation.
Policies
Capital’s policies regarding gifts and entertainment, political contributions, insider trading and personal investing are summarized below.
Gifts and Entertainment Policy
Under the Gifts and Entertainment Policy, associates may not receive or extend gifts or entertainment that are excessive, repetitive or extravagant, if such gifts or entertainment involve a government official or are due to a third party’s business relationship (or prospective business relationship) with Capital. The Policy is intended to ensure that gifts and entertainment involving associates do not raise questions of propriety regarding Capital’s business relationships or prospective business relationships, or Capital’s interactions with government officials. Accordingly, for gifts and entertainment involving those who conduct, or may conduct, business with Capital:
| · An associate may not accept gifts from (or give gifts to) the same person or entity worth more than $100 (or the local currency equivalent) in a 12-month calendar year period. |
| · An associate may not accept or extend entertainment valued at over $500 (or the local currency equivalent) unless a business reason exists for such entertainment and the entertainment is pre-approved by the associate’s manager and the Code of Ethics Team. Trading department associates are prohibited from accepting entertainment, regardless of value. |
Gifts or entertainment extended to a private-sector person by a Capital associate and approved by the associate’s manager for reimbursement by Capital do not need to be reported (or precleared). Trading department associates should report gifts and entertainment extended regardless of reimbursement. Note: Separate policies regarding extending business gifts or entertainment apply to AFD and CGIIS associates. Dollar amounts refer to U.S. dollars.
Capital Group is registered as a federal lobbyist and special rules apply to gifts and entertainment involving government officials and employees as a result. Associates must receive approval from Capital’s Code of Ethics Team prior to either: (1) hosting a federal government official or employee at a Capital facility if anything of value (e.g. food, tangible item) will be presented to that individual; or (2) providing anything of value to a federal government official or employee if Capital will pay or reimburse for the related cost.
Reporting
The limitations relating to gifts and entertainment apply to all associates as described above, and associates will be asked to complete quarterly disclosures. Associates must report any gift exceeding $50 and business entertainment in which an event exceeds $75 (although it is recommended that associates report all gifts and entertainment). Trading department associates should notify the Code of Ethics Team when gifts are received and report such gifts quarterly, whether the gift is received by an individual associate or by a department. In addition, trading associates should report gifts and entertainment extended regardless of reimbursement.
Charitable contributions
Associates must not allow Capital’s present or anticipated business to be a factor in soliciting political or charitable contributions from outside parties. In addition, it is generally not appropriate to solicit these outside parties or Capital associates for donations to a family-run non-profit organization, family foundation, donor-advised fund or other charitable organization in which an associate or their family members are significantly involved. Board membership alone would not be considered significant involvement.
Gifts and Entertainment Committee
The Gifts and Entertainment Committee oversees administration of the Policy. Questions regarding the Gifts and Entertainment Policy may be directed to the Code of Ethics Team.
Political Contributions Policy
Associates must be cautious when engaging in personal political activities, particularly when supporting officials, candidates, or organizations that may be in a position to influence decisions to award business to investment management firms. Associates should not make political contributions to officials or candidates (in any country) for the purpose of influencing the hiring of a Capital Group company as an advisor to a governmental entity. Associates are encouraged to contact the Code of Ethics Team with any questions about this policy.
Associates may not use Capital offices or equipment to engage in political fundraising or solicitation activity, for example, hosting a fundraising event at the office or using Capital phones or email systems to help solicit donations for an elected official, a candidate, Political Action Committee (PAC) or political party. Associates may volunteer their time on behalf of a candidate or political organization but should limit volunteer activities to non-work hours.
For contributions or activities supporting candidates
or political organizations within the U.S., we have adopted the guidelines set forth below, which apply to associates classified
as “Restricted Associates.”
Guidelines for political contributions and activities within the U.S.
U.S. Securities and Exchange Commission (SEC) regulations limit political contributions to certain Covered Government Officials
by certain employees of investment advisory firms and certain affiliated companies. “Covered Government Official,”
for purposes of the Political Contributions Policy, is defined as: (1) a state or local official; (2) a candidate for state or
local office; or (3) a federal candidate currently holding state or local office.
Many U.S. cities and states have also adopted regulations restricting political contributions by associates of investment management firms seeking to provide services to a governmental entity. Some associates are also subject to these regulations.
