Form 485BPOS TEMPLETON INSTITUTIONAL
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Table of Contents
INTENTION OF THE PARTIES; DEFINITION S | ||||
Intention of the Partie s | ||||
Definitions; Interpretatio n | ||||
WHAT J.P. MORGAN IS REQUIRED TO D O | ||||
Set Up Account s | ||||
Deposit of Cas h | ||||
Segregation and Registration of Assets; Nominee Nam e | ||||
Settlement of Transaction s | ||||
Contractual Settlement Date Accountin g | ||||
Income Collection (AutoCredit ) | ||||
Miscellaneous Administrative Dutie s | ||||
Corporate Action s | ||||
Security Class Action Settlement s | ||||
Proxie s | ||||
Statements of Accoun t | ||||
Access to J.P. Morgan’s Record s | ||||
Maintenance of Financial Assets at Subcustodian Location s | ||||
Foreign Exchange Transaction s | ||||
Assets Not Controlled by J.P. Morga n | ||||
Change Request s | ||||
Additional Customers and Fund s | ||||
Compliance with Laws and Regulation s | ||||
Personne l | ||||
INSTRUCTION S | ||||
Acting on Instructions; Method of Instruction and Unclear Instruction s | ||||
Verification and Security Procedure s | ||||
Instructions Contrary to Law/Market Practic e | ||||
Cut-Off Time s | ||||
Electronic Access and Cybersecurit y | ||||
Recording of Telephone Communication s | ||||
FEES, EXPENSES AND OTHER AMOUNTS OWING TO J.P. MORGA N | ||||
Fees and Expense s | ||||
Overdraft s | ||||
J.P. Morgan’s Right Over Account Assets; Set-of f | ||||
SUBCUSTODIANS AND SECURITIES DEPOSITORIE S | ||||
Appointment of Subcustodians; Use of Securities Depositorie s | ||||
Liability for Subcustodians and Securities Depositorie s | ||||
ADDITIONAL PROVISION S | ||||
Representations of the Customer and J.P. Morga n | ||||
The Customer is Liable to J.P. Morgan Even if it is Acting for Another Perso n | ||||
Special Settlement Service s | ||||
Provision of Informatio n | ||||
Information Concerning Deposits at J.P. Morgan’s Non-U.S. Branche s | ||||
Insuranc e | ||||
Security Holding Disclosur e | ||||
U.S. Regulatory Disclosure; Certain Information of the Custome r | ||||
Confidentialit y | ||||
Use of Nam e | ||||
WHEN J.P. MORGAN IS LIABLE TO THE CUSTOME R | ||||
Standard of Care; Liabilit y | ||||
Force Majeur e | ||||
J.P. Morgan May Consult With Counse l | ||||
J.P. Morgan Provides Diverse Financial Services and May Generate Profits as a Resul t | ||||
Ancillary Service s | ||||
TAXATIO N | ||||
Tax Obligation s | ||||
Tax Service s | ||||
TERM AND TERMINATIO N | ||||
Exit Procedur e | ||||
MISCELLANEOU S | ||||
Notic e | ||||
Successors and Assign s | ||||
Entire Agreement and Amendment s | ||||
Governing Law and Jurisdictio n | ||||
Severability; Waiver; and Surviva l | ||||
Counterpart s | ||
No Third Party Beneficiarie s | ||
Fund by Fund Basi s | ||
SCHEDULE A J.P. Morgan Investor Services Global Custody Restricted Market s | ||
GLOBAL CUSTODY AGREEMENT
This agreement, dated [March 1], 2020 (the “Agreement”), is between JPMORGAN CHASE BANK, NATIONAL ASSOCIATION ("J.P. Morgan"), with a place of business at 383 Madison Avenue, 11th floor, 10179, New York, NY; and severally and not jointly, each Cayman exempted company, Bermuda company, and Franklin Templeton investment company identified on Annex B hereto (as such exhibit may be amended from time to time), acting on behalf of its respective series or portfolios identified on Annex B (each such series or portfolio, as the case may be, hereinafter referred to as a “Fund”), as may be amended from time to time (each such Cayman exempted company, Bermuda company, and investment company referred to herein as a “Customer”), and in the case of those investment companies for which no separate series or portfolios are identified on such Annex B, acting for and on behalf of itself. For the sake of clarity, the term Customer when modified by the phrase “on behalf of a Fund”; “with respect to a Fund”; or similar phrasing covers both an investment company acting on behalf of its series or portfolio and an investment company with no separate series or portfolios but acting on behalf of itself. Although J.P. Morgan and each Customer have executed this document in the form of a master agreement for administrative convenience, except as expressly provided in this Agreement, this Agreement shall create a separate Agreement for each Customer as though J.P. Morgan had executed a separate Agreement with that Customer.
1. INTENTION OF THE PARTIES; DEFINITION S
(a) This Agreement sets out the terms on which J.P. Morgan will provide custodial, settlement, asset servicing and other associated services (collectively, the “Services”) to a Customer on behalf of its Funds. The Customer hereby appoints J.P. Morgan to provide the Services to the Customer and the Funds, subject to the terms of this Agreement and any requirements or restrictions imposed on the performance of such functions by any statutory provisions for the time being in force and which are applicable to J.P. Morgan as custodian. J.P. Morgan will be responsible for the performance of only those duties expressly set forth in this Agreement. The terms and conditions of this Agreement are applicable only to the Services which are specified in this Agreement.
(b) Investing in Financial Assets and cash in foreign jurisdictions may involve risks of loss or other burdens and costs. The Customer acknowledges that J.P. Morgan is not providing any legal, tax or investment advice in connection with the services under this Agreement and that a Fund’s investment adviser remains responsible for assessing and managing investment-related exposures arising out of Country Risk. Accordingly, J.P. Morgan will not be responsible for any Liabilities resulting from Country Risk.
1.2 Definitions; Interpretatio n
(a) Definitions
As used herein, the following terms have the meanings hereinafter stated.
“1940 Act” means Investment Company Act of 1940, as amended.
“Account” has the meaning set forth in Section 2.1.
“Account Assets” has the meaning set forth in Section 4.3(a).
“Affiliated Subcustodian Bank” means a Subcustodian that is both a subsidiary of JPMorgan Chase & Co. and either (i) a bank chartered or incorporated in the United States of America or (ii) a branch or subsidiary of such a bank.
“AML/Sanctions Requirements” means (a) any Applicable Law (including but not limited to the rules and regulations of the United States Office of Foreign Assets Control) applicable to J.P. Morgan, or to any J.P. Morgan Affiliate engaged in servicing any Account, which governs (i) money laundering, the financing of terrorism, insider dealing or other unlawful activities, or the use of financial institutions to facilitate such activities or (ii) transactions involving individuals or institutions which have been prohibited by, or are subject to, sanctions of any governmental authority under such Applicable Law; and (b) any J.P. Morgan policies and procedures reasonably designed to assure compliance with any such Applicable Law.
“Applicable Law” means any existing or future applicable statute, treaty, rule, regulation or law (including common law and federal, state, and local laws regarding equal employment opportunity, compensation, benefit, immigration, rights of the disabled, privacy, and anti-money laundering) and any applicable decree, injunction, judgment, order, formal interpretation or ruling issued by a court or governmental or regulatory entity.
“Authorized Person” means any person who has been designated by written notice from the Customer, on behalf of a Fund, substantially in the form as mutually agreed to by the Customer and J.P. Morgan (or by written notice in the form mutually agreed to by the Customer and J.P. Morgan from any agent designated by the Customer, including an investment manager) to act on behalf of the Customer or the Funds under this Agreement, any person who has been given a User Code by the Customer, or any person authorized by Customer to receive a User Code from J.P. Morgan. Such persons will continue to be Authorized Persons until such time as J.P. Morgan receives and has had reasonable time to act upon Instructions from the Customer (or its agent) that any such person is no longer an Authorized Person.
“Cash Account” has the meaning set forth in Section 2.1(a)(ii).
“Change” has the meaning set forth in Section 2.16.
“Change Request” has the meaning set forth in Section 2.16.
“Confidential Information” means all non-public information concerning the Customer, a Fund or the Accounts which J.P. Morgan receives in the course of providing services under this Agreement, including, but not limited to, the terms and conditions of this Agreement and information on portfolio securities owned by a Customer or a Fund. For the avoidance of doubt, to the extent Data (as defined in Annex A) includes any Confidential Information, such portion of the Data shall be deemed Confidential Information for purposes of this Agreement. Nevertheless, the term Confidential Information does not include (i) information that is or becomes available to the general public other than as a direct result of J.P. Morgan’s breach of the terms of this Agreement, (ii) information that J.P. Morgan develops independently without using the Customer’s or Fund’s confidential information, (iii) information that J.P. Morgan obtains on a non-confidential basis from a person who is not known to be subject to any obligation of confidence to the Customer with respect to that information, or (iv) information that the Customer, on behalf of a Fund, has designated as non-confidential or consented to be disclosed.
“Corporate Action” means any subscription right, bonus issue, stock repurchase plan, redemption, exchange, tender offer, or similar matter with respect to a Financial Asset in the Securities Account that requires discretionary action by the beneficial owner of the Financial Asset, but does not include rights with respect to class action litigation or proxy voting.
“Counterparty” has the meaning set forth in Section 2.1(c).
“Country Risk” means the risk of investing or holding assets in a particular country or market, including, but not limited to, risks arising from nationalization, expropriation, capital controls, currency restrictions or other governmental actions; the country’s financial infrastructure, including prevailing custody, tax and settlement practices; laws applicable to the safekeeping and recovery of Financial Assets and cash held in custody; the regulation of the banking and securities industries, including changes in market rules; currency devaluations or fluctuations;
and market conditions affecting the orderly execution of securities transactions or the value of assets.
“Customer Indemnitees” means the Customer and its respective trustees, directors, officers, and employees.
“Dormant Account” has the meaning set forth in Section 2.1.(d).
“Entitlement Holder” means the person named on the records of a Securities Intermediary as the person having a Security Entitlement against the Securities Intermediary.
“Financial Asset” means a Security and refers, as the context requires, either to the Security itself or to the means by which a person’s claim to the Security is evidenced, including a Security certificate or a Security Entitlement. The term “Financial Asset” does not include cash.
“Financial Services Best Practices” means the standards, policies and practices applicable to companies in the financial services industry of comparable size and scope as J.P. Morgan.
“Force Majeure Event” has the meaning set forth in Section 7.2(b) of this Agreement.
“Instruction” means an instruction that has been verified in accordance with the Security Procedure or, if no Security Procedure is applicable, that J.P. Morgan believes in good faith and in satisfaction of J.P. Morgan’s Standard of Care to have been given by an Authorized Person.
“J.P. Morgan Affiliate” means an entity controlling, controlled by, or under common control with J.P. Morgan.
“J.P. Morgan Indemnitees” means J.P. Morgan, J.P. Morgan Affiliates that provide Services in connection with this Agreement, Subcustodians, and their respective nominees, directors, officers, employees and agents.
“J.P. Morgan’s Standard of Care” has the meaning set forth in Section 7.1(a) of this Agreement.
“Liabilities” means any liabilities, losses, claims, costs, damages, penalties, fines, obligations, taxes (other than taxes based solely on a party’s own income), or expenses of any kind whatsoever (whether actual or contingent and including, without limitation, reasonable attorneys’, accountants’, consultants’ and experts’ fees and disbursements reasonably incurred and for the avoidance of doubt with respect to any Liabilities owed by the Customer, Liabilities shall also include any and all amounts owing to J.P. Morgan by the Customer’s counterparty in connection with collateral Accounts or control Accounts established at J.P. Morgan pursuant to the Customer’s Instruction) and outstanding from time to time; provided that, fees due in accordance with this Agreement that are subject to bona fide dispute shall not be considered Liabilities until the completion of a mutually agreed upon invoice dispute resolution process between J.P. Morgan and the Customer.
“Personal Information” or “PI” means any information that alone or in conjunction can be used to identify an individual or relates to an identifiable individual. Notwithstanding the foregoing “Personal Information” shall not include information that is lawfully obtained from publicly available information, or from federal, state or local government records lawfully made available to the general public.
“Securities” means shares, stocks, debentures, bonds, notes or other like obligations, whether issued in certificated or uncertificated form, and any certificates, receipts, warrants or other instruments representing rights to receive, purchase or subscribe for the same that are commonly traded or dealt in on securities exchanges or financial markets or obligations of an issuer, or shares, participations and interests in an issuer recognized in the country in which it is issued or dealt in as a medium for investment and any other property as may be acceptable to J.P. Morgan for the Securities Account.
“Securities Account” has the meaning set forth in Section 2.1(a)(i).
“Securities Depository” means any securities depository, clearing corporation, dematerialized book entry system or similar system for the central handling of Securities.
“Security Entitlement” means the rights and property interests of an Entitlement Holder with respect to a Financial Asset as set forth in Part 5 of Article 8 of the Uniform Commercial Code of the State of New York, as the same may be amended from time to time.
“Security Incident” means any confirmed, unauthorized or unlawful destruction, loss, alteration or disclosure of or access to a Fund’s or Customer’s Confidential Information that involves J.P. Morgan, a J.P. Morgan Affiliate or a Subcontractor in connection with the provisions of Services.
“Securities Intermediary” means J.P. Morgan, a Subcustodian, a Securities Depository and any other financial institution which in the ordinary course of business maintains Securities custody accounts for others and acts in that capacity.
“Security Procedure” means the applicable security procedure to be followed by the Customer (and its Authorized Persons) upon the issuance of an instruction and/or by J.P. Morgan upon receipt of an instruction, so as to enable J.P. Morgan to verify that an instruction is authorized. The applicable Security Procedure for different types of instructions may be set forth in service level documentation in effect from time to time with respect to the Services set forth in this Agreement or in separate documentation, and may be updated by J.P. Morgan from time to time upon notice to the Customer. A Security Procedure may, without limitation, involve the use of User Codes, dual-factor authentication, telephone call backs, or third party utilities. For the avoidance of doubt, an authenticated SWIFT message issued in the name of the Customer through any third party utility that J.P. Morgan has approved as a utility through which Instructions may be provided hereunder shall be deemed to have been verified through a Security Procedure.
“Subcontractor” means any person, other than a J.P. Morgan Affiliate, to whom J.P. Morgan subcontracts the provision of any part of the Services. “Subcontractor” does not include any Subcustodian, Securities Depository or any entity referred to in Section 7.5 of this Agreement.
“Subcustodian” means any of the subcustodians appointed by J.P. Morgan from time to time to hold Financial Assets and act on its behalf in different jurisdictions and includes any Affiliated Subcustodian Bank. J.P. Morgan will make available to the Customer an up-to-date list of Subcustodians via J.P. Morgan’s website in accordance with Section 3.5 (Electronic Access). In no event will an entity that is a Securities Depository, whether or not acting in that capacity, be deemed to be a Subcustodian. For the avoidance of doubt, the transfer agent of a Financial Asset shall not be deemed to be a Subcustodian with respect to that Financial Asset.
“User Code” means a password digital certificate, identifier (including biometric identifier), security device, algorithm, encryption or other similar procedure used by the Customer or an Authorized Person to access J.P. Morgan’s systems, applications or products or to issue Instructions to J.P. Morgan.
(b) Interpretation
(i) Headings are for convenience of reference only and shall not in any way form part of or affect the construction or interpretation of any provision of this Agreement.
(ii) Unless otherwise expressly stated to the contrary herein, references to Articles and Sections are to Articles and Sections of this Agreement and references to paragraphs are to paragraphs of the Sections in which they appear.
(iii) Unless the context requires otherwise, references in this Agreement to “persons” shall include legal as well as natural entities; references importing the singular shall include the plural (and vice versa) use of the term “including” shall be deemed to mean “including but not limited to”, and references to appendices and numbered sections shall be to such addenda and provisions herein.
(iv) Unless the context requires otherwise, any reference to a statute or a statutory provision shall include such statute or provision as from time to time modified to the extent such modification applies to any service provided hereunder. Any reference to a statute or a statutory provision shall also include any subordinate legislation made from time to time under that statute or provision.
(v) The Schedules, Appendices and Annexes to the Agreement are incorporated herein by reference and form part of the Agreement and shall have the same force and effect as if expressly set out in the body of the Agreement. If and to the extent that there is an inconsistency between the terms of the body of the Agreement and its Schedules, Appendices and Annexes, the terms of the body of the Agreement shall prevail unless expressly stated otherwise.
2. WHAT J.P. MORGAN IS REQUIRED TO D O
(a) J.P. Morgan will establish and maintain the following accounts (“Accounts”):
(i) one or more accounts in the name of the Customer on behalf of a particular Fund (or in another name requested by the Customer that is acceptable to J.P. Morgan) to which Financial Assets are or may be credited (each a “Securities Account”), which may be held by J.P. Morgan, a Subcustodian or a Securities Depository for J.P. Morgan on behalf of the Customer and a Fund, including as an Entitlement Holder; and
(ii) one or more cash accounts in the name of the Customer on behalf of a particular Fund (each, a “Cash Account”) (or in another name requested by the Customer that is acceptable to J.P. Morgan) for any and all cash in any currency received by or on behalf of J.P. Morgan for the account of the Customer and a Fund.
(b) At the request of the Customer on behalf of a particular Fund, additional Accounts may be opened in the future, and such additional Accounts shall be subject to the terms of this Agreement.
(c) In the event that the Customer on behalf of a particular Fund requests the opening of any additional Account for the purpose of holding collateral pledged by the Customer on behalf of a particular Fund to a securities exchange, clearing corporation, or other central counterparty (a “Counterparty”) to secure trading activity by the Customer on behalf of a particular Fund, or the pledge to a Counterparty of cash or individual Securities held in an Account, that Account (or the pledged cash or Securities) shall be subject to the collateral arrangements in effect between J.P. Morgan and the Counterparty in addition to the terms of this Agreement.
(d) Upon not less than thirty (30) days’ prior notice to the particular Customer on behalf of a Fund, J.P. Morgan may close any Account for which J.P. Morgan has not received any Instructions for at least one (1) year or which J.P. Morgan otherwise reasonably determines to be dormant (each a “Dormant Account”). Each Customer reserves the right to object to J.P. Morgan’s determination to close a Dormant Account and if an objection is raised by a Customer during such thirty day notice period, a Dormant Account will only be closed if mutually agreed upon by J.P. Morgan and a Customer. J.P. Morgan may, upon closure of a Dormant Account, move any Account Assets in that Account to another Account of the particular Customer on behalf of a Fund and, in the case of a cash payment, J.P. Morgan is authorized to enter into any foreign exchange transactions with the Customer needed to facilitate the payment, as contemplated by Section 2.14. For the avoidance of doubt, J.P. Morgan may not transfer Account Assets of a Fund or Customer to the Account of another Fund or Customer.
(e) J.P. Morgan’s obligation to open Accounts pursuant to Section 2.1(a) is conditional upon J.P. Morgan receiving (to the extent J.P. Morgan has not yet been provided with) such of the following documents as J.P. Morgan may require:
(iii) a certified copy of the Customer's constitutional documents as in force at the time of receipt;
(iv) evidence reasonably satisfactory to J.P. Morgan of the due authorization and execution of this Agreement by the Customer (for example by a certified copy of a resolution of the Customer's board of directors, board of trustees or equivalent governing body);
(v) in cases where the Customer, on behalf of a particular Fund, designates an investment manager, evidence reasonably satisfactory to J.P. Morgan of that appointment as an Authorized Person and of the officers and employees of the investment manager authorized to act with respect to the relevant Account;
(vi) information about the Customer’s or Fund’s financial condition, such as its audited and unaudited financial statements; and
(vii) in the case of any Account opened in a name other than that of the Customer, documentation with respect to that name similar to that set forth in paragraphs (i) – (iv).
(f) For avoidance of doubt, J.P. Morgan shall treat all “Financial Assets” as “financial assets” as that term is used in the Uniform Commercial Code (“UCC”) and hold them in a “securities account” as that term is used in the UCC.
(a) Any cash in any currency received by or on behalf of J.P. Morgan for the account of a Fund of the Customer will be either:
(i) deposited in one or more Cash Accounts at J.P. Morgan in New York or at one of its non-U.S. branch offices and will constitute a debt owing to the Customer or Fund, as applicable, by J.P. Morgan as banker, provided that (A) any cash so deposited with a non-U.S. branch office will be payable exclusively by that branch office in the applicable currency, subject to compliance with Applicable Law, including, without limitation, any applicable currency restrictions, and (B) while J.P. Morgan is not required to pay or charge interest on any such Cash Account, J.P. Morgan may, from time to time, in its discretion, pay interest on any such Cash Account (or charge interest, if at the time, the prevailing interest rate in the relevant market for similar deposits in the same currency is negative) at a rate to be determined by J.P. Morgan; or
(ii) deposited in an account maintained in the name of the Customer at the Subcustodian in the relevant market, in which case the deposit will constitute a debt owing to the Customer on behalf of a Fund by that Subcustodian as the Customer’s banker and not by J.P. Morgan, payable exclusively in the applicable currency at that Subcustodian; for the avoidance of doubt, cash held in that account will not be part of the Cash Account(s).
(b) Any amounts credited by J.P. Morgan to the Cash Account on the basis of a notice or a provisional credit from a third party, may be reversed if J.P. Morgan does not receive final payment in a timely manner. J.P. Morgan will promptly notify the Customer of any such reversal.
2.3 Segregation and Registration of Assets; Nominee Nam e
(a) J.P. Morgan will identify in its books that those Financial Assets credited to a Fund of the Customer’s Securities Account belong to that particular Fund of the Customer (except as may be otherwise agreed by J.P. Morgan and the Customer).
(b) To the extent permitted by Applicable Law, J.P. Morgan will require each Subcustodian to identify in its own books and records that Financial Assets held at such Subcustodian by J.P. Morgan on behalf of its customers belong to customers of J.P. Morgan, by means of differently titled accounts on the books of the Subcustodian or other equivalent measures that achieve the same level of protection so that it is readily apparent that the Financial Assets do not belong to J.P. Morgan or the Subcustodian.
(c) J.P. Morgan is authorized, in its discretion subject to Applicable Law to:
(viii) hold Financial Assets by physical possession of the share certificate or other instruments representing such Financial Assets to the extent such Financial Assets are customarily held in bearer form or are delivered to J.P. Morgan or its Subcustodian in bearer form;
(ix) hold Financial Assets in book entry form or deposit Financial Assets with any Securities Depository;
(x) hold Financial Assets in omnibus accounts which contain the Financial Assets of other customers of J.P. Morgan on a fungible basis and accept delivery into such omnibus accounts of Financial Assets of the same class and denomination as those deposited by the Customer, on behalf of a Fund; provided however, that such omnibus accounts will not contain any proprietary assets of J.P. Morgan; and further provided that to the extent that J. P. Morgan or any of its Subcustodians holds securities constituting the Customer’s or a Fund’s assets in an omnibus account that is identified as belonging to J. P. Morgan for the benefit of its customers, the records of J. P. Morgan shall identify which of such securities constitute a Customer’s or Fund’s assets;
(xi) register in the name of the particular Fund of the Customer, J.P. Morgan, a Subcustodian, a Securities Depository or their respective nominees, such Financial Assets as are customarily held in registered form; provided that J.P. Morgan shall, on an ongoing basis, provide accurate information to the Customer and such other persons as the Customer may designate with respect to the registration or location of the Customer’s or a Fund’s Financial Assets; and
(xii) decline to accept any asset or property which it deems to be unsuitable or inconsistent with its custodial operations. J.P. Morgan will promptly notify the Customer if it declines to accept any asset or property which it deems to be unsuitable or inconsistent with its custodial operations and the reasons for such decline.
(d) For the avoidance of doubt, unless J.P. Morgan has provided prior written approval, the Customer may not instruct a third party to register any Financial Asset in the name of J.P. Morgan, a Subcustodian, a Securities Depository or any of their respective nominees. The Customer agrees that any Financial Asset registered in the name of J.P. Morgan, a Subcustodian, a Securities Depository or any of their respective nominees without J.P. Morgan’s authorization shall not be considered to be held in custody under this Agreement. In addition, to the extent that the use of nominee names is not permitted by Applicable Law, foreign securities shall not be registered in a nominee name, and a Customer on behalf of a Fund shall not have any obligation to hold harmless any such nominee where such use of a nominee is not permitted by Applicable Law.
2.4 Settlement of Transaction s
(a) Subject to Section 3 and Section 4.2, J.P. Morgan will act in accordance with Instructions with respect to settlement of transactions. Settlement of transactions will be conducted in accordance with prevailing standards of the market in which the transaction occurs. If it is not possible to settle the transaction in accordance with any Instruction, J.P. Morgan will promptly notify the Customer. Without limiting the generality of the foregoing, the Customer authorizes J.P. Morgan to deliver Financial Assets or cash payment in accordance with applicable market practice in advance of receipt or settlement of consideration expected in connection with such
delivery or payment, and the Customer acknowledges and agrees that such action alone will not of itself constitute negligence, fraud, or willful misconduct of J.P. Morgan, and the risk of loss arising from any such action will be borne by the Customer or Fund. If the Customer’s or Fund’s counterparty (or other appropriate party) fails to deliver the expected consideration as agreed, J.P. Morgan will, upon Customer’s written request, attempt to contact the counterparty to seek settlement at the direction of the Customer and will promptly notify the Customer of such failure. For purposes of the foregoing, Customer shall provide J.P. Morgan with all relevant information, as required by J.P. Morgan, to contact such counterparty. If the Customer’s counterparty continues to fail to deliver the expected consideration, J.P. Morgan will promptly provide information reasonably requested by the Customer that J.P. Morgan has in its possession to allow the Customer to enforce its rights against the Customer’s counterparty, but neither J.P. Morgan nor its Subcustodians will be obliged to institute legal proceedings, file a proof of claim in any insolvency proceeding or take any similar action, unless there are any requirements imposed on J.P. Morgan under Applicable Law to take such actions.
(b) Except to the extent J.P. Morgan and the Customer have agreed to treat settlement of a transaction under the contractual settlement date accounting basis set forth in Section 2.5, J.P. Morgan will post such transaction on the date on which the cash or Financial Assets received as consideration for the transaction is actually received and settled by J.P. Morgan.
(c) J.P. Morgan reserves the right to reverse any transactions that are credited to the Accounts due to mis-postings, errors and other similar actions.
2.5 Contractual Settlement Date Accountin g
(a) In cases where J.P. Morgan and the Customer agree to do so, and subject to the other provisions of this Section 2.5, J.P. Morgan will effect book entries on a contractual settlement date accounting basis as described below with respect to the settlement for those Financial Assets and transactions as to which J.P. Morgan customarily offers contractual settlement date accounting.
(xiii) Sales: On the settlement date for a sale, J.P. Morgan will credit the Cash Account with the proceeds of the sale and post the Securities Account as pending delivery of the relevant Financial Assets.
(xiv) Purchases: On the settlement date for a purchase (or earlier, if market practice requires delivery of the purchase price before the settlement date), J.P. Morgan will debit the Cash Account for the settlement amount and will then post the Securities Account as awaiting receipt of the expected Financial Assets. The Customer, on behalf of a Fund, will not be entitled to the delivery of Financial Assets until J.P. Morgan or a Subcustodian actually receives them.
(b) J.P. Morgan may reverse any book entries made pursuant to Section 2.5(a) prior to a transaction's actual settlement upon notice to the Customer if J.P. Morgan reasonably believes that the transaction will not settle in the ordinary course within a reasonable time. The Customer, on behalf of a Fund, will be responsible for any Liabilities resulting from such reversal unless such Liabilities were caused by J.P. Morgan’s breach of J.P. Morgan’s Standard of Care. The Customer, on behalf of a Fund, acknowledges that the procedures described in Section 2.5 are of an administrative nature, and J.P. Morgan does not undertake to make loans of cash and/or Financial Assets to the Customer, on behalf of a Fund.
(c) J.P. Morgan shall make available on its web site a list of the markets for which it provides contractual settlement date accounting. J.P. Morgan may add markets to or remove markets from the contractual settlement date accounting service upon notice to the Customer that is reasonable in the circumstances. Additionally, J.P. Morgan reserves the right to restrict in good faith the availability of contractual settlement date accounting for credit or operational reasons,
either for individual Financial Assets, types of Financial Assets, counterparties or markets, or overall.
2.6 Income Collection (AutoCredit )
(a) J.P. Morgan will monitor information publicly available in the applicable market about forthcoming income payments on the Financial Assets held in the Securities Account, and will promptly notify the Customer of such information as it relates to a particular Fund.
(b) Except in cases where J.P. Morgan agrees to offer the AutoCredit service described in paragraph (c) of this Section 2.6, J.P. Morgan shall not be required to credit income on Financial Assets, net of any taxes withheld by J.P. Morgan or any third party, prior to actual receipt and reconciliation by J.P. Morgan.
(c) In cases where J.P. Morgan agrees to provide the following service, J.P. Morgan will credit the Cash Account with the anticipated income proceeds on Financial Assets on the anticipated payment date, net of any taxes that are withheld by J.P. Morgan or any third party (such service hereinafter defined as “AutoCredit”) for those Financial Assets and/or markets for which J.P. Morgan customarily offers an AutoCredit service. J.P. Morgan may reverse AutoCredit credits upon notice to the particular Fund of the Customer if J.P. Morgan believes that the corresponding payment will not be received by J.P. Morgan within a reasonably prompt period of time or the credit was incorrect, J.P. Morgan shall, upon request, promptly provide the Customer with relevant information related to any such reversal of credits. J.P. Morgan shall make available on its web site a list of the markets for which it provides AutoCredit. J.P. Morgan may add markets to or remove markets from the AutoCredit service upon notice to the Customer that is reasonable in the circumstances. Additionally, J.P. Morgan reserves the right to restrict in good faith the availability of AutoCredit for credit or operational reasons, either for individual Financial Assets, types of Financial Assets, counterparties or markets, or overall.
(d) J.P. Morgan will use reasonable efforts to contact appropriate parties to collect unpaid interest, dividends or redemption proceeds and promptly notify the Customer on behalf of a particular Fund if any amount payable with respect to portfolio securities or other asset of a Fund is not received by J.P. Morgan when due; however, neither J.P. Morgan nor its Subcustodians will be obliged to institute legal proceedings, file a proof of claim in any insolvency proceeding or take any similar action, unless there are express requirements to such effect imposed on J.P. Morgan under Applicable Law.
2.7 Miscellaneous Administrative Dutie s
(a) Until J.P. Morgan receives Instructions to the contrary, J.P. Morgan will:
(xv) present all Financial Assets for which J.P. Morgan has received written notice of a call for redemption or that have otherwise matured, and all income and interest coupons and other income items that call for payment upon presentation;
(xvi) execute in the name of the particular Fund of the Customer such certificates as may be required to obtain payment in respect of Financial Assets; and
(xvii) exchange interim or temporary documents of title held in the Securities Account for definitive documents of title.
(b) In the event that, as a result of holding Financial Assets in an omnibus account, a Fund of the Customer receives fractional interests in Financial Assets arising out of a corporate action or class action litigation, J.P. Morgan will credit such Fund of the Customer with the amount of cash of such Fund of the Customer would have received, as reasonably determined by J.P. Morgan, had the Financial Assets not been held in an omnibus account, and such Fund of the Customer shall relinquish to J.P. Morgan its interest in such fractional interests.
(c) If some, but not all, of an outstanding class of Financial Assets is called for redemption, J.P. Morgan will allot the amount redeemed among J.P. Morgan’s global custody customers who are the respective beneficial holders of such a class of Financial Assets in a manner that J.P. Morgan deems to be fair and equitable in line with market practice.
(a) J.P. Morgan will act in accordance with local market practice to obtain information concerning Corporate Actions that is publicly available in the local market. J.P. Morgan also will review information obtained from sources to which J.P. Morgan subscribes for information concerning such Corporate Actions. J.P. Morgan will promptly provide that information (or summaries that reflect the material points concerning the applicable Corporate Action) to the Customer or its Authorized Person. To the extent a Corporate Action requires an election from the Customer, such notice will clearly identify the timeframe in which the Customer shall provide Instructions in relation to such Corporate Action.
(b) J.P. Morgan will act in accordance with the Customer’s Instructions in relation to such Corporate Actions. If the Customer fails to provide J.P. Morgan with timely Instructions with respect to any Corporate Action within the timeframe set out in the notification J.P. Morgan provided under Section 2.8(a) with respect to such Corporate Action, neither J.P. Morgan nor its Subcustodians or their respective nominees will take any action in relation to that Corporate Action, except as otherwise agreed in writing by J.P. Morgan and the Customer or as may be set forth by J.P. Morgan as a default action in the notification it provides under Section 2.8(a) with respect to that Corporate Action. Notwithstanding and in no way limiting the above, if the Customer fails to provide J.P. Morgan with Instructions with respect to any Corporate Action within the timeframe set out in the notification J.P. Morgan provides under Section 2.8(a), upon written request of the Customer, (such written request to be sent to J.P. Morgan separately and in addition to the relevant late Instructions), J.P. Morgan shall use commercially reasonable efforts to act on Instructions received after the deadline set by J.P. Morgan as set out in such notification but before the deadline set by the Securities Depository to the extent circumstances permit, provided however that J.P. Morgan shall in no event be held liable for failure to act on such Instructions.
2.9 Security Class Action Settlement s
Any notices received by J.P. Morgan’s corporate actions department about settled securities class action litigation that requires action by affected owners of the underlying Financial Assets will be promptly notified to the particular Fund of the Customer if J.P. Morgan, using reasonable care and diligence in the circumstances, identifies that the particular Fund of the Customer was a shareholder and held the relevant Financial Assets in custody with J.P. Morgan at the relevant time. J.P. Morgan will not make filings in the name of a Fund of the Customer in respect to such notifications except as otherwise agreed in writing between the Customer on behalf of a Fund and J.P. Morgan. The services set forth in this Section 2.9 are available only in certain markets, details of which are available from J.P. Morgan on request.
(a) With respect to U.S. Financial Assets and, in cases where the Customer, on behalf of the Fund, elects to subscribe to the service described in this Section 2.10, other Financial Assets, J.P. Morgan will monitor information distributed to holders of Financial Assets about upcoming shareholder meetings, promptly notify the Customer on behalf of a Fund of such information and, subject to Section 2.10(c), act in accordance with the Customer’s Instructions in relation to such meetings (the “Proxy Voting Service”).
(b) The Proxy Voting Service is available only in certain markets and for certain types of Financial Assets, details of which are available from J.P. Morgan on request. Provision of the Proxy Voting
Service is conditional upon receipt by J.P. Morgan of a duly completed enrollment form as well as all documentation that may be required for certain markets.
(c) The Proxy Voting Service does not include physical attendance at shareholder meetings. Requests for physical attendance at shareholder meetings can be made but they will be evaluated and agreed to by J.P. Morgan on a case by case basis.
(d) The Customer, on behalf of each Fund, acknowledges that the provision of the Proxy Voting Service may be precluded or restricted under a variety of circumstances. These circumstances include, but are not limited to:
(xviii) the Financial Assets being on loan or out for registration;
(xix) the pendency of conversion or another corporate action;
(xx) the Financial Assets being held in a margin or collateral account at J.P. Morgan or another bank or broker, pledged to a Counterparty, or otherwise in a manner which affects voting;
(xxi) local law or market practices, or restrictions by the issuer; and
(xxii) J.P. Morgan being required to vote all shares held for a particular issue for all of J.P. Morgan’s customers on a uniform basis (i.e., a “yes” or “no” vote for the total position based on net voting instructions received from all its customers). Where this is the case, J.P. Morgan will promptly notify the Customer.
(a) J.P. Morgan will provide the Customer on behalf of a Fund with electronic access to Account information (the “Information”) that will enable the Customer to generate or receive reports and statements of account for each Account and to identify Account Assets as well as Account transactions. The Customer will review the Information and give J.P. Morgan written notice of (i) any suspected error or omission or (ii) the Customer’s inability to access any such Information. The Customer will provide J.P. Morgan such notice within a reasonable time after (x) the Information is made available to the Customer or (y) the Customer discovers that it is unable to access the Information, as the case may be.
(b) The Customer acknowledges that Information available to it electronically with respect to transactions posted after the close of the prior business day may not be accurate due to mis-postings, delays in updating Account records, and other causes. J.P. Morgan will not be liable for any Liabilities arising out of any such information accessed electronically that is subsequently updated or corrected by the close of business on the first business day after the original transaction was posted.
2.12 Access to J.P. Morgan’s Record s
(a) J.P. Morgan will, upon reasonable written advance notice, allow the Customer (the Customer’s auditors, regulatory officials and independent public accountants and/or other designated representatives of the Customer if required for their examination of books and records pertaining to the Customer's affairs) reasonable access during regular business hours to the records of J.P. Morgan relating to the Accounts. Subject to restrictions under the relevant local law, J.P. Morgan shall direct any Subcustodian to permit the Customer and its auditors and independent public accountants and/or other designated representatives of the Customer, reasonable access to the Subcustodian’s records of Financial Assets held in the Securities Account as may be required in connection with such examination.
(b) The Customer, on behalf of a Fund, shall reimburse J.P. Morgan and its Subcustodians for the reasonable cost of copying, collating and researching archived information as may be mutually agreed from time to time.
(c) During the performance of this Agreement and for any period as required by Applicable Law after the completion of this Agreement , J.P. Morgan will maintain complete, accurate and auditable records pertaining to this Agreement, including all books and records which J.P. Morgan is required to maintain pursuant to Applicable Law. All such books and records maintained by J.P. Morgan shall be maintained in a form acceptable under Applicable Law as it applies to J.P. Morgan in its capacity as provider of the Services. Subject to Section 2.12(b), during the term of this Agreement and for a period of at least three (3) years after the termination of this Agreement, J.P. Morgan will, upon reasonable written notice, allow the Customer reasonable access during normal working hours to the records of J.P. Morgan relating to the Accounts.
(d) Within 30 days of receiving the Customer’s request and at least annually, J.P. Morgan will send to the Customer (i) all reports J.P. Morgan receives from Securities Depositories concerning their systems of internal accounting control, and (ii) a copy of J.P. Morgan’s Service Organizational Control (SOC) 1 reports (or any successor reports) prepared in accordance with the requirements of AT section 801, Reporting on Controls at a Service Organization (formerly Statement on Standards for Attestation Engagements (SSAE) No. 16. In addition, from time to time as requested, J.P. Morgan will furnish a Customer a “gap” or “bridge” letter that will address any material changes that might have occurred in J.P. Morgan’s controls covered in the SOC Report from the end of the SOC Report period through a specified requested date.
(e) If, as a result of a review of J.P. Morgan’s records pertaining to the Accounts and the Services, a party believes the Customer or a Fund has been overcharged or undercharged for a Service, such party shall notify the other and request a joint review of the relevant records, to determine whether an overcharge or undercharge has occurred, its extent and agree on a reconciliation plan which may, but is not required to and will not necessarily, include a credit against future charges.
2.13 Maintenance of Financial Assets at Subcustodian Location s
(a) Unless Instructions require another location acceptable to J.P. Morgan, Financial Assets will be held in the country or jurisdiction in which their principal trading market is located, where such Financial Assets may be presented for payment, where such Financial Assets were acquired, or where such Financial Assets are located. J.P. Morgan shall post on its website from time to time a list of the countries and jurisdictions for which it supports custody services; J.P. Morgan reserves the right to refuse to accept delivery of Financial Assets or cash in countries and jurisdictions other than those on the list. J.P. Morgan shall not use a Subcustodian to hold U.S. domestic Financial Assets which are held through the Depository Trust Company or the Federal Reserve System unless specifically instructed by the Customer.
(b) J.P. Morgan reserves the right to restrict the Customer’s access to the services J.P. Morgan provides in, and the Liabilities it incurs with respect to, certain markets that are deemed by J.P. Morgan to be restricted markets from time to time. J.P. Morgan shall make available on its web site a list of markets that are restricted. A summary of current related restrictions on services and Liabilities relating to restricted markets, is set forth in Schedule A - J.P. Morgan Investor Services Global Custody Restricted Market Limitations. J.P. Morgan may update Schedule A from time to time upon notice to the Customer on behalf of a Fund.
2.14 Foreign Exchange Transaction s
To facilitate the administration of the trading and investment activity of a Customer on behalf of a Fund, J.P. Morgan may, but will not be obliged to, enter into spot or forward foreign exchange contracts as principal with the Customer on behalf of a Fund or an Authorized Person, and may also provide foreign exchange contracts and facilities through J.P. Morgan Affiliates or Subcustodians. Instructions, including standing Instructions, may be issued with respect to such contracts and facilities, but J.P. Morgan may establish rules or limitations concerning any foreign exchange contract or facility made available. In all cases where J.P. Morgan or J.P. Morgan Affiliates or Subcustodians enter into foreign exchange contracts
or facilities with the Customer on behalf of a Fund, J.P. Morgan will not be executing or otherwise placing any foreign exchange transaction as the Customer’s agent, and such transactions will be governed by the terms and conditions of such foreign exchange contracts or facilities (as the case may be). Such foreign exchange contracts and facilities shall not be deemed as part of the custodial, settlement or associated services under this Agreement. With respect to a Customer’s or a Fund’s foreign exchange contracts or facilities with J.P. Morgan, J.P. Morgan will be acting on a principal basis as a Customer’s or Fund’s counterparty, as applicable, on such foreign exchange contracts or facilities (as the case may be).
2.15 Assets Not Controlled by J.P. Morga n
(a) J.P. Morgan will not be obliged to (i) hold Financial Assets with any person not agreed to by J.P. Morgan or (ii) register or record Financial Assets in the name of any person other than a Customer, the Fund, J.P. Morgan, a Subcustodian, or their respective nominee or (iii) register or record Financial Assets in the name of J.P. Morgan or its nominee if J.P. Morgan concludes such Financial Assets cannot be operationally supported or (iv) register or record on J.P. Morgan’s records Financial Assets or cash held outside of J.P. Morgan’s control. If, however, the Customer, on behalf of a Fund, makes any such request and J.P. Morgan agrees to the request, the consequences of doing so will be at the Customer’s own risk. J.P. Morgan shall not be responsible for the control of any such Financial Asset or cash, for verifying the Customer’s initial or ongoing ownership of any such Financial Asset or cash or for income collection, proxy voting, class action litigation or Corporate Action notification and processing with respect to any such Financial Asset. Any transaction relating to the settlement of the purchase or sale of any such Financial Asset shall be treated for purposes of this Agreement as a cash only movement.
(b) From time to time, at the Customer’s request, J.P. Morgan may agree to hold in its vault on the Customer’s behalf documentation relating to Financial Assets not held in J.P. Morgan’s control. Notwithstanding anything in this Agreement to the contrary, J.P. Morgan shall not be responsible for reviewing this documentation for any purpose, including authenticity, sufficiency or relevance to the Financial Asset to which it purports to relate.
(a) If either party wishes to propose any amendment or modification to, or variation of, J.P. Morgan’s services contemplated by this Agreement including the scope or details of the services (a “Change”) then it shall notify the other party of that fact by sending a request (a “Change Request”) to the other party, specifying in as much detail as is reasonably practicable the nature of the Change. A Change Request and any related changes to the fees, also may be submitted to document a Change that was previously agreed to or performed by J.P. Morgan. For the avoidance of doubt, changes to the services or to how J.P. Morgan provides the services which are applicable to J.P. Morgan’s client base in general (and not related to the Customer in particular), are not deemed a Change Request under the Agreement and shall not be subject to the Change Request process.
(b) Promptly following the receipt of a Change Request, the parties shall agree in writing whether to implement the Change Request, whether implementation of the Change Request should result in a modification of the fees contemplated by Section 4.1, and the basis upon which J.P. Morgan will be compensated for implementing the Change Request. If J.P. Morgan submits a Change Request and if such Change Request results in additional costs to a Customer or Fund, the parties shall agree in writing whether implementation of such Change Request should result in a fee credit or reimbursement for such reasonable costs or expenses affecting a Customer or Fund.
(c) If a change to Applicable Law requires a Change, the parties shall follow the processes set forth in this Section to initiate a Change Request. If the change in Applicable Law results in a Change, or an increase in J.P. Morgan’s costs or risk associated with provision of its services
contemplated by this Agreement, J.P. Morgan shall, following consultation with the Customer and mutual agreement on any fee modification (such agreement not to be unreasonably withheld by the Customer), be entitled to an appropriately reasonable and proportionate increase in the fees contemplated by Section 4.1. J.P. Morgan shall bear its own costs with respect to implementing a Change Request based upon a change in Applicable Law except that:
(xxiii) If mutually agreed upon by the parties in writing, J.P. Morgan may charge the Customer, on behalf of a Fund, for any reasonable and necessary changes to software that have been developed or customized for the Customer, on behalf of a Fund; and
(xxiv) If mutually agreed to by Customer and J.P. Morgan (such agreement not to be unreasonably withheld by the Customer), J.P. Morgan shall be entitled to charge the Customer, on behalf of a Fund, for any Changes required as a result of the change in Applicable Law affecting the Customer, on behalf of a Fund, in a materially different way than it affects J.P. Morgan’s other customers, or which the Customer, on behalf of a Fund, wishes J.P. Morgan to implement in a way different from what J.P. Morgan reasonably intends to implement for its other customers.
2.17 Additional Customers and Fund s
The parties agree that subject to the terms of this Agreement (including for the avoidance of doubt this Section 2.17) additional entities may become party to this Agreement by such additional entities signing a joinder to this Agreement in the form set forth in Annex C.
2.18 Compliance with Laws and Regulation s
(a) J.P. Morgan will (A) review and comply with Applicable Law in the United States and any other laws, rules and regulations of governmental authorities having jurisdiction over J.P. Morgan as a service provider to the Customer with respect to the provision of the Services and (B) perform those Services in a manner compliant with Applicable Law applicable to the provision of those Services.
(b) J.P. Morgan shall obtain and maintain all necessary approvals, licenses, consents, permits or authorizations of any person or entity, or any notice to any person or entity, the granting of which is required by Applicable Law applicable to J.P. Morgan for the provision of the Services.