Restricted Associates
Certain associates are deemed “Restricted Associates” under this Policy. Restricted Associates include (1) “covered associates” as defined in the SEC’s rule relating to political contributions by investment advisers (Rule 206(4)-5 under the Investment Advisors Act of 1940); and (2) other associates who do not meet that definition but whom Capital has determined should be subject to the restrictions on political contributions contained in the Policy based on their roles and responsibilities at Capital. Contributions by Restricted Associates and their spouse/spouse equivalent are subject to specific limitations, preclearance, and reporting requirements as described below.
Preclearance of political contributions
Contributions by Restricted Associates to any of the following must be precleared:
| · State or local officials, or candidates for state or local office |
| · Federal candidate campaigns and affiliated committees, including federal incumbents and presidential candidates |
| · Political organizations such as Political Action Committees (PACs), Super PACs and 527 organizations and ballot measure committees |
| · Non-profit organizations that may engage in political activities, such as 501(c)(4) and 501(c)(6) organizations |
Restricted Associates must also preclear U.S. political contributions by their spouse/spouse equivalent to any of the foregoing, as well as contributions to any state, local or federal political party or political party committee, if the aggregate contributions by the Restricted Associate and spouse/spouse equivalent to any one candidate or political entity exceed $50,000 in a calendar year.
Certain documentation is required for contributions to Covered Governmental Officials, PACs or Super PACs, and may be required for contributions to other entities that engage in political activity. See “Required documentation” below for further details. To preclear a contribution, please contact the Code of Ethics Team.
Contributions include:
| · Monetary contributions, gifts or loans |
| · “In kind” contributions (for example, donations of goods or services or underwriting or hosting fundraisers) |
| · Contributions to help pay a debt incurred in connection with an election (including transition or inaugural expenses, and purchasing tickets to inaugural events) |
| · Contributions to joint fund-raising committees |
| · Contributions made by a Political Action Committee (PAC) controlled by a Restricted Associate[1] |
| Please contact the Code of Ethics Team to preclear a contribution. |
| [1] “Control” for this purpose includes service as an officer or member of the board (or other governing body) of a PAC. |
Required documentation
Restricted Associates must obtain additional documentation from an independent legal authority before they will be approved to contribute to Covered Government Officials. The purpose of the legal documentation is to verify that a specific state or local office does not have the ability to directly or indirectly influence the awarding of business to an investment manager. For contributions to PACs, Super PACs, or other entities that engage in political activities, Restricted Associates may be required to obtain a certification that the entity does not contribute to Covered Government Officials. The Code of Ethics Team will provide language for the documentation when you preclear the contribution.
If a candidate currently holds a state/local office and is running for a different state/local office, legal documentation must be obtained for both the current position and the office for which the candidate is running. Exceptions to the documentation requirements may be granted on a case-by-case basis.
Special political contribution requirements – CollegeAmerica
Certain associates involved with “CollegeAmerica,” the American Funds 529 college savings plan sponsored by the Commonwealth of Virginia, are subject to additional restrictions which prohibit them from contributing to Virginia political candidates or parties.
Administration of the Political Contributions Policy
The U.S. Public Policy Coordinating Group oversees the administration of this Policy, including considering and granting possible exceptions. Questions regarding the Political Contributions Policy may be directed to the Code of Ethics Team.
Insider Trading Policy
Antifraud provisions of U.S. securities laws as well as the laws of other countries generally prohibit persons in possession of material non-public information from trading on or communicating the information to others. Sanctions for violations can include civil injunctions, permanent bars from the securities industry, civil penalties up to three times the profits made or losses avoided, criminal fines and jail sentences. In addition, trading in fund shares while in possession of material, non-public information that may have an immediate impact on the value of the fund’s shares may constitute insider trading.
While investment research analysts are most likely to come in contact with material non-public information, the rules (and sanctions) in this area apply to all Capital associates and extend to activities both within and outside each associate's duties. Associates who believe they have material non-public information should contact any lawyer in the organization.
Personal Investing Policy
This policy applies only to “Covered Associates.” Special rules apply to certain associates in some non-U.S. offices.
The Personal Investing Policy (Policy) sets forth specific rules regarding personal investments that apply to "covered" associates. These associates may have access to confidential information that places them in a position of special trust. Under the Code of Ethics, associates are responsible for maintaining the highest ethical standards. Associates are reminded that the requirements of the Code of Ethics apply to personal investing activities, even if the matter is not covered by a specific provision of the Policy.
Personal investing should be viewed as a privilege, not a right. As such, the Personal Investing Committee may place limitations on the number of preclearance requests and/or transactions associates make.