(c) J.P. Morgan shall promptly notify the Customer of any change in Applicable Law of which it determines will have a material impact on the provision of the services or the performance of J.P. Morgan’s obligations under this Agreement.
(d) Customer shall comply with Applicable Law in which the Customer conducts business, to the extent that compliance with such Applicable Law is relevant to the provision or receipt of the Services or the marketing of the Customers or the Funds.
(e) If J.P. Morgan becomes aware that J.P. Morgan or a Subcontractor has committed a violation of any Applicable Law in the course of performing the Services or J.P. Morgan’s other obligations under this Agreement which has materially impacted the Customer or a Fund or J.P. Morgan’s ability to deliver the Services, J.P. Morgan will promptly notify the Customer in writing and use reasonable efforts to cure such non-compliance.
(a) J.P. Morgan will use personnel that are appropriately qualified and experienced with respect to the provision of the Services. J.P. Morgan’s personnel shall comply with the Customer’s policies at times when they are on the Customer’s premises or accessing the Customer’s systems, to the extent that the Customer advises the relevant personnel of those policies. The Customer shall cause each Authorized Person to comply with applicable J.P. Morgan policies while on J.P. Morgan premises or accessing J.P. Morgan systems.
(b) J.P. Morgan will maintain as part of its standard hiring practices a requirement to perform background checks with respect to J.P. Morgan personnel and for its Subcontractors to perform background checks. J.P. Morgan will conduct adequate background screenings based on applicable regulatory requirements on all J.P. Morgan personnel and contract workers who will provide Services to the Customer or the Funds to ensure that (i) any J.P. Morgan personnel or contract workers have not been convicted of any criminal offense involving dishonesty, breach of trust or money laundering, and have not agreed to enter into a pre-trial diversion or similar program in connection with a prosecution for such offense, and (ii) J.P. Morgan has conducted drug screening on all J.P. Morgan personnel and contract workers who will provide Services to the Customer or the Funds or will conduct subsequent screening if there is a reasonable basis to believe such J.P. Morgan personnel or contract worker has a recurring drug abuse or dependency issue. J.P. Morgan or its Subcontractors will conduct pre-employment screenings of all new J.P. Morgan personnel and contract workers who will provide Services to the Customer or the Funds in a manner consistent with J.P. Morgan’s pre-employment screening policies and procedures.
3.1 Acting on Instructions; Method of Instruction and Unclear Instruction s
(a) The Customer, on behalf of a Fund, authorizes J.P. Morgan to accept, rely upon and/or act upon any Instructions received by it without inquiry. The Customer is solely responsible for the accuracy and completeness of Instructions, their proper delivery to J.P. Morgan, for updating Instructions as may be necessary to ensure their continued accuracy and completeness, and for monitoring their status. J.P. Morgan will not be responsible for any Liabilities resulting from the Customer’s failure to perform these responsibilities. The Customer, on behalf of a Fund, will indemnify the J.P. Morgan Indemnitees against, and hold each of them harmless from, any Liabilities that may be imposed on, incurred by, or asserted against the J.P. Morgan Indemnitees as a result of any action or omission taken by J.P. Morgan in accordance with any Instruction, except to the extent that such Liabilities are caused by the fraud, bad faith negligence or willful misconduct of a J.P. Morgan Indemnitee in the manner in which it carries out the Instruction.
(b) To the extent possible, Instructions to J.P. Morgan shall be sent via an encrypted, electronic means using technology consistent with industry standards, or a trade information system acceptable to J.P. Morgan.
(c) J.P. Morgan shall promptly notify an Authorized Person if J.P. Morgan determines that an Instruction does not contain all information reasonably necessary for J.P. Morgan to carry out the Instruction. J.P. Morgan may reasonably decline to act upon an Instruction if it does not receive missing information, clarification or confirmation satisfactory to it but J.P. Morgan shall promptly notify the Customer of its decision not to act upon an Instruction, which notification may be in the form of a rejection automatically generated by the relevant systems. J.P. Morgan will not be liable for any Liabilities arising from any reasonable delay in carrying out any such Instruction while it seeks any such missing information, clarification or confirmation or in declining to act upon any Instruction for which it does not receive such missing information, clarification, or confirmation satisfactory to it provided J.P. Morgan acted in accordance with J.P. Morgan’s Standard of Care.
3.2 Verification and Security Procedure s
(a) J.P. Morgan and the Customer, on behalf of a Fund, shall comply with any applicable Security Procedures with respect to the delivery or authentication of Instructions.
(b) The Customer, on behalf of a Fund, acknowledges that the Security Procedure is designed to verify the authenticity of, and not to detect errors in, Instructions. The Customer, on behalf
of a Fund, shall promptly notify J.P. Morgan if it does not believe that any relevant Security Procedure is commercially reasonable, and its adherence to any Security Procedure without objection constitutes its agreement that it has determined the Security Procedure to be commercially reasonable.
(c) The Customer, on behalf of a Fund, and its Authorized Persons are solely responsible for ensuring that the User Codes are reasonably safeguarded and known to and used by only the respective Authorized Persons to whom such User Codes apply. If (i) the User Codes are (or the Customer or its relevant Authorized Person reasonably believes that the User Codes may be) lost, stolen, damaged, altered, unduly disclosed, or compromised, (ii) the Customer’s or any Authorized Persons’ access to J.P. Morgan’s systems, applications or products, or any third party messaging platform through which the Instructions are transmitted, is revoked or suspended, or (iii) the Customer or an Authorized Person reasonably suspects any technical or security failure relating to any systems, applications or products of J.P. Morgan or any third party messaging platform through which the Instructions are transmitted, the Customer shall immediately cease using such system, application, product or platform and promptly notify J.P. Morgan.
3.3 Instructions Contrary to Law/Market Practic e
J.P. Morgan need not act upon Instructions that it reasonably believes are contrary to Applicable Law, regulation or market practice and will not be responsible for any Liabilities resulting from not acting upon such Instruction. J.P. Morgan shall be under no duty to investigate whether any Instructions comply with Applicable Law or market practice. In the event that J.P. Morgan does not act upon such Instructions, J.P. Morgan will promptly, to the extent permitted by Applicable Law, notify the Customer of its concerns and allow the Customer an opportunity to give a valid Instruction.
J.P. Morgan has established cut-off times for receipt of Instructions, which will be made available to the Customer. If J.P. Morgan receives an Instruction after its established cut-off time, J.P. Morgan will attempt to act upon the Instruction on the day requested only if J.P. Morgan deems it practicable to do so or otherwise as soon as practicable after the day on which the Instruction was received. If an Instruction is not processed on the day it was received by J.P. Morgan, J.P. Morgan will notify the Customer on the next business day whether the Instruction can be processed or if a new Instruction from the Customer needs to be submitted to J.P. Morgan.
3.5 Electronic Access and Cybersecurit y
(a) Access by the Customer to certain systems, applications or products of J.P. Morgan shall be governed by this Agreement and the terms and conditions set forth in Annex A Electronic Access. The Customer and its Authorized Persons shall use User Codes to access J.P. Morgan’s systems, applications or products unless otherwise agreed by J.P. Morgan.
(b) J.P. Morgan will implement and maintain a written information security program, in compliance with all applicable foreign, federal, state and local laws and regulations (including any similar international laws) applicable to J.P. Morgan as a service provider to the Customer, that contains reasonable and appropriate security measures designed to safeguard the Confidential Information (including Personal Information of the Customers’ shareholders, employees, directors, trustees and/or officers) that J.P. Morgan, J.P. Morgan Affiliates or a Subcustodian receives, stores, maintains, processes, transmits or otherwise accesses in connection with the provision of services hereunder. In this regard, J.P. Morgan will establish and maintain policies, procedures, and technical, physical, and administrative safeguards consistent with Financial Services Best Practices, designed to (i) protect the security and confidentiality of all Confidential Information (including Personal Information) that J. P. Morgan receives, stores, maintains,
processes or otherwise accesses in connection with the provision of services hereunder, (ii) protect against any reasonably foreseeable threats or hazards to the security or integrity of Confidential Information (including Personal Information), (iii) protect against unauthorized access to or use of Confidential Information (including Personal Information), (iv) maintain reasonable procedures to detect and respond to any internal or external security breaches; (v) implement procedures to provide for the appropriate deletion or disposal of Confidential Information (including Personal Information) where operationally feasible and unless laws and regulations applicable to J.P. Morgan require a longer retention period and (vi) encrypt in transit and at rest Confidential Information. J.P. Morgan may in its discretion provide training or information on best practices to the Customer from time to time but in so doing it will not be considered a consultant or advisor with respect to cybersecurity.
(c) J.P. Morgan will monitor and review its information security program and revise it, as necessary and in its sole discretion, to ensure it appropriately addresses any reasonably foreseeable and applicable legal and regulatory requirements. J.P. Morgan shall periodically test and audit its information security program. If J.P. Morgan accesses a Customer’s computer system, J.P. Morgan agrees to provide such information security as is commercially and reasonably necessary to prevent the unauthorized use or disruption of a Customer’s computer system.
(d) J.P. Morgan shall respond to a Customer’s reasonable requests for information concerning J.P. Morgan’s information security program and, upon request, J.P. Morgan will provide a high-level summary of its applicable policies and procedures, or summaries thereof, to a Customer, to the extent it is able to do so without divulging sensitive, proprietary, or J.P. Morgan’s confidential information. Upon reasonable request, J.P. Morgan shall discuss with a Customer the information security program of J.P. Morgan and/or provide a high-level presentation summarizing such program. J.P. Morgan also agrees, when requested (such request not to occur more often than once every two (2) years), to complete any security questionnaire provided by a Customer and return it in a commercially reasonable period of time. The Customer, on behalf of a Fund, acknowledges that certain information provided by J.P. Morgan, including internal policies and procedures, may be proprietary to J.P. Morgan, and agrees to protect the confidentiality of all such materials it receives from J.P. Morgan under the terms of this agreement. J.P. Morgan agrees to (i) resolve any applicable control deficiencies that do not meet the standards established by federal and state privacy and data security laws, rules, regulations related to J.P. Morgan’s information security program, and (ii) to discuss with Customer any applicable control deficiencies that do not meet industry standards related to J.P. Morgan’s information security program, in either case as identified through the completion of the questionnaire or otherwise.
(e) J.P. Morgan shall notify Customer without undue delay in the event that J.P. Morgan confirms a Security Incident and shall provide details regarding a Security Incident, unless otherwise prohibited by Applicable Law or otherwise instructed by a law enforcement or supervisory authority. J.P. Morgan will take reasonable steps to mitigate the effects of the Security Incident and reasonably cooperate with Customer in investigating the Security Incident.
(f) This provision will survive termination or expiration of the Agreement in accordance with Section 6.9(f).
(g) Each of the Customer and J.P. Morgan will be responsible for the obtaining, proper functioning, maintenance and security of its own services, software, connectivity and other equipment.
(h) The Customer, on behalf of a Fund, will maintain written cybersecurity policies and procedures which implement commercially reasonable administrative, technical, and physical safeguards that are aligned with industry security standards and that, among other things, protect against anticipated threats or hazards to the security or integrity of their respective systems and data. Such cybersecurity policies and procedures shall require that Confidential Information be encrypted in transit and at rest.
3.6 Recording of Telephone Communication s
Either party may record any of their telephone communications.
4. FEES, EXPENSES AND OTHER AMOUNTS OWING TO J.P. MORGA N
The Customer, on behalf of a Fund, will pay J.P. Morgan for its services under this Agreement such fees as may be agreed upon by the parties in writing from time to time, together with J.P. Morgan's reasonable out-of-pocket expenses or incidental expenses, including, reasonable legal fees and tax or related fees incidental to processing charged directly or indirectly by governmental authorities, issuers or their agents. J.P. Morgan also reserves the right to charge a reasonable account maintenance fee for any Dormant Account subject to a mutual agreement between a Customer and J.P. Morgan or upon notice to the Customer’s notice address under this Agreement, if J.P. Morgan is unable to reach the Customer otherwise. Upon request by the Customer, J.P. Morgan shall provide the Customer with receipts, invoices or other appropriate written evidence reasonably satisfactory to the Customer confirming any expense for which payment or reimbursement is being sought under this Section, upon request by the Customer. Invoices will be payable within sixty (60) days following receipt of the invoice by the Customer. If the Customer, on behalf of a Fund, disputes an invoice, it shall nevertheless pay, on or before the date that payment is due, such portion of the invoice that is not subject to a bona fide dispute. J.P. Morgan may deduct amounts invoiced from the Cash Account except such portion of the invoice that the Customer has objected to in writing within sixty (60) days of the date of invoice (or such other period as the parties may agree in writing). Without prejudice to J.P. Morgan’s other rights, J.P. Morgan reserves the right to charge interest on overdue amounts from the due date until actual payment at such rate as J.P. Morgan customarily charges for similar overdue amounts except such portion of the invoice that the Customer has objected to within sixty (60) days following the receipt of the invoice (or such other period as the parties may agree in writing). Unless expressly specified in this Agreement, any price or cost that J.P. Morgan may charge as the Customer’s counterparty in the event J.P. Morgan enters into a principal transaction with the Customer are not treated as fees which must be agreed under this Agreement.
If a debit to any currency in the Cash Account results or would result in a debit balance, then J.P. Morgan may, in its discretion, (i) advance an amount equal to the overdraft, (ii) refuse to settle in whole or in part the transaction causing such debit balance, or (iii) if any such transaction is posted to the Securities Account, reverse any such posting. If J.P. Morgan elects to make such an advance, the advance will be deemed a loan to the Customer or a Fund, as applicable, and any remedy is to that particular Customer or Fund, as applicable, payable either on demand or automatically upon the occurrence of any event with respect to the Customer that is specified in either section 9.2(a)(ii) of this Agreement or section 365(e)(1) of the U.S. Bankruptcy Code, as amended from time to time. Any such advance will bear interest at the applicable rate charged by J.P. Morgan from time to time for such overdrafts, from the date of such advance to the date of payment (including after the date any judgment may be entered against the Customer with respect to any overdraft) and otherwise on the terms on which J.P. Morgan makes similar overdrafts available from time to time. No prior action or course of dealing on J.P. Morgan’s part with respect to the settlement of transactions on the Customer’s behalf will be asserted by the Customer against J.P. Morgan for J.P. Morgan’s refusal to make advances to the Cash Account or refusal to settle any transaction for which the Customer does not have sufficient available funds in the applicable currency in the Account. The Customer acknowledges that any advance made under this Agreement is intended to be treated as a “securities contract” for purposes of the U.S. Bankruptcy Code to the maximum extent permitted by that Code, as amended from time to time.
4.3 J.P. Morgan’s Right Over Account Assets; Set-of f
(a) Without prejudice to J.P. Morgan’s rights under Applicable Law and subject to Section 10.8 below, J.P. Morgan shall have, and the Customer, on behalf of a Fund, grants to J.P. Morgan, a first priority, perfected and continuing security interest in and a lien on all cash, Financial Assets and any other property of every kind that are credited to the Account or otherwise held for the Customer, on behalf of a Fund, by J.P. Morgan (“Account Assets”) as security for any and all Liabilities of the Customer, on behalf of a Fund, to J.P. Morgan under this Agreement. J.P. Morgan will be entitled to all rights and remedies available to a secured party under Applicable Law with respect to the Account Assets, including to withhold delivery of such Account Assets and, during such period, no part of any cash credited to a Cash Account or Securities in the Securities Account may be assigned or otherwise disposed of or encumbered by the Customer, on behalf of a Fund, unless all Liabilities of the Customer, on behalf of a Fund, have been duly paid or discharged in full and, with two (2) business days’ prior notice (to the extent practicable) to the Customer and an opportunity during such two day period for the Customer to satisfy such Liabilities, sell or otherwise realize any of such Account Assets and apply the proceeds and any other monies credited to the Cash Account in satisfaction of such Liabilities. Provided, however, that J.P. Morgan shall not be obligated to provide such prior notice if J.P. Morgan, in its reasonable business judgment, determines that, due to market conditions or other special circumstances, a delay would be likely to materially prejudice its ability to recover the Liabilities. During any such notice period, J.P. Morgan will, at Customer’s request, consult with Customer regarding the selection of Account Assets to be sold to satisfy the Liabilities, provided that after consultation with the Customer, J.P. Morgan retains the right to select the Account Assets to be sold to satisfy the Liabilities, and J.P. Morgan shall not be required to consult with the Customer if in its reasonable business judgment, J.P. Morgan determines that, due to market conditions or other special circumstances, such consultation would be likely to materially prejudice its ability to recover the Liabilities. For this purpose, J.P. Morgan may make such currency conversions as may be necessary at its then current rates for the sale and purchase of the relevant currencies. J.P. Morgan agrees that this provision applies to each applicable Customer or Fund separately, and that under Applicable Law, J.P. Morgan may not exercise such rights against the assets of any Customer or Fund to satisfy the Liabilities of another Customer or Fund.
(b) Without prejudice to J.P. Morgan’s rights under Applicable Law, J.P. Morgan may set off against any Liabilities of the Fund or a Customer owed to J.P. Morgan under this Agreement, any amount in any currency (i) standing to the credit of any of the Customer’s accounts (whether deposit or otherwise) with any J.P. Morgan branch or office or with any J.P. Morgan Affiliate and/or (ii) owed to the Customer by any J.P. Morgan branch or office or by any J.P. Morgan Affiliate. For this purpose, J.P. Morgan and any J.P. Morgan Affiliate shall be entitled to accelerate the maturity of any fixed term deposits and to effect such currency conversions as may be necessary at its current rates for the sale and purchase of the relevant currencies. J.P. Morgan shall provide reasonable notification (to the extent practicable) to the Customer of any such acceleration. J.P. Morgan agrees to, to the extent practicable, use reasonable efforts to seek repayment of such Liabilities and to consult with the Customer prior to exercising its set-off rights, provided however that J.P. Morgan’s failure to do so shall not impair or affect J.P. Morgan’s set-off rights under this Agreement in any way. For the avoidance of doubt, nothing in this section shall require J.P. Morgan to take any formal action against the Customer prior to exercising its set-off rights. J.P. Morgan agrees that this provision applies to each applicable Customer or Fund separately, and that under Applicable Law, J.P. Morgan may not exercise such rights against the accounts of any Customer or Fund to satisfy the Liabilities of another Customer or Fund.
5. SUBCUSTODIANS AND SECURITIES DEPOSITORIE S
5.1 Appointment of Subcustodians; Use of Securities Depositorie s
(a) J.P. Morgan is authorized under this Agreement to act through and hold the Customer's or Fund’s Financial Assets with Subcustodians. A list of the Subcustodians shall be made available to the Customer via J.P. Morgan’s web site (currently, https://jpmm-internal.jpmchase.net/#investor_services.market_intelligence or a different link as to which J.P. Morgan will notify the Customer) which will identify the name, address and principal place of business of any Subcustodian. J.P. Morgan may modify the list of Subcustodians from time to time upon notice to the Customer. In addition, J.P. Morgan and each Subcustodian may deposit Financial Assets with, and hold Financial Assets in any Securities Depository on such terms as such Securities Depository customarily operates, and the Customer will provide J.P. Morgan with such documentation or acknowledgements that J.P. Morgan may require to hold the Financial Assets in such Securities Depository. On the basis of such terms, a Securities Depository may have a security interest or lien over, or right of set-off in relation to the Financial Assets.
(b) Any agreement that J.P. Morgan enters into with a Subcustodian for holding J.P. Morgan’s customers' assets will provide (i) that such assets will not be subject to any right, charge, security interest, lien or claim of any kind in favor of such Subcustodian or its creditors except a claim for payment for their safe custody or administration, or, in the case of cash deposits, except for liens or rights in favor of creditors of the Subcustodian arising under bankruptcy, insolvency or similar law, and (ii) that the beneficial ownership thereof will be freely transferable without the payment of money or value other than for safe custody or administration, unless in each case required otherwise by Applicable Law in the relevant market. J.P. Morgan shall be responsible for all claims for payment of fees for safe custody or administration so that no Subcustodian exercises any claim for such payment against the Customer’s assets. Where a Subcustodian deposits Financial Assets with a Securities Depository, J.P. Morgan will direct the Subcustodian to identify on its records that the Financial Assets deposited by the Subcustodian at such Securities Depository belong to J.P. Morgan, as agent of the Customer on behalf of a Fund. Subject to Applicable Law, J.P. Morgan shall notify the Customer in writing if J.P. Morgan is notified by any Subcustodian that such Subcustodian has received notice of any claim against the assets of the Customer held hereunder.
(c) J.P. Morgan reserves the right to add, replace or remove Subcustodians. J.P. Morgan shall notify Customer promptly of any such action, which will be advance notice if practicable. Upon request by the Customer, J.P. Morgan will identify the name, address and principal place of business of any Subcustodian and the name and address of the governmental agency or other regulatory authority that supervises or regulates such Subcustodian.
5.2 Liability for Subcustodians and Securities Depositorie s
(a) Subject to Section 7.1(b), J.P. Morgan will be liable for direct Liabilities incurred by the Customer that result from:
(i) the failure by a Subcustodian to use reasonable care in the provision of custodial services by it in accordance with the standards prevailing in the relevant market or from the fraud, bad faith, willful misconduct or negligence of such Subcustodian in the provision of custodial services by it. For purposes of determining the Subcustodian’s negligence in the provision of custodial services, established market practices and laws prevailing in the relevant market at the time of the action or omission shall be taken into account; or
(ii) the insolvency of any Affiliated Subcustodian Bank.
(b) J.P. Morgan will satisfy J.P. Morgan’s Standard of Care in the selection, monitoring and continued appointment of Subcustodians. Subject to J.P. Morgan’s duty in the foregoing
sentence and J.P. Morgan’s duty to satisfy J.P. Morgan’s Standard of Care in the monitoring of a Subcustodian’s financial condition as reflected in its published financial statements and other publicly available financial information concerning it customarily reviewed by J.P. Morgan in its oversight process, J.P. Morgan will not be responsible for any losses (whether direct or indirect) incurred by the Customer, on behalf of a Fund that result from the insolvency of any Subcustodian which is not a branch of J.P. Morgan or an Affiliated Subcustodian Bank.
(c) J.P. Morgan is not responsible for the selection or monitoring of any Securities Depository and will not be liable for any Liabilities arising out of any act or omission by (or the insolvency of) any Securities Depository. In the event the Customer, on behalf of a Fund, incurs any Liabilities due to an act or omission, negligence, willful misconduct, fraud or insolvency of a Securities Depository, J.P. Morgan will make reasonable efforts, in its discretion, to seek recovery from the Securities Depository, but J.P. Morgan will not be obligated to institute legal proceedings, file a proof of claim in any insolvency proceeding or take any similar action.
6.1 Representations of the Customer and J.P. Morga n
(a) The Customer, on behalf of a Fund, represents, warrants and covenants that (i) it has full authority and power, and has obtained all necessary authorizations and consents (including from the Customer’s underlying clients, if applicable), to deposit and control the Account Assets, to use J.P. Morgan as its custodian in accordance with the terms of this Agreement, to incur overdrafts, to grant a lien over Account Assets as contemplated by Section 4.3 and to enter into foreign exchange transactions; (ii) assuming execution and delivery of this Agreement by J.P. Morgan, this Agreement is the Customer’s legal, valid and binding obligation, enforceable against the Customer in accordance with its terms and it has full power and authority to enter into and has taken all necessary corporate action to authorize the execution of this Agreement; (iii) there is no material administrative, civil or criminal proceeding pending or, to the knowledge of the Customer, threatened against the Customer; (iv) except for the representations outlined in Section 6.1.(b) below, it has not relied on any oral or written representation made by J.P. Morgan or any person on its behalf, and acknowledges that this Agreement sets out to the fullest extent the duties of J.P. Morgan; (v) it is a resident of the place identified in Annex B and shall notify J.P. Morgan of any changes in residency; (vi) the Financial Assets and cash deposited in the Accounts (other than those assets (A) pledged to a Counterparty pursuant to Section 2.1(c) or (B) held in Accounts established pursuant to certain account control agreements among the Customer, J.P. Morgan and secured party named therein, (A) and (B) collectively referred to as “Control Account Assets”) are not subject to any encumbrance or security interest whatsoever and the Customer undertakes that, so long as Liabilities of the Customer under or in connection with this Agreement are outstanding, it will not create or permit to subsist any encumbrance or security interest over such Financial Assets or cash (other than Control Account Assets); (vi) no delivery of Account Assets by the Customer to J.P. Morgan and no Instruction by the Customer or its Authorized Persons with respect to such Account Assets will contravene Applicable Law; (vii) none of the Account Assets to be held under this Agreement are “plan assets” as defined in Section 3(42) of the Employee Retirement Income Security Act of 1974, as amended, or the regulations thereunder except as otherwise expressly notified to J.P. Morgan. J.P. Morgan may rely upon the representations or certification of such other facts as may be required to administer J.P. Morgan’s obligations under this Agreement.
(b) J.P. Morgan represents and warrants that (i) assuming execution and delivery of this Agreement by the Customer, this Agreement is J.P. Morgan’s legal, valid and binding obligation, enforceable against J.P. Morgan in accordance with its terms; and (ii) it has full power and authority to enter
into and has taken all necessary corporate action to authorize the execution of this Agreement; (iii) there are no matters of which it is aware as at the date hereof which might materially and adversely affect its ability to perform its contractual obligations under this Agreement; (iv) it is qualified to act as custodian under Applicable Law (v) it is duly organized under the laws of its jurisdiction of organization; (vi) it is not insolvent or unable to pay its debts and no order has been made or resolution passed for its winding-up or for an administration order and no receiver, administrative receiver or manager has been appointed by any person of its business or all or a substantial part of its assets or any material part thereof nor has any equivalent event taken place in any jurisdiction; (vii) to the best of J.P. Morgan’s knowledge, there is no material administrative, civil or criminal proceeding pending against J.P. Morgan which would have a material effect on the provision of the Services.
6.2 The Customer is Liable to J.P. Morgan Even if it is Acting for Another Perso n
If the Customer, on behalf of a Fund, is acting as an agent or for another person as contemplated by Section 2.1(a) in respect of any transaction, cash or Financial Asset, J.P. Morgan nevertheless will treat the Customer as its principal for all purposes under this Agreement. In this regard, the Customer will be liable to J.P. Morgan as a principal in respect of any Liabilities arising out of any transactions relating to the Account. The foregoing will not affect any rights J.P. Morgan might have against the Customer's principal or the other person envisaged by Section 2.1(a).
6.3 Special Settlement Service s
J.P. Morgan may, but shall not be obliged to, make available to the Customer from time to time special settlement services (including continuous linked settlement) for transactions involving Financial Assets, cash, foreign exchange, and other instruments or contracts. The Customer shall comply, and shall cause its Authorized Persons to comply, with the requirements of any external settlement agency through which such settlements may be processed, including, without limitation, its rules and by-laws, where applicable.
(a) The Customer shall promptly provide to J.P. Morgan upon request such information about the Customer and its financial status as J.P. Morgan may reasonably request, including its current organizational documents and its current audited and unaudited financial statements.
6.5 Information Concerning Deposits at J.P. Morgan’s Non-U.S. Branche s
(a) Under U.S. federal law, deposit accounts that the Customer maintains in J.P. Morgan’s foreign branches (outside of the U.S.) are not insured by the Federal Deposit Insurance Corporation. In the event of J.P. Morgan’s liquidation, foreign branch deposits have a lesser preference than U.S. deposits, and such foreign deposits are subject to cross-border risks.
(b) J.P. Morgan’s London Branch is a participant in the UK Financial Services Compensation Scheme (the "FSCS"), and the following terms apply to the extent any amount standing to the credit of the Cash Account is deposited in one or more deposit accounts at J.P. Morgan’s London Branch. The terms of the FSCS offer protection in connection with deposits to certain types of claimants to whom J.P. Morgan London Branch provides services in the event that they suffer a financial loss as a direct consequence of J.P. Morgan’s London Branch being unable to meet any of its obligations and, subject to the FSCS rules regarding eligible deposits, the Customer may have a right to claim compensation from the FSCS. Subject to the FSCS rules, the maximum compensation payable by the FSCS in relation to eligible deposits is as set out in the relevant information sheet which is available online as referenced below. For the purposes of establishing such maximum compensation, all the Customer’s eligible deposits at J.P. Morgan London Branch are aggregated and the total is subject to such maximum compensation.
For further information about the compensation provided by the FSCS, refer to the FSCS website at www.FSCS.org.uk. Further information is also available online at http://www.jpmorgan.com/pages/deposit-guarantee-scheme-directive.
The Customer acknowledges that J.P. Morgan will not be required to maintain any insurance coverage specifically for the benefit of the Customer. J.P. Morgan will maintain insurance protection which is required under Applicable Law or which it deems advisable to cover its duties and responsibilities generally as a custodian of Financial Assets specifically for the benefit of J.P. Morgan.
6.7 Security Holding Disclosur e
With respect to Securities and Exchange Commission Rule 14b-2 under the U.S. Shareholder Communications Act regarding disclosure of beneficial owners to issuers of Securities, J.P. Morgan is instructed not to disclose the name, address or Securities positions of the Customer, on behalf of a Fund, in response to shareholder communications requests regarding the Account.
6.8 U.S. Regulatory Disclosure; Certain Information of the Custome r
(a) Section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) requires J.P. Morgan to implement reasonable procedures to verify the identity of any person that opens a new account with it. Accordingly, the Customer, on behalf of a Fund, acknowledges that Section 326 of the USA PATRIOT Act and J.P. Morgan’s identity verification procedures require J.P. Morgan to obtain information which may be used to confirm the Customer’s identity, including, without limitation, the Customer’s name, address and organizational documents (“identifying information”). The Customer, on behalf of a Fund, agrees to provide J.P. Morgan with and consents to J.P. Morgan obtaining from third parties any such identifying information required as a condition of opening an account with or using any service provided by J.P. Morgan.
(b) The Customer, on behalf of a Fund, hereby acknowledges that J.P. Morgan is obliged to comply with AML/Sanctions Requirements and that J.P. Morgan shall not be liable for any action it or any J.P. Morgan Affiliate reasonably takes to comply with any AML/Sanctions Requirements, including identifying and reporting suspicious transactions, rejecting transactions, and blocking or freezing funds, Financial Assets, or other assets. The Customer, on behalf of a Fund, shall cooperate with J.P. Morgan’s performance of its due diligence and other obligations concerning AML/Sanctions Requirements, including with regard to any Beneficial Owners (as defined below). In addition, the Customer, on behalf of a Fund, agrees that (i) J.P. Morgan may defer acting upon an Instruction pending completion of any review under its policies and procedures for compliance with AML/Sanctions Requirements and (ii) Customer’s utilization of Accounts as omnibus accounts to hold assets of Beneficial Owners is subject to J.P. Morgan’s discretion. Furthermore, J.P. Morgan shall not be obliged to hold any “penny stock” (or other Financial Asset raising special anti-money laundering concerns) in any Account in which a Beneficial Owner has an interest, or to settle any transaction in which a Beneficial Owner has an interest, that relates to any “penny stock” or any such other Financial Asset. For the purposes of this section, “Beneficial Owner” means any person, other than the Customer, who has a direct or indirect beneficial ownership interest in any assets held in any of the Accounts.
(c) (i) If an Account is eligible for “pass through” deposit insurance from the Federal Deposit Insurance Corporation (the “FDIC”) as set forth in the Federal Deposit Insurance Act and 12 CFR § 330, then the Customer, on behalf of a Fund, acknowledges and agrees that if J.P. Morgan becomes insolvent or enters into receivership (hereinafter a “Bank Receivership”), the Customer will: (1) cooperate fully with J.P. Morgan and the FDIC in connection with determining the insured status of funds in each Account, and (2) provide the FDIC with the information that identifies each beneficial owner and its interest in the funds in each such Account within 24
hours of the Bank Receivership, unless it falls within one of the enumerated exceptions in 12 CFR 370.5(b). The information described in (2) must be sent to J.P. Morgan in the format specified by FDIC regulation (see: www.fdic.gov/regulations/resources/recordkeeping/index.html). J.P. Morgan shall provide the Customer an opportunity to validate its capability to deliver the information described in (2) in the format specified by the FDIC so that a timely calculation of deposit insurance coverage for the Account can be completed.
(ii) The Customer further acknowledges and agrees that following a Bank Receivership: (1) a hold will be placed on each Account once a receiver of J.P. Morgan is appointed so that the FDIC can conduct the deposit insurance determination and such hold will not be released until the FDIC obtains the necessary data to enable the FDIC to calculate the deposit insurance coverage for each Account; (2) its failure to provide the necessary data to the FDIC may result in a delay in receipt of insured funds and legal claims against the Customer from the beneficial owners of the funds in the applicable Account; and (3) failure to provide the data the FDIC requires may result in the applicable Account being frozen until the information is received, delaying receipt of FDIC insurance proceeds.
(iii) Notwithstanding other provisions in this Agreement, this section survives after the FDIC is appointed as the J.P. Morgan’s receiver, and the FDIC is considered a third party beneficiary of this section.
(a) Subject to Section 6.9(b), J.P. Morgan will hold all Confidential Information in confidence and will not disclose any Confidential Information except as may be required by Applicable Law, to a regulator with jurisdiction over J.P. Morgan’s business, to enforce the terms of this Agreement or with the consent of the Customer, on behalf of a Fund. J.P. Morgan will secure and protect the Confidential Information from unauthorized use or disclosure by using at least the same degree of care as J.P. Morgan employs to avoid unauthorized use of or disclosure of its own confidential information, but in no event less than reasonable care. J.P. Morgan shall not duplicate or republish any material containing the Confidential Information except for purposes of or in relation to the performance of its obligations under this Agreement. Confidential Information may not be used by J.P. Morgan or any of J.P. Morgan Affiliates, officers, directors, agents, professional advisors, Subcontractors and employees, other than for the purposes contemplated by or otherwise permitted by this Agreement. J.P. Morgan represents that it will not (i) purchase or sell any portfolio securities contained in the Confidential Information on the basis of any information contained in, or as a result of being identified in, Confidential Information; (ii) use Confidential Information to trade against the Customers or to knowingly engage in any trading practices that are adverse the Customers or (iii) permit any of the Confidential Information to be disclosed to any entity that competes with the Customer, the Adviser, a Fund or any products thereof, unless otherwise authorized to or instructed by the Customer.
(b) The Customer, on behalf of a Fund, authorizes J.P. Morgan to disclose Confidential Information to:
(i) any Subcustodian, Subcontractor, agent, Securities Depository, securities exchange, broker, proxy solicitor, issuer, service provider, vendor or any other person that J.P. Morgan believes is reasonably required in connection with J.P. Morgan’s provision of relevant Services under this Agreement;
(ii) its and any J.P. Morgan Affiliate’s professional advisors, auditors and public accountants;
(iii) its branches and any J.P. Morgan Affiliate that J.P. Morgan believes is reasonably required in connection with J.P. Morgan’s provision of relevant services under this Agreement;
(iv) any revenue authority or any governmental entity in relation to the processing of any tax claim; and
(v) any regulatory authority having jurisdiction over the Customer upon the request of such regulator.
(c) The Confidential Information will remain the property of the Customer, on behalf of a Fund. Nothing contained in this Article will be construed as obligating the Customer, on behalf of a Fund, to disclose its Confidential Information to J.P. Morgan, or as granting to or conferring on J.P. Morgan, expressly or by implication, any rights or license to the Confidential Information of the Customer, on behalf of a Fund. Any such obligation or grant will only be as provided by other provisions of this Agreement.
(d) In the event of a breach or anticipated breach of this Agreement, J.P. Morgan agrees that any Customer to which the Confidential Information pertains shall have the right to seek injunctive relief in any court of competent jurisdiction, without any requirement of posting bond, demonstrating the fact that monetary damages or other relief would not be adequate remedies, and the availability of monetary damages or other relief shall not be asserted as a reason to grant such injunctive relief.
(e) To the extent J.P. Morgan is required by Applicable Law to disclose Confidential Information, J.P. Morgan shall:
(A) where legally permitted to do so, give reasonable and prompt advance notice of such disclosure requirement to the Customer; and
(B) upon the Customer’s request, J.P. Morgan will use reasonable efforts to obtain assurances from the relevant authority that confidential treatment will be accorded to the information that is required to be disclosed.
(f) Notwithstanding anything to the contrary in Section 6.9(e), J.P. Morgan may disclose any of the Confidential Information provided by the Customer to any bank regulatory authority having jurisdiction over J.P. Morgan upon the request of the bank regulatory authority without having to provide the Customer with notice of any kind.
(g) Return or Destruction
(i) As requested by the Customer, on behalf of a Fund, and subject to Section 2.12(b), during the term of this Agreement, J.P. Morgan will return or provide the Customer, on behalf of a Fund, a copy of any designated Confidential Information of the Customer.
(ii) Upon Customer’s request, J.P. Morgan will, upon cessation of work, completion of its obligations associated with such information under this Agreement or upon any earlier termination of this Agreement for any reason whatsoever, return, destroy or render unusable, and discontinue the use of, all copies of materials containing the Customer’s Confidential Information and to the extent reasonably practicable, all notes, memoranda, compilations, derivative works, data files or other materials prepared by or on behalf of J.P. Morgan that contain or otherwise reflect or refer to Confidential Information of the Customer upon J.P. Morgan’s cessation of work, completion of its obligations associated with such Confidential Information, except to the extent:
(A) that this Agreement provides for J.P. Morgan to continue to use or retain items that constitute or contain the Customer’s Confidential Information after the date of expiration or termination; or
(B) otherwise required to comply with Applicable Law, J.P. Morgan’s policies and procedures existing from time to time or defend or pursue claims arising under this Agreement.
(iii) At the Customer’s request, J.P. Morgan will certify in writing that it has handled Confidential Information pursuant to Applicable Law and J.P. Morgan’s policies and procedures.
(h) Subject to Section 2.12(b), J.P. Morgan’s obligations under this Section 6.9 will survive termination or expiration of the Agreement as follows:
(i) As to any portion of Confidential Information that constitutes a trade secret under Applicable Law, the obligations will continue for as long as such information is deemed a trade secret under Applicable Law; and
(ii) As to all other Confidential Information belonging to a Customer, on behalf of a Fund, the obligations will survive for three (3) years after the termination of this Agreement with respect to such Customer, on behalf of a Fund.
(a) The Customer, on behalf of a Fund, agrees not to use (or permit the use of) J.P. Morgan’s name in any public document, publication or publicity material relating to the Customer, including, but not limited to, notices, sales literature, stationery, advertisements, etc., without the prior written consent of J.P. Morgan (which consent shall not be unreasonably withheld), provided that no prior consent is needed if the document in which J.P. Morgan’s name is used merely states that J.P. Morgan is acting as custodian to the Customer.
(b) J.P. Morgan agrees not to use (or permit the use of) a Customer’s or a Fund’s name in any document, publication or publicity material relating to J.P. Morgan or a J.P. Morgan Affiliate, including, but not limited to, notices, sales literature, stationery, advertisements, etc., without the prior written consent of the particular Customer, on behalf of a Fund (which consent shall not be unreasonably withheld), provided that no prior consent is needed if the document in which a Customer’s name is used merely states that J.P. Morgan is acting as custodian to the Customer, on behalf of a Fund.
7. WHEN J.P. MORGAN IS LIABLE TO THE CUSTOME R
7.1 Standard of Care; Liabilit y
(a) J.P. Morgan will perform Services (i) with reasonable care, prudence and diligence and in good faith, (ii) without negligence, fraud, willful misconduct or willful omission, and at least at the same standard of care as J.P. Morgan provides for itself and/or J.P. Morgan Affiliates with respect to similar services, (iii) in a manner that is reasonably designed to meet J.P. Morgan’s obligations under this Agreement, and (iv) with the level of skill and care which would be expected from a reasonably skilled and experienced professional provider of the Services (“J.P. Morgan’s Standard of Care”).
(b) J.P. Morgan will only be liable for the Customer’s or Fund’s direct Liabilities and only to the extent they result from breach of J.P. Morgan’s Standard of Care in performing its duties as set out in this Agreement or the breach of any representations, warranties or the confidentiality obligations set forth herein.
(c) Under no circumstances will J.P. Morgan be liable for (i) any loss of profits (whether direct or indirect) or (ii) any indirect, incidental, consequential or special damages of any form, incurred by any person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought, with respect to the Accounts or resulting from J.P. Morgan’s
performance or non-performance under this Agreement, or J.P. Morgan’s role as custodian or banker or service provider to the Customer or the Fund.
(d) Under no circumstances will a Customer be liable for (i) any loss of profits (whether direct or indirect) or (ii) any indirect, incidental, consequential or special damages of any form, incurred by any person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought, resulting from Customer’s actions or omissions under this Agreement, provided that this Subsection 7.1(d) shall not apply to any Liability owing to a third party asserting a claim against J.P. Morgan for which J.P. Morgan is entitled to be indemnified under this Agreement.
(e) The Customer, on behalf of a Fund, will indemnify the J.P. Morgan Indemnitees against, and hold them harmless from, any Liabilities that may be imposed on, incurred by or asserted against any of the J.P. Morgan Indemnitees in connection with or arising out of (i) J.P. Morgan’s performance under this Agreement, provided that the J.P. Morgan Indemnitee has satisfied J.P. Morgan’s Standard of Care in connection with the Liabilities in question and has not materially breached this Agreement in connection with the Liabilities in question or (ii) any J.P. Morgan Indemnitee’s status as a holder of record of the Customer’s Financial Assets and further provided that J.P. Morgan shall use all commercially reasonable efforts to mitigate any Liability for which indemnity is sought hereunder provided, however, that reasonable expenses incurred with respect to such mitigation shall be Liabilities subject to indemnification hereunder. Nevertheless, the Customer, on behalf of a Fund, will not be obligated to indemnify any J.P. Morgan Indemnitee under the preceding sentence with respect to any Liability for which J.P. Morgan is liable under this Agreement, provided that, in each case, to the extent practicable, J.P. Morgan uses reasonable care to provide prompt notice to the Customer, on behalf of a Fund, of the circumstances and all pertinent facts related to the claim for indemnification, it being understood that a failure to notify shall not serve to limit Customer’s obligation to indemnify the J.P. Morgan Indemnitees hereunder, and provided further that in no instances shall the Customer, on behalf of a Fund, be obligated to indemnify any J.P. Morgan Indemnitee out of any assets other than the assets of the particular Customer or its Fund or Funds in connection with which the Liability has arisen.
(f) Subject to Section 7.1(b), (c), (g) and Section 7.2, J.P. Morgan shall indemnify the Customer Indemnitees from and against any direct Liabilities which may be imposed on, incurred by, or asserted against a Customer Indemnitee resulting directly either from (i) J.P. Morgan’s failure to meet J.P. Morgan’s Standard of Care in the performance of its obligations or duties hereunder; (ii) the failure of a Subcustodian to meet the standard of care set forth in Section 5.2(a) of this Agreement or (iii) the insolvency of any Affiliated Subcustodian, provided that (1) in no event shall J.P. Morgan be obliged to indemnify a Customer Indemnitee from against any Liability (or any claim for a Liability) to the extent such Liability is described in Section 7.2(b) and not caused by a breach of J.P. Morgan’s Standard of Care, and (2) each Customer Indemnitee shall use all commercially reasonable efforts to mitigate any Liability for which indemnity is sought hereunder provided, however, that reasonable expenses incurred with respect to such mitigation shall be Liabilities subject to indemnification hereunder. For the avoidance of doubt and subject to section 7.1(b) and (c) of this agreement, J.P. Morgan will indemnify a Customer Indemnitee for any direct Liabilities paid out of the pocket of a Customer Indemnitees that result directly from J.P. Morgan's failure to meet J.P. Morgan’s Standard of Care in the performance or its obligation duties under this Agreement, provided that the Customer Indemnitee has not acted with negligence or engaged in fraud or willful misconduct in connection with the Liabilities in question.
(g) The Customer, on behalf of a Fund, agrees that, except as otherwise provided in this Agreement, J.P. Morgan provides no service in relation to, and therefore has no duty or responsibility to: (i) question Instructions that J.P. Morgan reasonably believes to be given by an Authorized Person or make any suggestions to the Customer, a Fund or an Authorized Person regarding such
Instructions; (ii) supervise or make recommendations with respect to investments or the retention of Financial Assets; (iii) advise the Customer, a Fund or an Authorized Person regarding any default in the payment of principal or income on any Financial Asset other than as provided in Section 2.6(b); and (iv) evaluate or report to the Customer, a Fund or an Authorized Person regarding the financial condition of any broker, agent or other party to which J.P. Morgan is instructed to deliver Account Assets. J.P. Morgan is not responsible or liable in any way for the genuineness or validity of any Security or instrument received, delivered or held by J.P. Morgan in physical form that appears to be genuine and valid.
(a) J.P. Morgan will maintain and update from time to time business continuation and disaster recovery procedures with respect to the services and its global custody business that it determines from time to time meet reasonable commercial standards (“Business Continuity Plan” or “BCP”) and periodically test a written Business Continuity Plan that is reasonably designed to enable J. P. Morgan to effect the recovery and, as contemplated by the BCP, continuity of its key operations, systems and processes in a Force Majeure Event (as defined below). Upon request, J.P. Morgan shall provide the Customer with a summary of the Business Continuity Plan. Upon the occurrence of a Force Majeure Event, J. P. Morgan shall (where and to the extent applicable) use commercially reasonable efforts to implement the BCP in accordance with its terms. The Customer acknowledges that the effectiveness of the BCP is subject to actual implementation in a Force Majeure Event or other disaster situation during which time unforeseen crisis and critical events may occur that would affect the effectiveness of the BCP.
(b) Upon reasonable request, J.P. Morgan shall discuss with a Customer, on behalf of a Fund, any BCP of J.P. Morgan and/or provide a high-level presentation summarizing such procedures. Neither party (“Affected Party”) will be liable, however, for any Liabilities of any nature that the other party or any third party may suffer or incur, caused by an act of God, fire, flood, epidemics, earthquakes or other disasters, civil or labor disturbance, war, terrorism, act of any governmental authority or other act or threat of any authority (de jure or de facto), nationalization, expropriation, legal constraint, fraud, theft or forgery (other than on the part of the Affected Party or its employees), cyber-attack, malfunction of equipment or software (except where such malfunction is primarily and directly attributable to the Affected Party’s negligence in maintaining the equipment or software), currency re-denominations, currency restrictions, failure of or the effect of rules or operations of any external funds transfer system, inability to obtain (or interruption of) external communications facilities, power failures or any other cause beyond the reasonable control of the Affected Party (including, without limitation, the non-availability of appropriate foreign exchange) (a “Force Majeure Event”); provided that the Affected Party has not contributed to the Liability by acting with negligence, fraud or willful misconduct or by failing to use commercially reasonable efforts to mitigate any such Liabilities, including by using commercially reasonable efforts to implement a relevant BCP in accordance with its terms. Without limiting the generality of the foregoing, if an event resulting from Country Risk leads to restrictions on, or losses of, cash or cash equivalents held by J.P. Morgan or any Affiliated Subcustodian Bank in any market for the purposes of facilitating J.P. Morgan’s global custody business, J.P. Morgan may in its sole discretion apply the impact of those restrictions or losses to the relevant currency held in the Customer’s Cash Accounts in a proportional manner as J.P. Morgan may reasonably determine. J.P. Morgan will not be entitled to any additional payments from the Customer, on behalf of a Fund, for costs or expenses incurred by J.P. Morgan as a result of any Force Majeure Event.
7.3 J.P. Morgan May Consult With Counse l
J.P. Morgan shall exercise reasonable care in the selection and appointment of professional advisers and subject thereto shall be entitled to rely on, and may act upon the advice of, professional advisors (which may be the professional advisors of the Customer) at its own expense in relation to matters of law, regulation or market practice.
7.4 J.P. Morgan Provides Diverse Financial Services and May Generate Profits as a Resul t
Provided that nothing in this provision shall be taken as authorizing J.P. Morgan to contravene any Applicable Laws, the Customer, on behalf of a Fund, hereby authorizes J.P. Morgan to act under this Agreement notwithstanding that: (a) J.P. Morgan or any of its divisions, branches or J.P. Morgan Affiliates may have a material interest in transactions entered into by the Customer, on behalf of a Fund, with respect to the Account or that circumstances are such that J.P. Morgan may have a potential conflict of duty or interest, including the fact that J.P. Morgan or J.P. Morgan Affiliates may act as a market maker in the Financial Assets to which Instructions relate, provide brokerage services to other customers, act as financial adviser to the issuer of such Financial Assets, act in the same transaction as agent for more than one customer, have a material interest in the issuance of the Financial Assets; or earn profits from any of the activities listed herein and (b) J.P. Morgan or any of its divisions, branches or J.P. Morgan Affiliates may be in possession of information tending to show that the Instructions received may not be in the best interests of the Customer or a Fund. J.P. Morgan is not under any duty to disclose any such information to the Customer or to a Fund. Nothing in the foregoing shall release J.P. Morgan from any obligation to perform the Services under this Agreement or to treat the Customer, on behalf of a Fund, fairly in connection with the performance of the Services.
J.P. Morgan and its Subcustodians may use third party providers of information regarding matters such as pricing, proxy voting, corporate actions and class action litigation and use local agents to provide extraordinary services such as attendance at annual meetings of issuers of Securities. Although J.P. Morgan will use reasonable care (and cause its Subcustodians to use reasonable care) in the selection and retention of such third party providers and local agents, it will not be responsible for any errors or omissions made by those third party providers and local agents provided that reasonable care has been used in such selection and retention.
In all other respects, J.P. Morgan may delegate to a Subcontractor any of its functions herein (other than acting as custodian unless the Subcontractor is qualified to act as a Subcustodian under Applicable Law) provided, however, that the engagement of such Subcontractor is subject to consultation with the Customer and the prior consent (which shall not be unreasonably withheld) before J.P. Morgan implements the delegation of a material portion of the Services. J.P. Morgan shall be responsible for the acts and omissions of any such Subcontractor so employed as if J.P. Morgan had committed such acts and omissions itself. J.P. Morgan shall be responsible for the compensation of its Subcontractor. J.P. Morgan will maintain throughout this Agreement a due diligence and third party oversight program that meets regulatory requirements and use reasonable care in the selection and retention of any Delegate.
(a) The Customer, on behalf of a Fund, will pay or reimburse J.P. Morgan, and confirms that J.P. Morgan is authorized to deduct from any cash received or credited to the Cash Account, any taxes or levies required by any revenue or governmental authority for whatever reason in respect of the Customer's Accounts.
(b) The Customer, on behalf of a Fund, will provide to J.P. Morgan such certifications, declarations, documentation, and information as it may require in connection with taxation, and warrants
that, when given, this information is true and correct in every respect, not misleading in any way, and contains all material information to the best of a Customer’s knowledge. The Customer undertakes to notify J.P. Morgan immediately if any information requires updating or correcting. J.P. Morgan provides no service of controlling or monitoring, and therefore has no duty in respect of, or responsibility for any Liabilities (including any taxes, penalties, interest or additions to tax, whether payable or paid) that result from (i) the inaccurate completion of documents by the Customer or any third party; (ii) the provision to J.P. Morgan or a third party of inaccurate or misleading information by the Customer or any third party; (iii) the withholding of material information by the Customer or any third party; or (iv) any delay by any revenue authority or any other cause beyond J.P. Morgan’s control.
(c) If J.P. Morgan does not receive appropriate certifications, documentation and information then, as and when appropriate and required, tax shall be deducted from all income received in respect of the Financial Assets issued (including, but not limited to, withholding under United States Foreign Account Tax Compliance Act, United States non-resident alien tax and/or backup withholding tax, as applicable).
(d) The Customer, on behalf of a Fund, will be responsible in all events for the timely payment of all taxes relating to the Financial Assets in the Securities Account; provided, however, that J.P. Morgan will be responsible for any penalty or additions to tax due solely as a result of J.P. Morgan’s willful misconduct, negligent acts or omissions or other breaches of J.P. Morgan’s Standard of Care with respect to paying or withholding tax or reporting interest, dividend or other income paid or credited to the Cash Account.
(a) Subject to the provisions of this Section 8.2, J.P. Morgan will (i) provide (1) a “relief at source” service to obtain a reduction of withholding tax withheld as may be available in the applicable market in respect of income payments on Financial Assets credited to the Securities Account that J.P. Morgan believes may be available to the Customer and/or (2) a tax reclaim service on certain qualifying Financial Assets. J.P. Morgan may from time-to-time set minimum thresholds as to a de minimis value of tax reclaims or reduction of withholding which it will pursue in respect of income payments under this Section; (ii) file (or cause to be filed) claims for exemptions, reductions in withholding taxes, or refunds of any tax with respect to withheld foreign (non-U.S.) taxes in instances in which such claims are appropriate; (iii) withhold appropriate amounts as required by U.S. tax laws with respect to amounts received on behalf of U.S. and nonresident aliens with respect to securities held in custody with J.P. Morgan; (iv) withhold or cause to be withheld, as required under applicable tax law in its function as a custodian upon collection of any dividend, interest or other distribution with respect to any U.S. or non-U.S. securities in custody with J.P. Morgan; (v) maintain tax entitlement accruals for possible tax benefits available in markets of investment and monitor tax entitlements and tax reclaim accruals based on current situations in markets of investment to protect a Customer’s or Fund’s entitlements; (vi) where a Customer or Fund is eligible, based upon its fiscal domicile and legal structure, coordinate tax exemption applications when appropriate for a custodian to perform and reduction at source documentation requirements and file (or cause to be filed) the documentation with the appropriate market authorities on a Customer’s or Fund’s behalf; (vii) file (or cause to be filed) tax reclaims for those markets in which J.P. Morgan has notified a Customer or Fund that it offers tax reclaims on an ongoing basis on behalf of a Customer or Fund; (viii) cause its Subcustodians to work with a Customer’s or Fund’s local tax consultants to assist Customer or Fund, as applicable, in maintaining compliance with reporting, payment and filing requirements; and (ix) provide to a Customer or Fund mutually agreed information actually received by J.P. Morgan that could, in J.P. Morgan’s reasonable belief and sole discretion, assist any of the Customers or Funds in their submission of any reports or returns with respect to taxes. Where J.P. Morgan considers it appropriate to do so, J.P. Morgan shall use reasonable efforts to
assist a Customer or Fund with respect to any claim for exemption or refund under the tax law of countries for which a Customer or Fund has provided sufficient information and documentation.
(b) The provision of a tax relief service by J.P. Morgan is conditional upon J.P. Morgan receiving from the Customer (i) a declaration of its identity and place of residence and (ii) certain other documentation (pro forma copies of which are available from J.P. Morgan), prior to the receipt of Financial Assets in the Securities Account and/or the payment of income.
(c) J.P. Morgan will perform tax relief services only with respect to taxation levied by the revenue authorities of the countries advised to the Customer from time to time and J.P. Morgan may, by notification in writing, in its absolute discretion, supplement or amend the countries in which the tax relief services are offered. Other than as expressly provided in this Section 8.2, J.P. Morgan will have no responsibility with regard to the Customer’s tax position or status in any jurisdiction.
9.1 Term and Termination for Convenienc e
(a) The initial term of this Agreement shall be for a period of five (5) years following the date on which J.P. Morgan commenced providing Services under this Agreement. Following the initial term, this Agreement shall be in effect until a valid termination notice is given by (i) the Customer, on behalf of a Fund, upon at least sixty (60) days' prior written notice to J.P. Morgan, or (ii) J.P. Morgan upon at least one hundred and eighty (180) days’ prior written notice to the Customer.
(b) The Customer may terminate this Agreement at any time during the initial term by giving not less than sixty (60) days’ prior written notice to J.P. Morgan; provided that a termination fee shall be owed by the Customer to J.P. Morgan if after consultation both parties agree that such termination or partial termination of this Agreement has resulted in a material change to the aggregate value of the assets under custody or to the allocation of the assets under custody, based on the value of such assets by market of settlement, as at the commencement date of the initial term. The termination fee will be (i) twelve (12) times the average monthly fees paid during the twelve (12) months period prior to the Customer’s notice of termination (or since the date on which J.P. Morgan commenced providing the Services under this Agreement, if such period is less than twelve (12) months), if the Agreement is terminated within the first year of the initial term; (ii) six (6) times the average monthly fees paid during the six (6) months period prior to the Customer’s notice of termination, if the Agreement is terminated within the second year of the initial term; (iii) three (3) times the average monthly fees paid during the three (3) months period prior to the Customer’s notice of termination, if the Agreement is terminated within the third year of the initial term; or (iv) one (1) time the fees paid in the month immediately preceding the Customer’s notice of termination, if the Agreement is terminated within the fourth or fifth years of the initial term. In the event of a partial termination of this Agreement, any termination fee will be calculated based only on the average monthly fees of those Funds for which the Agreement has been terminated. The termination fee shall not apply to the termination of this Agreement with respect to a particular Fund in the event such Fund is liquidated or otherwise wound-down. The termination fee shall not apply to any Fund added to this Agreement after the date of execution of this Agreement.
(c) No termination penalty shall be owed by the Customer to J.P. Morgan if the Agreement is terminated by the Customer pursuant to Section 9.2.
(d) The Customer may terminate this Agreement at any time during the initial term without a termination penalty after consulting with J.P. Morgan regarding the materiality of the multiple or repeated breaches described in (A) or (B) below and giving not less than sixty (60) days’ prior written notice to J.P. Morgan upon the occurrence of (A) numerous non-material breaches which
have not been cured by J.P. Morgan after being given written notice of such individual breaches and where the collective impact of such breaches would constitute a material breach of this Agreement or (B) repeated breaches which may have been previously cured but then re-occur after being given written notice of such individual breaches and where the collective impact of such breaches would constitute a material breach of this Agreement.
9.2 Other Grounds for Terminatio n
(a) Either party may terminate this Agreement immediately on written notice to the other party upon the occurrence of any of the following:
(i) the other party commits any material breach of this Agreement and fails to remedy such material breach (if capable of remedy) within thirty (30) days of the party in breach being given written notice of the material breach (unless the parties agree to extend the period to remedy the breach); or
(ii) the other party (A) admits in writing its inability or is generally unable to pay its debts as they become due; (B) institutes, consents to or is otherwise subject to the institution of any proceeding under title 11 of the United States Code, as in effect from time to time, or any other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, composition with creditors, wind-down, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief law of the United States, or other applicable jurisdiction from time to time in effect and affecting the rights of creditors, generally; (C) is subject to an involuntary order for the transfer of all or part of its business by a statutory authority; (D) has any of its issued shares suspended from trading on any exchange on which they are listed (if applicable), or (E) is the subject of a measure similar to any of the foregoing;
(iii) the relevant federal or state authority withdrawing its authorization of either party
(iv) J.P. Morgan ceases to be qualified to act as custodian of a Customer or the Funds under Applicable Law;
(v) If a Force Majeure Event substantially prevents performance of any services necessary for the performance of functions reasonably agreed by the parties as critical for more than three (3) consecutive business days, then the Customer, on behalf of a Fund, may terminate all or any portion of this Agreement and the services so affected, as of a date specified by the Customer in a written notice of termination to J.P. Morgan, in which case, J.P. Morgan’s fees will be equitably adjusted as necessary to reflect the value of any remaining services; and
(vi) At any time, the Customer, on behalf of a Fund, may elect to remove any Fund from this Agreement in connection with the liquidation of the Fund or the merger of a Fund into another fund, in each case by notifying J.P. Morgan in writing or other mutually agreed communication method.
(b) J.P. Morgan may terminate this Agreement by giving not less than ninety (90) days’ prior written notice to the Customer in the event that J.P. Morgan reasonably determines that either the Customer has ceased to satisfy J.P. Morgan’s customary credit requirements or servicing the Customer raises reputational or regulatory concerns. The Customer, on behalf of a Fund, may terminate this Agreement by giving at least the ninety (90) days’ prior written notice to J.P. Morgan in the event that the Customer reasonably determined that J.P. Morgan raises reputational or regulatory concerns.
(a) The Customer, on behalf of a Fund, will provide J.P. Morgan full details of the persons to whom J.P. Morgan must deliver Account Assets within a reasonable period before the effective time of
termination of this Agreement. If the Customer fails to provide such details in a timely manner, J.P. Morgan shall be entitled to continue to be paid fees under this Agreement until such time as it is able to deliver the Account Assets to a successor custodian, but J.P. Morgan may take such steps as it reasonably determines to be necessary to protect itself following the effective time of termination, including ceasing to provide transaction settlement services in the event that J.P. Morgan is unwilling to assume any related credit risk.
(b) J.P. Morgan will, in any event, be entitled to deduct any amounts owing to it, that are not in dispute in accordance with this Agreement and the fees and expenses arrangements in existence, from the Cash Account prior to delivery of the Account Assets. In the event that insufficient funds are available in the Cash Account, the Customer agrees that, upon notice to the Customer, J.P. Morgan may, in such manner and at such time or times as J.P. Morgan in its sole discretion sees fit, liquidate Financial Assets in the Securities Account that J.P. Morgan, in its sole discretion, may select in order to deduct such amounts from the proceeds.
(c) The Customer, on behalf of a Fund, will reimburse J.P. Morgan promptly for all out-of-pocket expenses it incurs in delivering Financial Assets upon termination in accordance with this Agreement and the fees and expenses arrangements then in existence between them.
(d) Upon termination, the Customer, on behalf of a Fund, will provide J.P. Morgan with contact information and payment Instructions for any matters arising after termination.
(e) Termination will not affect any of the Liabilities either party owes to the other party arising under this Agreement prior to such termination.
(f) J.P. Morgan will act in accordance with all Instructions delivered to it by the Customer with respect to such delivery and transition of custody responsibilities to a successor custodian provided that such Instructions shall be reasonable and practicable and not in conflict with any provision of this Agreement.
(g) As soon as reasonably practicable following its resignation or termination of appointment becoming effective and subject to payment of any amount owing to J.P. Morgan under this Agreement, J.P. Morgan agrees to transfer such holding statements or position reports as are customarily transferred by an existing global custodian or provider of the Services, to any replacement provider of the Services or to such other person as the Customer may direct. J.P. Morgan will also provide reasonable assistance to its successor, for such transfer, subject to the payment of such reasonable expenses and charges as J.P. Morgan and the Customer may mutually agree for such assistance. The Customer undertakes to use its best efforts to appoint a new custodian or service provider as soon as reasonably practicable following the termination of this Agreement.
(a) Unless the Customer and J.P. Morgan have agreed otherwise, J.P. Morgan may, subject to Applicable Law, provide any notice to Customer required under this Agreement, other than a notice pursuant to Section 9, by either posting it on J.P. Morgan’s website or portal or, at its option, by other reasonable means.
(b) Notices pursuant to Section 9 shall be sent or served by registered mail, nationally recognized delivery service, courier service or hand delivery to the address of (i) J.P. Morgan as set out on the first page of this Agreement, and (ii) the respective Customer as set out on Annex B of this Agreement, unless at least two (2) days’ prior written notice of a new address is given to the other party in writing.
This Agreement will be binding on each of the parties' successors and assigns. The parties agree that neither party can assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other party, which consent will not be unreasonably withheld, delayed or conditioned. Nevertheless, the foregoing restriction on transfer shall not apply to any assignment or transfer by J.P. Morgan to any J.P. Morgan Affiliate or in connection with a merger, reorganization, stock sale or sale of all or substantially all of J.P. Morgan’s custody business, provided such successor is qualified to act as a custodian under Applicable Law; or by the Federal Deposit Insurance Corporation or a duly appointed conservator or receiver of J.P. Morgan in furtherance of its authority under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and/or the Federal Deposit Insurance Act.
10.3 Entire Agreement and Amendment s
This Agreement, including any Schedules, Exhibits, Annexes and Riders (and any separate agreement which J.P. Morgan and the Customer may enter into with respect to any Cash Account), sets out the entire agreement between the parties in connection with the subject matter hereof, and this Agreement supersedes any other agreement, statement or representation relating to custody, whether oral or written. The parties may enter into one or more non-binding service level documents on terms agreed by the parties and may vary any service level document by agreement at any time. The service level document will not form part of this Agreement. To the extent inconsistent with this Agreement, J.P. Morgan’s electronic access terms and conditions shall not apply to matters arising under this Agreement. Amendments must be in writing and, except when this Agreement provides for amendments by notice from J.P. Morgan, signed by both parties.
10.4 Governing Law and Jurisdictio n
This Agreement will be construed, regulated and administered under the laws of the United States or the State of New York, as applicable, without regard to New York’s principles regarding conflict of laws, except that the foregoing shall not reduce any statutory right to choose New York law or forum. The United States District Court for the Southern District of New York will have the sole and exclusive jurisdiction over any lawsuit or other judicial proceeding relating to or arising from this Agreement. If that court lacks federal subject matter jurisdiction, the Supreme Court of the State of New York, New York County will have sole and exclusive jurisdiction. Either of these courts will have proper venue for any such lawsuit or judicial proceeding, and the parties waive any objection to venue or their convenience as a forum. The parties agree to submit to the jurisdiction of any of the courts specified and to accept service of process to vest personal jurisdiction over them in any of these courts. The parties further hereby knowingly, voluntarily and intentionally waive, to the fullest extent permitted by Applicable Law, any right to statutory prejudgment interest and a trial by jury with respect to any such lawsuit or judicial proceeding arising or relating to this Agreement or the transactions contemplated hereby. To the extent that in any jurisdiction the Customer, on behalf of a Fund, 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, the Customer, on behalf of a Fund, shall not claim, and it hereby irrevocably waives, such immunity.
10.5 Severability; Waiver; and Surviva l
(a) If one or more provisions of this Agreement 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 will not in any way be affected or impaired.
(b) Except as otherwise provided herein, no failure or delay on the part of either party in exercising any power or right under this Agreement 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 of this Agreement, or waiver of any breach or default, is effective unless it is in writing and signed by the party against whom the waiver is to be enforced.
(c) The parties’ rights, protections and remedies under this Agreement shall survive its termination.
This Agreement may be executed in several counterparts each of which will be deemed to be an original and together will constitute one and the same agreement.
10.7 No Third Party Beneficiarie s
A person who is not a party to this Agreement shall have no right to enforce any term of this Agreement.
This Agreement is executed by a Customer with respect to each of its Funds and the obligations hereunder are not binding upon any of the directors, officers or shareholders of the Fund individually. Notwithstanding any other provision in this Agreement to the contrary, each and every obligation, liability or undertaking of a particular Fund under this Agreement shall constitute solely an obligation, liability or undertaking of, and be binding upon, such particular Fund and shall be payable solely from the available assets of such particular Fund and shall not be binding upon or affect any assets of any other Fund.
[Signature Page Follows]
Franklin Templeton Variable Insurance Products JPMORGAN CHASE BANK, N.A.
Trust, on behalf of its series:
Templeton Developing Markets VIP Fund
Templeton Foreign VIP Fund
Templeton Growth VIP Fund
By: | __/s/Matthew T. Hinkle_____ | By: | __/s/Brian Eckert_________ |
Name: | Matthew T. Hinkle_________ | Name: | Brian Eckert _____________ |
Title: | CEO Finance & Administration | Title: | Executive Director________ |
Date: | March 01, 2020___________ | Date: | May 7, 2020______________ |
Institutional Fiduciary Trust, on behalf of its series:
Franklin Money Market Fund
By: | __/s/Matthew T. Hinkle_____ |
Name: | Matthew T. Hinkle_________ |
Title: | CEO Finance & Administration |
Date: | March 01, 2020__________ |
Templeton Funds, on behalf of its series:
Templeton Foreign Fund
Templeton World Fund
By: | __/s/Matthew T. Hinkle_____ |
Name: | Matthew T. Hinkle_________ |
Title: | CEO Finance & Administration |
Date: | March 01, 2020_________ |
Templeton Global Investment Trust, on behalf of its series:
Templeton Emerging Markets Small Cap Fund
Templeton Frontier Markets Fund
By: | __/s/Matthew T. Hinkle_____ |
Name: | Matthew T. Hinkle_________ |
Title: | CEO Finance & Administration |
Date: | March 01, 2020___________ |
Templeton Income Trust, on behalf of its series:
Templeton Emerging Markets Bond Fund
Templeton Global Bond Fund
By: | __/s/Matthew T. Hinkle_____ |
Name: | Matthew T. Hinkle_________ |
Title: | CEO Finance & Administration |
Date: | March 01, 2020__________ |
Templeton Institutional Funds, on behalf of its series:
International Equity Series
Foreign Smaller Companies Series
Global Equity Series
By: | __/s/Matthew T. Hinkle_____ |
Name: | Matthew T. Hinkle_________ |
Title: | CEO Finance & Administration |
Date: | March 01, 2020__________ |
Templeton China World Fund
By: | __/s/Matthew T. Hinkle_____ |
Name: | Matthew T. Hinkle_________ |
Title: | CEO Finance & Administration |
Date: | March 01, 2020___________ |
Templeton Developing Markets Trust
By: | __/s/Matthew T. Hinkle_____ |
Name: | Matthew T. Hinkle_________ |
Title: | CEO Finance & Administration |
Date: | March 01, 2020__________ |
Templeton Dragon Fund, Inc.
By: | __/s/Matthew T. Hinkle_____ |
Name: | Matthew T. Hinkle_________ |
Title: | CEO Finance & Administrat |
By: | __/s/Matthew T. Hinkle_____ |
Templeton Emerging Markets Fund
By: | __/s/Matthew T. Hinkle_____ |
Name: | Matthew T. Hinkle_________ |
Title: | CEO Finance & Administration |
Date: | March 01, 2020__________ |
Templeton Emerging Markets Income Fund
By: | __/s/Matthew T. Hinkle_____ |
Name: | Matthew T. Hinkle_________ |
Title: | CEO Finance & Administration |
Date: | March 01, 2020__________ |
Templeton Global Smaller Companies Fund
By: | __/s/Matthew T. Hinkle_____ |
Name: | Matthew T. Hinkle_________ |
Title: | CEO Finance & Administration |
Date: | March 01, 2020__________ |
Templeton Growth Fund, Inc.
By: | __/s/Matthew T. Hinkle_____ |
Name: | Matthew T. Hinkle_________ |
Title: | CEO Finance & Administration |
Date: | March 01, 2020_________ |
Templeton Growth Fund II Limited
By: | __/s/Laura Fergerson_____ |
Name: | Laura Fergerson_________ |
Title: | Director_________________ |
Date: | March 01, 2020__________ |
Templeton China Opportunities Fund, Ltd.
By: | __/s/Laura Fergerson_____ |
Name: | Laura Fergerson_________ |
Title: | Director_________ _______ |
Date: | March 01, 2020__________ |
Templeton Global Income Fund
By: | __/s/Matthew T. Hinkle_____ |
Name: | Matthew T. Hinkle_________ |
Title: | CEO Finance & Administration |
Date: | March 01, 2020___________ |
Templeton Strategic Emerging Markets Fund III, L.P.
By: | __/s/Tek-Khaon Ong_____ |
Name: | Tek-Khaon Ong__________ |
Title: | Director_______________ |
Date: | March 01, 2020________ |
Templeton Strategic Emerging Markets Fund III (Cayman), L.P.
By: | __/s/Tek-Khaon Ong_____ |
Name: | Tek-Khaon Ong__________ |
Title: | Director________________ |
Date: | March 01, 2020_________ |
Templeton Ex-Japan Global Equity Fund Ltd.
By: | _________________________ |
Name: | _________NA______________ |
Title: | _________________________ |
Date: | _________________________ |
Templeton Strategic Emerging Markets Fund IV LDC
By: | __/s/Tek-Khaon Ong_____ |
Name: | Tek-Khaon Ong______________ |
Title: | Director and Co- Chief Executive Officer |
Date: | March 01, 2020___________ |
Templeton Strategic Emerging Markets Fund III LDC
By: | __/s/Tek-Khaon Ong_____ |
Name: | Tek-Khaon Ong__________ |
Title: | Director and Co- Chief Executive Officer |
Date: | March 01, 2020__________ |
Templeton Global Advisers Ltd. (Separate Account)
By: | __/s/Alan Bartlett__________ |
Name: | Alan Bartlett ______________ |
Title: | President ________________ |
Date: | March 01, 2020___ |
SCHEDULE A J.P. Morgan Investor Services Global Custody Restricted Market s
The following table identifies certain markets that J.P. Morgan has determined to be restricted markets and provides summary information about the nature of the restrictions applicable in each. J.P. Morgan reserves the right to update this Schedule from time to time upon notice to Customer, on behalf of a Fund.
Market | Restrictions |
Costa Rica | If J.P. Morgan’s Costa Rican Subcustodian exits the market or becomes an unacceptable provider of subcustody services, J.P. Morgan may cease to provide custody services with respect to Securities that are safekept in Costa Rica. Although J.P. Morgan will work with customers to mitigate the impact of any decision to exit the market, it may not be practicable to give significant advance notice of the exit. |
Iceland | Until further notice from J.P. Morgan, no deposits of Icelandic currency will be held in the Customer’s or Fund’s Cash Account except for the proceeds of sales of Securities safekept in Iceland (“Icelandic Securities”) or where income and corporate action proceeds are paid in local currency. Until further notice from J.P. Morgan, any credit of Icelandic currency to the Customer’s or Fund’s Cash Account with J.P. Morgan will be conditional and subject to reversal by J.P. Morgan upon notice to Customer except to the extent that the funds are able to be applied at Customer’s Instruction to the purchase of Icelandic Securities or J.P. Morgan is able to repatriate the funds from J.P. Morgan’s Icelandic Subcustodian via a foreign exchange transaction (upon Instruction received from Customer). In this regard, Customer or Fund will be entitled to no more than Customer’s or Fund’s pro rata share of any recoveries that J.P. Morgan is able to obtain, as reasonably determined by J.P. Morgan. |
Malawi | Local currency will be held in one or more separate cash accounts that the Customer, on behalf of a Fund, opened with J.P. Morgan’s Malawi Subcustodian that are in the Customer’s name and payable exclusively by J.P. Morgan’s Malawi Subcustodian. In respect of the cash accounts, J.P. Morgan’s Malawi Subcustodian will be the Customer’s local agent bank and pursuant to a power of attorney, J.P. Morgan will have a right to instruct J.P. Morgan’s Malawi Subcustodian in respect to the one or more separate cash accounts that the Customer, on behalf of a Fund, directly opened in the Customer’s name at the Subcustodian. Due to the unclear standards in the Malawi market with respect to the completion and submission of corporate action elections, J.P. Morgan will be subject to a “reasonable efforts” standard of care with respect to any Corporate Action related to Securities safekept in Malawi (“Malawi Securities”). If J.P. Morgan’s Malawi Subcustodian exits the market or becomes an unacceptable provider of subcustody services, J.P. Morgan may cease to provide custody services with respect to Malawi Securities. Although J.P. Morgan will work with customers to mitigate the impact of any decision to exit the market, it may not be practicable to give significant advance notice of the exit. |
Market | Restrictions |
Tanzania | Local currency will be held in one or more separate cash accounts that the Customer, on behalf of a Fund, opened with J.P. Morgan’s Tanzanian Subcustodian that are in the Customer’s name and payable exclusively by J.P. Morgan’s Tanzanian Subcustodian. In respect of the cash accounts, J.P. Morgan’s Tanzanian Subcustodian will be the Customer’s local agent bank and pursuant to a power of attorney, J.P. Morgan will have a right to instruct J.P. Morgan’s Tanzanian Subcustodian in respect to the one or more separate cash accounts that the Customer directly opened in the Customer’s name at the Subcustodian. Due to the unclear standards in the Tanzanian market with respect to the completion and submission of corporate action elections, J.P. Morgan will be subject to a “reasonable efforts” standard of care with respect to any Corporate Action related to Securities safekept in Tanzania (“Tanzanian Securities”). If J.P. Morgan’s Tanzanian Subcustodian exits the market or becomes an unacceptable provider of subcustody services, J.P. Morgan may cease to provide custody services with respect to Tanzanian Securities. Although J.P. Morgan will work with customers to mitigate the impact of any decision to exit the market, it may not be practicable to give significant advance notice of the exit. |
Ukraine (for Ukrainian Equities only) | Customer should refer to the current version of the applicable J.P. Morgan’s Ukraine briefing memo regarding the account structure and corporate action nuances of the Ukrainian market. For client opening accounts in Ukraine and unincorporated client types in particular, due to unclear standards in the Ukrainian market with respect to the completion and submission of corporate action elections, J.P. Morgan will be subject to a “reasonable efforts” standard of care with respect to any Corporate Action related to equity Securities safekept in Ukraine. |
West African Economic and Monetary Union (“WAEMU”) | Local currency will be held in one or more separate cash accounts that the Customer, on behalf of a Fund, opened with J.P. Morgan’s WAEMU Subcustodian that are in the Customer’s name and payable exclusively by J.P. Morgan’s WAEMU Subcustodian. In respect of the cash accounts, J.P. Morgan’s WAEMU Subcustodian will be the Customer’s local agent bank and pursuant to a power of attorney, J.P. Morgan will have a right to instruct J.P. Morgan’s WAEMU Subcustodian in respect to the one or more separate cash accounts that the Customer directly opened in the Customer’s name at the Subcustodian. If J.P. Morgan’s WAEMU Subcustodian exits the market or becomes an unacceptable provider of subcustody services, or if market conditions otherwise deteriorate within one or more of the member states of WAEMU, J.P. Morgan may cease to provide custody services with respect to Securities issued in member states of WAEMU that are settled and safekept at Dépositaire Central/Banque de Règlement S.A. Although J.P. Morgan will work with customers to mitigate the impact of any decision to exit the market, it may not be practicable to give significant advance notice of the exit. |
Zimbabwe | Until further notice from J.P. Morgan, any credit of U.S. Dollars to the Customer’s Cash Account with J.P. Morgan applied at Customer’s Instruction to the purchase or sale of Securities safekept in Zimbabwe (the “Zimbabwe Securities”) will be conditional and subject to reversal by J.P. Morgan upon notice to Customer except to the extent that the funds are able to be repatriated or J.P. Morgan is able to repatriate the funds from J.P. Morgan’s Zimbabwean Subcustodian via a foreign exchange transaction (upon Instruction received from Customer). In this regard, Customer will be entitled to no more than Customer’s pro rata share of any recoveries that J.P. Morgan is able to obtain, as reasonably determined by J.P. Morgan. |
Market | Restrictions |
If J.P. Morgan’s Zimbabwean Subcustodian exits the market or becomes an unacceptable provider of subcustody services, or if market conditions otherwise deteriorate, J.P. Morgan may cease to provide custody services with respect to Zimbabwe Securities. Although J.P. Morgan will work with customers to mitigate the impact of any decision to exit the market, it may not be practicable to give significant advance notice of the exit. |
1. J.P. Morgan may permit the Customer, on behalf of a Fund, and its Authorized Persons and other persons designated by the Customer or its Authorized Persons (collectively “Users”), to access certain electronic systems and applications (collectively, the “Products”) and to access or receive Data (as defined below) electronically in connection with the Agreement. J.P. Morgan may, from time to time, introduce new features to the Products or otherwise modify or delete existing features of the Products in its sole discretion. J.P. Morgan shall endeavor to give the Customer, on behalf of a Fund, reasonable notice of its termination or suspension of access to the Products, including suspension or cancelation of any User Codes, but may do so immediately if J.P. Morgan determines, in its sole discretion, that providing access to the Products would violate Applicable Law or that the security or integrity of the Products is known or suspected to be at risk. Access to the Products shall be subject to the Security Procedure.
2. In consideration of the fees paid by the Customer, on behalf of a Fund, to J.P. Morgan and subject to any applicable software license in relation to J.P. Morgan-owned or sublicensed software provided for a particular application and Applicable Law, J.P. Morgan grants to the Customer, on behalf of a Fund, a non-exclusive, non-transferable, non-sublicensable, limited and revocable license to use (i) the Products for internal business purposes only, and (ii) the information and data made available through the Products or transferred electronically (the “Data”) for use in Customer’s and its affiliates’ normal course of business, provided that J.P. Morgan may not revoke the Customer’s license to use the Data during the term of this Agreement. For avoidance of doubt, (a) all Data that is comprised of Customer Materials is the property of the Customer and a Fund; and (b) the Customer and Funds maintain all intellectual property rights in such Customer Materials. Without limiting the use by a Customer, a Fund or its affiliates of Data in the normal course of the business of a Customer or a Fund, the Customer, on behalf of a Fund, may download the Data and print out hard copies for its reference, provided that it does not remove any copyright or other notices contained therein. The license granted herein will permit use by the Users, provided that such use shall be in accordance with the terms of the Agreement, including this Annex. The Customer, on behalf of a Fund, will not disclose or distribute (and will cause the Users not to disclose or distribute) to any other party, or allow any other party to access, inspect or copy the Products or any Data, except that (i) with respect to Products only, as reasonably necessary in the course of Customer’s management or administration and Customer’s Board’s oversight of the funds or accounts for which services are provided under this Agreement and, (ii) with respect to Data only, as reasonably necessary in the normal course of business of the Customer, a Fund or its affiliates including but not limited to, Customer’s management or administration and a Fund’s Board’s oversight of the funds or accounts for which services are provided under this Agreement. The Customer, on behalf of a Fund, acknowledges that elements of the Data, including prices, Corporate Action information, and reference data, may have been licensed by J.P. Morgan from third parties and that any use of such Data beyond that authorized by the foregoing license, may require the permission of one or more third parties in addition to J.P. Morgan. In addition, the Customer and a Fund may disclose Data to any regulatory authority having jurisdiction over the Customer and a Fund upon the request of such regulator or any revenue authority or any governmental entity in relation to the processing of any tax claim. For the avoidance of doubt, any restrictions or limitations regarding the use of Data is not intended by J.P. Morgan to supersede any rights a Customer or Fund may have to use such Data based on its own agreements with any person (including a J.P. Morgan Affiliate) who provides software, information or the means of obtaining information on security prices, derivative prices, security characteristics data, market reference data derivative
prices, foreign exchange, credit ratings, performance measurement or any other information obtained by J.P. Morgan in connection with the Services (including index return providers, security characteristics providers, and value-at-risk providers).
3. The Customer, on behalf of a Fund, acknowledges that there are security, cyberfraud, corruption, transaction error and access availability risks associated with using open networks such as the internet to access and use the Products, and the Customer, on behalf of a Fund, hereby expressly assumes such risks. The Customer, on behalf of a Fund, is solely responsible for obtaining, maintaining and operating all of its own systems, software (including antivirus software, anti-spyware software, and other internet security software) and personnel necessary for the Customer and its Users to access and use the Products. All such software must be interoperable with J.P. Morgan’s software. Each of Customer, on behalf of a Fund, and J.P. Morgan shall be responsible for the proper functioning, maintenance and security of its own systems, services, software and other equipment.
4. In cases where J.P. Morgan’s website or the Products are unexpectedly down or otherwise unavailable, J.P. Morgan shall, absent a force majeure event, provide other appropriate means for the Customer, on behalf of a Fund, or its Users to instruct J.P. Morgan or obtain reports from J.P. Morgan. J.P. Morgan shall not be liable for any Liabilities arising out of the Customer’s use of, access to or inability to use the Products in the absence of J.P. Morgan’s negligence, fraud or willful misconduct.
5. Use of the Products may be monitored, tracked, and recorded in a manner as permitted by Applicable Law. In using the Products, the Customer, on behalf of a Fund, hereby expressly consents to, and will ensure that its Users are advised of and have consented to, such monitoring, tracking and recording, and J.P. Morgan’s right to disclose data derived from such activity in accordance with the Agreement, including this Annex. J.P. Morgan shall own all right, title and interest in the data reflecting the Customer usage of the Products or J.P. Morgan’s website (including general usage data and aggregated transaction data), provided that J.P. Morgan’s use of such data shall remain, subject to its obligations of confidentiality set forth in this Agreement. For clarity, the foregoing shall not be deemed to give J.P. Morgan ownership of, or any rights in or to, the Customer’s Confidential Information (whether or not in aggregated form), the use or disclosure of which shall at all times be subject to Section 6.9 of this Agreement unless otherwise agreed by the parties. Individuals and organizations should have no expectation of privacy unless local law, regulation, or contract provides otherwise. The Customer, on behalf of a Fund, hereby expressly consents, and will ensure that its Users are advised of and have consented to, J.P. Morgan’s collection, storage, use and transfer (including to or through jurisdictions that do not provide the same statutory protection as the originating jurisdictions(s)) of their personal data. Any personal data collected through, or in connection with, the Customer’s use of the Products shall be subject to J.P. Morgan’s Privacy Policy (available at: https://www.jpmorgan.com/global/privacy) and Cookies Policy (available at: https://www.jpmorgan.com/global/cookies), each as updated from time to time and incorporated herein by reference.
6. The Customer, on behalf of a Fund, shall not knowingly upload, post or transmit to or distribute or otherwise publish through the Products or J.P. Morgan’s web site any materials which (i) restrict or inhibit any other user from using the Products or the website, (ii) are defamatory, offensive, explicit, or indecent, (iii) infringe the rights of third parties including intellectual property rights, (iv) contain a virus, Trojan horse, worm, time bomb, cancelbot or other harmful component, or (v) constitute or contain false or misleading information.
7. The Customer, on behalf of a Fund, shall promptly and accurately designate in writing to J.P. Morgan the geographic location of its Users upon written request. The Customer, on behalf of a Fund, shall not access, and shall not permit its Users to access, the service from any jurisdiction where J.P. Morgan informs the Customer, on behalf of a Fund, or where the Customer, on behalf of a Fund, has actual knowledge, that the service is not authorized for use due to local
regulations or laws, including applicable software export rules and regulations. Prior to submitting any document which designates the Users, the Customer, on behalf of a Fund, shall obtain from each User all necessary consents to enable J.P. Morgan to process data concerning that User for the purposes of providing the Products.
8. The Customer, on behalf of a Fund, will be subject to and shall comply with Applicable Law with regard to its use of the Products, including Applicable Law concerning restricting collection, use, disclosure, processing and free movement of the Data.
9. The Customer, on behalf of a Fund, shall be responsible for the compliance of its Users with the terms of this Annex.
ANNEX B
List of Customers
Customer | Jurisdiction |
Templeton Developing Markets VIP Fund a series of Franklin Templeton Variable Insurance Products Trust | United States |
Templeton Foreign VIP Fund, a series of Franklin Templeton Variable Insurance Products Trust | United States |
Templeton Growth VIP Fund, a series of Franklin Templeton Variable Insurance Products Trust | United States |
Templeton World Fund, a series of Templeton Funds | United States |
Templeton Foreign Fund, a series of Templeton Funds | United States |
Templeton Emerging Markets Small Cap Fund, a series of Templeton Global Investment Trust | United States |
Templeton Frontier Markets Fund, a series of Templeton Global Investment Trust | United States |
Templeton Global Bond Fund, a series of Templeton Income Trust | United States |
Templeton Emerging Markets Bond Fund, a series of Templeton Income Trust | United States |
Foreign Smaller Companies Series, a series of Templeton Institutional Funds | United States |
International Equity Series, a series of Templeton Institutional Funds | United States |
Global Equity Series, a series of Templeton Institutional Funds | United States |
Franklin Money Market Fund, a series of Institutional Fiduciary Trust | United States |
Templeton Global Smaller Companies Fund | United States |
Templeton Growth Funds, Inc. | United States |
Templeton Emerging Markets Fund | United States |
Templeton Global Income Fund | United States |
Customer | Jurisdiction |
Templeton Developing Markets Trust | United States |
Templeton Emerging Markets Income Fund | United States |
Templeton Dragon Fund, Inc. | United States |
Templeton China World Fund | United States |
Templeton Strategic Emerging Markets Fund III, L.P. | United States |
Templeton Growth Fund II Limited | Cayman Islands |
Templeton China Opportunities Fund, Ltd. | Cayman Islands |
Templeton Strategic Emerging Markets Fund III, (Cayman) L.P. | Cayman Islands |
Templeton Ex-Japan Global Equity Fund Ltd. | Cayman Islands |
Templeton Strategic Emerging Markets Fund IV LDC | Cayman Islands |
Templeton Strategic Emerging Markets Fund III LDC | Cayman Islands |
Templeton Global Advisors Ltd (Separate Account) | Bahamas |
SECOND JOINDER TO GLOBAL CUSTODY AGREEMENT
This second Joinder (“Joinder”) to the GLOBAL CUSTODY AGREEMENT, dated March 1, 2020 among each of the Customers listed on Annex B thereto (each a “Customer”) and JPMORGAN CHASE BANK, N.A. (“J.P. Morgan”), as amended from time to time (the “Agreement”), is made and entered into as of March 12, 2021, and shall be effective as of March 12, 2021, between the New Customer (as defined below) and J.P. Morgan.
W I T N E S S E T H:
WHEREAS, the Customers and J.P. Morgan entered into the Agreement;
WHEREAS, the following entity request that J.P. Morgan provide custody services to them under the terms and conditions set forth in the Agreement:
Franklin OnChain U.S. Government Money Fund
(the “New Customer”);
WHEREAS, J.P. Morgan agrees to provide custody services to the New Customer pursuant to the terms and conditions set forth in the Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereby agree as follows:
1. Definitions. Unless otherwise defined herein, defined terms used in this Joinder shall have the meaning ascribed to such terms in the Agreement.
2. Joinder. New Customer hereby agree to be subject to and bound by the terms and conditions of the Agreement.
3. Amendments. The Agreement shall be amended as follows:
(A) Annex B of the Agreement is hereby amended and restated in its entirety by Annex I hereto. (B) Save as amended by this Joinder, the Agreement shall remain in full force and effect.
4. Representations. Each party represents to the other parties that all representations contained in the Agreement are true and accurate as of the date of this Joinder, and that such representations are deemed to be given or repeated by each party, as the case may be, on the date of this Joinder.
5. Entire Agreement. This Joinder and the Agreement and any documents referred to in each of them, constitutes the whole agreement between the parties relating to their subject matter and supersedes and extinguishes any other drafts, agreements, undertakings, representations, warranties and arrangements of any nature, whether in writing or oral, relating to such subject matter. If any of the provisions of this Joinder are inconsistent with or in conflict with any of the provisions of the Agreement then, to the extent of any such inconsistency or conflict, the provisions of this Joinder shall prevail as between the parties.
6. Counterparts. This Joinder may be executed in any number of counterparts which together shall constitute one agreement. Each party hereto may enter into this Joinder by executing a counterpart and this Joinder shall not take effect until it has been executed by both parties.
7. Law and Jurisdiction. This Joinder shall be governed by, and construed in accordance with, the laws of the State of New York.
[ Signature page follows ]
IN WITNESS WHEREOF, the parties have executed this Joinder as of the date first above
written.