Covered Associates
“Covered Associates” are associates with access to non-public
information relating to current or imminent fund/client transactions, investment recommendations or fund portfolio holdings.
The Policy applies to the personal investments of Covered Associates and their spouses/spouse equivalents, significant other (commingling
expenses), and other immediate family members residing in their household (for example, children, siblings and parents –
including adoptive, step and in-law relationships).
Questions regarding coverage status should be directed to the Code of Ethics Team.
Additional rules apply to Investment Professionals
“Investment Professionals” include portfolio managers, research directors, investment counselors, investment analysts and research associates, investment group administrative assistants, trading associates, and global investment control associates, including assistants. See “Additional policies for Investment Professionals and CIKK associates” below for more details.
Prohibited transactions
The following transactions are prohibited:
| · Initial Public Offering (IPO) investments (this prohibition applies to all Capital associates) |
| Note: Exceptions are rarely granted; however, they will be considered on a case-by-case basis (for example, where a family member is employed by the IPO company and IPO shares are considered part of that family member’s compensation). |
| · Initial Coin Offering (ICO) investments (this prohibition applies to all Capital associates) |
| · Derivatives on securities and financial contracts, such as futures and forwards contracts, with limited exceptions described below |
| · Short selling of securities including short selling “against the box” and transactions in inverse or inverse/long ETFs, with limited exceptions described below |
| · Spread betting/contracts for difference (CFD) on securities |
| · Interest rate swaps (IRS), with limited exceptions described below |
Exceptions:
| · Derivatives, financial contracts, short selling and investments in inverse or inverse/long ETF transactions are permitted only if they are based on non-reportable instruments (such as currencies and commodities) or if they are based on the S&P 500, Russell 2000 or MSCI EAFE indices. |
| · Interest rate swaps are permitted if based on currencies and government bonds of the G7. |
Reporting requirements
Covered Associates are required to report any securities accounts, holdings and transactions: (1) in which the Covered Associate or any immediate family member residing in their household has a pecuniary interest (in other words, the ability to obtain an economic benefit or otherwise profit from a security) or (2) over which the Covered Associate or any immediate family member residing in their household exercises investment discretion or has direct or indirect influence or control. Quarterly and annual certifications of accounts, holdings and transactions must also be submitted. An electronic reporting platform is available for these disclosures.
Examples of accounts that must be disclosed include: (1) trusts if the Covered Associate or family member are the grantor or serve as trustee or custodian or have the ability to appoint or remove the trustee, (2) trusts that you or a family member have the power to revoke, (3) trusts for which you or a family member are a beneficiary and exercise investment discretion or have direct or indirect influence or control and (4) accounts of another person or entity if the Covered Associate or family member makes or influences investment decisions, such as by suggesting purchases and sales of securities in the account. The obligation to disclose accounts includes professionally managed accounts.
Covered Associates should immediately notify the Code of Ethics Team when opening new securities accounts; associates may also disclose accounts by logging into Protegent PTA and entering the account information directly.
Newly hired associates and associates transferring into a position designated as “covered” are required to maintain their U.S.-based brokerage accounts with electronic reporting firms. This requirement includes immediate family members living in their household. All Covered Associates and immediate family members residing in their household must use an electronic reporting firm for any new U.S.-based brokerage accounts. There are some exceptions to this requirement which include professionally managed accounts, employer-sponsored retirement accounts, and employee stock purchase plans.
Duplicate statements and trade confirmations (or approved equivalent documentation) are required for accounts holding securities subject to preclearance and/or reporting and due no later than 30 days after the documents’ issuance date. This requirement includes employer-sponsored retirement accounts and employee stock purchase plans (ESPP, ESOP, 401(k)). Documentation allowing the acquisition of shares via an employer-sponsored plan may be required.
Preclearance procedures
Certain transactions may be exempt from preclearance; please refer to the Personal Investing Policy for more details.
Before any purchase or sale of securities subject to preclearance, including securities that are not publicly traded, Covered Associates must receive approval from the Code of Ethics Team. This requirement applies to any purchase or sale of securities in which the Covered Associate or any immediate family member residing in the same household (1) has, or by reason of such transaction may acquire, pecuniary interest (in other words, the ability to obtain an economic benefit or
otherwise profit from a security), or (2) exercises investment discretion or direct or indirect influence or control. Transactions in an approved professionally managed accounts are not subject to preclearance. Please refer to the Personal Investing Policy for more details on preclearable securities.