Franklin Templeton Trust, on behalf of its. series: JPMORGAN CHASE BANK, N.A
Franklin OnChain U.S. Government Money Fund
By:___________________________ By:___________________________
Name: Matthew Hinkle Name: Carl Mehldau
Title: Chief Executive Officer – Finance and Administration Title: Vice President
ANNEX I
“ANNEX B TO THE GLOBAL CUSTODY AGREEMENT”
List of Customers
Customer | Jurisdiction |
Templeton Developing Markets VIP Fund a series of Franklin Templeton Variable Insurance Products Trust | United States |
Templeton Foreign VIP Fund, a series of Franklin Templeton Variable Insurance Products Trust | United States |
Templeton Growth VIP Fund, a series of Franklin Templeton Variable Insurance Products Trust | United States |
Templeton World Fund, a series of Templeton Funds | United States |
Templeton Foreign Fund, a series of Templeton Funds | United States |
Templeton Emerging Markets Small Cap Fund, a series of Templeton Global Investment Trust | United States |
Templeton Frontier Markets Fund, a series of Templeton Global Investment Trust | United States |
Templeton Global Bond Fund, a series of Templeton Income Trust | United States |
Templeton Emerging Markets Bond Fund, a series of Templeton Income Trust | United States |
Foreign Smaller Companies Series, a series of Templeton Institutional Funds | United States |
International Equity Series, a series of Templeton Institutional Funds | United States |
Global Equity Series, a series of Templeton Institutional Funds | United States |
Franklin Money Market Fund, a series of Institutional Fiduciary Trust | United States |
Templeton Global Smaller Companies Fund | United States |
Templeton Growth Funds, Inc. | United States |
Templeton Emerging Markets Fund | United States |
Templeton Global Income Fund | United States |
Templeton Developing Markets Trust | United States |
Templeton Emerging Markets Income Fund | United States |
Templeton Dragon Fund, Inc. | United States |
Templeton China World Fund | United States |
Templeton Strategic Emerging Markets Fund III, L.P. | United States |
Templeton Growth Fund II Limited | Cayman Islands |
Templeton China Opportunities Fund, Ltd. | Cayman Islands |
Templeton Strategic Emerging Markets Fund III, (Cayman) L.P. | Cayman Islands |
Templeton Strategic Emerging Markets Fund IV LDC | Cayman Islands |
Templeton Strategic Emerging Markets Fund III LDC | Cayman Islands |
Templeton Global Advisors Ltd (Separate Account) | Bahamas |
Franklin Equity Portfolio Fund, a series of Franklin ETF Trust | United States |
Franklin Fixed Income Portfolio Fund, a series of Franklin ETF Trust | United States |
Franklin OnChain U.S. Government Money Fund* | United States |
*Denotes a Customer added through this Joinder.
THIRD JOINDER TO GLOBAL CUSTODY AGREEMENT
Third “(Joinder)” GLOBAL CUSTODY AGREEMENT, dated March 1, 2020, among each of the Customers listed on Annex B thereto each a “(Customer)” and JPMORGAN CHASE BANK, N.A(“J.P Morgan”) as amended from time to time (the “Agreement”) is made and entered into as of August 11, 2021 and shall be effective as of September 1, 2021, between the New Customer (as defined below) and J.P. Morgan.
W I T N E S S E T H:
WHEREAS, the Customers and J.P. Morgan entered into the Agreement;
WHEREAS, the following entity request that J.P. Morgan provide custody services to them under the terms and conditions set forth in the Agreement:
Franklin Templeton SMACS: Series EM, a series of Templeton Global Investment Trust (the“New Customer”);
WHEREAS, J.P. Morgan agrees to provide custody services to the New Customer pursuant to the terms
and conditions set forth in the Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereby agree as follows:
1. Definitions. Unless otherwise defined herein, defined terms used in this Joinder shall have the meaning ascribed to such terms in the Agreement.
2. Joinder. New Customer hereby agree to be subject to and bound by the terms and conditions of the Agreement.
3. Amendments. The Agreement shall be amended as follows:
(A) Annex B of the Agreement is hereby amended and restated in its entirety by Annex I hereto.
(B) Save as amended by this Joinder, the Agreement shall remain in full force and effect.
4. Representations. Each party represents to the other parties that all representations contained in the Agreement are true and accurate as of the date of this Joinder, and that such representations are deemed to be given or repeated by each party, as the case may be, on the date of this Joinder.
5. Entire Agreement. This Joinder and the Agreement and any documents referred to in each of them, constitutes the whole agreement between the parties relating to their subject matter and supersedes and extinguishes any other drafts, agreements, undertakings, representations, warranties and arrangements of any nature, whether in writing or oral, relating to such subject matter. If any of the provisions of this Joinder are inconsistent with or in conflict with any of the provisions of the Agreement then, to the extent of any such inconsistency or conflict, the provisions of this Joinder shall prevail as between the parties.
6. Counterparts. This Joinder may be executed in any number of counterparts which together shall constitute one agreement. Each party hereto may enter into this Joinder by executing a counterpart and this Joinder shall not take effect until it has been executed by both parties.
7. Law and Jurisdiction. This Joinder shall be governed by, and construed in accordance with, the laws of the State of New York.
[ Signature page follows ]
IN WITNESS WHEREOF, the parties have executed this Joinder as of the date first above
written.
Templeton Global Investment Trust, on behalf of its series: JPMORGAN CHASE BANK, N.A.
Franklin Templeton SMACS: Series EM
By:/s/ Lori A. Weber By: /s/Carl Mehldau
Name: Lori A. Weber Name: Carl Mehldau
Title: Vice President and Secretary Title: Vice President
ANNEX I
“ANNEX B TO THE GLOBAL CUSTODY AGREEMENT”
List of Customers
Customer | Jurisdiction |
Templeton Developing Markets VIP Fund a series of Franklin Templeton Variable Insurance Products Trust | United States |
Templeton Foreign VIP Fund, a series of Franklin Templeton Variable Insurance Products Trust | United States |
Templeton Growth VIP Fund, a series of Franklin Templeton Variable Insurance Products Trust | United States |
Templeton World Fund, a series of Templeton Funds | United States |
Templeton Foreign Fund, a series of Templeton Funds | United States |
Templeton Emerging Markets Small Cap Fund, a series of Templeton Global Investment Trust | United States |
Templeton Frontier Markets Fund, a series of Templeton Global Investment Trust | United States |
Templeton Global Bond Fund, a series of Templeton Income Trust | United States |
Templeton Emerging Markets Bond Fund, a series of Templeton Income Trust | United States |
Foreign Smaller Companies Series, a series of Templeton Institutional Funds | United States |
International Equity Series, a series of Templeton Institutional Funds | United States |
Global Equity Series, a series of Templeton Institutional Funds | United States |
Franklin Money Market Fund, a series of Institutional Fiduciary Trust | United States |
Templeton Global Smaller Companies Fund | United States |
Templeton Growth Funds, Inc. | United States |
Templeton Emerging Markets Fund | United States |
Templeton Global Income Fund | United States |
Templeton Developing Markets Trust | United States |
Templeton Emerging Markets Income Fund | United States |
Templeton Dragon Fund, Inc. | United States |
Templeton China World Fund | United States |
Templeton Strategic Emerging Markets Fund III, L.P. | United States |
Templeton Growth Fund II Limited | Cayman Islands |
Templeton China Opportunities Fund, Ltd. | Cayman Islands |
Templeton Strategic Emerging Markets Fund III, (Cayman) L.P. | Cayman Islands |
Templeton Strategic Emerging Markets Fund IV LDC | Cayman Islands |
Templeton Strategic Emerging Markets Fund III LDC | Cayman Islands |
Templeton Global Advisors Ltd (Separate Account) | Bahamas |
Franklin Equity Portfolio Fund, a series of Franklin ETF Trust | United States |
Franklin Fixed Income Portfolio Fund, a series of Franklin ETF Trust | United States |
Franklin OnChain U.S. Government Money Fund | United States |
Franklin Templeton SMACS: Series EM* | United States |
*Denotes a Customer added through this Joinder.
Table of Contents
1. INTENTION OF THE PARTIES; DEFINITIONS 1
1.1. Intention of the Parties 1
1.2. Definitions; Interpretation 1
2. WHAT J.P. MORGAN IS REQUIRED TO DO 5
2.1. The Services 5
2.2. No Duty to Monitor Compliance 7
2.3. No Responsibility for Tax Returns 7
2.4. Access to J.P. Morgan’s Records 7
2.5. Compliance with Laws, Regulations and Certain Documents 8
2.6. Change Control 8
2.7. Report Corrections 9
3. INSTRUCTIONS 10
3.1. Acting on Instructions; Method of Instruction; and Unclear Instructions 10
3.2. Verification and Security Procedure 11
3.3. Instructions Contrary to Law/Market Practice/Fund Documents 11
3.4. Cut-Off Times 12
3.5. Electronic Access 12
3.6. Recording of Telephone Communications 13
4. FEES AND EXPENSES OWING TO J.P. MORGAN 13
4.1. Fees and Expenses 13
5. ADDITIONAL PROVISIONS 14
5.1. Representations of the Customer and J.P. Morgan 14
5.2. The Customer to Provide Certain Information to J.P. Morgan 15
5.3. U.S. Regulatory Disclosure; Certain Information of the Customer 15
5.4. Redistribution of Data from Third Parties 16
5.5. Intellectual Property Rights 16
5.6. Insurance 17
5.7. Confidentiality 17
5.8. Use of a Party’s Name 19
6. WHEN J.P. MORGAN IS LIABLE TO THE CUSTOMER 19
6.1. Standard of Care; Liability 19
6.2. Limitations of Liability 20
6.3. Force Majeure 21
6.4. J.P. Morgan May Consult with Counsel 21
6.5. J.P. Morgan Provides Diverse Financial Services and May Generate Profits as a Result 22
7. TERM AND TERMINATION 22
7.1. Term and Termination 22
7.2. Other Grounds for Termination 22
7.3. Transition following Termination 23
8. MISCELLANEOUS 23
8.1. Notices 23
8.2. Successors and Assigns 24
8.3. Entire Agreement and Amendments 24
8.4. Governing Law and Jurisdiction 24
8.5. Severability; Waiver; and Survival 24
8.6. Counterparts 25
8.7. No Third Party Beneficiaries 25
Annex I List of Funds 26
Annex II Electronic Access 31
Appendix A NAV Error Correction Policy 33
FUND SERVICES AGREEMENT
This agreement, dated January 22, 2020 (this “Agreement”), is between JPMORGAN CHASE BANK, N.A. (“J.P. Morgan”) with a place of business at 70 Fargo Street, Boston, MA 02210 and FRANKLIN TEMPLETON SERVICES, LLC (“FT Services” or the “Customer”) with a place of business at One Franklin Parkway, San Mateo, California 94403.
1. INTENTION OF THE PARTIES; DEFINITIONS
1.1. Intention of the Parties.
(a) Each investment company acting on behalf of its respective series or portfolios identified on Annex I (each such series or portfolio, as the case may be, hereinafter referred to as a "Fund"), as may be amended from time to time, and in the case of those investment companies for which no separate series or portfolios are identified on such Annex I, acting for and on behalf of itself (each also a “Fund”) has entered into an investment management agreement with a Franklin Templeton- affiliated investment adviser (an “Adviser/Administrator”) for the provision of investment advisory, fund administration and fund accounting services to the Funds.
(b) Each Adviser has entered into a subcontract for fund administration services (or substantially similar agreement) with FT Services for the provision of fund administration and fund accounting services to the Funds.
(c) FT Services desires to retain J.P. Morgan to provide the fund administration and fund accounting Services described hereinafter and hereby appoints J.P. Morgan as a sub-administrator to provide Services to FT Services and the Funds, as described hereinafter, for the period and on the terms set forth in this Agreement.
(d) J.P. Morgan has agreed to provide such services to the Customer in accordance with this Agreement. J.P. Morgan will be responsible for the performance of only those duties expressly set forth in this Agreement. The terms and conditions of this Agreement are applicable only to the services which are specified in this Agreement.
1.2. Definitions; Interpretation.
(a) Definitions
As used herein, the following terms have the meaning hereinafter stated:
“1940 Act” means the Investment Company Act of 1940, as amended.
“AML/Sanctions Requirements” means (a) any Applicable Law (including but not limited to the rules and regulations of the United States Office of Foreign Assets Control) applicable to J.P. Morgan, or to any J.P. Morgan Affiliate engaged in servicing the Customer or a Fund under this Agreement, which governs (i) money laundering, the financing of terrorism, insider dealing or other unlawful activities, or the use of financial institutions to facilitate such activities or (ii) transactions involving individuals or institutions which have been prohibited by, or are subject to, sanctions of any governmental authority under such Applicable Law; and (b) any J.P. Morgan policies and procedures reasonably designed to assure compliance with any such Applicable Law.
“Affiliate” with respect to a party means an entity controlling, controlled by or under common control with that party.
“Applicable Law” means any existing or future applicable statute, treaty, rule, regulation or law (including common law and federal, state, and local laws regarding equal employment opportunity, compensation, benefit, immigration, rights of the disabled, privacy, and anti-money laundering) and any applicable decree, injunction, judgment, order, formal interpretation or ruling issued by a court or governmental or regulatory entity.
“Authorized Person” means any person who has been designated by written notice from the Customer in the form mutually agreed to by the Customer and by J.P. Morgan (or by written notice in the form as mutually agreed to by the Customer and J.P. Morgan from any agent designated by the Customer, including the Investment Adviser) to act on behalf of the Customer under this Agreement, any person who has been given a User Code by the Customer, or any person authorized by the Customer to receive a User Code from J.P. Morgan. Such persons will continue to be Authorized Persons until such time as J.P. Morgan receives and has had reasonable time to act upon Instructions from the Customer (or its agent) that any such person is no longer an Authorized Person.
“Cash Account” means any cash account established and maintained by J.P. Morgan pursuant to a custody agreement or deposit account agreement in the name of a Fund (or in another name requested by a Fund) for any and all cash in any currency received by or on behalf of the J.P. Morgan for the account of such Fund.
“Confidential Information” means all non-public information concerning the Customer and/or a Fund which J.P. Morgan receives in the course of providing Services under this Agreement including but not limited to information on portfolio securities owned by a Fund and Personal Information. For the avoidance of doubt, to the extent Data (as defined in Annex II) includes any Confidential Information, such portion of the Data shall be deemed Confidential Information for purposes of this Agreement.
Nevertheless, the term Confidential Information does not include (i) information that is or becomes available to the general public other than as a direct result of J.P. Morgan’s breach of the terms of this Agreement, (ii) information that J.P. Morgan develops independently without using the Customer’s or a Fund’s confidential information, (iii) information that J.P. Morgan obtains on a non-confidential basis from a person who is not known to be subject to any obligation of confidence to the Customer with respect to that information, or (iv) information that the Customer has designated as non-confidential or consented to be disclosed.
“Customer Indemnitees” means the Customer, a Fund and their respective directors, trustees, officers, and employees.
“Dependencies” has the meaning set forth in Section 2.1(e).
“Financial Services Best Practices” means the standards, policies and practices applicable to companies in the financial services industry of comparable size and scope as J.P. Morgan.
“Governing Documents” means, as applicable, the agreement and declaration of trust, certificate of incorporation, bylaws, memorandum of association and articles of association, certificate of formation, limited partnership agreement, limited liability company agreement, investment management agreement or other governing documents of a Fund, as amended from time to time.
“Information Provider” means any person (including a J.P. Morgan Affiliate) who provides software, information or the means of obtaining information on security prices, derivative prices, security
characteristics data, market reference data derivative prices, foreign exchange, credit ratings, performance measurement or any other information obtained by J.P. Morgan in connection with the Services (including index return providers, security characteristics providers, and value-at-risk providers).
“Instruction” means an instruction that has been verified in accordance with the Security Procedure or, if no Security Procedure is applicable, that J.P. Morgan believes in good faith and in satisfaction of J.P. Morgan’s Standard of Care to have been given by an Authorized Person.
“Intellectual Property Rights” means any and all rights arising under or deriving from any patent. copyright, trademark, trade secret or other form of intellectual property in the United States and throughout the world, including any application or right to apply for registration of, or assert or waive, any such rights.
“Investment Adviser” means any person or entity appointed as investment adviser, investment manager, general partner, or managing member of a Fund, if applicable, or in a similar capacity, in accordance with the Governing Documents.
“Investment Decisions” means decisions in relation to buying, selling or holding any investment, engaging or removing an investment manager, emulation, rebalancing, asset allocation, hedging, treasury or risk management, or any other trading or investment decision.
“J.P. Morgan Affiliate” means an entity controlling, controlled by, or under common control with, J.P. Morgan.
“J.P. Morgan Indemnitees” means J.P. Morgan, J.P. Morgan Affiliates that provide Services in connection with this Agreement, and their respective, directors, officers and employees.
“J.P. Morgan's Standard of Care” has the meaning set forth in Section 6.1(a) of this Agreement. “Key Performance Indicators” has the meaning set forth in the SLD.
“Liabilities” means any liabilities, losses, claims, costs, damages, penalties, fines, obligations, taxes (other than taxes based solely on a party’s own income), or expenses of any kind whatsoever (whether actual or contingent and including, without limitation, reasonable attorneys’, accountants’, consultants’ and experts’ fees and disbursements reasonably incurred; provided that, fees due in accordance with this Agreement that are subject to bona fide dispute shall not be considered Liabilities until the completion of the mutually agreed upon invoice dispute resolution process between J.P. Morgan and the Customer).
“Offering Documents” means, as applicable the Registration Statement, prospectus, offering memorandum, statement of additional information, and any other offering documentation of the Funds, as supplemented, updated or amended from time to time.
"Personal Information" or “PI” means any information that alone or in
conjunction can be used to identify an individual or relates to an identifiable individual. Notwithstanding the foregoing "Personal Information" shall not include information that is lawfully obtained from publicly available information, or from federal, state or local government records lawfully made available to the general public.
“Registration Statement” means the registration statement on Form N-1A, Form N-2 or Form N-14 of a Fund, filed under the Securities Act of 1933 (as amended) and 1940 Act , as amended or supplemented, updated or amended from time to time.
“Reports” means the reports issued by J.P. Morgan in connection with the provision of the Services.
“Security Incident” means any confirmed, unauthorized or unlawful destruction, loss, alteration or disclosure of or access to a Fund’s or Customer’s Confidential Information that involves J.P. Morgan, a
J.P. Morgan Affiliate or a Subcontractor in connection with the provisions of Services.
“Security Procedure” means the applicable security procedure to be followed by the Customer (and its Authorized Persons) upon the issuance of an instruction and/or by J.P. Morgan upon receipt of an instruction, so as to enable J.P. Morgan to verify that an instruction is authorized. The applicable Security Procedure for different types of instructions may be set forth in SLD in effect from time to time with respect to the Services set forth in this Agreement or in separate documentation, and may be updated by
J.P. Morgan from time to time upon mutual agreement by J.P. Morgan and the Customer. A Security Procedure may, without limitation, involve the use of User Codes, dual-factor authentication, telephone call backs, or third party utilities.
“Service Credit” has the meaning set forth in the SLD.
“Service Level” means any of the quantitative performance standards set forth in service level documentation (“SLD”), as agreed from time to time by the parties, to assess the performance of the Services.
“Services” means the services and Reports provided to the Customer as agreed upon by the parties in advance and in writing from time to time (“Service Description”).
“Shareholder” means a holder of Shares.
“Shares” means the securities as defined in the Securities Act of 1933 (as amended) issued by a Fund.
“Subcontractor” means any person other than a J.P. Morgan Affiliate or an Information Provider to whom J.P. Morgan subcontracts the provision of any part of the Services.
“Underlying Funds” has the meaning set forth in Section 5.1(b).
“User Code” means a password, digital certificate, identifier (including biometric identifier), security device, algorithm, encryption or other similar procedure used by the Customer or an Authorized Person to access J.P. Morgan’s systems, applications or products or to issue Instructions to J.P. Morgan.
(b) Interpretation
(i) Headings are for convenience of reference only and shall not in any way form part of or affect the construction or interpretation of any provision of this Agreement.
(ii) Unless otherwise expressly stated to the contrary herein, references to Articles and Sections are to Articles and Sections of this Agreement and references to paragraphs are to
paragraphs of the Sections in which they appear.
(iii) Unless the context requires otherwise, references in this Agreement to “persons” shall include legal as well as natural entities; references importing the singular shall include the plural (and vice versa) use of the term “including” shall be deemed to mean “including but not limited to” and references to appendices and numbered sections shall be to such addenda and provisions herein.
(iv) Unless the context requires otherwise, any reference to a statute or a statutory provision shall include such statute or provision as from time to time modified to the extent such modification
applies to any service provided hereunder. Any reference to a statute or a statutory provision shall also include any subordinate legislation made from time to time under that statute or provision.
(v) The Annexes to the Agreement are incorporated herein by reference and form part of the Agreement and shall have the same force and effect as if expressly set out in the body of the Agreement. If and to the extent that there is an inconsistency between the terms of the body of the Agreement and its Annexes, the terms of the body of the Agreement shall prevail unless expressly stated otherwise.
2. WHAT J.P. MORGAN IS REQUIRED TO DO
2.1. The Services.
(a) The Customer hereby appoints, and beginning on the effective date indicated in the preamble of this Agreement, J.P. Morgan agrees to act as sub-administrator of and to provide the Services to the Customer in accordance with and subject to the terms of this Agreement. J.P. Morgan shall retain the right to employ Subcontractors to provide or assist it in the provision of any part of the Services stated herein or the discharge of any other obligations or duties under this Agreement provided that
J.P. Morgan shall provide the Customer with a list of its current Subcontractors and shall provide advance notice to notify the Customer to the extent any new Subcontractors are added to such list. If any Subcontractor added to the list is an asset manager considered by the Customer to be a competitor of the Customer, the Adviser/Administrator or the Funds (a “Competitor/Subcontractor”), J.P. Morgan and Customer will consult with each other regarding whether an information barrier between the Customer’s and/or a Fund’s Confidential Information and such Competitor/Subcontractor can be established or whether a more suitable Subcontractor could be used to provide the services that are proposed to be allocated to the Competitor/Subcontractor. If J.P. Morgan determines (i) that there is no alternative to J.P. Morgan’s use of the Competitor/Subcontractor and (ii) that it is not commercially reasonable to establish an information barrier between the Customer’s and/or a Fund’s Confidential Information and such Competitor/Subcontractor, the Customer shall have the right to amend or terminate the relevant portion of this Agreement and any related fee schedule that applies to the services to be provided by the Competitor/Subcontractor, subject to agreement between Customer and J.P. Morgan regarding such amendment or partial termination. Subject to Section 2.1.(e)(viii), J.P. Morgan shall be responsible for the acts and omissions of any such Subcontractor so employed as if
J.P. Morgan had committed such acts and omissions itself. J.P. Morgan shall be responsible for the compensation of its Subcontractors, unless otherwise expressly agreed in writing by the parties.
J.P. Morgan will maintain throughout this Agreement a due
diligence and third party oversight program that meets regulatory requirements applicable to J.P. Morgan and use reasonable care in the selection and retention of any Subcontractor.
(b) In providing the Services, J.P. Morgan is performing an administrative function for the Customer and is acting solely as agent for the Customer and not as a fiduciary for the Customer, a Fund, the Investment Adviser, any Shareholder or any other third party with respect to the Services, even if
J.P. Morgan or a J.P. Morgan Affiliate separately acts in a fiduciary capacity with respect to the Customer. The Customer is responsible for determining that the Services are appropriate for the Customer’s or Fund’s use.
(c) The Customer acknowledges that J.P. Morgan is not making any recommendation or providing any legal, tax or investment advice in providing the Services. The Customer agrees that the provision
of Reports by J.P. Morgan will not be taken in any way to constitute advice from J.P. Morgan as to any matter including Investment Decisions.
(d) The Customer acknowledges and agrees (i) that J.P. Morgan will make use of various calculation methodologies and assumptions in performing the Services and preparing the Reports, (ii) that it has had an opportunity to make inquiries regarding such methodologies and assumptions, (iii) to
J.P. Morgan’s use of such methodologies and assumptions in preparing the Reports and performing the Services, whether or not the Customer availed itself of the opportunity to make inquiries, and
(iv) that J.P. Morgan may rely on such methodologies and assumptions for the valuation of holdings, and that any such valuation an is indicative value and does not indicate the actual terms on which the holding could be liquidated.
(e) The Customer agrees that J.P. Morgan’s ability to provide the Services and comply with the terms of this Agreement is dependent upon the performance of actions or obligations by the Customer, a Fund, the Investment Adviser, or by any person (other than J.P. Morgan) (the “Dependencies”). In any period during which the Dependencies are not met, the parties will cooperate to ensure that such period is kept as short as reasonably possible and J.P. Morgan will use commercially reasonable efforts to provide the Services, provided that J.P. Morgan shall not be obliged to incur additional costs to do so. The Dependencies are as follows:
(i) the Customer, a Fund or the Investment Adviser performing any responsibility set forth in any service-level document or any other documents agreed between the parties from time to time;
(ii) the Customer, a Fund, the Investment Adviser and other service providers of the Customer or the Investment Adviser whose cooperation is reasonably required in order for J.P. Morgan to provide the Services, providing such cooperation, information, documentation, data, notice and Instructions to J.P. Morgan promptly, accurately, adequately and completely and in accordance with any agreed formats or timelines to allow J.P. Morgan to provide the Services;
(iii) any information provided to J.P. Morgan by or on behalf of the Customer, a Fund or the Investment Adviser, or which was prepared or maintained by the Customer, a Fund or Investment Adviser, or any third party (other than a sub-contractor of J.P. Morgan) on their behalf, being authorized, accurate and complete;
(iv) the continuation in force of all agreements between the Customer, a Fund or the Investment Adviser, as applicable, and any third party provider, upon which J.P. Morgan relies in providing the Services and which are not being provided
by a J.P. Morgan Affiliate;
(v) any warranty, representation, covenant or undertaking made by the Customer under this Agreement being and remaining true and correct at all times;
(vi) communications systems in respect of activities which interface with the Services being and remaining fully operational (whether such systems are operated by the Customer, a Fund, the Investment Adviser or a third party (as instructed by the Customer or the Investment Adviser));
(vii) markets on which a Fund’s securities or derivatives are traded are operating normally, and no cessation or suspension of trading of any securities or derivatives held by a Fund on any market;
(viii) any information provided to J.P. Morgan by any Information Provider being accurate and complete; and
(ix) any data that is transitioned to J.P. Morgan prior to the time it begins to provide the Services being accurate and complete.
2.2. No Duty to Monitor Compliance.
Each party hereto acknowledges J.P. Morgan, in its capacity as the provider of any of the Services, does not have any obligation or duty to monitor or enforce the compliance of the Customer, its Authorized Persons, a Fund, the Investment Adviser or any other third party with any restriction or guideline imposed on the Customer, a Fund or the Investment Adviser by the Governing Documents, Offering Documents, or any other document, or by law or regulation or otherwise with regard to the Customer, a Fund or the Investment Adviser. Notwithstanding the foregoing, J.P. Morgan in its capacity as provider of any of the Services will use its best efforts to notify the Customer when it has knowledge that an Instruction
violates any restriction or guideline imposed on a Fund, the Customer, the Investment Adviser by the Governing Documents or the Offering Documents, provided that J.P. Morgan shall have no liability for its failure to notify the Customer of any such violation.
2.3. No Responsibility for Tax Returns.
While J.P. Morgan may provide the Customer with information regarding taxable events in the United States in relation to the Customer or the Funds, other than those reports or returns listed in the Service Description, J.P. Morgan is not responsible for preparing or filing any tax reports or returns on behalf of the Customer, a Fund, the Investment Adviser, or the Shareholders unless separately agreed by the parties hereto in writing.
2.4. Access to J.P. Morgan’s Records.
(a) J.P. Morgan will, upon reasonable written notice, allow the Customer and the Investment Adviser (and/or the Customer’s or a Fund’s auditors and independent public accountants and appropriate regulatory authority if required for their examination of books and records pertaining to the Customer's or a Fund’s affairs) reasonable access during regular business hours to the records of
J.P. Morgan relating to the Customer and the Funds.
(b) The Customer shall reimburse J.P. Morgan for the reasonable cost of copying, collating and researching archived information (as may be mutually agreed upon at the time).
(c) During the performance of this Agreement and for any period as required by Applicable Law after the completion of this Agreement, J.P. Morgan will maintain complete, accurate and auditable records pertaining to this Agreement, including all books and records which J.P. Morgan is required to maintain pursuant to Applicable Law. All such books and records maintained by J.P. Morgan shall be maintained in a form acceptable under Applicable Law as it applies
to J.P. Morgan in its capacity as provider of the Services. Subject to Section 2.4.(b), during the term of this Agreement and for a period of at least three (3) years after the termination of this Agreement, J.P. Morgan will, upon reasonable written notice, allow the Customer reasonable access during normal working hours to the records of J.P. Morgan relating to the Services.
(d) Within 30 days of receiving the Customer's request and at least annually, J.P. Morgan will send to the Customer a copy of J.P. Morgan's Service Organizational Control (SOC) 1 reports (or any successor reports) prepared in accordance with the requirements of AT section 801, Reporting on Controls at a Service Organization (formerly Statement on Standards for Attestation Engagements (SSAE) No. 16). In addition, from time to time as requested, J.P. Morgan will furnish the Customer a "gap" or "bridge" letter that will address any material changes that might have occurred
in J.P. Morgan's controls covered in the SOC Report from the end of the SOC Report period through a specified requested date.
(e) If, as a result of a review of J.P. Morgan's records pertaining to the Services, a party believes the Customer has been overcharged or undercharged for a Service, such party shall notify the other and a request a joint review of the relevant records, to determine whether an overcharge or undercharge has occurred, its extent and agree on a reconciliation plan which may, but is not required to and will not necessarily, include a credit against future charges.
2.5. Compliance with Laws, Regulations and Certain Documents.
(a) J.P. Morgan will, in the performance of the Services, comply with Applicable Law that applies to
J.P. Morgan in its provision of the Services. The Customer shall comply with Applicable Law in the United States, Cayman Islands, and Bermuda to the extent applicable, and in each jurisdiction that the Customer or a Fund, as applicable, conducts business or offers Shares, to the extent that compliance with such Applicable Law is relevant to the provision or receipt of the Services or the marketing of the Customer or a Fund, as applicable.
(b) J.P. Morgan is not responsible and shall not be liable for any Liabilities incurred or suffered by any person, whether on their own account or for the account of the Customer or a Fund, as a result of the failure of the Customer, its Authorized Persons, a Fund, the Investment Adviser or any other third party to comply with the Applicable Laws of any country or jurisdiction in which Shares are offered.
(c) J.P. Morgan shall obtain and maintain all necessary approvals, licenses, consents, permits or authorizations of any person or entity, or any notice to any person or entity, the granting of which is required by Applicable Law applicable to J.P. Morgan for the provision of the Services.
(d) J.P. Morgan shall promptly notify the Customer of any change in Applicable Law of which it determines will have a material impact on the provision of the Services or the performance of J.P. Morgan's obligations under this Agreement by submitting a Change Request pursuant to Section 2.6 of this Agreement.
(e) J.P. Morgan will promptly disclose the occurrence of any material compliance violations of any Applicable Law by J.P. Morgan, a J.P. Morgan Affiliate or Subcontractor in the course of performing the Services, provided J.P. Morgan becomes aware of such material violation. J.P. Morgan shall further cooperate with a Fund in the exercise of their oversight responsibilities under Rule 38a-1 of the 1940 Act with respect to J.P. Morgan in its role as sub-sub-administrator to a Fund.
2.6. Change Control.
(a) If either party wishes to propose any amendment or modification to, or variation of, the Services (including the scope or details of the Services) (a “Change”) then it shall notify the other party of that fact by sending a request (a “Change Request”) to the other party, specifying in as much detail as is reasonably practicable the nature of the Change. A Change Request, and any related changes to the fees, also may be submitted to document a Change that was previously agreed to or performed by J.P. Morgan.
(b) Promptly following the receipt of a Change Request, the parties shall agree in writing whether to implement the Change Request, whether implementation of the Change Request should result in a
modification of the fees contemplated by Section 4.1, and the basis upon which J.P. Morgan will be compensated for implementing the Change Request. If J.P. Morgan submits a Change Request and if such Change Request results in additional costs or expenses to the Customer, the parties shall agree in writing whether implementation of such Change Request should result in a fee credit or reimbursement for such costs or expenses affecting the Customer.
(c) If a change to Applicable Law requires a Change, the parties shall follow the processes set forth in this Section to initiate a Change Request. If the change in Applicable Law results in a change to the Services, or an increase in J.P. Morgan’s costs or risk associated with provision of the Services, J.P. Morgan shall be entitled to propose an appropriately reasonable and proportionate increase in the fees. Any such increase in fees shall be subject to the parties’ mutual consent. For the avoidance of doubt, J.P. Morgan shall not be required to implement a Change required by Applicable Law, and may cease to provide the affected Service, unless both parties have agreed on the relevant fees. J.P. Morgan shall bear its own costs with respect to implementing a Change Request based upon a change to Applicable Law, except that:
(i) If mutually agreed upon by the parties in writing, J.P. Morgan may charge the Customer for any reasonable and necessary changes to software that have been developed or customized for the Customer or a Fund.
(ii) If mutually agreed upon by the parties in writing, J.P. Morgan may charge the Customer for any reasonably agreed upon changes required as a result of the change in Applicable Law affecting the Customer or a Fund in a materially different way than it affects J.P. Morgan’s other customers, or which the Customer or a Fund wishes J.P. Morgan to implement in a way different from what J.P. Morgan reasonably intends to implement for its other customers.
(d) The parties agree that subject to the terms of this Agreement (including for the avoidance of doubt this Section 2.6) additional entities may become party to this Agreement by the parties signing a joinder to this Agreement.
2.7. Report Corrections.
J.P. Morgan’s responsibilities with respect to the correction of an error in calculating the net asset value of a Fund shall be subject to the NAV correction policy and procedures as set forth in Appendix A hereto.
2.8. Service Credit Regime
(a) Subject to the terms and conditions of this Agreement for the Services, J.P. Morgan will perform its obligations to adhere to the Key Performance Indicators.
(b) Beginning 6 (six) months after the date of this Agreement, if J.P.
Morgan fails to meet any Key Performance Indicator, and not due to any of the circumstances set forth in Sections 6.2. and 6.3., J.P. Morgan shall pay the Customer, a Service Credit if required by the SLD.
(c) Service Credits shall be recovered by the Customer as a credit against the next invoice for charges.
2.9 Evolution of Services
Throughout the term of this Agreement, J.P. Morgan will seek to improve the quality, efficiency and effectiveness of the Services, and to generally keep pace with technological advances. In this regard,
J.P. Morgan will seek to identify best practices, train its personnel in new techniques and technologies that have been implemented by J.P. Morgan and to continue to make appropriate investments in the
tools, infrastructure and other resources used to provide the Services. J.P. Morgan and the Customer will meet annually to conduct a formal review of the Services, and discuss how J.P. Morgan can assist the Customer in supporting evolving business and competitive needs. Any changes to the Services or, as applicable, any Service Levels will be subject, where appropriate, to the Change process outlined in Section 2.6 herein.
2.10 Compatibility
To the extent that the Customer makes J.P. Morgan aware of certain compatibility requirements,
J.P. Morgan shall use reasonable commercial efforts to ensure compatibility among the Services and the systems, technical environment, operational processes and standards of the Customer and
J.P. Morgan, provided, however, that (i) if, due to bespoke elements or customization of the Customer's systems or technical environment, there will be a material incremental cost to J.P. Morgan to comply with the compatibility requirements, the matter shall be addressed through the Change process outlined in Section 2.6 of this Agreement, and (ii) J.P. Morgan will not be required to make any Changes hereunder that do not align with prevailing industry practice or that J.P. Morgan, in its sole discretion, does not determine to be strategic to its business. Subject to Section 2.6 of this Agreement, J.P. Morgan shall reasonably cooperate with the Customer's vendors to ensure, to the extent practicable, integration of any third party systems where the Customer procures third party services on behalf of the Customer.
2.11 Personnel
(a) J.P. Morgan will use personnel that are appropriately qualified and experienced with respect to the provision of the Services. J.P. Morgan's personnel shall comply with the Customer's policies at times when they are on the Customer's premises or accessing the Customer's systems, to the extent that the Customer advises the relevant personnel of those policies. The Customer shall cause each Authorized Person to comply with applicable J.P. Morgan policies while on J.P. Morgan premises or accessing J.P. Morgan systems.
(b) J.P. Morgan will maintain as part of its standard hiring practices a requirement to perform background checks with respect to J.P. Morgan personnel and for its Subcontractors to perform background checks. J.P. Morgan will conduct adequate background screenings based on applicable regulatory requirements on all J.P. Morgan personnel and contract workers who will provide Services to the Customer to ensure that (i) any J.P. Morgan personnel or contract workers have not been convicted of any criminal offense involving dishonesty, breach of trust or money laundering, and have not agreed to enter into a pretrial diversion or similar program in connection with a prosecution for such offense, and (ii) J.P. Morgan has conducted drug screening on all J.P. Morgan personnel and
contract workers who will provide Services to the Customer or will conduct subsequent screening if there is a reasonable basis to believe such J.P. Morgan personnel or contract worker has a recurring drug abuse or dependency issue. J.P. Morgan or its Subcontractors will conduct pre-employment screenings of all new J.P. Morgan personnel and contract workers who will provide Services to the Customer in a manner consistent with J.P. Morgan's pre-employment screening policies and procedures.
3. INSTRUCTIONS
3.1. Acting on Instructions; Method of Instruction; and Unclear Instructions.
(a) The Customer authorizes J.P. Morgan to accept, rely upon and/or act upon any Instructions received by it or as documented in the SLD. The Customer is solely responsible for the accuracy
and completeness of Instructions, their proper delivery to J.P. Morgan, for updating such Instructions as may be necessary to ensure continued accuracy and completeness, and for monitoring their status. J.P. Morgan will not be responsible for any Liabilities resulting from the Customer’s failure to perform these responsibilities. The Customer will indemnify the J.P. Morgan Indemnitees against, and hold each of them harmless from, any Liabilities that may be imposed on, incurred by, or asserted against the J.P. Morgan Indemnitees as a result of any actions or omissions taken in accordance with any Instruction, except to the extent that such Liabilities are caused by the fraud, negligence, bad faith, or willful misconduct of the J.P. Morgan Indemnitee in the manner in which it carries out the Instruction.
(b) To the extent possible, Instructions to J.P. Morgan shall be sent via an encrypted, electronic means using technology consistent with industry standards, or a trade information system acceptable to
J.P. Morgan.
(c) J.P. Morgan shall promptly notify an Authorized Person, if J.P. Morgan determines that an Instruction does not contain all information reasonably necessary for J.P. Morgan to carry out the Instruction. J.P. Morgan may reasonably decline to act upon an Instruction if it does not receive missing information, clarification or confirmation satisfactory to it but J.P. Morgan shall promptly notify the Customer of its decision not to act upon an Instruction, which notification may be in the form of a rejection automatically generated by the relevant systems. J.P. Morgan will not be liable for any Liabilities arising from any reasonable delay in carrying out any such Instruction while it seeks any such missing information, clarification or confirmation or in declining to act upon any Instruction for which it does not receive such missing information, clarification or confirmation satisfactory to it, unless the Liability in question results from J.P. Morgan’s failure to meet J.P. Morgan’s Standard of Care
3.2. Verification and Security Procedure.
(a) J.P. Morgan and the Customer shall comply with any applicable Security Procedure with respect to the delivery or authentication of Instructions.
(b) The Customer acknowledges that the Security Procedure is designed to verify the authenticity of, and not to detect errors in, instructions. The Customer shall promptly notify J.P. Morgan if it does not believe that any relevant Security Procedure is commercially reasonable, and its adherence to any Security Procedure without objection constitutes its agreement that it has determined the Security Procedure to be commercially reasonable. J.P. Morgan shall notify the Customer in advance of any material changes to the Security Procedures.
(c) The Customer and its Authorized Persons are solely responsible for
ensuring that the User Codes are reasonably safeguarded and known to and used by only the respective Authorized Persons to whom such User Codes apply. If (i) the User Codes are (or the Customer or its relevant Authorized Person reasonably believes that the User Codes may be) lost, stolen, damaged, altered, unduly disclosed, or compromised, (ii) the Customer’s or any Authorized Persons’ access to J.P. Morgan’s systems, applications or products, or any third party messaging platform through which the Instructions are transmitted, is revoked or suspended, or (iii) the Customer or an Authorized Person reasonably suspects any technical or security failure relating to any systems, applications or products of J.P. Morgan or any third party messaging platform through which the Instructions are transmitted, the Customer shall immediately cease using such system, application, product or platform and promptly notify J.P. Morgan.
3.3. Instructions Contrary to Law/Market Practice/Fund Documents.
J.P. Morgan need not act upon Instructions that it reasonably believes (acting in accordance with Section 6.1.(a)) to be contrary to Applicable Law, the Governing Documents, the Offering Documents or market practice and will not be responsible for any Liabilities resulting from not acting upon such Instruction. Notwithstanding the foregoing, J.P. Morgan shall be under no duty to investigate whether any Instructions comply with Applicable Law, the Governing Documents, the Offering Documents or market practice. In the event that J.P. Morgan does not act upon such Instructions, J.P. Morgan will, to the extent permitted by Applicable Law, promptly notify the Customer and allow the Customer an opportunity to provide a valid instruction.
3.4. Cut-Off Times.
J.P. Morgan has established cut-off times for receipt of Instructions, which have been made available to the Customer and Investment Advisor. If J.P. Morgan receives an Instruction after its established cut-off time, J.P. Morgan will attempt to act upon the Instruction on the day requested if J.P. Morgan deems it practicable to do so or otherwise as soon as practicable thereafter, unless otherwise specified in the applicable SLD.
3.5. Electronic Access.
(a) Access by the Customer and the Investment Advisor to certain systems, applications or products of
J.P. Morgan shall be governed by this Agreement and the terms and conditions set forth in Annex II Electronic Access. The Customer and its Authorized Persons shall use User Codes to access J.P. Morgan’s systems, applications or products unless otherwise agreed by J.P. Morgan.
(b) J.P. Morgan will implement and maintain a written information security program, in compliance with all applicable foreign, federal, state and local laws and regulations (including any similar international laws) applicable to J.P. Morgan as a service provider to the Customer, that contains reasonable and appropriate security measures designed to safeguard the Confidential Information (including Personal Information of the Customer’s and Funds’ shareholders, employees, trustees, directors and/or officers) that J.P. Morgan, any J.P. Morgan Affiliate or Subcontractor receives, stores, maintains, processes, transmits or otherwise accesses in connection with the provision of Services hereunder. In this regard, J.P. Morgan will establish and maintain policies, procedures, and technical, physical, and administrative safeguards consistent with Financial Services Best Practices, designed to (i) protect the security and confidentiality of all Confidential Information (including Personal Information) that J.P. Morgan and a J.P. Morgan Affiliate receives, stores, maintains, processes or otherwise accesses in connection with the provision of Services hereunder,
(ii) protect against any reasonably foreseeable threats or hazards to the security or integrity of Confidential Information (includingPersonal Information), (iii) protect against unauthorized access to or use of Confidential Information (including Personal Information), (iv) maintain reasonable procedures to detect and respond to any internal or external security breaches; (v) implement procedures to provide for the appropriate deletion or disposal of Confidential Information and Personal Information where operationally feasible and unless laws and regulations applicable to J.P. Morgan require a longer retention period; (vi) maintain a full suite of information risk and security policies, standards and procedures, which are consistent with industry standard frameworks and best practices and designed to meet industry best practice and the requirements of global regulators.; and (vii) encrypt in transit and at rest Confidential Information. J.P. Morgan may in its discretion provide training or information on best practices to the Customer from time to time but in so doing it will not be considered a consultant or advisor with respect to cybersecurity.
(c) J.P. Morgan will monitor and review its information security program and revise it, as necessary and in its sole discretion, to ensure it appropriately addresses any reasonably foreseeable and applicable legal and regulatory requirements. J.P. Morgan shall periodically test and audit its information security program. If J.P. Morgan accesses the Customer's computer system, J.P. Morgan agrees to provide such information security as is commercially and reasonably necessary to prevent the unauthorized use or disruption of the Customer's computer system.
(d)
J.P. Morgan shall respond to the Customer's reasonable requests for information concerning J.P. Morgan's information security program and, upon request, J.P. Morgan will provide a high-level summary of its applicable policies and procedures, to the Customer, to the extent it is able to do so without divulging sensitive, proprietary, or J.P. Morgan’s confidential information. Upon reasonable request, J.P. Morgan shall discuss with the Customer the information security program of J.P. Morgan and/or provide a high-level presentation summarizing such program. J.P. Morgan also agrees, when requested (such request not to occur more often than once every two (2) years), to complete any security questionnaire provided by the Customer and return it in a commercially reasonable period of time. The Customer acknowledges that certain information provided by J.P. Morgan, including internal policies and procedures, may be proprietary to J.P. Morgan, and agrees to protect the confidentiality of all such materials it receives from J.P. Morgan under the terms of this agreement. J.P. Morgan agrees (i) to resolve any applicable control deficiencies that do not meet the standards established by federal and state privacy and data security laws, rules, regulations related to J.P. Morgan's information security program, and (ii) to discuss with Customer any applicable control deficiencies that do not meet industry standards related to J.P. Morgan's information security program, in either case as identified through the completion of the questionnaire or otherwise.(e) J.P. Morgan shall notify Customer without undue delay in the event that J.P. Morgan confirms a Security Incident and provide details regarding a Security Incident, unless otherwise prohibited by Applicable Law or otherwise instructed by a law enforcement or supervisory authority. J.P. Morgan will take reasonable steps to mitigate the effects of the Security Incident and reasonably cooperate with Customer in investigating the Security Incident.
(f) The Customer will maintain written cybersecurity policies and procedures which implement commercially reasonable administrative, technical, and physical safeguards that are aligned with industry security standards and that, among other things, protect against anticipated threats or hazards to the security or integrity of their respective systems and data. Such cybersecurity policy and procedures shall require that all Confidential Information be encrypted in transit and at rest.
(g) This provision will survive termination or expiration of the
Agreement in accordance with Section 5.7.(g).
(h) The Customer and J.P. Morgan will be responsible for the obtaining, proper functioning, maintenance and security of its own services, software, connectivity and other equipment.
3.6. Recording of Telephone Communications.
Either party may record any of their telephone communications.
4. FEES AND EXPENSES OWING TO J.P. MORGAN
4.1. Fees and Expenses.
(a) The Customer will pay J.P. Morgan for the Services such fees as may be agreed upon by the parties in advance and in writing from time to time, together with J.P. Morgan’s reasonable out-of-pocket expenses or incidental expenses, including, market data charges, pricing vendors charges, and costs incurred by J.P. Morgan in determining the value of assets. In addition to the fees provided for in the immediately preceding sentence, the Customer shall be responsible for the payment of all governmental or similar fees, charges, taxes, duties and imposts levied in or by any relevant authority on or in respect of the Customer or a Fund, which are incurred by J.P. Morgan with regard to the Services. Upon request by the Customer, J.P. Morgan shall provide the Customer with receipts, invoices or other appropriate written evidence reasonably satisfactory to the Customer confirming any expense for which payment or reimbursement is being sought under this Section.
(b) J.P. Morgan may propose reasonable amendments to the fees at any time (subject to advance notice and Customer agreement) should either (i) the Funds’ actual investment portfolio and/or trading activity differ significantly from the assumptions used to develop J.P. Morgan’s fee proposal or (ii) the Customer’s service requirements change, or (iii) there is a change in Applicable Law that results in a change to the Services, or an increase in J.P. Morgan’s costs or risk associated with provision of the Services, as set forth in further detail in Section 2.6(c) hereof. If such amendments are mutually satisfactory, the fee schedule will be amended accordingly. For the avoidance of doubt,
J.P. Morgan may cease to provide the affected Service upon the passing of a reasonable period of time to allow the Customer to transition such Services to another service provider if the parties are not able to mutually agree on such amendments.
(c) Invoices will be payable within sixty (60) days following receipt of the invoice. If the Customer disputes an invoice, it shall nevertheless pay, on or before the date that payment is due, such portion of the invoice that is not subject to a bona fide dispute. J.P. Morgan may deduct amounts invoiced from the Cash Account except such portion of the invoice that the Customer has objected to in writing within sixty (60) days of the date of invoice (or such other period as the parties may agree in writing or other agreed to communication detailed in the SLD). J.P. Morgan agrees that this provision applies to each applicable Fund separately and that under Applicable Law J.P. Morgan may not exercise such rights against the assets of any Fund to satisfy the Liabilities of another Fund. Without prejudice to J.P. Morgan’s other rights, J.P. Morgan reserves the right to charge interest on overdue amounts except such portion of the invoice that the Customer has objected to within sixty (60) days following the receipt of the invoice (or such other period as the parties may agree in writing) from the due date until actual payment at such rate as J.P.
Morgan customarily charges for similar overdue amounts, which shall be notified to the Customer at the relevant time.
(d) If Customer requests that J.P. Morgan repeat its performance of any of the Services, other than as a result of an error by J.P. Morgan, then Customer shall compensate J.P. Morgan at the relevant rates mutually agreed upon by the parties for such Services in accordance with Section 4.1.(a).
(e) The Customer shall compensate J.P. Morgan at its customary hourly rates, for any additional work required to re-process any incorrect or incomplete information, or for remediation efforts needed to correct any error in information, transitioned to it from or at the direction of the Customer, a Fund, the Investment Advisor or a prior administrator.
5. ADDITIONAL PROVISIONS
5.1. Representations of the Customer and J.P. Morgan.
(a) The Customer represents, warrants and covenants that (i) assuming execution and delivery of this Agreement by J.P. Morgan, this Agreement is the Customer’s legal, valid and binding obligation, enforceable against the Customer in accordance with its terms, (ii) it has full power and authority to enter into and has taken all necessary corporate action to authorize the execution of this Agreement, (iii) to the best of Customer’s knowledge, there is no material administrative, civil or criminal proceeding pending against the Customer or the Investment Adviser, (iv) except for the representations outlined in Section 5.1.(b), it has not relied on any oral or written representation made by J.P. Morgan or any person on its behalf, and acknowledges that this Agreement sets out to the fullest extent the duties of J.P. Morgan, and
(v) no Instruction by the Customer or its Authorized Persons will knowingly contravene Applicable Law.
J.P. Morgan may rely upon the representations or certification of such other facts as may be required to administer J.P. Morgan’s obligations under this Agreement.
(b) J.P. Morgan represents and warrants that (i) assuming execution and delivery of this Agreement by the Customer, this Agreement is J.P. Morgan’s legal, valid and binding obligation, enforceable against J.P. Morgan in accordance with its terms (ii) it has full power and authority to enter into and has taken all necessary corporate action to authorize the execution of this Agreement; (iii) to the best of J.P. Morgan’s knowledge, there is no material administrative, civil or criminal proceeding pending against J.P. Morgan which would have a material effect on the provision of the Services; (iv) any and all information J.P. Morgan provided to Customer or its representatives in connection with the Customer's evaluation of J.P. Morgan's experience and capabilities to provide the Services was at the time it was provided true, correct and complete in all material respects; and (v) it has established and maintains and enforces written policies and procedures reasonably designed to prevent material and intentional violations of Applicable Law relating to J.P. Morgan's duties as a service provider hereunder, including U.S. federal securities laws prohibiting unlawful use and disclosure of material, non-public information regarding an issuer (such as a Fund) or a security (such as a Fund’s shares). To the extent permitted by Applicable Law, J.P. Morgan makes no representations or warranties of any kind, whether express or implied, concerning any of the Reports or the Services.
5.2. The Customer to Provide Certain Information to J.P. Morgan.
(a) The Customer shall provide to J.P. Morgan a copy of a Fund’s Governing Documents and Offering Documents. Customer also shall provide to J.P. Morgan a copy of any amendments to a Fund’s Governing Documents and Offering Documents. If any such amendment is inconsistent with the terms and conditions of this Agreement, J.P. Morgan shall not be required to act in accordance with the amendment until the Change Control process in Section 2.6
has been completed.
(b) The Customer will promptly provide J.P. Morgan such other information as J.P. Morgan may reasonably request, including but not limited to (i) the Customer's or Fund’s current audited and unaudited financial statements, (ii) any contracts or regulatory documents that relate to the Services,
(iii) information about the Customer’s or the Fund’s assets.
(c) J.P. Morgan shall be entitled to rely on information provided by the Customer, a Fund, the Investment Adviser and other service providers of the Customer or the Investment Adviser, and shall not be required to independently review or validate such information.
5.3. U.S. Regulatory Disclosure; Certain Information of the Customer.
(a) Section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) requires J.P. Morgan to implement reasonable procedures to verify the identity of any person that opens a new account with it. Accordingly, the Customer acknowledges that Section 326 of the USA PATRIOT Act and J.P. Morgan’s identity verification procedures require J.P. Morgan to obtain information which may be used to confirm the Customer’s and a Fund’s identity, including, without limitation, the Customer’s and a Fund’s name, address and organizational documents (“Identifying Information”). The Customer agrees to provide J.P. Morgan with and consents to J.P. Morgan obtaining from third parties any such Identifying Information required as a condition of opening an account with or using any service provided by J.P. Morgan.
(b) The Customer hereby acknowledges that J.P. Morgan is obliged to comply with AML/Sanctions Requirements and that, provided J.P. Morgan satisfies the J.P. Morgan Standard of Care, J.P. Morgan shall not be liable for any action it or any J.P. Morgan Affiliate reasonably takes to comply with any AML/Sanctions Requirements, including identifying and reporting suspicious transactions, rejecting transactions, and blocking or freezing funds, financial assets, or other assets. The Customer shall cooperate, and shall cause the Funds to cooperate, with J.P. Morgan’s performance of its due diligence and other obligations concerning AML/Sanctions
Requirements. In addition, the Customer agrees that J.P. Morgan may defer acting upon an Instruction pending completion of any review under its policies and procedures for compliance with AML/Sanctions Requirements, and that, provided J.P. Morgan satisfies the J.P. Morgan Standard of Care, J.P. Morgan shall not be responsible for any Liabilities resulting from or relating to such deferral. To the extent permitted by Applicable Law, J.P. Morgan will notify the Customer as soon as reasonably practicable, if J.P. Morgan defers acting upon any Instruction pursuant to this Section.
5.4. Redistribution of Data from Third Parties.
The Reports and other output from the Services provided by J.P. Morgan to the Customer under this Agreement may contain data licensed from Information Providers. Unless agreed otherwise in writing by the parties with respect to any specific Information Provider, J.P. Morgan shall be responsible for licensing such data at its own costs as necessary or desirable for the performance of its obligations under this Agreement. Such data is the intellectual property of those Information Providers and is subject to restrictions on use contained in the license agreement between the Information Provider and J.P. Morgan, which J.P. Morgan cannot unilaterally change. J.P. Morgan will promptly notify the Customer of any such restrictions that may affect the Customer’s use of such data to the extent provided herein, and shall use prompt and best efforts to notify the Customer if the Information Provider adds additional restrictions on the
use of such data. Customer acknowledges that its continued use of such data as provided herein shall constitute Customer's acceptance of the revised usage restrictions, provided, however, that any redistribution of such data or information derived therefrom may require a separate license from the relevant Information Providers. For the avoidance of doubt, any restrictions or limitations regarding the use of such data is not intended by J.P. Morgan to supersede any rights Customer may have to use such data based on its own agreements with such Information Providers.
5.5. Intellectual Property Rights.
(a) As between the Customer and J.P. Morgan, the Intellectual Property Rights in and to any documentation or other materials provided by the Customer and maintained by J.P. Morgan for the Customer (“Customer Materials”), shall be owned by the Customer and remain subject to the
terms and conditions of this Agreement. The Customer grants to J.P. Morgan a non-exclusive, royalty free, fully-paid, sub-licensable, worldwide right and license to use, adapt, display, modify, merge, reproduce, translate and create derivative works from the Customer Materials as may be necessary or beneficial for the performance by J.P. Morgan of its obligations or the exercise of its rights under this Agreement and solely for the benefit of the Customer or as required pursuant to Applicable Law or J.P. Morgan’s record retention policies. The Customer hereby represents, warrants and covenants that the Customer Materials and J.P. Morgan’s use thereof shall not infringe upon or otherwise violate the Intellectual Property Rights of any third party.
(b) The Customer acknowledges that the Intellectual Property Rights in and to any and all of J.P. Morgan’s methodologies, processes, working documents, know-how and techniques of any kind developed, created or used in connection with this Agreement are owned by J.P. Morgan.
5.6. Insurance.
(a) The Customer acknowledges that J.P. Morgan will not be required to maintain any insurance coverage specifically for the benefit of the Customer. J.P. Morgan will, however, provide summary information regarding its own general insurance coverage to the Customer upon written request.
(b) J.P. Morgan will maintain insurance protection which is required under Applicable Law or which
J.P. Morgan deems advisable to cover its duties and responsibilities generally as a fund administrator under this Agreement.
5.7. Confidentiality.
(a) Subject to Section 5.7.(b), J.P. Morgan will hold all Confidential Information in confidence and use reasonable efforts to ensure that any J.P. Morgan Affiliate or Subcontractor used by J.P. Morgan to provide services to the Customer has reasonable procedures to keep such Confidential Information in confidence and will not disclose any Confidential Information except as may be required by Applicable Law, a regulator with jurisdiction over J.P. Morgan's business, to enforce the terms of this Agreement or with the consent of the Customer. J.P. Morgan will secure and protect the Confidential Information from unauthorized use or disclosure by using at least the same degree of care as J.P. Morgan employs to avoid unauthorized use of or disclosure of its own confidential information, but in no event less than reasonable care. J.P. Morgan shall not duplicate or republish any material containing the Confidential Information except for purposes of or in relation to the performance of its obligations under this Agreement. Confidential Information may not be used by
J.P. Morgan or any of J.P. Morgan Affiliates, officers, directors,
agents, professional advisors, Subcontractors and employees, other than for the purposes contemplated by or otherwise permitted by this Agreement. J.P. Morgan represents that it will not (i) purchase or sell any portfolio securities contained in the Confidential Information on the basis of any information contained in, or as a result of being identified in, Confidential Information; (ii) use the Confidential Information to trade against the Customer or to knowingly engage in any trading practices that are adverse to the Customer; and (iii) not permit any of the Confidential Information to be disclosed to any entity that competes with the Customer, the Adviser/Administrator, a Fund or any products thereof, unless otherwise authorized or instructed by the Customer.
(b) The Customer authorizes J.P. Morgan to disclose Confidential Information to:
(i) any Subcontractor, agent, securities exchange, broker, proxy solicitor, issuer, service provider, vendor or any other person that J.P. Morgan believes is reasonably required in connection with
J.P. Morgan's provision of relevant Services under this Agreement;
(ii) its and any J.P. Morgan Affiliate's professional advisors, auditors and public accountants;
(iii) its branches and any J.P. Morgan Affiliate that J.P. Morgan believes is reasonably required in connection with J.P. Morgan’s provision of relevant Services under this Agreement;
(iv) any revenue authority or any governmental entity in relation to the processing of any tax claim; and
(v) any regulatory authority having jurisdiction over the Customer upon the request of such regulator.
(c) The Confidential Information will remain the property of the Customer. Nothing contained in this Article will be construed as obligating the Customer to disclose its Confidential Information to J.P. Morgan, or as granting to or conferring on J.P. Morgan, expressly or by implication, any rights or license to the Confidential Information of the Customer. Any such obligation or grant will only be as provided by other provisions of this Agreement.
(d) In the event of a breach or anticipated breach of this Agreement, J.P. Morgan agrees that the Customer shall have the right to seek injunctive relief in any court of competent jurisdiction, without any requirement of posting bond, demonstrating the fact that monetary damages or other relief would not be adequate remedies, and the availability of monetary damages or other relief shall not be asserted as a reason not to grant such injunctive relief.
(e) To the extent J.P. Morgan is required to disclose Confidential Information by Applicable Law, J.P. Morgan shall:
(i) where legally permitted to do so, give reasonable and prompt advance notice of such disclosure requirement to the Customer; and
(ii) upon the Customer’s request, J.P. Morgan will use reasonable efforts to obtain assurances from the relevant authority that confidential treatment will be accorded to the information that is required to be disclosed.
(f) Notwithstanding anything to the contrary in Section 5.7.(e), J.P. Morgan may disclose any of the Confidential Information provided by the Customer to any bank regulatory authority having jurisdiction over J.P. Morgan upon the request of the bank regulatory authority without having to provide the Customer with notice of any kind.
(g) Return or Destruction.
(i) As requested by the Customer and subject to Section 2.4.(b), during the term of this Agreement, J.P. Morgan will return or provide the Customer a copy of any designated Confidential Information of the Customer.
(ii) Upon Customer’s request, J.P. Morgan will, upon cessation of work, completion of its obligations associated with such information under this Agreement or upon any earlier termination of this Agreement for any reason whatsoever, return, destroy or render unusable, and discontinue the use of, all copies of materials containing the Customer’s Confidential Information and to the extent reasonably practicable, all notes, memoranda, compilations, derivative works, data files or other materials prepared by or on behalf of J.P. Morgan that
contain or otherwise reflect or refer to Confidential Information of the Customer, except to the extent:
(A) that this Agreement provides for J.P. Morgan to continue to use or retain items that constitute or contain the Customer's Confidential Information after the date of expiration or termination; or
(B) otherwise required to comply with Applicable Law, J.P. Morgan's policies and procedures existing from time to time or defend or pursue claims arising under this Agreement.
(iii) At the Customer's request, J.P. Morgan will certify in writing that it has handled Confidential Information pursuant to Applicable Law and J.P. Morgan’s policies and procedures.
(h) Subject to Section 2.4.(b), J.P. Morgan’s obligations under this Section 5.7 will survive termination or expiration of the Agreement as follows:
(i) As to any portion of Confidential Information that constitutes a trade secret under Applicable Law, the obligations will continue for as long as such information is deemed a trade secret under Applicable Law; and
(ii) As to all other Confidential Information belonging to the Customer the obligations will survive for three (3) years after the termination of this Agreement with respect to such Customer.
5.8. Use of a Party’s Name.
(a) The Customer agrees not to use (or permit the use of) J.P. Morgan’s name in any public document, publication or publicity material relating to the Customer, including but not limited to notices, sales literature, stationery, advertisements, etc., without the prior written consent of J.P. Morgan (which consent shall not be unreasonably withheld), provided that no prior consent is needed if the document in which J.P. Morgan’s name is used merely states that J.P. Morgan is acting as administrator to the Customer or as sub-sub-administrator to a Fund.
(b) J.P. Morgan agrees not to use (or permit the use of) the Customer's or a Fund’s name in any document, publication or publicity material relating to J.P. Morgan or a J.P. Morgan Affiliate, including, but not limited to, notices, sales literature, stationery, advertisements, etc., without the prior written consent of the Customer (which consent shall not be unreasonably withheld), provided that no prior consent is needed for J.P. Morgan to use the Customer's name merely to state that J.P. Morgan is acting as administrator to the Customer or as sub-sub-administrator to a Fund in connection with a regulatory request or filing.
6. WHEN J.P. MORGAN IS LIABLE TO THE CUSTOMER
6.1. Standard of Care; Liability.
(a) J.P. Morgan will perform Services (i) with reasonable care, prudence, and diligence and in good faith, (ii) without negligence, fraud, willful misconduct or willful omission, and at least at the same standard of care as J.P. Morgan provides for itself and/or J.P. Morgan Affiliates with respect to similar services, (iii) in a manner that is reasonably designed to meet J.P. Morgan's obligations under this Agreement, and (iv) with the level of skill and care which would be expected from a
reasonably skilled, experienced, and industry leading professional provider of the Services ("J.P. Morgan's Standard of Care").
(b) Subject to Section 6.2, J.P. Morgan will only be liable for the Customer’s or a Fund’s direct Liabilities to the extent they result from the breach of J.P. Morgan’s Standard of Care in performing its duties as set out in this Agreement or the breach of any representations, warranties or the confidentiality obligations set forth in Section 5.7.
(c)
The Customer will indemnify the J.P. Morgan Indemnitees against, and hold them harmless from, any Liabilities that may be imposed on, incurred by or asserted against any of the J.P. Morgan Indemnitees in connection with or arising out of J.P. Morgan’s performance under this Agreement, provided that the J.P. Morgan Indemnitee has satisfied the J.P. Morgan Standard of Care in connection with the Liabilities in question. J.P. Morgan shall, to the extent practicable, use reasonable care to provide prompt notice to the Customer of the circumstances and all pertinent facts related to a claim for indemnification, it being understood that a failure to notify shall not serve to limit Customer's obligation to indemnify the J.P. Morgan Indemnitees hereunder.(d) The J.P. Morgan Indemnitees shall each use commercially reasonable efforts to mitigate any Liability for which it seeks indemnification under this Agreement (provided, however, that expenses reasonably incurred with respect to such mitigation shall be Liabilities subject to indemnification hereunder). A J.P. Morgan Indemnitee shall notify the Customer in writing promptly after determining that it will seek indemnity under this Section 6.1 for any litigation or proceeding brought against such J.P. Morgan Indemnitee.
(e) Subject to Section 6.2, J.P. Morgan will indemnify the Customer Indemnitees against, and hold them harmless from, any Liabilities that are not attributable to the negligent or fraudulent acts or omissions of the Customer Indemnitees which may be imposed on, incurred by, or asserted against a Customer Indemnitee resulting directly from J.P. Morgan’s failure to meet J.P. Morgan’s Standard of Care in the performance of its obligations or duties under this Agreement, and provided that, in each case, to the extent practicable, the Customer uses reasonable care to provide prompt notice to J.P. Morgan of the circumstances and all pertinent facts related to the claim for indemnification, it being understood that a failure to notify shall not serve to limit J.P. Morgan's obligation to indemnify the Customer Indemnitees hereunder. For the avoidance of doubt, subject to Section 6.2, J.P. Morgan will indemnify the Customer Indemnities for any Liabilities that are (i) not attributable to the negligent or fraudulent acts or omissions of the Customer Indemnitees and
(ii) paid out of the pocket of a Customer Indemnitee that result directly from J.P. Morgan’s failure to meet J.P. Morgan’s Standard
of Care in the performance of its obligations or duties under this Agreement.
6.2. Limitations of Liability.
(a) Under no circumstances will J.P. Morgan be liable for (i) any loss of profits (whether direct or indirect); or (ii) any indirect, incidental, consequential or special damages of any form, incurred by any person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought, with respect to J.P. Morgan’s performance or non-performance under this Agreement.
(b) Under no circumstances will the Customer, an Adviser/Administrator or a Fund be liable for (i) any loss of profits (whether direct or indirect); or (ii) any indirect, incidental, consequential or special damages of any form, incurred by any person or entity, whether or not foreseeable and regardless of
the type of action in which such a claim may be brought, with respect to the Customer’s, Adviser’s or Fund’s acts or omissions under this Agreement, provided that this Subsection 6.2(b) shall not apply to any Liability owing to a third party (other than a J.P. Morgan Affiliate or Subcontractor) asserting a claim against J.P. Morgan for which J.P. Morgan is entitled to be indemnified under this Agreement.
(c) Under no circumstances will J.P. Morgan be liable for (i) any Liabilities suffered by any person as a result of the failure of any of the Dependencies to be met; (ii) the assumptions made by J.P. Morgan in good faith in preparing a Report proving to be incorrect, inaccurate or inapplicable or any assumption which could or should have been made not being made; (iii) any Liabilities arising as a consequence of the Customer using, or providing to any other person to use, any Report or information in or derived from or based on any Report, to make decisions (including Investment Decisions) in respect of the Customer; or (iv) any Liabilities suffered by any person relating to any decisions made by J.P. Morgan in complying with the AML/Sanctions Requirements.
(d) Notwithstanding any provision herein that may be to the contrary, the maximum aggregate liability of J.P. Morgan Indemnitees in respect of any and all claims of any kind arising out of, in connection with or relating to this Agreement or the provision of the Services, regardless of the form of action (including breach of warranty, breach of contract, tort, negligence, strict liability or statutory) or type of damages, in respect of any calendar year, shall not exceed an aggregate amount equal to five times (5 x) the total annual administration fee paid by the Customer under this Agreement provided that the liability cap provisions of this Subsection 6.2(d) shall not apply to an error by J.P. Morgan in calculating the net asset value of a Fund.
6.3. Force Majeure.
(a) J.P. Morgan will maintain and update from time to time business continuation and disaster recovery procedures with respect to the services and its global business that it determines from time to time meet reasonable commercial standards (“Business Continuity Plan” or “BCP”) and periodically test a written Business Continuity Plan that is reasonably designed to enable J. P. Morgan to effect the recovery and, as contemplated by the BCP, continuity of its key operations, systems and processes in a Force Majeure Event (as defined below). Upon request, J.P. Morgan shall provide the Customer with a summary of the Business Continuity Plan. Upon the occurrence of a Force Majeure Event, J. P. Morgan shall (where and to the extent applicable) use commercially reasonable efforts to implement the BCP in accordance with its terms. The Customer acknowledges that the effectiveness of the BCP is subject to actual implementation in a Force Majeure Event or other disaster situation during which time unforeseen crisis and critical events may occur
that would affect the effectiveness of the BCP.
(b) Upon reasonable request, J.P. Morgan shall discuss with the Customer any BCP of J.P. Morgan and/or provide a high-level presentation summarizing such procedures. Neither party (“Affected Party”) will be liable, however, for any Liabilities of any nature that the other party or any third party may suffer or incur, caused by an act of God, fire, flood, epidemics, earthquakes or other disasters, civil or labor disturbance, war, terrorism, act of any governmental authority or other act or threat of any authority (de jure or de facto), nationalization, expropriation, legal constraint, fraud, theft or forgery (other than on the part of the Affected Party or its employees), cyber-attack, malfunction of equipment or software (except where such malfunction is primarily and directly attributable to the Affected Party’s negligence in maintaining the equipment or software), currency re-denominations, currency restrictions, failure of or the effect of rules or operations of any external funds transfer system, inability to obtain (or interruption of) external communications facilities,
power failures or any other cause beyond the reasonable control of the Affected Party (including, without limitation, the non-availability of appropriate foreign exchange) (a “Force Majeure Event”); provided that the Affected Party has not contributed to the Liability by acting with negligence, fraud or willful misconduct or by failing to use commercially reasonable efforts to mitigate any such Liabilities, including by using commercially reasonable efforts to implement a relevant BCP in accordance with its terms.
(c) J.P. Morgan will not be entitled to any additional payments from the Customer for costs or expenses incurred by J.P. Morgan as a result of any Force Majeure Event.
6.4. J.P. Morgan May Consult with Counsel.
J.P. Morgan shall exercise reasonable care in the selection and appointment of professional advisers and subject thereto will be entitled to rely on, and may act upon the advice of professional advisors (which may be the professional advisors of the Customer, a Fund or the Investment Adviser), at its own expense, in relation to matters of law, regulation or market practice.
6.5. J.P. Morgan Provides Diverse Financial Services and May Generate Profits as a Result.
Provided that nothing in this provision shall be taken as authorizing J.P. Morgan to contravene any Applicable Laws, the Customer hereby authorizes J.P. Morgan to act under this Agreement notwithstanding that: (a) J.P. Morgan or any of its divisions, branches or J.P. Morgan Affiliates may have a material interest in transactions entered into by the Customer or a Fund or that circumstances are such that J.P. Morgan may have a potential conflict of duty or interest, including the fact that J.P. Morgan or
J.P. Morgan Affiliates may act as a market maker in the markets in which a Fund participates, provide brokerage services to other customers, act as financial adviser to the issuer of securities in which a Fund invests, act in the same transaction as agent for more than one customer, have a material interest in the issue of securities; or earn profits from any of the activities listed herein and (b) J.P. Morgan or any of its divisions, branches or J.P. Morgan Affiliates may be in possession of information tending to show that the Instructions received may not be in the best interests of the Customer or a Fund. J.P. Morgan is not under any duty to disclose any such information to the Customer or to a Fund. Nothing in the foregoing shall release J.P. Morgan from any obligation to perform the Services under this Agreement or to treat the Customer fairly in connection with the performance of the Services.
7. TERM AND TERMINATION
7.1. Term and Termination.
This Agreement shall be in effect for an initial term of five (5) years from
the date of this Agreement (the “Initial Term”). Following the Initial Term, this Agreement shall be in effect until a valid termination notice is given by the Customer or J.P. Morgan upon at least one hundred and eighty (180) days’ prior notice.
7.2. Other Grounds for Termination.
(a) Either party may terminate this Agreement immediately upon written notice to the other party following the occurrence of any of the following:
(i) the other party committing any material breach of this Agreement and failing to remedy such breach (if capable of remedy) within sixty (60) days of being given written notice of the
material breach, unless the parties agree to extend the period to remedy the breach or the parties agree in writing to shorten the period to remedy the breach;
(ii) the other party (A) admits in writing its inability or is generally unable to pay its debts as they become due; (B) institutes, consents to or is otherwise subject to the institution of any proceeding under title 11 of the United States Code, as in effect from time to time, or any other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, composition with creditors, wind-down, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief law of the United States or other applicable jurisdiction from time to time in effect and affecting the rights of creditors, generally; (C) is subject to an involuntary order for the transfer of all or part of its business by a statutory authority; (D) has any of its issued shares suspended from trading on any exchange on which they are listed (if applicable), or (E) is the subject of a measure similar to any of the foregoing; or
(iii) the relevant federal or state authority withdrawing its authorization of either party.
(iv) If a Force Majeure Event substantially prevents performance of any Services necessary for the performance of functions reasonably agreed by the parties as critical for more than three (3) consecutive business days, then the Customer may terminate all or any portion of this Agreement and the Services so affected, as of a date specified by the Customer in a written notice of termination to J.P. Morgan, in which case, J.P. Morgan's fees will be equitably adjusted as necessary to reflect the value of any remaining Services;
(v) At any time (including during the Initial Term), the Customer may elect to remove any Fund from this Agreement in connection with the liquidation of the Fund or the merger of a Fund into another fund, in each case by notifying J.P. Morgan in writing or other mutually agreed communication method.
(b) Either party may terminate this Agreement by giving not less than sixty (60) days’ prior written notice to the other party in the event that the party in question reasonably determines that the relationship with the other party raises reputational or regulatory concerns.
(c) In the event of the termination of the custody agreement between J.P. Morgan and the Funds of the Franklin Templeton mutual fund complex, J.P. Morgan may terminate this Agreement in whole or in part and cease to provide the Services simultaneously with the transition of the assets of the Funds to a successor custodian.
7.3. Transition following Termination.
(a) The Customer undertakes to use its best efforts to appoint a new administrative service provider as soon as practicable after receiving a notice of termination, provided that if Customer has not transitioned to a new administrative service provider as of the date of termination, J.P. Morgan will continue to provide the Services at the fees agreed upon by the Customer and J.P. Morgan. Customer agrees to pay such reasonable expenses and charges as J.P. Morgan and Customer may mutually agree in connection with such transition. Subject to payment of any amount duly owing to
J.P. Morgan under this Agreement, J.P. Morgan agrees to transfer a copy of such records and related supporting documentation held by it under this Agreement, to any replacement provider of the Services or to such other person as the Customer may direct. J.P. Morgan will cooperate in the transfer of its duties and responsibilities hereunder and will also provide reasonable assistance to its successor, for such transfer, subject to the payment of such reasonable expenses and charges as J.P. Morgan and Customer may mutually agree in connection with such assistance.
(b) J.P. Morgan will act in accordance with all Instructions delivered to it by the Customer with respect to such delivery and transition of its responsibilities to a successor fund administrator provided that such Instructions shall be reasonable and practicable and not in conflict with any provision of this Agreement.
8. MISCELLANEOUS
8.1. Notices.
Notices pursuant to Section 7 shall be sent or served by registered mail, nationally recognized delivery service, courier service or hand delivery to the address of the respective party as set out on the first page of this Agreement, unless at least two (2) days’ prior written notice of a new address is given to the other party in writing.
8.2. Successors and Assigns.
This Agreement will be binding on each of the parties’ successors and assigns. The parties agree that neither party can assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other party, which consent will not be unreasonably withheld, delayed or conditioned; except that J.P. Morgan may assign this Agreement without the Customer’s consent (a) to any J.P. Morgan Affiliate or (b) in connection with a merger, reorganization, stock sale or sale of all or substantially all of J.P. Morgan’s fund servicing business.
8.3. Entire Agreement and Amendments.
This Agreement, including any Annexes, sets out the entire agreement between the parties in connection with the subject matter hereof, and this Agreement supersedes any other agreement, statement, or representation relating to the Services under this Agreement, whether oral or written. The parties may enter into a non-binding SLD on terms agreed by the parties and may vary any SLD by agreement at any time. The SLD will not form part of this Agreement. To the extent inconsistent with this Agreement, J.P. Morgan’s electronic access terms and conditions shall not apply to matters arising under this Agreement. Amendments shall be in writing and signed by both parties.
8.4. Governing Law and Jurisdiction.
This Agreement will be construed, regulated and administered under the laws of the United States or the State of New York, as applicable, without regard to New York’s principles regarding conflict of laws, except that the foregoing shall not reduce any statutory right to choose New York law or forum. The United States District Court for the Southern District of New York will have the sole and exclusive jurisdiction over any lawsuit or other judicial proceeding relating to or arising from this Agreement. If that court lacks federal subject matter jurisdiction, the Supreme Court of the State of New York, New York County will have sole and exclusive jurisdiction. Either of these courts will have proper venue for any such
lawsuit or judicial proceeding, and the parties waive any objection to venue or their convenience as a forum. The parties agree to submit to the jurisdiction of any of the courts specified and to accept service of process to vest personal jurisdiction over them in any of these courts. The parties further hereby knowingly, voluntarily and intentionally waive, to the fullest extent permitted by Applicable Law, any right to statutory prejudgment interest and a trial by jury with respect to any such lawsuit or judicial proceeding arising or relating to this Agreement or the transactions contemplated hereby. To the extent that in any jurisdiction the Customer 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, the Customer shall not claim, and it hereby irrevocably waives, such immunity.
8.5. Severability; Waiver; and Survival.
(a) If one or more provisions of this Agreement 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 will not in anY. way be affected or impaired.
(b) Except as otherwise provided herein, no failure or delay on the part of either party in exercising any power or right under this Agreement 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 of this Agreement, or waiver of any breach or default, is effective unless it is in writing and signed by the party against whom the waiver is to be enforced.
(c) The parties' rights, protections, and remedies under this Agreement shall survive its tennination.
8.6. Counterparts.
This Agreement may be executed in several counterparts each of which will be deemed to be an original and together will constitute one and the same agreement.
8.7. No Third Party Beneficiaries.
A person who is not a party to this Agreement shall have no right to.enforce any term of this Agreement.
FRANKLIN TEMPLETON SERVICES LLC JPMORGAN CHASE BANK, N.A.
By: /s/ Laura F. Fergerson By: /s/ Keith Slattery
Name: Laura F. Fergerson Name: Keith Slattery
Title: President Title: Managing Director
25
Annex I List of Funds
Fund Services Agreement dated January 22, 2020
Name | Entity Type | Jurisdiction | ERISA Benefit Plan Assets (Y/N) |
Franklin Templeton US Government Securities II Ltd | Bermuda | N | |
Templeton Growth Fund II Limited | Cayman | N | |
Alternative Strategies (FT) Ltd | Cayman | N | |
Templeton China Opportunities Fund, Ltd | Cayman | N | |
Franklin USD Diversified Bond 2021 Fund | Cayman | N | |
Franklin Diversified High Yield Global Sukuk 2022 Fund | Cayman | N | |
Franklin USD Diversified Bond Fund III | Cayman | N | |
Templeton Global Smaller Companies Fund | U.S.A. | N | |
TF-Templeton World Fund | U.S.A. | N | |
TF-Templeton Foreign Fund | U.S.A. | N | |
TIT-Templeton Global Bond Fund | U.S.A. | N | |
Templeton Growth Fund, Inc. | U.S.A. | N |
Templeton Emerging Markets Fund | U.S.A. | N | |
Templeton Global Income Fund | U.S.A. | N |
TIF-International Equity Series | U.S.A. | N | |
FTVIPT-Templeton Developing Markets VIP Fund | U.S.A. | N | |
FMSF-Franklin Mutual Beacon Fund | U.S.A. | N | |
FMSF-Franklin Mutual Global Discovery Fund | U.S.A. | N | |
FMSF-Franklin Mutual European Fund | U.S.A. | N | |
FMSF-Franklin Mutual Quest Fund | U.S.A. | N | |
FMSF-Franklin Mutual Shares Fund | U.S.A. | N | |
Templeton Developing Markets Trust | U.S.A. | N | |
FTVIPT-Templeton Foreign VIP Fund | U.S.A. | N | |
Templeton Emerging Markets Income Fund | U.S.A. | N | |
Templeton Dragon Fund, Inc. | U.S.A. | N | |
FMSF-Franklin Mutual Financial Services Fund | U.S.A. | N | |
Franklin Universal Trust | U.S.A. | N | |
FFRMT-Franklin Floating Rate Master Series | U.S.A. | N | |
FCF-Franklin U.S. Government Securities Fund | U.S.A. | N | |
FVIT-Franklin Mutual U.S. Value Fund | U.S.A. | N | |
FCTFT-Franklin California Intermediate-Term Tax-Free Income | U.S.A. | N | |
FNYTFT-Franklin New York Intermediate-Term Tax- Free Income F | U.S.A. | N | |
Franklin Strategic Mortgage Portfolio | U.S.A. | N |
FTFT-Franklin Kentucky Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Federal Intermediate-Term Tax-Free Income Fund | U.S.A. | N | |
FMST-Franklin California High Yield Municipal Fund | U.S.A. | N | |
TMMP-The U.S. Government Money Market Portfolio | U.S.A. | N | |
FVIT-Franklin Microcap Value Fund | U.S.A. | N | |
FREST-Franklin Real Estate Securities Fund | U.S.A. | N | |
FSS-Franklin Strategic Income Fund | U.S.A. | N | |
FSS-Franklin Small-Mid Cap Growth Fund | U.S.A. | N | |
FMST-Franklin Tennessee Municipal Bond Fund | U.S.A. | N | |
FVIT-Franklin Small Cap Value Fund | U.S.A. | N | |
TGIT-Templeton Global Balanced Fund | U.S.A. | N | |
Franklin Gold And Precious Metals Fund | U.S.A. | N | |
FHIT-Franklin High Income Fund | U.S.A. | N | |
FCF-Franklin Growth Fund | U.S.A. | N | |
FCF-Franklin Utilities Fund | U.S.A. | N | |
FCF-Franklin DynaTech Fund | U.S.A. | N | |
FCF-Franklin Income Fund | U.S.A. | N | |
FUSGMF-Franklin U.S. Government Money Fund | U.S.A. | N | |
Franklin California Tax-Free Income Fund | U.S.A. | N |
Franklin New York Tax-Free Income Fund | U.S.A. | N | |
Franklin Federal Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Massachusetts Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Michigan Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Minnesota Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Ohio Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Colorado Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Georgia Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Pennsylvania Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin High Yield Tax-Free Income Fund | U.S.A. | N | |
FIST-Franklin Convertible Securities Fund | U.S.A. | N | |
FIST-Franklin Adjustable U.S. Government Securities Fund | U.S.A. | N | |
FIST-Franklin Equity Income Fund | U.S.A. | N | |
IFT-Money Market Portfolio | U.S.A. | N | |
FTFT-Franklin Federal Limited-Term Tax-Free Fund | U.S.A. | N | |
FMT-Franklin Rising Dividends Fund | U.S.A. | N | |
FTFT-Franklin Missouri Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Oregon Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Virginia Tax-Free Income Fund | U.S.A. | N |
FTFT-Franklin Alabama Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Florida Tax-Free Income Fund | U.S.A. | N | |
TGIT-Templeton Emerging Markets Small Cap Fund | U.S.A. | N | |
FSS-Franklin Biotechnology Discovery Fund | U.S.A. | N | |
FSS-Franklin Natural Resources Fund | U.S.A. | N | |
FTVIPT-Franklin Flex Cap Growth VIP Fund | U.S.A. | N | |
FIST-Franklin Floating Rate Daily Access Fund | U.S.A. | N | |
FGT-Franklin Emerging Market Debt Opportunities Fund | U.S.A. | N | |
TIF-Foreign Smaller Companies Series | U.S.A. | N | |
FIST-Franklin Managed Income Fund | U.S.A. | N | |
FGT-Franklin International Small Cap Fund | U.S.A. | N | |
FIST-Franklin Total Return Fund | U.S.A. | N | |
FSS-Franklin Growth Opportunities Fund | U.S.A. | N | |
FTFT-Franklin Arizona Tax-Free Income Fund | U.S.A. | N | |
FSS-Franklin Small Cap Growth Fund | U.S.A. | N | |
FTFT-Franklin Connecticut Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Louisiana Tax-Free Income Fund | U.S.A. | N | |
Franklin Limited Duration Income Trust | U.S.A. | N | |
Templeton China World Fund | U.S.A. | N |
FTFT-Franklin Maryland Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin North Carolina Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin New Jersey Tax-Free Income Fund | U.S.A. | N | |
FTVIPT-Franklin Growth and Income VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Global Real Estate VIP Fund | U.S.A. | N | |
FTVIPT-Templeton Global Bond VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Income VIP Fund | U.S.A. | N | |
FTVIPT-Franklin U.S. Government Securities VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Rising Dividends VIP Fund | U.S.A. | N | |
FTVIPT-Templeton Growth VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Small-Mid Cap Growth VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Large Cap Growth VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Mutual Global Discovery VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Mutual Shares VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Small Cap Value VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Strategic Income VIP Fund | U.S.A. | N | |
FIST-Franklin Real Return Fund | U.S.A. | N | |
FIST-Franklin Low Duration Total Return Fund | U.S.A. | N | |
FSS-Franklin Select U.S. Equity Fund | U.S.A. | N |
TIF-Global Equity Series | U.S.A. | N | |
FGT-Franklin International Growth Fund | U.S.A. | N | |
TGIT-Templeton Frontier Markets Fund | U.S.A. | N | |
TIT-Templeton Global Total Return Fund | U.S.A. | N | |
FTVIPT-Franklin VolSmart Allocation VIP Fund | U.S.A. | N | |
TIT-Templeton Emerging Markets Bond Fund | U.S.A. | N | |
FMSF-Franklin Mutual International Fund | U.S.A. | N | |
TIT-Templeton International Bond Fund | U.S.A. | N | |
FFAS-Franklin Payout 2019 Fund | U.S.A. | N | |
FFAS-Franklin Payout 2020 Fund | U.S.A. | N | |
FFAS-Franklin Payout 2021 Fund | U.S.A. | N | |
FSS-Franklin Flexible Alpha Bond Fund | U.S.A. | N | |
FFRMT-Franklin Floating Rate Income Fund | U.S.A. | N | |
FCF-Franklin Focused Growth Fund | U.S.A. | N | |
FFAS-Franklin Payout 2022 Fund | U.S.A. | N | |
TF Templeton International - Climate Change Fund | U.S.A. | N | |
Franklin Conservative Allocation Age 9-10 Years 529 Portfolio | U.S.A. | N | |
Franklin Conservative Allocation Age 13-14 Years 529 Portfolio | U.S.A. | N | |
FFAS-Franklin LifeSmart Retirement Income Fund | U.S.A. | N |
Franklin Founding Funds 529 Portfolio | U.S.A. | N | |
FFAS-Franklin LifeSmart 2025 Retirement Target Fund | U.S.A. | N | |
FFAS-Franklin LifeSmart 2035 Retirement Target Fund | U.S.A. | N | |
FTVIPT-Franklin Allocation VIP Fund | U.S.A. | N | |
FFAS-Franklin LifeSmart 2045 Retirement Target Fund | U.S.A. | N | |
FFAS-Franklin Corefolio Allocation Fund | U.S.A. | N | |
FFAS-Franklin Founding Funds Allocation Fund | U.S.A. | N | |
FFAS-Franklin Conservative Allocation Fund | U.S.A. | N | |
FFAS-Franklin Moderate Allocation Fund | U.S.A. | N | |
FFAS-Franklin Growth Allocation Fund | U.S.A. | N | |
Franklin Corefolio 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation Newborn - 4 Years 529 Portfolio | U.S.A. | N | |
Franklin Growth 529 Portfolio | U.S.A. | N | |
Franklin Income 529 Portfolio | U.S.A. | N | |
Franklin Small Mid Cap Growth 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation 529 Portfolio | U.S.A. | N | |
Franklin Income Allocation 529 Portfolio | U.S.A. | N | |
Franklin Mutual Shares 529 Portfolio | U.S.A. | N | |
Templeton Growth 529 Portfolio | U.S.A. | N |
S&P 500 Index 529 Portfolio | U.S.A. | N | |
Franklin Conservative Allocation Newborn-4 Years 529 Portfolio | U.S.A. | N | |
Franklin Moderate Allocation Newborn-4 Years 529 Portfolio | U.S.A. | N | |
Franklin Moderate Allocation Age 9-10 Years 529 Portfolio | U.S.A. | N | |
Franklin Moderate Allocation Age 17-18 Years 529 Portfolio | U.S.A. | N | |
FFAS-Franklin LifeSmart 2030 Retirement Target Fund | U.S.A. | N | |
FFAS-Franklin LifeSmart 2050 Retirement Target Fund | U.S.A. | N | |
FFAS-Franklin LifeSmart 2040 Retirement Target Fund | U.S.A. | N | |
FFAS-Franklin LifeSmart 2020 Retirement Target Fund | U.S.A. | N | |
FFAS-Franklin NextStep Conservative Fund | U.S.A. | N | |
FFAS-Franklin NextStep Moderate Fund | U.S.A. | N | |
FFAS-Franklin NextStep Growth Fund | U.S.A. | N | |
Franklin Mutual Global Discovery 529 Portfolio | U.S.A. | N | |
Templeton Global Bond 529 Portfolio | U.S.A. | N | |
FFAS-Franklin LifeSmart 2055 Retirement Target Fund | U.S.A. | N | |
NJ Best Trust A | U.S.A. | N | |
NJ Best Trust B | U.S.A. | N | |
NJ Best Trust C | U.S.A. | N | |
NJ Best Trust D | U.S.A. | N |
NJ Best Trust E | U.S.A. | N | |
NJ Better Educational Saving Trust | U.S.A. | N | |
NJ Best Pooled Equity | U.S.A. | N | |
Franklin Growth Allocation Age 9 - 10 Years 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation Age 13 - 14 Years 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation Age 17-18 Years 529 Portfolio | U.S.A. | N | |
Franklin Growth & Income Allocation 529 Portfolio | U.S.A. | N | |
Franklin Conservative Allocation Age 17-18 Years 529 Portfolio | U.S.A. | N | |
Franklin Moderate Allocation Age 13-14 Years 529 Portfolio | U.S.A. | N | |
Franklin U.S. Government Money 529 Portfolio | U.S.A. | N | |
FT Holdings Corporations III | U.S.A. | N | |
FT Holdings Corporations IV | U.S.A. | N | |
FT Holdings Corporations I | U.S.A. | N | |
FT Holdings Corporations II | U.S.A. | N | |
Franklin Conservative Allocation Age 5 - 8 Years 529 Portfolio | U.S.A. | N | |
Franklin Conservative Allocation Age 11 - 12 Years 529 Portfolio | U.S.A. | N | |
Franklin Conservative Allocation Age 15 - 16 Years 529 Portfolio | U.S.A. | N | |
Franklin Conservative Allocation Age 19+ Years 529 Portfolio | U.S.A. | N | |
Franklin Moderate Allocation Age 5 - 8 Years 529 Portfolio | U.S.A. | N |
Franklin Moderate Allocation Age 11 - 12 Years 529 Portfolio | U.S.A. | N | |
Franklin Moderate Allocation Age 15 - 16 Years 529 Portfolio | U.S.A. | N | |
Franklin Moderate Allocation Age 19+ Years 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation Age 5 - 8 Years 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation Age 11 - 12 Years 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation Age 15 - 16 Years 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation Age 19+ Years 529 Portfolio | U.S.A. | N | |
FSS-Franklin Templeton SMACS Series CH | U.S.A. | N | |
FSS-Franklin Templeton SMACS Series H | U.S.A. | N | |
FSS-Franklin Templeton SMACS Series E | U.S.A. | N | |
FSS-Franklin Templeton SMACS Series I | U.S.A. | N | |
Franklin USD Diversified Bond IV 2024 Fund A (Qdis) USD | Cayman | N | |
Franklin U.S. Core Equity (IU) Fund | U.S.A. | N | |
Franklin International Core Equity (IU) Fund | U.S.A. | N | |
Franklin Emerging Markets Core Equity (UI) Fund | U.S.A. | N | |
Franklin USD Diversified Bond 2021 Fund II | Cayman | N | |
Franklin USD Diversified Bond V 2024 | Cayman | N | |
Franklin USD Diversified Bond VI 2024 SP | Cayman | N |
FTFT-Franklin Municipal Green Bond Fund | U.S.A. | N | |
Franklin USD Diversified Fixed Tenure Bond SP | Cayman | N | |
Franklin USD Diversified Bond VII 2024 SP | Cayman | N |
Annex II Electronic Access
1. J.P. Morgan may permit the Customer and its Authorized Persons and other persons designated by the Customer or its Authorized Persons (collectively “Users”), to access certain electronic systems and applications (collectively, the “Products”) and to access or receive Data (as defined below) electronically in connection with the Agreement. J.P. Morgan may, from time to time, introduce new features to the Products or otherwise modify or delete existing features of the Products in its sole discretion. J.P. Morgan shall endeavor to give the Customer reasonable notice of its termination or suspension of access to the Products, including suspension or cancelation of any User Codes, but may do so immediately if J.P. Morgan determines, in its sole discretion, that providing access to the Products would violate Applicable Law or that the security or integrity of the Products is known or suspected to be at risk. Access to the Products shall be subject to the Security Procedure.