Submitting preclearance requests
To submit a preclear request, log into Protegent PTA. Covered Associates should then click on the Preclear button on the Dashboard and enter the request details.
For assistance or questions, please contact the Code of Ethics Team.
Preclearance requests will be handled during the hours the New York Stock Exchange (NYSE) is open, generally 6:30am to 1:00pm Pacific Time. A response to requests will generally be sent within one business day.
Transactions will generally not be permitted in securities on days the funds or clients are transacting in the issuer in question. In the case of Investment Professionals, permission to transact will be denied if the transaction would violate the seven-day blackout or short-term trading policies (see “Additional policies for Investment Professionals and CIKK associates” below). Preclearance requests by Investment Professionals are subject to special review.
Preclearance will generally not be approved for analysts’ transactions involving securities held in their professional portfolio(s) or if the issuer of such securities falls within their industry research responsibilities or a related industry.
Unless a different period is specified, clearance is good until the close of the NYSE on the day of the request. Associates from offices outside the U.S. and/or associates trading on non-U.S. exchanges are usually granted enough time to complete their transaction during the next available trading day.
If the precleared trade has not been executed within the cleared timeframe, preclearance must be requested again. For this reason, the following are strongly discouraged:
| · Limit orders (for example, stop loss and good-till-canceled orders) |
| · Margin accounts |
Private investments or other limited offerings
Participation in private investments or other limited offerings are subject to special review. The following types of private investments must be precleared:
| · Hedge funds |
| · Private companies |
| · Limited Liability Companies (LLCs) |
| · Limited Partnerships (LPs) |
| · Private equity funds |
| · Private funds |
| · Private placements |
| · Private real estate investment companies |
| · Venture capital funds |
In addition, opportunities to acquire a stock that is "limited" (that is, a broker-dealer is only given a certain number of shares to sell and is offering the opportunity to buy) may be subject to the Gifts and Entertainment Policy.
Preclearance procedures for private investments
Preclear private investments by contacting the Code of Ethics Team.
To make a subsequent investment, or increase a previously approved investment, a new Private Investment Preclear Form must be submitted, and approval received before making the subsequent or increased investment.
Additional policies for Investment Professionals and CIKK associates
Disclosure of personal and professional holdings (cross-holdings) for certain Investment Professionals
Portfolio managers, research directors and investment analysts will be asked to disclose securities they own both personally and professionally on a quarterly basis. Research directors and analysts will also be required to disclose securities they hold personally that are within their research responsibilities. This disclosure must be made to the Code of Ethics Team, and may be reviewed by various Capital committees.
If disclosure has not already been made to the Code of Ethics Team, any associate who is in a position to recommend a security that the associate owns personally for purchase or sale in a fund or client account should first disclose such personal ownership either in writing (in a company write-up) or verbally (when discussing the company at investment meetings) prior to making a recommendation. This disclosure requirement is consistent with both the CFA Institute standards as well as the ICI Advisory Group Guidelines.
Blackout periods
Investment Professionals may not buy or sell a security during the period seven calendar days after a fund or client account transacts in that issuer. The blackout period applies to trades in the same management company with which the associate is affiliated.
If a fund or client account transaction takes place in the seven calendar days following a transaction executed by an Investment Professional, the personal transaction may be reviewed
by the Personal Investing Committee to determine the appropriate action, if any. For example, the Personal Investing Committee may recommend the associate be subject to a price adjustment.
Ban on short-term trading
Investment Professionals and CIKK associates are prohibited from engaging in short-term trading of reportable securities and economically equivalent instruments.
Associates and their family members may not buy and then sell or sell and then buy the same security and/or economically equivalent instruments:
| · Within 60 calendar days for Investment Professionals |
| · Within 6 months for CIKK associates |
Economically equivalent instruments include derivatives or other securities or instruments with a value derived from the value of the subject security. Additionally, they may not enter into an option or other derivative instrument that expires within 60 days from purchase.
Investment Professionals and CIKK associates should contact the Code of Ethics Team before transacting if they have any questions about the application of this rule to transactions in derivatives.
Failure to comply with this requirement may result in remedial action, including disgorgement of the profits.
Penalties for violating the Personal Investing Policy
Covered Associates may be subject to penalties for violating the Personal Investing Policy, such as restrictions on personal trading, disgorgement of profits, and other disciplinary action, up to and including termination. Violations to the Policy include failing to preclear or report securities transactions, failing to report securities accounts or submit statements, and failing to submit timely initial, quarterly and annual certification forms.
Personal Investing Committee
The Personal Investing Committee oversees the administration of the Policy. Among other duties, the Committee considers certain types of preclearance requests as well as requests for exceptions to the Policy.
Questions regarding the Personal Investing Policy may be directed to the Code of Ethics Team.
* * * * *
Questions regarding the Code of Ethics may be directed to the Code of Ethics Team.
[Logo – American Funds®]
The following is representative of the Code of Ethics in effect for each Fund:
CODE OF ETHICS
With respect to non-affiliated Board members and all other access persons to the extent that they are not covered by The Capital Group Companies, Inc. policies:
| · | No Board member shall so use his or her position or knowledge gained therefrom as to create a conflict between his or her personal interest and that of the Fund. |
| · | No Board member shall engage in excessive trading of shares of the fund or any other affiliated fund to take advantage of short-term market movements. |
| · | Each non-affiliated Board member shall report to the Secretary of the Fund not later than thirty (30) days after the end of each calendar quarter any transaction in securities which such Board member has effected during the quarter which the Board member then knows to have been effected within fifteen (15) days before or after a date on which the Fund purchased or sold, or considered the purchase or sale of, the same security. |
| · | For purposes of this Code of Ethics, transactions involving United States Government securities as defined in the Investment Company Act of 1940, bankers’ acceptances, bank certificates of deposit, commercial paper, or shares of registered open-end investment companies are exempt from reporting as are non-volitional transactions such as dividend reinvestment programs and transactions over which the Board member exercises no control. |
* * * *
In addition, the Fund has adopted the following standards in accordance with the requirements of Form N-CSR adopted by the Securities and Exchange Commission pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 for the purpose of deterring wrongdoing and promoting: 1) honest and ethical conduct, including handling of actual or apparent conflicts of interest between personal and professional relationships; 2) full, fair, accurate, timely and understandable disclosure in reports and documents that a fund files with or submits to the Commission and in other public communications made by the fund; 3) compliance with applicable governmental laws, rules and regulations; 4) the prompt internal reporting of violations of the Code of Ethics to an appropriate person or persons identified in the Code of Ethics; and 5) accountability for adherence to the Code of Ethics. These provisions shall apply to the principal executive officer or chief executive officer and treasurer (“Covered Officers”) of the Fund.
| 1. | It is the responsibility of Covered Officers to foster, by their words and actions, a corporate culture that encourages honest and ethical conduct, including the ethical resolution of, and appropriate disclosure of conflicts of interest. Covered Officers should work to assure a working environment that is characterized by respect for law and compliance with applicable rules and regulations. |
| 2. | Each Covered Officer must act in an honest and ethical manner while conducting the affairs of the Fund, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. Duties of Covered Officers include: |
| · | Acting with integrity; |
| · | Adhering to a high standard of business ethics; and |
| · | Not using personal influence or personal relationships to improperly influence investment decisions or financial reporting whereby the Covered Officer would benefit personally to the detriment of the Fund. |
| 3. | Each Covered Officer should act to promote full, fair, accurate, timely and understandable disclosure in reports and documents that the Fund files with or submits to, the Securities and Exchange Commission and in other public communications made by the Fund. |
| · | Covered Officers should familiarize themselves with disclosure requirements applicable to the Fund and disclosure controls and procedures in place to meet these requirements; and |
| · | Covered Officers must not knowingly misrepresent, or cause others to misrepresent facts about the Fund to others, including the Fund’s auditors, independent directors, governmental regulators and self-regulatory organizations. |
| 4. | Any existing or potential violations of this Code of Ethics should be reported to The Capital Group Companies’ Personal Investing Committee. The Personal Investing Committee is authorized to investigate any such violations and report their findings to the Chairman of the Audit Committee of the Fund. The Chairman of the Audit Committee may report violations of the Code of Ethics to the Board or other appropriate entity including the Audit Committee, if he or she believes such a reporting is appropriate. The Personal Investing Committee may also determine the appropriate sanction for any violations of this Code of Ethics, including removal from office, provided that removal from office shall only be carried out with the approval of the Board. |
| 5. | Application of this Code of Ethics is the responsibility of the Personal Investing Committee, which shall report periodically to the Chairman of the Audit Committee of the Fund. |
| 6. | Material amendments to these provisions must be ratified by a majority vote of the Board. As required by applicable rules, substantive amendments to the Code of Ethics must be filed or appropriately disclosed. |
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