2. In consideration of the fees paid by the Customer to J.P. Morgan and subject to any applicable software license in relation to J.P. Morgan-owned or sublicensed software provided for a particular application and Applicable Law, J.P. Morgan grants to the Customer a non-exclusive, non- transferable, non-sublicensable, limited and revocable license to use (i) the Products for internal business purposes only, and (ii) the information and data made available through the Products or transferred electronically (the “Data”) for use in Customer’s and its affiliates’ normal course of business, provided that J.P. Morgan may not revoke the Customer’s license to use the Data during the term of this Agreement. For avoidance of doubt, (a) all Data that is comprised of Customer Materials is the property of the Customer and a Fund; (b) the Customer and Funds maintain all intellectual property rights in such Customer Materials. Without limiting the use by a Customer, a Fund or its affiliates of Data in the normal course of the business of a Customer or a Fund, the Customer may download the Data and print out hard copies for its reference, provided that it does not remove any copyright or other notices contained therein. The license granted herein will permit use by the Users, provided that such use shall be in accordance with the terms of the Agreement, including this Annex. The Customer will not disclose or distribute (and will cause the Users not to disclose or distribute) to any other party, or allow any other party to access, inspect or copy the Products or any Data, except that (i) with respect to Products only, as reasonably necessary in the course of Customer’s management or administration and Customer’s Board’s oversight of the funds or accounts for which services are provided under this Agreement and, (ii) with respect to Data only, as reasonably necessary in the normal course of business of the Customer, a Fund or its affiliates including but not limited to, Customer’s management or administration and a Fund’s Board’s oversight of the funds or accounts for which services are provided under this Agreement. The Customer acknowledges that elements of the Data, including prices, Corporate Action information, and reference data, may have been licensed by J.P. Morgan from third parties and that any use of such Data beyond that authorized by the foregoing license, may require the permission of one or more third parties in addition to J.P. Morgan. In addition, the Customer and a Fund may disclose Data to any regulatory authority having jurisdiction over the Customer and a Fund upon the request of such regulator or any revenue authority or any governmental entity in relation to the processing of any tax claim. For the avoidance of doubt, any restrictions or limitations regarding the use of Data is not intended by J.P. Morgan to supersede any rights a Customer or Fund may have to use such Data based on its own agreements with any person (including a J.P. Morgan Affiliate) who provides software, information or the means of obtaining information on security prices, derivative prices, security characteristics data, market reference data derivative prices, foreign exchange, credit ratings, performance measurement or any other information obtained by J.P. Morgan in connection with the
Services (including index return providers, security characteristics providers, and value-at-risk providers). .
3. The Customer acknowledges that there are security, cyberfraud, corruption, transaction error and access availability risks associated with using open networks such as the internet to access and use the Products, and the Customer hereby expressly assumes such risks. The Customer is solely responsible for obtaining, maintaining and operating all of its own systems, software (including antivirus software, anti-spyware software, and other internet security software) and personnel necessary for the Customer and its Users to access and use the Products. All such software must be interoperable with
J.P. Morgan’s software. Each of the Customer and J.P. Morgan shall be responsible for the proper functioning, maintenance and security of its own systems, services, software and other equipment.
4. In cases where J.P. Morgan’s website or the Products are unexpectedly down or otherwise unavailable, J.P. Morgan shall, absent a force majeure event, provide other appropriate means for the Customer or its Users to instruct J.P. Morgan or obtain reports from J.P. Morgan. J.P. Morgan shall not be liable for any Liabilities arising out of the Customer’s use of, access to or inability to use the Products in the absence of J.P. Morgan’s negligence, fraud or willful misconduct.
5. Use of the Products may be monitored, tracked, and recorded in a manner as permitted by Applicable Law. In using the Products, the Customer hereby expressly consents to, and will ensure that its Users are advised of and have consented to, such monitoring, tracking and recording, and J.P. Morgan’s right to disclose data derived from such activity in accordance with the Agreement, including this Annex. J.P. Morgan shall own all right, title and interest in the data reflecting the Customer usage of the Products or J.P. Morgan’s website (including general usage data and aggregated transaction data), provided that J.P. Morgan’s use of such data shall remain, subject to its obligations of confidentiality set forth in this Agreement. For clarity, the foregoing shall not be deemed to give J.P. Morgan ownership of, or any rights in or to, the Customer’s confidential information (whether or not in aggregated form), the use or disclosure of which shall at all times be subject to Section 5.7 of this Agreement unless otherwise agreed by the parties. Individuals and organizations should have no expectation of privacy unless local law, regulation, or contract provides otherwise. The Customer hereby expressly consents, and will ensure that its Users are advised of and have consented to, J.P. Morgan’s collection, storage, use and transfer (including to or through jurisdictions that do not provide the same statutory protection as the originating jurisdictions(s)) of their personal data. Any personal data collected through, or in connection with, the Customer’s use of the Products shall be subject to J.P. Morgan’s Privacy Policy (available at: https://www.jpmorgan.com/global/privacy) and Cookies Policy (available at: https://www.jpmorgan.com/global/cookies), each as updated from time to time and incorporated herein by reference.
6. The Customer shall not knowingly upload, post or transmit to or distribute or otherwise publish through the Products or J.P. Morgan’s web site any materials which (i) restrict or inhibit any other user from using the Products or the website, (ii) are defamatory, offensive, explicit, or indecent, (iii) infringe the rights of third parties including intellectual property rights, (iv) contain a virus, Trojan horse, worm, time bomb, cancelbot or other harmful component, or (v) constitute or contain false or misleading information.
7. The Customer shall promptly and accurately designate in writing to J.P. Morgan the geographic location of its Users upon written request. The Customer shall not access, and shall not permit its Users to access, the service from any jurisdiction which J.P. Morgan informs the Customer or which the Customer has actual knowledge, that the service is not authorized for use due to local regulations or laws, including applicable software export rules and regulations. Prior to submitting any document
which designates the Users, the Customer shall obtain from User all necessary consents to enable J.P. Morgan to process data concerning that User for the purposes of providing the Products.
8. The Customer will be subject to and shall comply with Applicable Law with regard to its use of the Products, including Applicable Law concerning restricting collection, use, disclosure, processing and free movement of the Data.
9. The Customer shall be responsible for the compliance of its Users with the terms of this Annex.
APPENDIX A
NET ASSET VALUE ERROR CORRECTION POLICY & PROCEDURES
1. Definitions
As used in this Appendix A, the following terms shall have the meaning hereinafter stated:
“Fund” means an investment fund for which J.P. Morgan provides NAV calculation services under the Agreement.
“Fund Benefit” means a situation where a Fund has either paid insufficient redemption proceeds as a result of an understatement of NAV or received excessive subscription proceeds as a result of an overstatement of NAV. When such a Fund Benefit occurs, the individual Unitholders effecting transactions suffer a corresponding loss (a “Unitholder Loss”).
“Fund Loss” refers to a situation where a Fund has either paid excessive redemption proceeds as a result of an overstatement of the NAV or received insufficient subscription proceeds as a result of an understatement of the NAV. When such a Fund Loss occurs, the individual Unitholders effecting transactions received a corresponding benefit.
“Intermediary” means a bank, broker-dealer, other fund or defined contribution plan record keeper through which Shareholders hold Shares.
“NAV” shall mean the net value of a Fund’s assets and liabilities.
“NAV Error” is defined as one or more errors in the computation of net asset value which, when considered cumulatively, result in a difference between the originally computed NAV and the corrected NAV of (i) at least USD $0.010 (one cent) per Unit with respect to any U.S. or Canadian Fund, or (ii) at least 50 basis points per Unit with respect to any Bahamian or Cayman Fund. This computation is based upon the actual difference and is not based upon any rounding of the NAV to the nearest cent per unit.
“NAV Error Period” comprises those days during which a NAV Error existed.
“Net Fund Loss (Benefit) Amount” means an amount equal to the difference between (i) the aggregate amount of Fund Losses less (ii) the aggregate amount of Fund Benefits arising out of a given NAV Error. This amount shall be a “Net Fund Loss Amount” when a positive number and a “Net Fund Benefit Amount” when a negative number.
“Per Unit NAV” shall mean the result obtained by dividing a Fund’s NAV by the number of existing Units of the Fund. In determining Unit value, fractions will be taken to two or four decimal places, as agreed upon with the Customer. Unit value shall be determined as of each valuation date before taking into account additions to and withdrawals from the Fund occurring as of such valuation date.
“Per Unit NAV Error” is the difference between the originally computed per Unit NAV, and the amount that would have been computed had the errors not occurred.
“Unitholder” means a holder of one or more Units.
“Units” means the units or shares issued by the Fund.
The term “responsible person” means one or more persons who, by virtue of negligence, fraud, or willful misconduct, caused or contributed to an NAV Error.
2. General Principles
J.P. Morgan shall not be liable for any Net Fund Loss Amount in the absence of J.P. Morgan’s negligence, fraud, willful misconduct or bad faith. J.P. Morgan shall not be liable for (i) the accuracy or completeness of any information provided to J.P. Morgan by the Investment Adviser or any Information Provider, (ii) values stated by the trustee of any group trust, including common and collective funds (each, a “Group Trust”), which shall be reported at the value stated by the trustee of the Group Trust (other than when J.P. Morgan is the trustee), (iii) the net asset value or other unit or share value as announced by any limited partnership, limited liability company, investment company, or other fund or its operator, or (iv) any redemption fees, surrender charges or similar fees or charges imposed on any investment held by the Fund; or (v) NAV errors, as described in Section 3(a) below.
J.P. Morgan agrees that it shall be liable to the Customer or Fund for a claim by an Intermediary (as defined above) to the Customer or Fund for reprocessing costs directly resulting from a NAV Error for which JPM is responsible pursuant to the terms of this agreement, provided that the maximum aggregate liability for any single particular NAV Error of J.P. Morgan in respect of any and all claims of any kind arising out of, in connection with or relating to this paragraph with respect to such single particular NAV error, regardless of the form of action (including breach of warranty, breach of contract, tort, negligence, strict liability or statutory) or type of damages, shall not exceed an aggregate amount of USD $100,000.
3. Error Correction Procedures
The following procedures will be utilized by J.P. Morgan with respect to NAV Error corrections:
(a) If the error in the computation of the net asset value does not constitute a NAV Error, no action shall be taken unless regulatory requirements specify otherwise.
(b) If a NAV Error occurs with respect to a particular Fund and the Per Unit NAV Error is less than ½ of 1% (one half of one percent) of the originally computed Per Unit NAV,
J.P. Morgan, on behalf of the Fund, will determine whether total Fund Losses exceeded total Fund Benefits for the NAV Error Period. If the Fund incurred a net loss, the Fund will be responsible for obtaining reimbursement for such loss from the responsible person or persons. If the Fund had a net benefit, no action need be taken; however, such net benefit should not be carried forward to any analyses performed in the future for other NAV Errors that may arise.
(c) If a NAV Error occurs with respect to a particular Fund and the Per Unit NAV Error equals or exceeds ½ of 1% (one half of one percent) of the originally computed Per Unit NAV, 1) account adjustments should be made to compensate Unitholders for Unitholder Losses, and 2) the Fund will be responsible for obtaining reimbursement for such loss from the responsible person or persons for Fund Losses.
(i) With respect to individual Unitholder Losses, the Fund will be responsible for causing the Fund (or responsible party) to pay to individual Unitholders any additional redemption proceeds owed and either refund excess subscription monies paid or credit the Unitholder account as of the date of the NAV Error, for additional Units. Nevertheless, no correction of a given individual Unitholder account shall be made unless the applicable Unitholder Loss for such Unitholder equals or exceeds a de minimis amount of USD $10 and CAD $25 for Canadian Funds.
(ii) With respect to Fund Losses, the Fund will be responsible for causing either the responsible person or persons or at the Fund’s discretion, the individual Unitholders to reimburse the Fund for the amount of the Fund Losses. (Note that there is no netting of Fund Losses (as described in (b) above) where the error equals or exceeds
½ of 1% (one half of one percent) of NAV, to the extent benefits were paid out by the Fund to Unitholders as account adjustments).
(d) In the case of a NAV Error that fluctuates above and below ½ of 1% (one half of one percent), individual Unitholder adjustments should be effected for those days where the NAV Error was equal to or exceeded ½ of 1% (one half of one percent). With respect to the remaining days, the Fund level process described above in Section 3(a) above may be applied.
(e) If there is a subsequent discovery of an error which affects a NAV Error Period that had previously been corrected in the manner described above, the subsequently discovered NAV Error should be analyzed in isolation without taking into consideration the previously corrected NAV Errors.
(f) In cases where a NAV Error (as described in (c) above) has occurred, the Fund, upon J.P. Morgan’s request, will instruct the Transfer Agent to reprocess transactions and to adjust each Unitholder’s Units upwards or downwards accordingly, at the expense of the responsible person or persons. If the Transfer Agent does not agree to reprocess transactions resulting from a NAV Error for which J.P. Morgan is a responsible person,
J.P. Morgan’s liability will be limited to the amount it would have been liable for had the reprocessing occurred.
(g) In cases where J.P. Morgan is not the responsible person with regard to an NAV Error,
J.P. Morgan shall be entitled to reasonable compensation from the Fund for the work it performs with respect to the remediation of the NAV Error, other than to re-calculate the NAV.
(h) In cases where J.P. Morgan is a responsible person with regard to an NAV Error, but not the sole responsible person, the Fund, to the extent customary under industry practice, shall seek recovery from each such responsible person, for its proportional share of the applicable Fund Loss or Unitholder Loss.
(i)
AMENDMENT TO FUND SERVICES AGREEMENT
This Amendment (“Amendment”) to the FUND SERVICES AGREEMENT, dated January 22, 2020 among FRANKLIN TEMPLETON SERVICES, LLC (the “Customer”) and JPMORGAN CHASE BANK, N.A. (“J.P. Morgan”), as amended from time to time (the “Agreement”), is made and entered into as of July 15, 2020, between the Customer and J.P. Morgan.
W I T N E S S E T H:
WHEREAS, the Customer and J.P. Morgan entered into the Agreement;
WHEREAS, the Customer wants to update the list of Funds, as set forth in Annex I to the Agreement, to which J.P. Morgan shall provide fund administration services under the terms and conditions set forth in the Agreement to include Franklin Equity Portfolio Fund, a series of Franklin ETF Trust and Franklin Fixed Income Portfolio Fund, a series of Franklin ETF Trust; and
WHEREAS, J.P. Morgan agrees to update Annex I as set forth in this Amendment.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereby agree as follows:
1. Definitions. Unless otherwise defined herein, defined terms used in this Amendment shall have the meaning ascribed to such terms in the Agreement.
2. Amendments. The Agreement shall be amended as follows:
(A) Annex I of the Agreement is hereby amended and restated in its entirety by Annex I hereto.
(B) Save as amended by this Amendment, the Agreement shall remain in full force and effect.
3. Representations. Each party represents to the other parties that all representations contained in the Agreement are true and accurate as of the date of this Amendment, and that such representations are deemed to be given or repeated by each party, as the case may be, on the date of this Amendment.
4. Entire Agreement. This Amendment and the Agreement and any documents referred to in each of them, constitutes the whole agreement between the parties relating to their subject matter and supersedes and extinguishes any other drafts, agreements, undertakings, representations, warranties and arrangements of any nature, whether in writing or oral, relating to such subject matter. If any of the provisions of this Amendment are inconsistent with or in conflict with any of the provisions of the Agreement then, to the extent of any such inconsistency or conflict, the provisions of this Amendment shall prevail as between the parties.
5. Counterparts. This Amendment may be executed in any number of counterparts which together shall constitute one agreement. Each party hereto may enter into this Amendment by executing a counterpart and this Amendment shall not take effect until it has been executed by both parties.
6. Law and Jurisdiction. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.
FRANKLIN TEMPLETON SERVICES, LLC By:__ /s/Matthew T. Hinkle Name: Matthew T. Hinkle Title: Senior Vice President | JPMORGAN CHASE BANK, N.A. By:_/s/John Miller Name: John Miller Title: Executive Director |
ANNEX I
“ANNEX I TO THE FUND SERVICES AGREEMENT”
List of Funds
Name | Entity Type | Jurisdiction | ERISA Benefit Plan Assets (Y/N) |
Franklin Templeton US Government Securities II Ltd | Bermuda | N | |
Templeton Growth Fund II Limited | Cayman | N | |
Alternative Strategies (FT) Ltd | Cayman | N | |
Templeton China Opportunities Fund, Ltd | Cayman | N | |
Franklin USD Diversified Bond 2021 Fund | Cayman | N | |
Franklin Diversified High Yield Global Sukuk 2022 Fund | Cayman | N | |
Franklin USD Diversified Bond Fund III | Cayman | N | |
Templeton Global Smaller Companies Fund | U.S.A. | N | |
TF-Templeton World Fund | U.S.A. | N | |
TF-Templeton Foreign Fund | U.S.A. | N | |
TIT-Templeton Global Bond Fund | U.S.A. | N | |
Templeton Growth Fund, Inc. | U.S.A. | N | |
Templeton Emerging Markets Fund | U.S.A. | N | |
Templeton Global Income Fund | U.S.A. | N | |
TIF-International Equity Series | U.S.A. | N | |
FTVIPT-Templeton Developing Markets VIP Fund | U.S.A. | N | |
FMSF-Franklin Mutual Beacon Fund | U.S.A. | N | |
FMSF-Franklin Mutual Global Discovery Fund | U.S.A. | N | |
FMSF-Franklin Mutual European Fund | U.S.A. | N | |
FMSF-Franklin Mutual Quest Fund | U.S.A. | N | |
FMSF-Franklin Mutual Shares Fund | U.S.A. | N | |
Templeton Developing Markets Trust | U.S.A. | N | |
FTVIPT-Templeton Foreign VIP Fund | U.S.A. | N |
Templeton Emerging Markets Income Fund | U.S.A. | N | |
Templeton Dragon Fund, Inc. | U.S.A. | N | |
FMSF-Franklin Mutual Financial Services Fund | U.S.A. | N | |
Franklin Universal Trust | U.S.A. | N | |
FFRMT-Franklin Floating Rate Master Series | U.S.A. | N | |
FCF-Franklin U.S. Government Securities Fund | U.S.A. | N | |
FVIT-Franklin Mutual U.S. Value Fund | U.S.A. | N | |
FCTFT-Franklin California Intermediate-Term Tax-Free Income | U.S.A. | N | |
FNYTFT-Franklin New York Intermediate-Term Tax-Free Income F | U.S.A. | N | |
Franklin Strategic Mortgage Portfolio | U.S.A. | N | |
FTFT-Franklin Kentucky Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Federal Intermediate-Term Tax-Free Income Fund | U.S.A. | N | |
FMST-Franklin California High Yield Municipal Fund | U.S.A. | N | |
TMMP-The U.S. Government Money Market Portfolio | U.S.A. | N | |
FVIT-Franklin Microcap Value Fund | U.S.A. | N | |
FREST-Franklin Real Estate Securities Fund | U.S.A. | N | |
FSS-Franklin Strategic Income Fund | U.S.A. | N | |
FSS-Franklin Small-Mid Cap Growth Fund | U.S.A. | N | |
FMST-Franklin Tennessee Municipal Bond Fund | U.S.A. | N | |
FVIT-Franklin Small Cap Value Fund | U.S.A. | N | |
TGIT-Templeton Global Balanced Fund | U.S.A. | N | |
Franklin Gold And Precious Metals Fund | U.S.A. | N | |
FHIT-Franklin High Income Fund | U.S.A. | N | |
FCF-Franklin Growth Fund | U.S.A. | N | |
FCF-Franklin Utilities Fund | U.S.A. | N | |
FCF-Franklin DynaTech Fund | U.S.A. | N |
FCF-Franklin Income Fund | U.S.A. | N | |
FUSGMF-Franklin U.S. Government Money Fund | U.S.A. | N | |
Franklin California Tax-Free Income Fund | U.S.A. | N | |
Franklin New York Tax-Free Income Fund | U.S.A. | N | |
Franklin Federal Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Massachusetts Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Michigan Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Minnesota Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Ohio Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Colorado Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Georgia Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Pennsylvania Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin High Yield Tax-Free Income Fund | U.S.A. | N | |
FIST-Franklin Convertible Securities Fund | U.S.A. | N | |
FIST-Franklin Adjustable U.S. Government Securities Fund | U.S.A. | N | |
FIST-Franklin Equity Income Fund | U.S.A. | N | |
IFT-Money Market Portfolio | U.S.A. | N | |
FTFT-Franklin Federal Limited-Term Tax-Free Fund | U.S.A. | N | |
FMT-Franklin Rising Dividends Fund | U.S.A. | N | |
FTFT-Franklin Missouri Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Oregon Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Virginia Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Alabama Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Florida Tax-Free Income Fund | U.S.A. | N | |
TGIT-Templeton Emerging Markets Small Cap Fund | U.S.A. | N | |
FSS-Franklin Biotechnology Discovery Fund | U.S.A. | N | |
FSS-Franklin Natural Resources Fund | U.S.A. | N |
FTVIPT-Franklin Flex Cap Growth VIP Fund | U.S.A. | N | |
FIST-Franklin Floating Rate Daily Access Fund | U.S.A. | N | |
FGT-Franklin Emerging Market Debt Opportunities Fund | U.S.A. | N | |
TIF-Foreign Smaller Companies Series | U.S.A. | N | |
FIST-Franklin Managed Income Fund | U.S.A. | N | |
FGT-Franklin International Small Cap Fund | U.S.A. | N | |
FIST-Franklin Total Return Fund | U.S.A. | N | |
FSS-Franklin Growth Opportunities Fund | U.S.A. | N | |
FTFT-Franklin Arizona Tax-Free Income Fund | U.S.A. | N | |
FSS-Franklin Small Cap Growth Fund | U.S.A. | N | |
FTFT-Franklin Connecticut Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin Louisiana Tax-Free Income Fund | U.S.A. | N | |
Franklin Limited Duration Income Trust | U.S.A. | N | |
Templeton China World Fund | U.S.A. | N | |
FTFT-Franklin Maryland Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin North Carolina Tax-Free Income Fund | U.S.A. | N | |
FTFT-Franklin New Jersey Tax-Free Income Fund | U.S.A. | N | |
FTVIPT-Franklin Growth and Income VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Global Real Estate VIP Fund | U.S.A. | N | |
FTVIPT-Templeton Global Bond VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Income VIP Fund | U.S.A. | N | |
FTVIPT-Franklin U.S. Government Securities VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Rising Dividends VIP Fund | U.S.A. | N | |
FTVIPT-Templeton Growth VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Small-Mid Cap Growth VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Large Cap Growth VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Mutual Global Discovery VIP Fund | U.S.A. | N |
FTVIPT-Franklin Mutual Shares VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Small Cap Value VIP Fund | U.S.A. | N | |
FTVIPT-Franklin Strategic Income VIP Fund | U.S.A. | N | |
FIST-Franklin Real Return Fund | U.S.A. | N | |
FIST-Franklin Low Duration Total Return Fund | U.S.A. | N | |
FSS-Franklin Select U.S. Equity Fund | U.S.A. | N | |
TIF-Global Equity Series | U.S.A. | N | |
FGT-Franklin International Growth Fund | U.S.A. | N | |
TGIT-Templeton Frontier Markets Fund | U.S.A. | N | |
TIT-Templeton Global Total Return Fund | U.S.A. | N | |
FTVIPT-Franklin VolSmart Allocation VIP Fund | U.S.A. | N | |
TIT-Templeton Emerging Markets Bond Fund | U.S.A. | N | |
FMSF-Franklin Mutual International Fund | U.S.A. | N | |
TIT-Templeton International Bond Fund | U.S.A. | N | |
FFAS-Franklin Payout 2019 Fund | U.S.A. | N | |
FFAS-Franklin Payout 2020 Fund | U.S.A. | N | |
FFAS-Franklin Payout 2021 Fund | U.S.A. | N | |
FSS-Franklin Flexible Alpha Bond Fund | U.S.A. | N | |
FFRMT-Franklin Floating Rate Income Fund | U.S.A. | N | |
FCF-Franklin Focused Growth Fund | U.S.A. | N | |
FFAS-Franklin Payout 2022 Fund | U.S.A. | N | |
TF Templeton International - Climate Change Fund | U.S.A. | N | |
Franklin Conservative Allocation Age 9-10 Years 529 Portfolio | U.S.A. | N | |
Franklin Conservative Allocation Age 13-14 Years 529 Portfolio | U.S.A. | N | |
FFAS-Franklin LifeSmart Retirement Income Fund | U.S.A. | N | |
Franklin Founding Funds 529 Portfolio | U.S.A. | N | |
FFAS-Franklin LifeSmart 2025 Retirement Target Fund | U.S.A. | N |
FFAS-Franklin LifeSmart 2035 Retirement Target Fund | U.S.A. | N | |
FTVIPT-Franklin Allocation VIP Fund | U.S.A. | N | |
FFAS-Franklin LifeSmart 2045 Retirement Target Fund | U.S.A. | N | |
FFAS-Franklin Corefolio Allocation Fund | U.S.A. | N | |
FFAS-Franklin Founding Funds Allocation Fund | U.S.A. | N | |
FFAS-Franklin Conservative Allocation Fund | U.S.A. | N | |
FFAS-Franklin Moderate Allocation Fund | U.S.A. | N | |
FFAS-Franklin Growth Allocation Fund | U.S.A. | N | |
Franklin Corefolio 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation Newborn - 4 Years 529 Portfolio | U.S.A. | N | |
Franklin Growth 529 Portfolio | U.S.A. | N | |
Franklin Income 529 Portfolio | U.S.A. | N | |
Franklin Small Mid Cap Growth 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation 529 Portfolio | U.S.A. | N | |
Franklin Income Allocation 529 Portfolio | U.S.A. | N | |
Franklin Mutual Shares 529 Portfolio | U.S.A. | N | |
Templeton Growth 529 Portfolio | U.S.A. | N | |
S&P 500 Index 529 Portfolio | U.S.A. | N | |
Franklin Conservative Allocation Newborn-4 Years 529 Portfolio | U.S.A. | N | |
Franklin Moderate Allocation Newborn-4 Years 529 Portfolio | U.S.A. | N | |
Franklin Moderate Allocation Age 9-10 Years 529 Portfolio | U.S.A. | N | |
Franklin Moderate Allocation Age 17-18 Years 529 Portfolio | U.S.A. | N | |
FFAS-Franklin LifeSmart 2030 Retirement Target Fund | U.S.A. | N | |
FFAS-Franklin LifeSmart 2050 Retirement Target Fund | U.S.A. | N | |
FFAS-Franklin LifeSmart 2040 Retirement Target Fund | U.S.A. | N | |
FFAS-Franklin LifeSmart 2020 Retirement Target Fund | U.S.A. | N | |
FFAS-Franklin NextStep Conservative Fund | U.S.A. | N |
FFAS-Franklin NextStep Moderate Fund | U.S.A. | N | |
FFAS-Franklin NextStep Growth Fund | U.S.A. | N | |
Franklin Mutual Global Discovery 529 Portfolio | U.S.A. | N | |
Templeton Global Bond 529 Portfolio | U.S.A. | N | |
FFAS-Franklin LifeSmart 2055 Retirement Target Fund | U.S.A. | N | |
NJ Best Trust A | U.S.A. | N | |
NJ Best Trust B | U.S.A. | N | |
NJ Best Trust C | U.S.A. | N | |
NJ Best Trust D | U.S.A. | N | |
NJ Best Trust E | U.S.A. | N | |
NJ Better Educational Saving Trust | U.S.A. | N | |
NJ Best Pooled Equity | U.S.A. | N | |
Franklin Growth Allocation Age 9 - 10 Years 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation Age 13 - 14 Years 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation Age 17-18 Years 529 Portfolio | U.S.A. | N | |
Franklin Growth & Income Allocation 529 Portfolio | U.S.A. | N | |
Franklin Conservative Allocation Age 17-18 Years 529 Portfolio | U.S.A. | N | |
Franklin Moderate Allocation Age 13-14 Years 529 Portfolio | U.S.A. | N | |
Franklin U.S. Government Money 529 Portfolio | U.S.A. | N | |
FT Holdings Corporations III | U.S.A. | N | |
FT Holdings Corporations IV | U.S.A. | N | |
FT Holdings Corporations I | U.S.A. | N | |
FT Holdings Corporations II | U.S.A. | N | |
Franklin Conservative Allocation Age 5 - 8 Years 529 Portfolio | U.S.A. | N | |
Franklin Conservative Allocation Age 11 - 12 Years 529 Portfolio | U.S.A. | N | |
Franklin Conservative Allocation Age 15 - 16 Years 529 Portfolio | U.S.A. | N | |
Franklin Conservative Allocation Age 19+ Years 529 Portfolio | U.S.A. | N |
Franklin Moderate Allocation Age 5 - 8 Years 529 Portfolio | U.S.A. | N | |
Franklin Moderate Allocation Age 11 - 12 Years 529 Portfolio | U.S.A. | N | |
Franklin Moderate Allocation Age 15 - 16 Years 529 Portfolio | U.S.A. | N | |
Franklin Moderate Allocation Age 19+ Years 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation Age 5 - 8 Years 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation Age 11 - 12 Years 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation Age 15 - 16 Years 529 Portfolio | U.S.A. | N | |
Franklin Growth Allocation Age 19+ Years 529 Portfolio | U.S.A. | N | |
FSS-Franklin Templeton SMACS Series CH | U.S.A. | N | |
FSS-Franklin Templeton SMACS Series H | U.S.A. | N | |
FSS-Franklin Templeton SMACS Series E | U.S.A. | N | |
FSS-Franklin Templeton SMACS Series I | U.S.A. | N | |
Franklin USD Diversified Bond IV 2024 Fund A (Qdis) USD | Cayman | N | |
Franklin U.S. Core Equity (IU) Fund | U.S.A. | N | |
Franklin International Core Equity (IU) Fund | U.S.A. | N | |
Franklin Emerging Markets Core Equity (UI) Fund | U.S.A. | N | |
Franklin USD Diversified Bond 2021 Fund II | Cayman | N | |
Franklin USD Diversified Bond V 2024 | Cayman | N | |
Franklin USD Diversified Bond VI 2024 SP | Cayman | N | |
FTFT-Franklin Municipal Green Bond Fund | U.S.A. | N | |
Franklin USD Diversified Fixed Tenure Bond SP | Cayman | N | |
Franklin USD Diversified Bond VII 2024 SP | Cayman | N | |
Franklin Equity Portfolio Fund, a series of Franklin ETF Trust* | U.S.A. | N | |
Franklin Fixed Income Portfolio Fund, a series of Franklin ETF Trust* | U.S.A. | N |
*Denotes a Fund added through this Amendment.
AMENDMENT TO FUND SERVICES AGREEMENT
This Amendment (“Amendment”) to the FUND SERVICES AGREEMENT, dated January 22, 2020 among FRANKLIN TEMPLETON SERVICES, LLC (the “Customer”) and JPMORGAN CHASE BANK, N.A. (“J.P. Morgan”), as amended from time to time (the “Agreement”), is made and entered into as of January 27, 2021 and shall be effective as of January 29, 2021, between the Customer and J.P. Morgan.
W I T N E S S E T H:
WHEREAS, the Customer and J.P. Morgan entered into the Agreement;
WHEREAS, the Customer wants to update the list of Funds, as set forth in Annex I to the Agreement, to which J.P. Morgan shall provide fund administration services under the terms and conditions set forth in the Agreement to include Franklin USD Diversified Fixed Tenure Bond Series II SP, Franklin Lifesmart 2060 Retirement Target Fund; and
WHEREAS, J.P. Morgan agrees to update Annex I as set forth in this Amendment.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereby agree as follows:
1. Definitions. Unless otherwise defined herein, defined terms used in this Amendment shall have the meaning ascribed to such terms in the Agreement.
2. Amendments. The Agreement shall be amended as follows:
(A) Annex I of the Agreement is hereby amended and restated in its entirety by Annex I hereto.
(B) Save as amended by this Amendment, the Agreement shall remain in full force and effect.
3. Representations. Each party represents to the other parties that all representations contained in the Agreement are true and accurate as of the date of this Amendment, and that such representations are deemed to be given or repeated by each party, as the case may be, on the date of this Amendment.
4. Entire Agreement. This Amendment and the Agreement and any documents referred to in each of them, constitutes the whole agreement between the parties relating to their subject matter and supersedes and extinguishes any other drafts, agreements, undertakings, representations, warranties and arrangements of any nature, whether in writing or oral, relating to such subject matter. If any of the provisions of this Amendment are inconsistent with or in conflict with any of the provisions of the Agreement then, to the extent of any such inconsistency or conflict, the provisions of this Amendment shall prevail as between the parties.
5. Counterparts. This Amendment may be executed in any number of counterparts which together shall constitute one agreement. Each party hereto may enter into this Amendment by executing a counterpart and this Amendment shall not take effect until it has been executed by both parties.
6. Law and Jurisdiction. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.
FRANKLIN TEMPLETON SERVICES, LLC By:/s/Laura F. Fergerson Name: Laura F. Fergerson Title: President | JPMORGAN CHASE BANK, N.A. By:/s/Gregory Cook Name: Gregory Cook Title: Executive Director |
ANNEX I
“ANNEX I TO THE FUND SERVICES AGREEMENT”
List of Funds
Name | Entity Type | Jurisdiction |
Franklin Templeton US Government Securities II Ltd | Bermuda | |
Templeton Growth Fund II Limited | Cayman | |
Alternative Strategies (FT) Ltd | Cayman | |
Templeton China Opportunities Fund, Ltd | Cayman | |
Franklin USD Diversified Bond 2021 Fund | Cayman | |
Franklin Diversified High Yield Global Sukuk 2022 Fund | Cayman | |
Franklin USD Diversified Bond Fund III | Cayman | |
Templeton Global Smaller Companies Fund | U.S.A. | |
TF-Templeton World Fund | U.S.A. | |
TF-Templeton Foreign Fund | U.S.A. | |
TIT-Templeton Global Bond Fund | U.S.A. | |
Templeton Growth Fund, Inc. | U.S.A. | |
Templeton Emerging Markets Fund | U.S.A. | |
Templeton Global Income Fund | U.S.A. | |
TIF-International Equity Series | U.S.A. | |
FTVIPT-Templeton Developing Markets VIP Fund | U.S.A. | |
FMSF-Franklin Mutual Beacon Fund | U.S.A. | |
FMSF-Franklin Mutual Global Discovery Fund | U.S.A. | |
FMSF-Franklin Mutual European Fund | U.S.A. | |
FMSF-Franklin Mutual Quest Fund | U.S.A. | |
FMSF-Franklin Mutual Shares Fund | U.S.A. | |
Templeton Developing Markets Trust | U.S.A. | |
FTVIPT-Templeton Foreign VIP Fund | U.S.A. |
Templeton Emerging Markets Income Fund | U.S.A. | |
Templeton Dragon Fund, Inc. | U.S.A. | |
FMSF-Franklin Mutual Financial Services Fund | U.S.A. | |
Franklin Universal Trust | U.S.A. | |
FFRMT-Franklin Floating Rate Master Series | U.S.A. | |
FCF-Franklin U.S. Government Securities Fund | U.S.A. | |
FVIT-Franklin Mutual U.S. Value Fund | U.S.A. | |
FCTFT-Franklin California Intermediate-Term Tax-Free Income | U.S.A. | |
FNYTFT-Franklin New York Intermediate-Term Tax-Free Income F | U.S.A. | |
Franklin Strategic Mortgage Portfolio | U.S.A. | |
FTFT-Franklin Kentucky Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin Federal Intermediate-Term Tax-Free Income Fund | U.S.A. | |
FMST-Franklin California High Yield Municipal Fund | U.S.A. | |
TMMP-The U.S. Government Money Market Portfolio | U.S.A. | |
FVIT-Franklin Microcap Value Fund | U.S.A. | |
FREST-Franklin Real Estate Securities Fund | U.S.A. | |
FSS-Franklin Strategic Income Fund | U.S.A. | |
FSS-Franklin Small-Mid Cap Growth Fund | U.S.A. | |
FMST-Franklin Tennessee Municipal Bond Fund | U.S.A. | |
FVIT-Franklin Small Cap Value Fund | U.S.A. | |
TGIT-Templeton Global Balanced Fund | U.S.A. | |
Franklin Gold And Precious Metals Fund | U.S.A. | |
FHIT-Franklin High Income Fund | U.S.A. | |
FCF-Franklin Growth Fund | U.S.A. | |
FCF-Franklin Utilities Fund | U.S.A. | |
FCF-Franklin DynaTech Fund | U.S.A. | |
FCF-Franklin Income Fund | U.S.A. |
FUSGMF-Franklin U.S. Government Money Fund | U.S.A. | |
Franklin California Tax-Free Income Fund | U.S.A. | |
Franklin New York Tax-Free Income Fund | U.S.A. | |
Franklin Federal Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin Massachusetts Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin Michigan Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin Minnesota Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin Ohio Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin Colorado Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin Georgia Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin Pennsylvania Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin High Yield Tax-Free Income Fund | U.S.A. | |
FIST-Franklin Convertible Securities Fund | U.S.A. | |
FIST-Franklin Adjustable U.S. Government Securities Fund | U.S.A. | |
FIST-Franklin Equity Income Fund | U.S.A. | |
IFT-Money Market Portfolio | U.S.A. | |
FTFT-Franklin Federal Limited-Term Tax-Free Fund | U.S.A. | |
FMT-Franklin Rising Dividends Fund | U.S.A. | |
FTFT-Franklin Missouri Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin Oregon Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin Virginia Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin Alabama Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin Florida Tax-Free Income Fund | U.S.A. | |
TGIT-Templeton Emerging Markets Small Cap Fund | U.S.A. | |
FSS-Franklin Biotechnology Discovery Fund | U.S.A. | |
FSS-Franklin Natural Resources Fund | U.S.A. | |
FTVIPT-Franklin Flex Cap Growth VIP Fund | U.S.A. |
FIST-Franklin Floating Rate Daily Access Fund | U.S.A. | |
FGT-Franklin Emerging Market Debt Opportunities Fund | U.S.A. | |
TIF-Foreign Smaller Companies Series | U.S.A. | |
FIST-Franklin Managed Income Fund | U.S.A. | |
FGT-Franklin International Small Cap Fund | U.S.A. | |
FIST-Franklin Total Return Fund | U.S.A. | |
FSS-Franklin Growth Opportunities Fund | U.S.A. | |
FTFT-Franklin Arizona Tax-Free Income Fund | U.S.A. | |
FSS-Franklin Small Cap Growth Fund | U.S.A. | |
FTFT-Franklin Connecticut Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin Louisiana Tax-Free Income Fund | U.S.A. | |
Franklin Limited Duration Income Trust | U.S.A. | |
Templeton China World Fund | U.S.A. | |
FTFT-Franklin Maryland Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin North Carolina Tax-Free Income Fund | U.S.A. | |
FTFT-Franklin New Jersey Tax-Free Income Fund | U.S.A. | |
FTVIPT-Franklin Growth and Income VIP Fund | U.S.A. | |
FTVIPT-Franklin Global Real Estate VIP Fund | U.S.A. | |
FTVIPT-Templeton Global Bond VIP Fund | U.S.A. | |
FTVIPT-Franklin Income VIP Fund | U.S.A. | |
FTVIPT-Franklin U.S. Government Securities VIP Fund | U.S.A. | |
FTVIPT-Franklin Rising Dividends VIP Fund | U.S.A. | |
FTVIPT-Templeton Growth VIP Fund | U.S.A. | |
FTVIPT-Franklin Small-Mid Cap Growth VIP Fund | U.S.A. | |
FTVIPT-Franklin Large Cap Growth VIP Fund | U.S.A. | |
FTVIPT-Franklin Mutual Global Discovery VIP Fund | U.S.A. | |
FTVIPT-Franklin Mutual Shares VIP Fund | U.S.A. |
FTVIPT-Franklin Small Cap Value VIP Fund | U.S.A. | |
FTVIPT-Franklin Strategic Income VIP Fund | U.S.A. | |
FIST-Franklin Real Return Fund | U.S.A. | |
FIST-Franklin Low Duration Total Return Fund | U.S.A. | |
FSS-Franklin Select U.S. Equity Fund | U.S.A. | |
TIF-Global Equity Series | U.S.A. | |
FGT-Franklin International Growth Fund | U.S.A. | |
TGIT-Templeton Frontier Markets Fund | U.S.A. | |
TIT-Templeton Global Total Return Fund | U.S.A. | |
FTVIPT-Franklin VolSmart Allocation VIP Fund | U.S.A. | |
TIT-Templeton Emerging Markets Bond Fund | U.S.A. | |
FMSF-Franklin Mutual International Fund | U.S.A. | |
TIT-Templeton International Bond Fund | U.S.A. | |
FFAS-Franklin Payout 2019 Fund | U.S.A. | |
FFAS-Franklin Payout 2020 Fund | U.S.A. | |
FFAS-Franklin Payout 2021 Fund | U.S.A. | |
FSS-Franklin Flexible Alpha Bond Fund | U.S.A. | |
FFRMT-Franklin Floating Rate Income Fund | U.S.A. | |
FCF-Franklin Focused Growth Fund | U.S.A. | |
FFAS-Franklin Payout 2022 Fund | U.S.A. | |
TF Templeton International - Climate Change Fund | U.S.A. | |
Franklin Conservative Allocation Age 9-10 Years 529 Portfolio | U.S.A. | |
Franklin Conservative Allocation Age 13-14 Years 529 Portfolio | U.S.A. | |
FFAS-Franklin LifeSmart Retirement Income Fund | U.S.A. | |
Franklin Founding Funds 529 Portfolio | U.S.A. | |
FFAS-Franklin LifeSmart 2025 Retirement Target Fund | U.S.A. | |
FFAS-Franklin LifeSmart 2035 Retirement Target Fund | U.S.A. |
FTVIPT-Franklin Allocation VIP Fund | U.S.A. | |
FFAS-Franklin LifeSmart 2045 Retirement Target Fund | U.S.A. | |
FFAS-Franklin Corefolio Allocation Fund | U.S.A. | |
FFAS-Franklin Founding Funds Allocation Fund | U.S.A. | |
FFAS-Franklin Conservative Allocation Fund | U.S.A. | |
FFAS-Franklin Moderate Allocation Fund | U.S.A. | |
FFAS-Franklin Growth Allocation Fund | U.S.A. | |
Franklin Corefolio 529 Portfolio | U.S.A. | |
Franklin Growth Allocation Newborn - 4 Years 529 Portfolio | U.S.A. | |
Franklin Growth 529 Portfolio | U.S.A. | |
Franklin Income 529 Portfolio | U.S.A. | |
Franklin Small Mid Cap Growth 529 Portfolio | U.S.A. | |
Franklin Growth Allocation 529 Portfolio | U.S.A. | |
Franklin Income Allocation 529 Portfolio | U.S.A. | |
Franklin Mutual Shares 529 Portfolio | U.S.A. | |
Templeton Growth 529 Portfolio | U.S.A. | |
S&P 500 Index 529 Portfolio | U.S.A. | |
Franklin Conservative Allocation Newborn-4 Years 529 Portfolio | U.S.A. | |
Franklin Moderate Allocation Newborn-4 Years 529 Portfolio | U.S.A. | |
Franklin Moderate Allocation Age 9-10 Years 529 Portfolio | U.S.A. | |
Franklin Moderate Allocation Age 17-18 Years 529 Portfolio | U.S.A. | |
FFAS-Franklin LifeSmart 2030 Retirement Target Fund | U.S.A. | |
FFAS-Franklin LifeSmart 2050 Retirement Target Fund | U.S.A. | |
FFAS-Franklin LifeSmart 2040 Retirement Target Fund | U.S.A. | |
FFAS-Franklin LifeSmart 2020 Retirement Target Fund | U.S.A. | |
FFAS-Franklin NextStep Conservative Fund | U.S.A. | |
FFAS-Franklin NextStep Moderate Fund | U.S.A. |
FFAS-Franklin NextStep Growth Fund | U.S.A. | |
Franklin Mutual Global Discovery 529 Portfolio | U.S.A. | |
Templeton Global Bond 529 Portfolio | U.S.A. | |
FFAS-Franklin LifeSmart 2055 Retirement Target Fund | U.S.A. | |
NJ Best Trust A | U.S.A. | |
NJ Best Trust B | U.S.A. | |
NJ Best Trust C | U.S.A. | |
NJ Best Trust D | U.S.A. | |
NJ Best Trust E | U.S.A. | |
NJ Better Educational Saving Trust | U.S.A. | |
NJ Best Pooled Equity | U.S.A. | |
Franklin Growth Allocation Age 9 - 10 Years 529 Portfolio | U.S.A. | |
Franklin Growth Allocation Age 13 - 14 Years 529 Portfolio | U.S.A. | |
Franklin Growth Allocation Age 17-18 Years 529 Portfolio | U.S.A. | |
Franklin Growth & Income Allocation 529 Portfolio | U.S.A. | |
Franklin Conservative Allocation Age 17-18 Years 529 Portfolio | U.S.A. | |
Franklin Moderate Allocation Age 13-14 Years 529 Portfolio | U.S.A. | |
Franklin U.S. Government Money 529 Portfolio | U.S.A. | |
FT Holdings Corporations III | U.S.A. | |
FT Holdings Corporations IV | U.S.A. | |
FT Holdings Corporations I | U.S.A. | |
FT Holdings Corporations II | U.S.A. | |
Franklin Conservative Allocation Age 5 - 8 Years 529 Portfolio | U.S.A. | |
Franklin Conservative Allocation Age 11 - 12 Years 529 Portfolio | U.S.A. | |
Franklin Conservative Allocation Age 15 - 16 Years 529 Portfolio | U.S.A. | |
Franklin Conservative Allocation Age 19+ Years 529 Portfolio | U.S.A. | |
Franklin Moderate Allocation Age 5 - 8 Years 529 Portfolio | U.S.A. |
Franklin Moderate Allocation Age 11 - 12 Years 529 Portfolio | U.S.A. | |
Franklin Moderate Allocation Age 15 - 16 Years 529 Portfolio | U.S.A. | |
Franklin Moderate Allocation Age 19+ Years 529 Portfolio | U.S.A. | |
Franklin Growth Allocation Age 5 - 8 Years 529 Portfolio | U.S.A. | |
Franklin Growth Allocation Age 11 - 12 Years 529 Portfolio | U.S.A. | |
Franklin Growth Allocation Age 15 - 16 Years 529 Portfolio | U.S.A. | |
Franklin Growth Allocation Age 19+ Years 529 Portfolio | U.S.A. | |
FSS-Franklin Templeton SMACS Series CH | U.S.A. | |
FSS-Franklin Templeton SMACS Series H | U.S.A. | |
FSS-Franklin Templeton SMACS Series E | U.S.A. | |
FSS-Franklin Templeton SMACS Series I | U.S.A. | |
Franklin USD Diversified Bond IV 2024 Fund A (Qdis) USD | Cayman | |
Franklin U.S. Core Equity (IU) Fund | U.S.A. | |
Franklin International Core Equity (IU) Fund | U.S.A. | |
Franklin Emerging Markets Core Equity (UI) Fund | U.S.A. | |
Franklin USD Diversified Bond 2021 Fund II | Cayman | |
Franklin USD Diversified Bond V 2024 | Cayman | |
Franklin USD Diversified Bond VI 2024 SP | Cayman | |
FTFT-Franklin Municipal Green Bond Fund | U.S.A. | |
Franklin USD Diversified Fixed Tenure Bond SP | Cayman | |
Franklin USD Diversified Bond VII 2024 SP | Cayman | |
Franklin Equity Portfolio Fund, a series of Franklin ETF Trust | U.S.A. | |
Franklin Fixed Income Portfolio Fund, a series of Franklin ETF Trust | U.S.A. | |
Franklin USD Diversified Fixed Tenure Bond Series II SP* | Cayman | |
Franklin Lifesmart 2060 Retirement Target Fund* | U.S.A. |
*Denotes a Fund added through this Amendment.
THIRD AMENDMENT TO FUND SERVICES AGREEMENT
This third Amendment (“Amendment”) to the FUND SERVICES AGREEMENT, dated January 22, 2020 among FRANKLIN TEMPLETON SERVICES, LLC (the “Customer”) and JPMORGAN CHASE BANK, N.A. (“J.P. Morgan”), as amended from time to time (the “Agreement”), is made and entered into as of March 12, 2021, and shall be effective as of March 12, 2021, between the Customer and J.P. Morgan.
W I T N E S S E T H:
WHEREAS, the Customer and J.P. Morgan entered into the Agreement;
WHEREAS, the Customer wants to update the list of Funds, as set forth in Annex I to the Agreement, to which J.P. Morgan shall provide fund administration services under the terms and conditions set forth in the Agreement to include Franklin Equity Portfolio Fund, a series of Franklin ETF Trust and Franklin Fixed Income Portfolio Fund, a series of Franklin ETF Trust; and
WHEREAS, J.P. Morgan agrees to update Annex I as set forth in this Amendment.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereby agree as follows:
1. Definitions. Unless otherwise defined herein, defined terms used in this Amendment shall have the meaning ascribed to such terms in the Agreement.
2. Amendments. The Agreement shall be amended as follows:
(A) Annex I of the Agreement is hereby amended and restated in its entirety by Annex I hereto. (B) Save as amended by this Amendment, the Agreement shall remain in full force and effect.
3. Representations. Each party represents to the other parties that all representations contained in the Agreement are true and accurate as of the date of this Amendment, and that such representations are deemed to be given or repeated by each party, as the case may be, on the date of this Amendment.
4. Entire Agreement. This Amendment and the Agreement and any documents referred to in each of them, constitutes the whole agreement between the parties relating to their subject matter and supersedes and extinguishes any other drafts, agreements, undertakings, representations, warranties and arrangements of any nature, whether in writing or oral, relating to such subject matter. If any of the provisions of this Amendment are inconsistent with or in conflict with any of the provisions of the Agreement then, to the extent of any such inconsistency or conflict, the provisions of this Amendment shall prevail as between the parties.
5. Counterparts. This Amendment may be executed in any number of counterparts which together shall constitute one agreement. Each party hereto may enter into this Amendment by executing a counterpart and this Amendment shall not take effect until it has been executed by both parties.
6. Law and Jurisdiction. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.
FRANKLIN TEMPLETON SERVICES, LLC JPMORGAN CHASE BANK, N.A.
By: /s/ Matthew T. Hinkle By: /s/ Gregory Cook
Name: Matthew T. Hinkle Name: Gregory Cook
Title: Sr. Vice President Title: Executive Director
ANNEX I
“ANNEX I TO THE FUND SERVICES AGREEMENT”
List of Funds
Name | Entity Type | Jurisdiction |
Franklin Templeton US Government Securities II Ltd |
| Bermuda |
Templeton Growth Fund II Limited |
| Cayman |
Alternative Strategies (FT) Ltd |
| Cayman |
Templeton China Opportunities Fund, Ltd |
| Cayman |
Franklin USD Diversified Bond 2021 Fund |
| Cayman |
Franklin Diversified High Yield Global Sukuk 2022 Fund |
| Cayman |
Franklin USD Diversified Bond Fund III |
| Cayman |
Templeton Global Smaller Companies Fund |
| U.S.A. |
TF-Templeton World Fund |
| U.S.A. |
TF-Templeton Foreign Fund |
| U.S.A. |
TIT-Templeton Global Bond Fund |
| U.S.A. |
Templeton Growth Fund, Inc. |
| U.S.A. |
Templeton Emerging Markets Fund |
| U.S.A. |
Templeton Global Income Fund |
| U.S.A. |
TIF-International Equity Series |
| U.S.A. |
FTVIPT-Templeton Developing Markets VIP Fund |
| U.S.A. |
FMSF-Franklin Mutual Beacon Fund |
| U.S.A. |
FMSF-Franklin Mutual Global Discovery Fund |
| U.S.A. |
FMSF-Franklin Mutual European Fund |
| U.S.A. |
FMSF-Franklin Mutual Quest Fund |
| U.S.A. |
FMSF-Franklin Mutual Shares Fund |
| U.S.A. |
Templeton Developing Markets Trust |
| U.S.A. |
FTVIPT-Templeton Foreign VIP Fund |
| U.S.A. |
Templeton Emerging Markets Income Fund |
| U.S.A. |
Templeton Dragon Fund, Inc. |
| U.S.A. |
FMSF-Franklin Mutual Financial Services Fund |
| U.S.A. |
Franklin Universal Trust |
| U.S.A. |
FFRMT-Franklin Floating Rate Master Series |
| U.S.A. |
FCF-Franklin U.S. Government Securities Fund |
| U.S.A. |
FVIT-Franklin Mutual U.S. Value Fund |
| U.S.A. |
FCTFT-Franklin California Intermediate-Term Tax-Free Income |
| U.S.A. |
FNYTFT-Franklin New York Intermediate-Term Tax-Free Income F |
| U.S.A. |
Franklin Strategic Mortgage Portfolio |
| U.S.A. |
FTFT-Franklin Kentucky Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin Federal Intermediate-Term Tax-Free Income Fund |
| U.S.A. |
FMST-Franklin California High Yield Municipal Fund |
| U.S.A. |
TMMP-The U.S. Government Money Market Portfolio |
| U.S.A. |
FVIT-Franklin Microcap Value Fund |
| U.S.A. |
FREST-Franklin Real Estate Securities Fund |
| U.S.A. |
FSS-Franklin Strategic Income Fund |
| U.S.A. |
FSS-Franklin Small-Mid Cap Growth Fund |
| U.S.A. |
FMST-Franklin Tennessee Municipal Bond Fund |
| U.S.A. |
FVIT-Franklin Small Cap Value Fund |
| U.S.A. |
TGIT-Templeton Global Balanced Fund |
| U.S.A. |
Franklin Gold And Precious Metals Fund |
| U.S.A. |
FHIT-Franklin High Income Fund |
| U.S.A. |
FCF-Franklin Growth Fund |
| U.S.A. |
FCF-Franklin Utilities Fund |
| U.S.A. |
FCF-Franklin DynaTech Fund |
| U.S.A. |
FCF-Franklin Income Fund |
| U.S.A. |
FUSGMF-Franklin U.S. Government Money Fund |
| U.S.A. |
Franklin California Tax-Free Income Fund |
| U.S.A. |
Franklin New York Tax-Free Income Fund |
| U.S.A. |
Franklin Federal Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin Massachusetts Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin Michigan Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin Minnesota Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin Ohio Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin Colorado Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin Georgia Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin Pennsylvania Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin High Yield Tax-Free Income Fund |
| U.S.A. |
FIST-Franklin Convertible Securities Fund |
| U.S.A. |
FIST-Franklin Adjustable U.S. Government Securities Fund |
| U.S.A. |
FIST-Franklin Equity Income Fund |
| U.S.A. |
IFT-Money Market Portfolio |
| U.S.A. |
FTFT-Franklin Federal Limited-Term Tax-Free Fund |
| U.S.A. |
FMT-Franklin Rising Dividends Fund |
| U.S.A. |
FTFT-Franklin Missouri Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin Oregon Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin Virginia Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin Alabama Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin Florida Tax-Free Income Fund |
| U.S.A. |
TGIT-Templeton Emerging Markets Small Cap Fund |
| U.S.A. |
FSS-Franklin Biotechnology Discovery Fund |
| U.S.A. |
FSS-Franklin Natural Resources Fund |
| U.S.A. |
FTVIPT-Franklin Flex Cap Growth VIP Fund |
| U.S.A. |
FIST-Franklin Floating Rate Daily Access Fund |
| U.S.A. |
FGT-Franklin Emerging Market Debt Opportunities Fund |
| U.S.A. |
TIF-Foreign Smaller Companies Series |
| U.S.A. |
FIST-Franklin Managed Income Fund |
| U.S.A. |
FGT-Franklin International Small Cap Fund |
| U.S.A. |
FIST-Franklin Total Return Fund |
| U.S.A. |
FSS-Franklin Growth Opportunities Fund |
| U.S.A. |
FTFT-Franklin Arizona Tax-Free Income Fund |
| U.S.A. |
FSS-Franklin Small Cap Growth Fund |
| U.S.A. |
FTFT-Franklin Connecticut Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin Louisiana Tax-Free Income Fund |
| U.S.A. |
Franklin Limited Duration Income Trust |
| U.S.A. |
Templeton China World Fund |
| U.S.A. |
FTFT-Franklin Maryland Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin North Carolina Tax-Free Income Fund |
| U.S.A. |
FTFT-Franklin New Jersey Tax-Free Income Fund |
| U.S.A. |
FTVIPT-Franklin Growth and Income VIP Fund |
| U.S.A. |
FTVIPT-Franklin Global Real Estate VIP Fund |
| U.S.A. |
FTVIPT-Templeton Global Bond VIP Fund |
| U.S.A. |
FTVIPT-Franklin Income VIP Fund |
| U.S.A. |
FTVIPT-Franklin U.S. Government Securities VIP Fund |
| U.S.A. |
FTVIPT-Franklin Rising Dividends VIP Fund |
| U.S.A. |
FTVIPT-Templeton Growth VIP Fund |
| U.S.A. |
FTVIPT-Franklin Small-Mid Cap Growth VIP Fund |
| U.S.A. |
FTVIPT-Franklin Large Cap Growth VIP Fund |
| U.S.A. |
FTVIPT-Franklin Mutual Global Discovery VIP Fund |
| U.S.A. |
FTVIPT-Franklin Mutual Shares VIP Fund |
| U.S.A. |
FTVIPT-Franklin Small Cap Value VIP Fund |
| U.S.A. |
FTVIPT-Franklin Strategic Income VIP Fund |
| U.S.A. |
FIST-Franklin Real Return Fund |
| U.S.A. |
FIST-Franklin Low Duration Total Return Fund |
| U.S.A. |
FSS-Franklin Select U.S. Equity Fund |
| U.S.A. |
TIF-Global Equity Series |
| U.S.A. |
FGT-Franklin International Growth Fund |
| U.S.A. |
TGIT-Templeton Frontier Markets Fund |
| U.S.A. |
TIT-Templeton Global Total Return Fund |
| U.S.A. |
FTVIPT-Franklin VolSmart Allocation VIP Fund |
| U.S.A. |
TIT-Templeton Emerging Markets Bond Fund |
| U.S.A. |
FMSF-Franklin Mutual International Fund |
| U.S.A. |
TIT-Templeton International Bond Fund |
| U.S.A. |
FFAS-Franklin Payout 2019 Fund |
| U.S.A. |
FFAS-Franklin Payout 2020 Fund |
| U.S.A. |
FFAS-Franklin Payout 2021 Fund |
| U.S.A. |
FSS-Franklin Flexible Alpha Bond Fund |
| U.S.A. |
FFRMT-Franklin Floating Rate Income Fund |
| U.S.A. |
FCF-Franklin Focused Growth Fund |
| U.S.A. |
FFAS-Franklin Payout 2022 Fund |
| U.S.A. |
TF Templeton International - Climate Change Fund |
| U.S.A. |
Franklin Conservative Allocation Age 9-10 Years 529 Portfolio |
| U.S.A. |
Franklin Conservative Allocation Age 13-14 Years 529 Portfolio |
| U.S.A. |
FFAS-Franklin LifeSmart Retirement Income Fund |
| U.S.A. |
Franklin Founding Funds 529 Portfolio |
| U.S.A. |
FFAS-Franklin LifeSmart 2025 Retirement Target Fund |
| U.S.A. |
FFAS-Franklin LifeSmart 2035 Retirement Target Fund |
| U.S.A. |
FTVIPT-Franklin Allocation VIP Fund |
| U.S.A. |
FFAS-Franklin LifeSmart 2045 Retirement Target Fund |
| U.S.A. |
FFAS-Franklin Corefolio Allocation Fund |
| U.S.A. |
FFAS-Franklin Founding Funds Allocation Fund |
| U.S.A. |
FFAS-Franklin Conservative Allocation Fund |
| U.S.A. |
FFAS-Franklin Moderate Allocation Fund |
| U.S.A. |
FFAS-Franklin Growth Allocation Fund |
| U.S.A. |
Franklin Corefolio 529 Portfolio |
| U.S.A. |
Franklin Growth Allocation Newborn - 4 Years 529 Portfolio |
| U.S.A. |
Franklin Growth 529 Portfolio |
| U.S.A. |
Franklin Income 529 Portfolio |
| U.S.A. |
Franklin Small Mid Cap Growth 529 Portfolio |
| U.S.A. |
Franklin Growth Allocation 529 Portfolio |
| U.S.A. |
Franklin Income Allocation 529 Portfolio |
| U.S.A. |
Franklin Mutual Shares 529 Portfolio |
| U.S.A. |
Templeton Growth 529 Portfolio |
| U.S.A. |
S&P 500 Index 529 Portfolio |
| U.S.A. |
Franklin Conservative Allocation Newborn-4 Years 529 Portfolio |
| U.S.A. |
Franklin Moderate Allocation Newborn-4 Years 529 Portfolio |
| U.S.A. |
Franklin Moderate Allocation Age 9-10 Years 529 Portfolio |
| U.S.A. |
Franklin Moderate Allocation Age 17-18 Years 529 Portfolio |
| U.S.A. |
FFAS-Franklin LifeSmart 2030 Retirement Target Fund |
| U.S.A. |
FFAS-Franklin LifeSmart 2050 Retirement Target Fund |
| U.S.A. |
FFAS-Franklin LifeSmart 2040 Retirement Target Fund |
| U.S.A. |
FFAS-Franklin LifeSmart 2020 Retirement Target Fund |
| U.S.A. |
FFAS-Franklin NextStep Conservative Fund |
| U.S.A. |
FFAS-Franklin NextStep Moderate Fund |
| U.S.A. |
FFAS-Franklin NextStep Growth Fund |
| U.S.A. |
Franklin Mutual Global Discovery 529 Portfolio |
| U.S.A. |
Templeton Global Bond 529 Portfolio |
| U.S.A. |
FFAS-Franklin LifeSmart 2055 Retirement Target Fund |
| U.S.A. |
NJ Best Trust A |
| U.S.A. |
NJ Best Trust B |
| U.S.A. |
NJ Best Trust C |
| U.S.A. |
NJ Best Trust D |
| U.S.A. |
NJ Best Trust E |
| U.S.A. |
NJ Better Educational Saving Trust |
| U.S.A. |
NJ Best Pooled Equity |
| U.S.A. |
Franklin Growth Allocation Age 9 - 10 Years 529 Portfolio |
| U.S.A. |
Franklin Growth Allocation Age 13 - 14 Years 529 Portfolio |
| U.S.A. |
Franklin Growth Allocation Age 17-18 Years 529 Portfolio |
| U.S.A. |
Franklin Growth & Income Allocation 529 Portfolio |
| U.S.A. |
Franklin Conservative Allocation Age 17-18 Years 529 Portfolio |
| U.S.A. |
Franklin Moderate Allocation Age 13-14 Years 529 Portfolio |
| U.S.A. |
Franklin U.S. Government Money 529 Portfolio |
| U.S.A. |
FT Holdings Corporations III |
| U.S.A. |
FT Holdings Corporations IV |
| U.S.A. |
FT Holdings Corporations I |
| U.S.A. |
FT Holdings Corporations II |
| U.S.A. |
Franklin Conservative Allocation Age 5 - 8 Years 529 Portfolio |
| U.S.A. |
Franklin Conservative Allocation Age 11 - 12 Years 529 Portfolio |
| U.S.A. |
Franklin Conservative Allocation Age 15 - 16 Years 529 Portfolio |
| U.S.A. |
Franklin Conservative Allocation Age 19+ Years 529 Portfolio |
| U.S.A. |
Franklin Moderate Allocation Age 5 - 8 Years 529 Portfolio |
| U.S.A. |
Franklin Moderate Allocation Age 11 - 12 Years 529 Portfolio |
| U.S.A. |
Franklin Moderate Allocation Age 15 - 16 Years 529 Portfolio |
| U.S.A. |
Franklin Moderate Allocation Age 19+ Years 529 Portfolio |
| U.S.A. |
Franklin Growth Allocation Age 5 - 8 Years 529 Portfolio |
| U.S.A. |
Franklin Growth Allocation Age 11 - 12 Years 529 Portfolio |
| U.S.A. |
Franklin Growth Allocation Age 15 - 16 Years 529 Portfolio |
| U.S.A. |
Franklin Growth Allocation Age 19+ Years 529 Portfolio |
| U.S.A. |
FSS-Franklin Templeton SMACS Series CH |
| U.S.A. |
FSS-Franklin Templeton SMACS Series H |
| U.S.A. |
FSS-Franklin Templeton SMACS Series E |
| U.S.A. |
FSS-Franklin Templeton SMACS Series I |
| U.S.A. |
Franklin USD Diversified Bond IV 2024 Fund A (Qdis) USD |
| Cayman |
Franklin U.S. Core Equity (IU) Fund |
| U.S.A. |
Franklin International Core Equity (IU) Fund |
| U.S.A. |
Franklin Emerging Markets Core Equity (UI) Fund |
| U.S.A. |
Franklin USD Diversified Bond 2021 Fund II |
| Cayman |
Franklin USD Diversified Bond V 2024 |
| Cayman |
Franklin USD Diversified Bond VI 2024 SP |
| Cayman |
FTFT-Franklin Municipal Green Bond Fund |
| U.S.A. |
Franklin USD Diversified Fixed Tenure Bond SP |
| Cayman |
Franklin USD Diversified Bond VII 2024 SP |
| Cayman |
Franklin Equity Portfolio Fund, a series of Franklin ETF Trust |
| U.S.A. |
Franklin Fixed Income Portfolio Fund, a series of Franklin ETF Trust |
| U.S.A. |
Franklin OnChain U.S. Government Money Fund * |
| U.S.A. |
*Denotes a Fund added through this Amendment.
FRANKLIN TEMPLETON INVESTOR SERVICES, LLC
SECOND AMENDED AND RESTATED
TRANSFER AGENT AND SHAREHOLDER SERVICES AGREEMENT
Investment Company: TEMPLETON INSTITUTIONAL FUNDS
Date: March 1, 2022
The parties to this Agreement are the Investment Company named above ("Investment Company"), an open-end investment company registered as such under the Investment Company Act of 1940 ("1940 Act"), on behalf of each class of shares of each series, if any, of the Investment Company which now exists or may hereafter be created (individually, a "Fund" and collectively, the "Funds") and FRANKLIN TEMPLETON INVESTOR SERVICES, LLC ("FTIS"), a registered transfer agent. This Agreement supersedes the Amended and Restated Transfer Agent and Shareholder Services Agreement between the parties.
WITNESSETH:
That, for and in consideration of the mutual promises hereinafter set forth, the Investment Company and FTIS agree as follows:
1. Definitions. Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
(a) "Articles" shall mean the Articles of Incorporation or Agreement and Declaration of Trust, as appropriate, of the Investment Company as the same may be amended from time to time;
(b) "Authorized Person" shall be deemed to include any person, whether or not such person is an officer or employee of the Investment Company, duly authorized to give Oral Instructions or Written Instructions on behalf of the Investment Company, as indicated in a resolution of the Investment Company's Board which was valid at the time of this Agreement, or as indicated in a certificate furnished to FTIS pursuant to Section 4(c) hereof;
(c) "Board" shall mean the Investment Company's Board of Directors, Board of Trustees or Managing General Partners, as appropriate;
(d) "Custodian" shall mean a custodian and any sub-custodian of securities and other property which the Investment Company may from time to time deposit, or cause to be deposited or held under the name or account of such custodian pursuant to the Custody Agreement;
(e) "Oral Instructions" shall mean instructions (including without limitation instructions received by telephone, facsimile, electronic mail or other electronic communication), other than written instructions, actually received by FTIS from a person reasonably believed by FTIS to be an Authorized Person;
(f) "Shares" shall mean shares of each class of capital stock, beneficial interest or limited partnership interest, as appropriate, of each series of the Investment Company; and
(g) "Written Instructions" shall mean a written communication signed by a person reasonably believed by FTIS to be an Authorized Person and actually received by FTIS.
2. Appointment of FTIS. The Investment Company hereby appoints FTIS as transfer agent for Shares of the Investment Company, as service agent in connection with dividend and distribution functions, and as shareholder servicing agent for the Investment Company, and FTIS accepts such appointment and agrees to perform the duties described in this Agreement.
3. Payments to FTIS.
(a) Compensation for Servicing: The Investment Company, on behalf of each Fund, agrees to pay FTIS for its services, as set forth in Schedule A hereto. FTIS will bill the Investment Company as soon as practicable after the end of each calendar month for such compensation. The Investment Company will promptly pay to FTIS the amount of such billing.
(b) Reimbursement of FTIS
(i) Out-of-Pocket Expenses: The Investment Company, on behalf of each Fund, will reimburse FTIS in the manner set forth is Schedule B for out-of-pocket disbursements paid to third parties by FTIS on behalf of the Fund or its share classes in the performance of FTIS’s obligations hereunder including, but not limited to, the items specified in the written schedule of out-of-pocket expenses paid to third parties annexed hereto as Schedule B and incorporated herein. Unspecified out-of-pocket expenses shall be limited to those out-of-pocket expenses reasonably incurred by FTIS in the performance of its obligations hereunder, subject to approval by the Board. Reimbursement by the Investment Company for out-of-pocket disbursements paid by FTIS in any month shall be made as soon as practicable after the receipt of an itemized bill from FTIS.
(ii) Beneficial Owner Servicing Fees to Third Parties: Subject to the limitation set forth in paragraph (c) below, the Investment Company, on behalf of each Fund, will reimburse FTIS for servicing fee payments ("Beneficial Owner Servicing Fees") made by FTIS on the Investment Company's behalf to:
(A) institutions that purchase and hold the Fund's shares (other than Class R6 shares or Class IS shares, if any) in the institution's name, or in the name of an affiliate, nominee or other designated entity, through a master fund level account ("Omnibus Account") on behalf of numerous "Beneficial Owners," or
(B) in the case of shares issued to a 529 Plan Portfolio, institutions that hold units of the 529 Plan Portfolio in the institution's name on behalf of numerous 529 Plan accounts for whom the institution provides Individual 529 Investor Servicing;
it being understood, however, that to the extent FTIS causes Beneficial Owner Servicing Fees to be paid directly by the Investment Company on behalf of a Fund, FTIS shall not be entitled to reimbursement therefor.
Each account maintained in the name of a financial intermediary by a Fund under preceding sub-paragraph (A) or by a 529 Plan Portfolio under preceding sub-paragraph (B) is referred to as an "Omnibus Account." For purposes of this Agreement, (i) "Beneficial Owner" means each person with an indirect interest in fund shares issued and recorded in an Omnibus Account; and (ii) a person will be deemed to have an "indirect interest" in a Fund's shares if the value of the person's interest changes directly in relation to changes in the net asset value of the Fund's shares.
(iii) Networked Account Servicing Fees to Third Parties: Subject to the limitation set forth in paragraph (c) below, the Investment Company, on behalf of each Fund, will reimburse FTIS for servicing fee payments ("Networked Account Servicing Fees") made by FTIS on the Investment Company's behalf to an institution for each Fund account (a "Networked Account"), other than accounts holding Class R6 shares or Class IS shares maintained by FTIS in which servicing is shared with that institution by the exchange of account data through the National Securities Clearing Corporation (NSCC) networking system. It is understood, however, that to the extent FTIS causes Networked Account Servicing Fees to be paid directly by the Investment Company on behalf of a Fund, FTIS shall not be entitled to reimbursement therefor.
(c) Negotiation of Beneficial Owner Servicing Fees and Networked Account Servicing Fees. The Investment Company authorizes FTIS to negotiate Beneficial Owner Servicing Fees and Networked Account Servicing Fees (other than with respect to Class R6 shares or Class IS shares, if any) on the Investment Company's behalf and shall reimburse FTIS for those fees negotiated as set forth above. For all classes of shares of a Fund, other than Class R6 shares or Class IS shares, FTIS will in no event negotiate and agree, on behalf of any Fund, after the date of this Agreement, nor will the Investment Company, on behalf of a Fund, reimburse FTIS for, Beneficial Owner Servicing Fees and Networked Account Servicing Fees for each fiscal year of the Fund that exceed the amounts set forth in Schedule C hereto, unless otherwise agreed to in advance by the Investment Company’s Board of Trustees/Directors.
4. Documents. In connection with the appointment of FTIS, the Investment Company shall, within a reasonable period of time for FTIS to prepare to perform its duties hereunder, deliver to FTIS the following documents:
(a) If applicable, specimens of the certificates for the Shares;
(b) All account application forms and other documents relating to Shareholder accounts or to any plan, program or service offered by the Investment Company;
(c) A certificate identifying the Authorized Persons and specimen signatures of Authorized Persons who will sign Written Instructions; and
(d) All documents and papers necessary under the laws of the Investment Company's state of domicile, under the Investment Company's Articles, and as may be required for the due performance of FTIS's duties under this Agreement or for the due performance of additional duties as may from time to time be agreed upon between the Investment Company and FTIS.
5. Duties of FTIS.
(a) General. FTIS shall be responsible for administering and/or performing transfer agent functions; for acting as service agent in connection with dividend and distribution functions; and for performing shareholder account and administrative agent functions in connection with the issuance, transfer, exchange, redemption or repurchase (including coordination with the Custodian) of Shares. FTIS shall be bound to follow its usual and customary operating standards and procedures, as they may be amended from time to time, and each current prospectus and Statement of Additional Information (hereafter, collectively, the "prospectus") of the Investment Company. Without limiting the generality of the foregoing, FTIS agrees to perform the specific duties listed on Schedule D.
(b) "Blue Sky" Reporting. The Investment Company’s administrator and/or distributor shall identify to FTIS the states and countries where Shares of each Fund are registered or exempt, and the number of Shares of each class registered for sale with respect to each state or country, as applicable. FTIS shall (i) establish parameters for the daily transmission of a file to the Investment Company's manager or to such person or entity to which the Investment Company or its manager has designated responsibility for submitting “blue sky” filings on behalf of the Investment Company (the “Blue Sky Filer”), showing sales of Shares by class in each state or country ("Blue Sky Parameters"), and (ii) transmit the "blue sky" file resulting from the application of the Blue Sky Parameters with respect to each business day ("Blue Sky File") to the Blue Sky Filer in a format designated by the Blue Sky Filer ("Blue Sky Format"). The Investment Company’s administrator shall verify that the Blue Sky Parameters have been correctly established for each state or country prior to the sale of any applicable Shares. The responsibility of FTIS for the Investment Company's blue sky registration status is solely limited to the establishment of the Blue Sky Parameters and the daily transmission of the Blue Sky File to the Blue Sky Filer in the Blue Sky Format.
(c) Not Responsible for Requirements Under Laws of Foreign Countries. The duties to be performed by FTIS shall not include the engagement, supervision or compensation of any service providers, or the payment of any registrations or fees of any kind, which are required by the laws of any foreign country in which the Fund may choose to invest portfolio assets or sell Shares.
6. (a) Distributions Payable in Shares. In the event that the Board of the Investment Company shall declare a distribution payable in Shares, the Investment Company shall deliver to FTIS written notice of such declaration signed on behalf of the Investment Company by an officer thereof, upon which FTIS shall be entitled to rely for all purposes, certifying (i) the number of Shares involved, and (ii) that all appropriate action has been taken to effect such distribution.
(b) Distributions Payable in Cash; Redemption Payments. In the event that the Board of the Investment Company shall declare a distribution payable in cash, the Investment Company shall deliver to FTIS written notice of such declaration signed on behalf of the Investment Company by an officer thereof, upon which FTIS shall be entitled to rely for all purposes, certifying (i) the amount per share to be distributed, (ii) the record and payment dates for the distribution, and (iii) that all appropriate action has been taken to effect such distribution. Once the amount and validity of any dividend or redemption payments to shareholders have been determined, the Investment Company shall transfer the payment amounts from the Investment Company's accounts to an account or accounts held in the name of FTIS, as paying agent for the shareholders, in accordance with any applicable laws or regulations, and FTIS shall promptly cause payments to be made to the shareholders.
7. Recordkeeping and Other Information. FTIS shall create, maintain and preserve all necessary records in accordance with all applicable laws, rules and regulations. Such records are the property of the Investment Company, and FTIS will promptly surrender them to the Investment Company upon request or upon termination of this Agreement. In the event of such a request or termination, FTIS shall be entitled to make and retain copies of all records surrendered, and to be reimbursed by the Investment Company for reasonable expenses actually incurred in making such copies. FTIS will take reasonable actions to maintain the confidentiality of the Investment Company's records, which may nevertheless be disclosed to the extent permitted under Section 16.
8. Other Duties. In addition, FTIS shall perform such other duties and functions,
and shall be paid such amounts therefor, as may from time to time be agreed upon in writing between the Investment Company and FTIS. Such other duties and functions shall be reflected in a written amendment to Schedule D, and the compensation for such other duties and functions shall be reflected in a written amendment to Schedule A.
9. Reliance by FTIS; Instructions.
(a) FTIS will be protected in acting upon Written or Oral Instructions reasonably believed to have been executed or orally communicated by an Authorized Person and will not be held to have any notice of any change of authority of any person until receipt of a Written Instruction thereof from an officer of the Investment Company. FTIS will also be protected in processing Share certificates which it reasonably believes to bear the proper manual or facsimile signatures of the officers of the Investment Company and the proper countersignature of FTIS.
(b) At any time FTIS may apply to any Authorized Person of the Investment Company for Written Instructions, or may seek advice at the Investment Company's expense from legal counsel for the Investment Company, with respect to any matter arising in connection with this Agreement. FTIS shall not be liable for any action taken or not taken or suffered by it in good faith in accordance with such Written Instructions or in accordance with the opinion of counsel for the Investment Company. Written Instructions requested by FTIS will be provided by the Investment Company within a reasonable period of time.
10. Force Majeure. No party will be liable or responsible for delays or errors by reason of circumstances beyond its control, including acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdown beyond its control, earthquake, flood or catastrophe, acts of God, insurrection, war, riots or failure beyond its control of transportation, communication or power supply, except in any case to the extent that FTIS shall have failed to use its reasonable best efforts to minimize the likelihood of occurrence of such circumstances or to mitigate any loss or damage to the Investment Company caused by such circumstances, or has not complied with the terms of Section 18. In any such event, the non-performing party shall be excused from the further performance of the obligations so affected only for as long as such circumstances prevail and such party continues to use commercially reasonable efforts to mitigate damages and to recommence performance or observance as soon as practicable. This Section 10 shall not in any way limit FTIS’s obligations under Section 18.
11. Duty of Care; Indemnification.
(a) Duty of Care. FTIS shall provide its services as transfer agent in accordance with the applicable provisions of Section 17A under the Securities Exchange Act of 1934, as amended. In performing the responsibilities delegated to it under this Agreement, FTIS shall at all times act in good faith and agrees to exercise reasonable care, diligence and expertise of a transfer agent having responsibility for providing transfer agent services to investment companies registered under the 1940 Act, but FTIS shall not be liable for any losses, claims, damages, liabilities or expenses arising out of its performance of or failure to perform its duties under this Agreement, except to the extent such damages arise out of its own negligence, bad faith, willful misfeasance or reckless disregard of duty or that of its employees, agents, representatives or delegates or violations of applicable laws, regulations or requirements of any governmental authority having jurisdiction over FTIS or the Investment Company, or breach of this Agreement. FTIS’s liability may arise from or in connection with this Agreement, or from any services under this Agreement provided or omitted to be provided during the term of this Agreement, whether in contract, or in tort, or otherwise.
(b) Indemnification. FTIS will indemnify the Investment Company against and hold it harmless from any and all losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) resulting from any claim, demand, action or suit resulting from willful misfeasance, bad faith, negligence, reckless disregard of duty, violations of applicable laws, regulations or requirements of any governmental authority having jurisdiction over FTIS or the Investment Company, or breach of this Agreement on the part of FTIS or its employees, agents, representatives or delegates, and arising out of, or in connection with, its or their duties hereunder. However, FTIS shall have no liability for or obligation to indemnify the Investment Company against any losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) incurred by the Investment Company as a result of: (i) any action taken in accordance with written or oral advice reasonably believed by FTIS to have been given by counsel for the Investment Company; or (ii) any action taken in accordance with shareholder instructions which meet the standards described in the Investment Company's current prospectus, including without limitation oral instructions which meet the standards described in the section of the prospectus dealing with telephone transactions, so long as FTIS believes such instructions to be genuine. The obligations of the parties hereto under this Section shall survive the termination of this Agreement.
12. Term and Termination.
(a) This Agreement shall be effective as of the date first written above, shall continue through June 1, 2022, and thereafter shall continue automatically for successive annual periods ending on June 1 of each year, provided such continuance is specifically approved at least annually by the Investment Company's Board, in each case, unless terminated sooner pursuant to Section 12(b).
(b) Either party hereto may terminate this Agreement by giving to the other party a notice in writing specifying the date of such termination, which shall be not less than 60 days after the date of receipt of such notice. Upon such termination, FTIS will (i) deliver to such successor a certified list of shareholders of the Investment Company (with names and addresses) and a historical record of the account of each Shareholder and the status thereof; (ii) surrender all other relevant records in accordance with Section 7 of this Agreement, above, and (iii) cooperate in the transfer of such duties and responsibilities, including provisions for assistance from FTIS's personnel in the establishment of books, records and other data by such successor or successors. FTIS shall be entitled to charge the Investment Company a reasonable fee for services rendered and expenses actually incurred in performing its duties under this paragraph.
(c) Notwithstanding anything to the contrary in this Section 12, until a successor transfer agent is designated and the Funds’ books and records and other property have been transferred to such successor transfer agent, this Agreement will remain in effect unless FTIS is notified otherwise by the Investment Company.
13. Amendment. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties.
14. Delegation. The Investment Company agrees that FTIS may, in its discretion and at its expense, delegate to one or more entities all or any portion of its responsibility for the services and other obligations described in this Agreement or the Schedules hereto; provided that (i) FTIS reasonably believes, after due investigation, that each entity (an “Agent”) engaged by FTIS to provide any such services or assume any such responsibilities has the requisite capability, qualifications and experience to provide such services and that such Agent shall perform such services in accordance with the applicable provisions of Section 17A under the Securities Exchange Act of 1934 and any other applicable laws and regulations; (ii) FTIS adopts and implements a reasonable program for the supervision and monitoring of each such Agent; and (iii) the appointment of any such Agent shall not relieve FTIS of any of its responsibilities hereunder. FTIS will be responsible for the compensation, if any, of any such Agents for such services to the Investment Company, unless otherwise agreed to by the parties. Notwithstanding any delegation pursuant to this paragraph, FTIS will continue to have overall responsibility and liability for all such services provided to the Investment Company under this Agreement. FTIS will be responsible for the services of Agents (and FTIS’s other agents and delegates) provided with respect to the Investment Company as if FTIS were performing the services itself.
15. Data Processing System, Program and Information
(a) The Investment Company shall not, solely by virtue of this Agreement, obtain any rights, title and interest in and to the computer systems and programs, including all related documentation, employed by FTIS in connection with rendering services hereunder; provided however, that the records prepared, maintained and preserved by FTIS pursuant to this Agreement shall be the property of the Investment Company.
(b) Any modifications, changes and improvements in the automatic data processing system (the "System") or in the manner in which the services are rendered shall be made or provided as follows, and provided further that modifications for which the Investment Company will be required to bear any expenses shall be made only as set forth herein.
(i) FTIS shall, at no expense to the Investment Company, make any revisions in the System necessary to (1) perform the services which it has contracted to perform, (2) create and maintain the records which it has contracted to create and maintain hereunder or (3) enhance or update the System to the extent and in the manner necessary to maintain said System. However, if specific reprogramming, coding or other changes are necessary in the records of the Investment Company or in its shareholder accounts in order to complete a system revision, the costs for completing work specific to the Investment Company shall be subject to a subsequent agreement between the parties. The System is at all times to be competitive with that which is generally available to the mutual fund industry from transfer agents.
(ii) To the extent that the System is modified to comply with changes in the accounting or record-keeping rules applicable to mutual funds, the Investment Company agrees to pay a reasonable pro rata portion of the costs of the design, revision and programming of the System; provided, however, that if the Investment Company's pro rata portion exceeds $1,000 per 12 month period, the Investment Company's obligation to pay a reasonable pro rata portion shall be conditioned upon FTIS's having obtained prior Written Instructions from the Investment Company for any charge. The determination that such modifications or revisions are necessary, and that the System as so modified produces records which comply with the record-keeping requirements, as amended, shall be by mutual agreement; provided, however, that upon written request by the Investment Company, FTIS will provide the Investment Company with a written opinion of counsel to FTIS to the effect that the modifications were required by changes in the applicable laws or regulations and that the System, as modified, complies with the laws or regulations as amended. Upon completion of the changes FTIS shall render a statement to the Investment Company, in reasonably detailed form, identifying the nature of the revisions, the services, expenses and costs, and the basis for determining the Investment Company's reasonable pro rata portion. Any determination by FTIS of the Investment Company's pro rata portion based upon the ratio of the number of shareholder accounts of the Investment Company to the total number of shareholder accounts of all clients for which FTIS provides comparable services shall conclusively be presumed to be reasonable unless the nature of the change to the System relates to certain types of shareholder accounts, in which case the pro rata portion will be determined on a mutually agreeable basis.
(iii) If system improvements are requested by the Investment Company and are not otherwise required under Section 15(b), FTIS shall be entitled to request a reasonable fee before agreeing to make the improvements and shall be entitled to refuse to make any requested improvements which FTIS reasonably believes to be incompatible with its systems providing services to other funds.
16. Confidentiality/Privacy.
FTIS shall keep the Confidential Information (as defined in Section 16(a) below) of the Investment Company in confidence and will not use or disclose or allow access to or use of such Confidential Information except (A) as appropriate in connection with activities contemplated by this Agreement; (B) as required pursuant to a court order, subpoena, governmental or regulatory or self-regulatory authority or agency, law, regulation, or binding discovery request in pending litigation (provided the receiving party will provide the other party written notice of such requirement, to the extent such notice is permitted, and subject to proper jurisdiction, if applicable); (C) as requested by a governmental, regulatory or self-regulatory authority or agency in connection with an inquiry, examination, audit or other review; or (D) the information or data is relevant and material to any claim or cause of action between the parties or the defense of any claim or cause of action asserted against FTIS.
(a) "Confidential Information" means non-public personal information of the Investment Company’s shareholders.
(b) FTIS represents, warrants and agrees that it has adopted and implemented, and shall maintain policies and procedures that address administrative, technical and physical safeguards for the protection of Confidential Information and records that are in compliance with Regulation S-P promulgated under the Gramm-Leach-Bliley Act of 1999 ("Regulation S-P") and all other applicable laws, rules, regulations, and governmental standards and FTIS represents, warrants and agrees that it will use Confidential Information only in compliance with all of the following: (i) the provisions of this Agreement; (ii) its own Privacy and Information Sharing Policy, as amended and updated from time to time; and (iii) privacy laws and regulations applicable to the Fund’s and FTIS’s business, including the Gramm-Leach-Bliley Act of 1999. When FTIS disposes of Confidential Information, FTIS shall properly dispose of Confidential Information, including, without limitation, any electronic or physical copies in any form, by taking reasonable measures to protect against unauthorized access to or use of the records or information in connection with its disposal, as required by Regulation S-P and all applicable laws, rules, regulations and governmental standards, or as directed by the Investment Company.
17. Security.
(a) FTIS represents, warrants and agrees that it shall itself implement, and also enter into and maintain in effect with appropriate parties one or more agreements which implement, reasonable procedures and systems to safeguard from loss or damage attributable to fire, flood, theft or any other cause (including provision for twenty-four hours a day restricted access) Confidential Information and the Investment Company’s records and other data and FTIS’s records, data equipment facilities and other property used in the performance of its obligations hereunder consistent with industry standards applicable to serving as a transfer agent to a publicly offered registered investment company. FTIS will make such changes therein from time to time as it may deem reasonably necessary for the secure performance of its obligations hereunder, and to ensure that FTIS’s equipment, facilities and other property used in the performance of its obligations hereunder comply with all applicable laws, rules, regulations and governmental standards, and it will make such changes therein from time to time as in its reasonable judgment, or as reasonably requested by the Board of the Investment Company and agreed to by FTIS, are required for the secure performance of its obligations hereunder. FTIS shall review such systems and procedures on a periodic basis (no less than annually).
(b) FTIS or its agents shall conduct a prompt investigation if it is reasonably suspected that a breach of security has occurred in connection with Confidential Information. If FTIS or its agents determine after appropriate investigation that such a breach of security has occurred, and if the applicable Confidential Information was in the possession or under the control of FTIS or its employees, agents, representatives or delegates at the time of such violation, FTIS will promptly (i) notify the applicable Fund, (ii) investigate and contain the breach and put safeguards in place that are designed to prevent similar occurrences of the breach, (iii) provide the Fund with assurance reasonably satisfactory to the Fund that such breach will not recur, and (iv) determine whether it is appropriate, under the circumstances, to provide credit monitoring services to individuals whose personal information was compromised due to the security breach and, if so, shall provide such services for a one-year period. In addition, FTIS will take such other action as may be required under FTIS’s applicable policies and procedures.
18. Disaster Recovery. FTIS, through Franklin Templeton, shall maintain a comprehensive business recovery plan that shall be presented to the Board of Trustees/Directors of the Investment Company not less frequently than annually, which shall be reasonably designed for sufficient recovery of FTIS’s administrative operations to enable FTIS, within 24 hours after any event necessitating the use of such plan to fulfill its obligations under this Agreement; provided, however, FTIS will (i) endeavor to achieve a recovery time objective of four hours or less (a recovery time objective is tested and validated, but it should be noted that there is no guarantee that facilities, operations or services can be recovered in any given time frame due to the unpredictable nature of events, such as a force majeure event), and (ii) test such business recovery plan no less frequently than annually. FTIS has provided the Investment Company with a report regarding FTIS’s business recovery plan. In the event of a business disruption that materially impacts FTIS's provision of services under this Agreement, FTIS will promptly notify the Investment Company of the disruption and the steps being implemented under the business recovery plan.
19. The U.S. Foreign Account Tax Compliance Act ("FATCA").
(a) FTIS shall collect from all accountholders registered on the books of the Funds (each a "Customer", and, collectively, the “Customers”), valid documentation sufficient to establish the US-status or non-US status, as the case may be, of each such Customer, for purposes of FATCA including by requiring Customers to provide FTIS with an executed United States Internal Revenue Service Form W-8BEN or other applicable United States Internal Revenue Service Form W-8 (or any successor thereto) and/or a United States Internal Revenue Service Form W-9 (or any successor thereto). All such documentation is hereinafter referred to as the "Customer Information."
(b) FTIS shall monitor Customers and Customer Information for any changes with respect to a Customer’s US or non-US status in accordance with its reasonably designed FATCA compliance standards.
(c) To the extent required by applicable law, FTIS shall diligently request from each Customer a waiver of such Customer’s privacy, data protection and similar rights in connection with the collection, processing and transferring of the Customer’s personal data pursuant to each Fund’s obligations under FATCA, or otherwise obtain the written consent of the Customer for FTIS to collect, process and transfer the Customer’s personal data pursuant to a Fund’s obligations under FATCA.
(d) FTIS shall comply with all applicable provisions of FATCA to the extent a Customer is a "Foreign Financial Institution, " as that term is defined under FATCA.
20. AML Compliance. FTIS shall comply with the Investment Company’s and FTIS’ policies and procedures to: implement the Investment Company’s Anti-Money Laundering (“AML”), Customer Identification (“CIP”) Programs and any applicable identity theft regulatory requirements (the “Red Flags Rules”), as such policies and procedures may be amended from time to time, including currency transaction reporting; screen account names and addresses against the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) list of Specially Designated Nationals and Blocked Persons (the “SDN list”) and the country-based U.S. trade and economic sanctions programs administered by OFAC; respond to requests for information from the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) pursuant to Section 314(a) of the USA PATRIOT Act; file Suspicious Activity Reports (“SARs”), as necessary, on behalf of the Investment Company; and perform such other anti-money laundering functions as agent of the Investment Company.
21. Unclaimed Property Services. FTIS shall employ commercially reasonable measures to comply on behalf of the Investment Company with the unclaimed property laws and regulations of the states and territories of the United States ("Unclaimed Property Laws") with respect to Eligible Property (as defined below). In connection with its performance of the foregoing services ("Unclaimed Property Services"), FTIS and its agents shall be entitled to rely on the written advice of counsel with respect to the interpretation of and compliance with the Unclaimed Property Laws and interaction with the agencies enforcing and administering the Unclaimed Property Laws and neither shall be liable for conduct undertaken in accordance with such advice, provided such advice is a reasoned interpretation of such Unclaimed Property Laws.
"Eligible Property" means property beneficially owned by a person or entity other than the Investment Company and held in a bank account maintained by FTIS for or on behalf of the Investment Company, or property held in an Investment Company shareholder account, which is (a) subject to reporting or escheat under an Unclaimed Property Law, and (b) of a nature or type or classification reasonably related to the services performed by FTIS under this Agreement (such as cash amounts representing non-negotiated dividend checks and shares in abandoned shareholder accounts).
22. Insurance. FTIS, directly or through an affiliate, shall maintain insurance coverage with respect to FTIS, including, without limitation, errors and omissions, fidelity bond (covering, among other things, larceny and embezzlement) and electronic data processing coverages at levels of coverage consistent with those customarily maintained by other transfer agents for large registered investment company complexes. Upon the request of the Investment Company, FTIS shall provide evidence that such coverage is in place. FTIS shall promptly notify the Investment Company in the event that such coverage is cancelled, or in the event there are material claims made with respect to any service provided under this Agreement. To the extent that policies of insurance may provide for coverage of claims for liability or indemnity by the parties set forth in this Agreement, the contracts of insurance shall take precedence, and no provision of this Agreement shall be construed to relieve an insurer of any obligation to pay claims to a Fund, FTIS or other insured party which would otherwise be a covered claim in the absence of any provision of this Agreement.
23. Miscellaneous.
(a) Any notice or other instrument authorized or required by this Agreement to be given in writing to the Investment Company or FTIS shall be sufficiently given if addressed to that party and received by it at its office at the place described in the Investment Company's most recent registration
statement or at such other place as it may from time to time designate in writing.
(b) This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by either party without the written consent of the other party.
(c) This Agreement shall be construed in accordance with the laws of the State of California applicable to contracts between California residents which are to be performed primarily within California.
(d) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original; but such counterparts shall, together, constitute only one instrument. This Agreement supersedes all prior Shareholder Services Agreements between the parties, and supersedes all prior agreements between the parties relating to the subject matters of this Agreement to the extent they are inconsistent with this Agreement.
(e) The captions of this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.
(f) It is understood and expressly stipulated that neither the holders of Shares of the Investment Company nor any member of the Board, officer, agent or employee of the Investment Company shall be personally liable hereunder, nor shall any resort be had to other private property for the satisfaction of any claim or obligation hereunder, but the Investment Company only shall be liable. FTIS agrees that it shall look only to the assets and property of the applicable Fund in asserting any rights or claims under this Agreement with respect to services rendered with respect to such Fund and will not seek to obtain satisfaction of such rights or claims from the assets of any other Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective corporate officers thereunder duly authorized as of the day and year first above written.
TEMPLETON INSTITUTIONAL FUNDS FRANKLIN TEMPLETON INVESTOR
SERVICES, LLC
By: ___________________ By: __________________________
Name: Lori A. Weber Name: Basil K. Fox, Jr.
Title: Vice President and Secretary Title: President
SCHEDULE A
BASE FEE:
The Investment Company, on behalf of each Fund, agrees to pay FTIS for its services an annual base service fee and certain transaction charges, to be calculated daily and paid monthly, as follows: (i) for all classes of shares, other than Class R6 shares, if any, (A) a base service fee, based on the value of the Fund's average daily net assets for such classes, at the annual rate of 0.02% and (B) a charge of $1.50 for each transaction recorded on the shareholder accounting system, including, but not limited to, the transactions set forth below; and (ii) for Class R6 shares, if any, (A) a base service fee, based on the value of the Fund's average daily net assets for such Class R6 shares, at the annual rate of 0.02% and (B) a charge of $1.50 for each transaction recorded on the shareholder accounting system, including, but not limited to, the transactions set forth below.
TRANSACTION CHARGES:
A charge will be charged for each transaction recorded on the shareholder accounting system, including, but not limited to, the following transactions:
· Share purchases;
· Share redemptions;
· Fund liquidations;
· Dividends;
· Wire order purchases and redemptions (placement and confirmations);
· Exchanges;
· Account maintenance such as address changes;
· Transfers; and
· Account opening.
For transactions within the 529 portfolios, FTIS will allocate the transaction fee on a pro-rata basis to the underlying Funds based on the 529 portfolio's holdings in such Funds.
SCHEDULE B
OUT-OF-POCKET EXPENSES
In addition to Beneficial Owner Servicing Fees and Networked Account Servicing Fees paid in accordance with Section 3 of this Agreement, the Investment Company shall reimburse FTIS monthly (i) for all classes of shares, other than any Class R6 shares, for the following out-of-pocket expenses paid to third parties in connection with the servicing of Accounts as required under the terms of this Agreement and (ii) for any Class R6 shares, for the following out-of-pocket expenses paid to third parties in connection with the servicing of shareholder accounts as required under the terms of this Agreement:
Expenses in connection with the preparation and physical or electronic delivery of shareholder communications required under the terms of this Agreement, such as prospectuses, shareholder reports, tax information, proxy statements, and shareholder statements. Such amounts paid to third parties include, but are not limited to, costs of printing, mailing, stationary, forms, postage, and electronic delivery. In the case of out-of-pocket expenses incurred by FTIS or an affiliate associated with the printing of new account confirming prospectuses (which prospectuses the Investment Company is obligated to deliver under its Underwriting Agreement and that FTIS agrees to deliver, on behalf of the Fund, in connection with the confirmation process), FTIS and the Investment Company each will pay one-half (50%) of the costs of printing the new account confirming prospectus (including, but not limited to, print on demand prospectuses used for that purpose);
Telephone costs associated with servicing shareholders in accordance with this agreement;
ACH, Federal Reserve and bank charges for check clearance, electronic funds transfers, wire transfers, and other banking charges associated with account and cash reconciliation for shareholder activity;
Data Storage: Retention of electronic and paper account records; and other costs associated with data storage of account records and transactions records (e.g., magnetic tape, microfilm and microfiche, and digital images);
Insurance against loss of Share certificates when in transit;
Terminals, transmitting lines and any expenses incurred in connection with such terminals and lines established and/or maintained by FTIS to perform its obligations under this agreement;
Amounts paid to independent accounting firms to perform independent audits of FTIS and the issuance of reports such as a SOC-1;
Amounts paid in connection with use of national data bases to comply with requirements for locating lost shareholders;
Proxy solicitation and tabulation expenses;
NSCC expenses. Costs associated with NSCC system use, including networking services, hardware and circuits to send customer cost basis information, commission and 12b-1 fees to brokerage firms
All other miscellaneous expenses reasonably incurred by FTIS in the performance of its obligations under the Agreement, excluding the costs relating to the compensation of Agents as contemplated under Section 14 of the Agreement.
This Schedule B may be amended by FTIS upon not less than 30 days' written notice to the Investment Company, subject to approval by the Board.
SCHEDULE C
Beneficial Owner Servicing Fees and Networked Account Servicing Fees for each fiscal year of the Fund may not exceed (i), for each contract with an institution based on Fund assets, 15 basis points (0.15%) of such Fund's net assets attributable to the appropriate class of shares for which such institution provides services as contemplated by Section 3(b)(ii) and (iii) of this Agreement (“Services”) or (ii) for each contract with an institution based upon a flat per account fee, $16 per account for accounts that are not subject to a contingent deferred sales charge for which the institution provides Services and $19 per account for accounts that are subject to a contingent deferred sales charge for which the institution provides Services.
This Schedule C may be amended only upon agreement in advance of FTIS, the Investment Company and its Board of Trustees/Directors.
SCHEDULE D
As the registered transfer agent and shareholder servicing agent for the Funds, FTIS is responsible for providing overall support for the customers of each Fund, including shareholders, financial advisors, distribution intermediaries, and other authorized representatives. FTIS controls the flow of the customer interactions, processes transactions, and handles inquiries while ensuring mitigation of operational, financial, regulatory, and reputational risk. FTIS is responsible for affecting activity in accordance with fund policies, (e.g. Rule 12b-1 payments, fund openings, reorganizations, closings), as well as required trade confirmations, statements, and tax reporting. FTIS maintains relationships with the back offices of intermediaries and ensures appropriate payments to intermediaries and other service vendors in accordance with this Agreement.
Specific functions FTIS performs in accordance with securities laws, IRS laws or other regulations include:
AS TRANSFER AGENT FOR THE INVESTMENT COMPANY, FTIS WILL:
Upon receipt of proper authorization, record the transfer of Fund shares ("Shares") in its transfer records in the name(s) of the appropriate legal shareholder(s) of record; and
Upon receipt of proper authorization, redeem Shares, debit shareholder accounts and provide for payment to shareholders.
AS SHAREHOLDER SERVICE AGENT FOR THE INVESTMENT COMPANY, FTIS WILL:
Receive from the Investment Company, from the Investment Company's Principal Underwriter or from a Fund shareholder, in a manner acceptable to FTIS, information necessary to record Share sales and redemptions and to generate sale and/or redemption confirmations;
o Mail, or electronically transmit, sale and/or redemption confirmations;
Coordinate the delivery of an account opening prospectus with delivery of initial purchase confirmations;
Accept and process payments from investors and their broker-dealers or other agents, for the purchase of Shares;
Support the use of automated systems for payment and other share transactions, such as NSCC Fund/Serv and Networking and other systems which may be reasonably requested by FTIS customers;
Keep records as necessary to implement any deferred sales charges, exchange restrictions or other policies of the Investment Company affecting Share transactions, including without limitation any restrictions or policies applicable to certain classes of shares, as stated in the applicable prospectus;
o Requisition Shares in accordance with instructions of the Principal Underwriter, if applicable;
o Open, maintain and close shareholder accounts;
Establish registration of ownership of Shares in accordance with generally accepted form;
Maintain records of (i) issued Shares and (ii) number of shareholders and their aggregate shareholdings classified according to their residence in each State of the United States or foreign country;
Accept and process telephone exchanges and redemptions for Shares in accordance with a Fund's Telephone Exchange and Redemption Privileges as described in the Fund's current prospectus.
Maintain and safeguard records for each shareholder showing name(s), address, number of any certificates issued, and number of Shares registered in such name(s), together with continuous proof of the outstanding Shares, and dealer identification, and reflecting all current changes. On request, provide information as to an investor's qualification for Cumulative Quantity Discount. Provide all accounts with, at minimum, quarterly and year-end historical statements;
Provide on request a duplicate set of records for file maintenance in the Investment Company's office;
Provide for the proper allocation of proceeds of share sales to the Investment Company and to the Principal Underwriter, in accordance with the applicable prospectus;
Redeem Shares and provide for the preparation and delivery of liquidation proceeds, including the processing of redemption checks and maintain checking account records;
Exercise reasonable and good-faith business judgment in the registration of Share transfers, pledges and releases from pledges in accordance with the California Uniform Commercial Code - - Investment Securities;
Upon receipt of proper documentation, place stop transfers, obtain necessary insurance forms, and cancel lost, stolen or destroyed Share certificates, and record ownership of Shares formerly represented by such certificates in its transfer records in the name(s) of the appropriate legal shareholder(s) of record, so long as applicable;
Check surrendered certificates for stop transfer restrictions, so long as applicable. Although FTIS cannot ensure the genuineness of certificates surrendered for cancellation, it will employ all due reasonable care in deciding the genuineness of such certificates and the guarantor of the signature(s) thereon;
o Cancel surrendered certificates and record ownership of Shares formerly represented by such certificates in its transfer records in the name(s) of the appropriate legal shareholder(s) of record, so long as applicable;
o Certify outstanding Shares to auditors;
In connection with any meeting of shareholders, upon receiving appropriate detailed instructions and written materials prepared by the Investment Company and proxy proofs checked by the Investment Company, provide for: (a) the printing of proxy cards, (b) the delivery to shareholders of all reports, prospectuses, proxy cards and related proxy materials of suitable design for enclosing, (c) the receipt and tabulation of executed proxies, (d) solicitation of shareholders for their votes and (e) delivery of a list of shareholders for the meeting;
Answer routine written correspondence, email, and telephone inquiries about individual accounts. Prepare monthly reports for correspondence volume and correspondence data necessary for the Investment Company's Semi-Annual Report on Form N -CEN;
Provide for the preparation and delivery of dealer commission statements and checks;
Maintain and furnish the Investment Company and its shareholders with such information as the Investment Company may reasonably request for the purpose of compliance by the Investment Company with the applicable tax and securities laws of applicable jurisdictions;
o Deliver confirmations of transactions to investors and dealers in a timely fashion;
Provide for the payment or reinvestment of income dividends and/or capital gains distributions to shareholders of record, in accordance with the Investment Company's and/or shareholder's instructions, provided that:
(a) The Investment Company shall notify FTIS promptly upon
declaration of any such dividend and/or distribution, and in any event at least forty-eight (48) hours before the record date;
(b) Such notification shall include the declaration date, the record
date, the payable date, the rate, and, if applicable, the reinvestment date and the reinvestment price to be used; and
(c) Prior to the payable date, the Investment Company shall furnish
FTIS with sufficient fully and finally collected funds to make such distribution;
Prepare and file annual U.S. information returns of dividends and capital gain distributions, gross redemption proceeds, foreign person's U.S. source income, and other U.S. federal and state information returns as required, and mail payee copies to shareholders, report and pay U.S. backup withholding on all reportable payments; report and pay U.S. federal income taxes withheld from distributions and other payments made to nonresidents of the U.S.; prepare and mail to shareholders any notice required by the Internal Revenue Code as to taxable dividends, tax-exempt interest dividends, realized net capital gains distributed and/or retained, foreign taxes paid and foreign source income distributed or deemed distributed, U.S. source income and any tax withheld on such income, dividends received deduction information, or other applicable tax information appropriate for dissemination to shareholders of the Trust.
Comply with all U.S. federal income tax requirements regarding the collection of tax identification numbers and other required shareholder certifications and information pertaining to shareholder accounts; respond to all notifications from the U.S. Internal Revenue Service regarding the application of the U.S. backup withholding requirements including tax identification number solicitation requirements;
o Prepare transfer journals;
o Set up wire order Share transactions on file;
Provide for receipt of payment for Share transactions, and update the transaction file;
o Sort and print shareholder information by state, social code, price break, etc.; and
Promptly transmit the Statement of Additional Information of the Investment Company to each shareholder upon request.
IN CONNECTION WITH THE INVESTMENT COMPANY'S SYSTEMATIC WITHDRAWAL PLAN, FTIS WILL:
Make payment of amounts withdrawn periodically by the shareholder pursuant to the systematic withdrawal plan by redeeming Shares, and confirm such redemptions to the shareholder; and
Provide confirmations of all redemptions, reinvestment of dividends and distributions, and any additional investments in the systematic withdrawal plan, including a summary confirmation at the year-end.
FORM OF RULE 12d1-4
FUND OF FUNDS INVESTMENT AGREEMENT
THIS AGREEMENT, dated as of [___________], is made among each entity listed on Schedule A (as amended from time to time), severally and not jointly (each, an “Acquiring Fund”), and each Acquired Fund listed on Schedule A (as amended from time to time), severally and not jointly (each, an “Acquired Fund” and together with the Acquiring Funds, the “Funds”).
WHEREAS, each Fund is registered with the U.S. Securities and Exchange Commission (“SEC”) as an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”);
WHEREAS, Section 12(d)(1)(A) of the 1940 Act limits the extent to which a registered investment company may invest in shares of other registered investment companies, Section 12(d)(1)(B) limits the extent to which a registered investment company, its principal underwriter (“Distributor”) or registered brokers or dealers (“Brokers”) may knowingly sell shares of such registered investment company to other investment companies, and Section 12(d)(1)(C) limits the extent to which an investment company may invest in the shares of a registered closed-end investment company;
WHEREAS, Rule 12d1-4 under the 1940 Act (the “Rule”) permits (i) registered investment companies, such as the Acquiring Funds, to invest in shares of other registered investment companies, such as the Acquired Funds, in excess of the limits of Section 12(d)(1)(A) and Section 12(d)(1)(C) of the 1940 Act, and (ii) registered investment companies, such as the Acquired Funds, as well as the Distributor and Brokers, knowingly to sell shares of the Acquired Funds to the Acquiring Funds in excess of the limits of Section 12(d)(1)(B) of the 1940 Act, subject to compliance with the conditions of the Rule;
WHEREAS, an Acquiring Fund may, from time to time, invest in shares of one or more Acquired Funds in excess of the limitations of Section 12(d)(1)(A) and Section 12(d)(1)(C), as applicable, in reliance on the Rule; and
WHEREAS, an Acquired Fund, Distributor, or Broker, from time to time, may knowingly sell shares of one or more Acquired Funds to an Acquiring Fund in excess of the limitations of Section 12(d)(1)(B) in reliance on the Rule;
NOW THEREFORE, in accordance with the Rule, each Acquiring Fund and each Acquired Fund desires to set forth the following terms pursuant to which an Acquiring Fund may invest in an Acquired Fund in reliance on the Rule and each Acquired Fund, Distributor, or Broker may sell shares of an Acquired Fund to an Acquiring Fund in reliance on the Rule.
1. Terms of Investment
(a) In order to help reasonably address the risk of undue influence on an Acquired Fund that operates as a mutual fund (“Acquired Mutual Fund”) by an Acquiring Fund, and to assist the Acquired Mutual Fund’s investment adviser with making the required findings under the Rule, each Acquiring Fund and each Acquired Mutual Fund agree as follows:
(i) In-kind redemptions. The Acquiring Fund acknowledges and agrees that, if and to the extent consistent with the Acquired Mutual Fund’s registration statement, as amended from time to time, the Acquired Mutual Fund in its sole discretion may honor any redemption request partially or wholly in-kind. In the event that the Acquired Mutual Fund honors a redemption request partially or wholly in-kind, the Acquired Mutual Fund shall have sole discretion to determine the selection of its portfolio securities to distribute in-kind.
(ii) Timing/advance notice of redemptions. The Acquiring Fund will use reasonable efforts to spread large redemption requests (greater than % of the Acquired Mutual Fund’s total outstanding shares) over multiple days or to provide at least business days’ advance notification to the Acquired Mutual Fund of redemption requests in excess of % of the Acquired Fund’s outstanding shares whenever practicable and consistent with the Acquiring Fund’s best interests. The Acquired Mutual Fund acknowledges and agrees that any notification provided pursuant to the foregoing is not a commitment to redeem and constitutes an estimate that may differ materially from the amount, timing and manner in which a redemption request is submitted, if any.
(iii) Scale of investment. Upon the reasonable request of an Acquired Mutual Fund, the Acquiring Fund will provide summary information regarding the anticipated timeline of its investment in the Acquired Mutual Fund and the scale of its contemplated investments in the Acquired Mutual Fund.
(b) With
respect to investments in Acquired Funds that operate as exchange-traded funds (“Acquired ETFs”),
the Funds note that each Acquired ETF is designed to accommodate large investments and redemptions, whether
from Acquiring Funds or other investors. Creation and redemption orders for shares of the Acquired ETFs
can only be submitted by Brokers or other participants of a registered clearing agency (collectively,
“Authorized
Participants”) that have entered into an agreement (“Authorized Participant
Agreement”) with the Acquired ETFs’ Distributor to transact in shares of the Acquired
ETFs. The Acquired ETFs also have policies and procedures (the “Basket Policies”)
that have been adopted pursuant to Rule 6c-11 under the 1940 Act, which govern creations and redemptions
of the Acquired ETFs’ shares. Any creation or redemption order submitted by an Acquiring Fund through
an Authorized Participant will be satisfied pursuant to the Basket Policies and the relevant Authorized
Participant Agreement. The Basket Policies include provisions that govern in-kind creations and redemptions,
as well as cash transactions. In any event, the Funds generally expect that the Acquiring Funds will
transact in shares in the Acquired ETFs on the secondary market rather than through direct creation and
redemption transactions with the Acquired ETF. The Funds believe that these material terms regarding
an Acquiring Fund’s investment in shares of an Acquired ETF should assist the Acquired ETF’s investment
adviser with making the required findings under the Rule.
(c) With respect to investments in Acquired Funds that operate as closed-end funds (“Acquired CEFs”), the Funds note that Acquired CEFs do not permit daily redemptions and that Acquired CEFs that permit periodic repurchases, such as interval funds that operate under
Rule 23c-3 under the 1940 Act or funds that conduct periodic tender offers pursuant to Rule 13e-4 under the Securities Exchange Act of 1934, as amended, would do so only under prescribed circumstances. Upon a reasonable request by an Acquired CEF, the Acquiring Fund will provide summary information regarding the anticipated timeline of its investment in the Acquired CEF and the scale of its contemplated investments in the Acquired CEF.
(d) In order to assist the Acquiring Fund’s investment adviser, principal underwriter or depositor, as applicable, with evaluating the complexity of the structure and fees and expenses associated with an investment in an Acquired Fund, the Acquired Fund shall provide the Acquiring Fund with information on the fees and expenses of the Acquired Fund reasonably requested by the Acquiring Fund in order to facilitate compliance with the Rule. In accordance with the foregoing and in recognition of each Acquired Fund’s obligations regarding disclosure of material nonpublic information under applicable laws, rules and regulations, including without limitation Regulation FD, the Funds agree that information on fees and expenses of an Acquired Fund shall be provided through delivery of or access to publicly available documents.
(e) An Acquiring Fund shall promptly provide an Acquired Fund with information regarding the amount of the Acquiring Fund’s investments in the Acquired Fund, and information regarding affiliates of the Acquiring Fund, upon the Acquired Fund’s request.
2. Representations of the Acquired Funds.
In connection with any investment by an Acquiring Fund in an Acquired Fund in excess of the limitations in Section 12(d)(1)(A) or Section 12(d)(1)(C) or knowing sale of shares by an Acquired Fund, Distributor, or Broker to an Acquiring Fund in excess of the limitations in Section 12(d)(1)(B), the Acquired Fund agrees to: (i) comply with all conditions of the Rule, as interpreted or modified by the SEC or its Staff from time to time, applicable to Acquired Funds; (ii) comply with its obligations under this Agreement; and (iii) promptly notify the Acquiring Fund if such Acquired Fund fails to comply with the Rule with respect to an investment by the Acquiring Fund, as interpreted or modified by the SEC or its Staff from time to time, or fails to comply with this Agreement.
3. Representations of the Acquiring Funds.
(a) In connection with any investment by an Acquiring Fund in an Acquired Fund in excess of the limitations in Section 12(d)(1)(A) or Section 12(d)(1)(C) or knowing sale of shares by an Acquired Fund, Distributor, or Broker to an Acquiring Fund in excess of the limitations in Section 12(d)(1)(B), the Acquiring Fund agrees to: (i) comply with all conditions of the Rule, as interpreted or modified by the SEC or its Staff from time to time, applicable to Acquiring Funds; (ii) comply with its obligations under this Agreement; and (iii) promptly notify the Acquired Fund if such Acquiring Fund fails to comply with the Rule with respect to its investment in such Acquired Fund, as interpreted or modified by the SEC or its Staff from time to time, or fails to comply with this Agreement.
(b) Except as set forth on Schedule A, no Acquiring Fund holds outstanding voting securities of any Acquired Fund in excess of the limit in Section 12(d)(1)(A)(i). No Acquiring Fund will purchase or acquire shares of an Acquired Fund that would cause such Acquiring Fund to hold outstanding voting securities of such Acquired Fund in excess of the limit in Section 12(d)(1)(A)(i) without prior written approval from the Acquired Fund.
(c) An Acquiring Fund shall promptly notify an Acquired Fund:
(i) of any purchase or acquisition of shares of an Acquired Fund that causes the Acquiring Fund to hold 5% or more of the Acquired Fund’s total outstanding voting securities;
(ii) if at any time the Acquiring Fund and its “Advisory Group” (as defined in the Rule), individually or in the aggregate, hold more than 25% of the Acquired Fund’s total outstanding voting securities; and
(iii) if at any time the Acquiring Fund and, if applicable, its Advisory Group no longer holds voting securities of the Acquired Fund in excess of an amount noted in clause (i) or (ii) above.
(d) Notwithstanding anything herein to the contrary, if an Acquiring Fund has an “affiliated person” (as defined under the 1940 Act) that is: (i) a broker-dealer, (ii) a broker-dealer or bank that borrows as part of a securities lending program, or (iii) a futures commission merchant or a swap dealer, such Acquiring Fund: (a) will not make an investment in an Acquired Fund that causes such Acquiring Fund to hold 5% or more of the Acquired Fund’s total outstanding voting securities without prior approval from the Acquired Fund; and (b) will notify the Acquired Fund if, notwithstanding compliance with clause (a) at the time of investment, the Acquired Fund subsequently holds 5% or more of the Acquired Fund’s total outstanding voting securities.
(e) With respect to any investment by an Acquiring Fund in an Acquired CEF, the Acquiring Fund agrees as follows:
(i) the Acquiring Fund and its Advisory Group will not control (individually or in the aggregate) any Acquired Fund;
(ii) the Acquiring Fund shall not purchase or otherwise acquire securities issued by any Acquired Fund in excess of the limit in Section 12(d)(1)(A)(i) of the 1940 Act (i.e., three percent (3%) of the total outstanding voting shares of the Acquired Fund);
(iii) the Acquiring Fund, together with all affiliated persons of the Acquiring Fund (including, for the avoidance of doubt, any private funds and managed accounts), in the aggregate, will not purchase or otherwise acquire more than ten percent (10%) of the outstanding voting securities of any Acquired Fund; if such 10% ownership limit is exceeded in any Acquired Fund, the Acquiring Fund will notify the applicable Acquired Fund immediately, will not purchase any additional securities of the Acquired Fund and will cause such ownership to comply with the 10% limit within six (6) months or such shorter time as may be required by law;
(iv) during the term of this Agreement, the Acquiring Fund agrees to appear at all Acquired Fund shareholder meetings or otherwise cause Acquired Fund shares owned by the Acquiring Fund to be counted as present thereat for purposes of calculating a quorum;
(v) (A) except as provided in paragraph (B) below, or otherwise required by applicable law or rules thereunder, the Acquiring Fund will vote all Acquired Fund securities held by the Acquiring Fund in the same proportion as the vote of all other holders of such securities (“echo voting”);
(B) if requested in writing by the Acquired Fund at least 30 days prior to the date on which Acquired Fund shareholders are to vote on any matter, the Acquiring Fund will consider, to the extent permitted, voting in its own discretion (rather than echo voting) in accordance with the best interest of its unitholders or shareholders; and
(vi) during the term of this Agreement, the Acquiring Fund will not effect, seek, offer, engage in, propose (whether publicly or otherwise), cause or participate in, or assist any other person to effect, seek, offer, engage in, propose (whether publicly or otherwise), cause or participate in, any “solicitation” of “proxies” (as defined in Rule 14a-1 under the Securities Exchange Act of 1934, as amended) with respect to any Acquired Fund or propose any matter for submission to a vote of shareholders of any Acquired Fund. Additionally, the Acquiring Fund will not knowingly sell shares of any Acquired Fund to any investor which the Acquiring Fund knows or reasonably should know to be engaged in acquiring or holding the securities of publicly traded companies with a purpose or effect of changing or influencing control of such companies, or in connection with or as a participant in any transactions having that purpose or effect.
4. Notices.
All notices, including all information that either party is required to provide under the terms of this Agreement and the Rule, shall be in writing and shall be delivered by registered or overnight mail, facsimile, or electronic mail to the address for each party specified below.
If to the Acquiring Fund: If to the Acquired Fund:
[Name] [Name]
c/o [Company] [Address] c/o [Company] [Address]
[City, State, Zip] [City, State, Zip]
Fax: Fax:
Email: Email:
With a copy to: [Name] With a copy to: [Name]
Attn: Legal Dept. [Address] Attn: Legal Dept. [Address]
[City, State, Zip] [City, State, Zip]
Fax: Fax:
Email: Email:
5. Term and Termination
(a) This Agreement shall be effective for the duration of the Acquired Funds’ and
the Acquiring Funds’ reliance on the Rule, as interpreted or modified by the SEC or its Staff from time to time. While the terms of the Agreement shall only be applicable to investments in Funds made in reliance on the Rule, as interpreted or modified by the SEC or its Staff from time to time, the Agreement shall continue in effect until terminated pursuant to Section 5(b).
(b) This Agreement shall continue until terminated in writing (i) by either party upon 60 days’ notice to the other party or (ii) by a non-breaching party immediately if the other party is in material breach of this Agreement. Upon termination of this Agreement, an Acquiring Fund may not purchase additional shares of an Acquired Fund beyond the Section 12(d)(1)(A) or Section 12(d)(1)(C) limits in reliance on the Rule. In addition, the Acquired Fund shall have the right to require the Acquiring Fund to sell or otherwise dispose of any shares of the Acquired Fund that the Acquiring Fund purchased or otherwise acquired in violation of the Rule or in breach of this Agreement.
(c) If this Agreement is terminated pursuant to Section 5(b) hereof with respect to an Acquiring Fund and corresponding Acquired Fund, the provisions set forth in Sections 3(e)(iv) and (v) shall survive and be a continuing obligation of such Acquiring Fund so long as the Acquiring Fund holds voting securities of the applicable Acquired Fund.
6. Assignment, Amendment; Miscellaneous
(a) This Agreement may not be “assigned” (as defined in the 1940 Act) by either party without the prior written consent of the other.
(b) This Agreement may be amended, including the addition of Acquiring Funds and Acquired Funds to Schedule A, only by a writing that is signed by each affected party.
(c) In any action involving the Acquiring Funds under this Agreement, each Acquired Fund agrees to look solely to the individual Acquiring Fund that is involved in the matter in controversy for satisfaction, and not to any other series of the trust or corporation of which any such Acquiring Fund is a series, if applicable, or to the Acquiring Funds’ directors, trustees, officers, employees or shareholders, or any of them, or any of their personal assets for such satisfaction.
(d) In any action involving the Acquired Funds under this Agreement, each Acquiring Fund agrees to look solely to the individual Acquired Fund that is involved in the matter in controversy for satisfaction, and not to any other series of the trust or corporation of which any such Acquired Fund is a series, if applicable, or to the Acquired Funds’ directors, trustees, officers, employees or shareholders, or any of them, or any of their personal assets for such satisfaction.
(e) In no event and under no circumstances will any party to this Agreement be liable to any person, including without limitation any other party to this Agreement, for any special, indirect or consequential loss or damages resulting from any act or failure to act in accordance with the provisions of this Agreement, even if such party had been advised of the possibility of such losses or damages.
(f) The Acquiring Funds and Acquired Funds may file a copy of this Agreement with the SEC or any other regulatory body if required by applicable law.
(g) For any Acquired Fund that is a Massachusetts business trust or a series of a Massachusetts business trust, a copy of the Declaration of Trust of such Acquired Fund or trust is on file with the Secretary of The Commonwealth of Massachusetts. Notice is hereby given that no trustee, officer, employee, agent or shareholder of an Acquired Fund shall have any personal liability under this Agreement and that this Agreement is binding only upon the assets and property of the applicable Acquired Fund.
(h) This Agreement will be governed by the laws of the State of Delaware without regard to its choice of law principles.
[Signature page to follow]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
[Acquired Funds]
By:
Name:
Title:
[Acquiring Fund]
By:
Name:
Title:
SCHEDULE A
List of Funds to Which the Agreement Applies
Acquiring Funds
Acquired Funds
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form N-1A of Templeton Institutional Funds of our reports dated February 17, 2022, relating to the financial statements and financial highlights, which appear in Foreign Smaller Companies Series and International Equity Series’ Annual Reports on Form N-CSR for the year ended December 31, 2021. We also consent to the references to us under the headings “Financial Highlights” and "Independent Registered Public Accounting Firm" in such Registration Statement.
/s/PricewaterhouseCoopers LLP
San Francisco, California
April 26, 2022
FRANKLIN TEMPLETON
PERSONAL INVESTMENTS AND INSIDER TRADING POLICY (“The Policy”)
(This Policy serves as a code of ethics adopted pursuant to Rule 17j-1 under the Investment Company Act of 1940 and Rule 204A-1 under the Investment Advisers Act of 1940)
Revised August 16, 2021
SECTION 1. | PURPOSE OF THE POLICY | 1 |
1.1 | SCOPE AND PURPOSE OF THE POLICY | 2 |
1.2 | STATEMENT OF PRINCIPLES | 2 |
1.3 | PROHIBITED ACTIVITIES | 2 |
1.4 | MONITORING OF THE POLICY AND ADDITIONAL INFORMATION | 3 |
SECTION 2. | PERSONAL INVESTMENTS | 3 |
2.1 | STATEMENT ON COVERED EMPLOYEE INVESTMENTS | 3 |
2.2 | CATEGORIES OF PERSONS SUBJECT TO THE POLICY | 3 |
2.3 | ACCOUNTS AND TRANSACTIONS COVERED BY THE POLICY | 4 |
2.4 | PROHIBITED TRANSACTIONS | 4 |
2.5 | ADDITIONAL PROHIBITIONS AND REQUIREMENTS FOR ACCESS PERSONS AND PORTFOLIO PERSONS | 5 |
2.6 | REPORTING REQUIREMENTS | 6 |
2.7 | PRE-CLEARANCE REQUIREMENTS | 6 |
2.8 | REQUIREMENTS FOR INDEPENDENT DIRECTORS | 7 |
SECTION 3. | INSIDER TRADING | 7 |
3.1 | POLICY ON INSIDER TRADING | 7 |
SECTION 4. | RELATED POLICIES AND REQUIREMENTS | 8 |
4.1 | STATEMENT ON OTHER POLICIES AND REQUIREMENTS | 8 |
SECTION 5. | ADMINISTRATION OF THE POLICY, WAIVERS & REPORTING VIOLATIONS | 8 |
5.1 | CODE OF ETHICS COMMITTEE; REPORTING TO FT FUND BOARDS | 8 |
5.2 | VIOLATIONS OF THE POLICY | 8 |
5.3 | WAIVERS OF THE POLICY | 9 |
5.4 | REPORTING VIOLATIONS | 9 |
This document is the proprietary product of Franklin Templeton. Any unauthorized use, reproduction or transfer of this document is strictly prohibited. Franklin Templeton © 2021. All Rights Reserved.
SECTION 1. PURPOSE OF THE POLICY
1.1 Scope and Purpose of the Policy
The Franklin Templeton Personal Investments and Insider Trading Policy (the “Policy”) applies to the personal investment activities of all Covered Employees (as defined in section 2.2 of the Policy) of Franklin Resources, Inc. (“FRI”) and all of its subsidiaries (collectively, “Franklin Templeton”).
Franklin Templeton provides services to the funds that are advised or sub-advised by a Franklin Templeton investment adviser (the “FT Funds”) and other client accounts (“Client Accounts”). Thus, for purposes of this Policy, “FT Fund” includes all open-end and closed-end funds within the Franklin Templeton Group of Funds, as well as any other fund that is advised or sub-advised by a Franklin Templeton investment adviser.
The purpose of the Policy is to summarize the values, principles and business practices that guide Franklin Templeton’s business conduct and to establish a set of principles to guide Covered Employees regarding the conduct expected of them when managing their personal investments.
1.2 Statement of Principles
All Covered Employees are required to conduct themselves in a lawful, honest and ethical manner in their business practices and to maintain an environment that fosters fairness, respect and integrity.
Franklin Templeton’s policy is that the interests of the FT Funds and Client Accounts are paramount and come before the interests of any employee. Information concerning the securities1 holdings and financial circumstances of the FT Funds and Client Accounts, as well as the identity of certain Client Accounts, is confidential and Covered Employees are required to safeguard this information.
The personal investment activities of Covered Employees must be conducted in a manner to avoid actual or potential conflicts of interest with the FT Funds and Client Accounts. In particular, to the extent that a Covered Employee learns of an investment opportunity because of his or her position with Franklin Templeton (e.g., internal or third party research, Franklin Templeton or company sponsored conferences, or communications with company officers), the Covered Employee must give preference to the FT Funds or Client Accounts.
Personal transactions in a security may not be executed, regardless of quantity, if the Covered Employee has access to information regarding, or knowledge or even a presumed knowledge of, FT Fund or Client Account activity in such security, including proposed activity and recommendations.
1.3 Prohibited Activities
Covered Employees generally are prohibited from engaging or participating in any activity that has the potential to cause harm to an FT Fund or Client Account. Examples of prohibited activities include, but are not limited to:
• Making investment decisions, changes in research ratings and trading decisions other than exclusively for the benefit of, and in the best interest of, the FT Funds or Client Accounts;
• Taking, delaying or omitting to take any action with respect to any research recommendation, report or rating or any investment or trading decision for an FT Fund or Client Account in order to avoid economic injury to themselves or anyone other than the FT Funds or Client Accounts;
• Purchasing or selling a security on the basis of knowledge of a possible trade by or for an FT Fund or Client Account with the intent of personally profiting from, or avoiding a loss with respect to, personal holdings in the same or related securities;
1. For purposes of this Policy, the term “securities” also includes derivatives, such as futures, options and swaps.
• Revealing to any other person (except in the normal course of the Covered Employee’s duties on behalf of an
FT Fund or Client Account) any information regarding securities transactions by any FT Fund or Client Account or the consideration by any FT Fund or Client Account of any such securities transactions; or
• Engaging in any act, practice or course of business that operates or would operate as a fraud or deceit on an FT Fund or Client Account or engaging in any manipulative practice with respect to any FT Fund or Client Account.
1.4 Monitoring of the Policy and Additional Information
Questions regarding the Policy and related requirements should be directed to the Code of Ethics Department located in San Mateo, CA. The Code of Ethics Department can be reached by e-mail at [email protected]. The Code of Ethics Department uses PTA, http://coeprod/pta/index.jsp, an automated transaction pre-clearance system, to manage the oversight of personal investments. Administration of the Policy is the responsibility of the Code of Ethics Committee.
SECTION 2. PERSONAL INVESTMENTS
2.1 Statement on Covered Employee Investments
Franklin Templeton recognizes the importance to Covered Employees of managing their own financial resources. However, because of the potential conflicts of interest inherent in its business, Franklin Templeton has implemented this Policy with regard to personal investments of Covered Employees. This Policy is designed to minimize these conflicts and help ensure that Franklin Templeton focuses on meeting its duties as a fiduciary to the FT Funds or Client Accounts.
Covered Employees should be aware that their ability to invest in certain securities and to liquidate those positions may be severely restricted under this Policy due to trading by the FT Funds or Client Accounts, including during times of market volatility. Therefore, as a general matter, Franklin Templeton encourages Covered Employees to exercise caution when investing in individual securities, particularly in situations where a Covered Employee wishes to invest in securities held or likely to be held by the FT Funds or Client Accounts.
Franklin Templeton also discourages Covered Employees from engaging in a pattern of securities transactions that is so excessively frequent as to potentially impact the Covered Employee’s ability to carry out their assigned responsibilities, increases the possibility of potential conflicts or violates the Policy or the FT Funds’ prospectuses.
2.2 Categories of Persons Subject to the Policy
All persons subject to the Policy are assigned to the following categories based on their access to information regarding, or involvement in, investment activities. Persons subject to other personal trading policies or codes of ethics adopted by Franklin Templeton or its affiliates generally are exempt from this Policy.2 Please consult the Code of Ethics Department if you have any questions about how this Policy applies to you.
Covered Employees: Covered Employees are: (1) partners, officers, directors (or persons occupying a similar status or having similar functions) and employees (including certain designated temporary employees or consultants) of any Franklin Templeton investment adviser, as well as any other persons who provide advice on behalf of any Franklin Templeton investment adviser and are subject to the supervision and control of that investment adviser; (2) Access Persons, as defined below; and (3) Independent directors of FT Funds within the Franklin Templeton Group of Funds and independent directors of Franklin Templeton investment advisers (collectively, “Independent Directors”).
2. In limited circumstances, certain affiliates of FRI may adopt separate policies or codes of ethics governing personal trading in order to address the specific features of their investment activities and operations. Individuals subject to such separate policies or codes of ethics generally are exempt from this Policy.
Access Persons: Access Persons are those who have access to non-public information regarding FT Funds’ or Client Accounts’ securities transactions; or have access to recommendations that are non-public; or have access to non-public information regarding the portfolio holdings of the FT Funds or Client Accounts.
Portfolio Persons: Portfolio Persons, a subset of Access Persons, are those who, in connection with their regular functions or duties, make or participate in the decision to purchase or sell a security by an FT Fund or Client Account or if his or her functions relate to the making of any recommendations about those purchases or sales.
Please see the Appendix to this Policy for a table indicating how the provisions of the Policy apply to each category of persons. In addition, please see section 2.8 of the Policy for a description of the requirements for Independent Directors.
2.3 Accounts and Transactions Covered by the Policy
The Policy covers two types of securities accounts and transactions: (1) those in which Covered Employees have or share investment control, and (2) those in which Covered Employees have direct or indirect beneficial ownership.
Generally, a person has a beneficial ownership in a security if he or she, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares a direct or indirect pecuniary interest in the security. “Pecuniary interest” has the same meaning as in Rule 16a-1(a)(2) under the Securities Exchange Act of 1934. Generally, a pecuniary interest in a security means the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the security. Covered Employees are presumed to have a pecuniary interest in securities held by members of their immediate family or domestic partners sharing the same household.
Certain types of securities and investments are exempt from the Policy. These include, but are not limited to, direct obligations of the U.S. government, money market instruments, cryptocurrencies and registered open-end funds other than the FT Funds. Please consult the Code of Ethics Department or PTA for further information about specific types of securities that are exempt from the Policy.
2.4 Prohibited Transactions
Trading that Conflicts with FT Funds or Client Accounts
Covered Employees are prohibited from any trading activity that conflicts with the FT Funds’ or Client Accounts’ trading activity. Examples of prohibited trading activity include, but are not limited to:
• “front running” or trading ahead of an FT Fund or Client Account; and
• trading parallel to or against an FT Fund or Client Account.
Short Sales of Securities Issued by Franklin Resources and FT Sponsored Closed-end Funds and Exchange Traded Funds (ETFs)
Covered Employees are prohibited from effecting short sales, including “short sales against the box,” of securities issued by FRI, or any FT sponsored closed-end funds or FT exchange traded funds (ETFs). This prohibition includes economically equivalent transactions such as call or put options, swap transactions or other derivatives that would result in having a net short exposure to FRI or any closed-end fund or ETF sponsored or advised by Franklin Templeton.
Pledged Securities
Directors and Executive Officers are also prohibited from pledging, hypothecating or otherwise encumbering securities issued by Franklin Resources as described in greater detail in the FRI Code of Ethics and Business Conduct.
Trading in Shares of the FT Funds
A Covered Employee is prohibited from buying and selling shares of an FT Fund if in possession of material non- public information about the FT Fund. Specifically, Covered Employees are prohibited from taking personal advantage of their non-public knowledge of recent or impending investment activities of FT Funds or the FT Funds’ investment advisers or any other non-public information that a reasonable investor would likely consider important in making his or her investment decisions, including information that may have a material effect on an FT Fund’s share price or net asset value.
Covered Employees must keep confidential at all times any non-public information they may obtain about an FT Fund, including but not limited to information such as portfolio holdings, pricing or valuation of an FT Fund’s portfolio holdings, recent or impending securities transactions by an FT Fund, activities of an FT Fund’s investment advisers, offerings of new FT Funds, changes to investment minimums, closings of FT Funds, changes to investment personnel, FT Fund flow activity, and information on current or prospective FT Fund shareholders.
Short-Term Trading in Open-end FT Funds
Franklin Templeton discourages short-term or excessive trading, often referred to as “market timing,” in shares of the open-end FT Funds. Covered Employees must be familiar with the “Frequent Trading Policy” or its equivalent described in the prospectus of each open-end FT Fund in which they invest and must not engage in trading activity that might violate the purpose or intent of such policy. Accordingly, all Covered Employees must comply with the purpose and intent of each open-end FT Fund’s Frequent Trading Policy or its equivalent and must not engage in any short-term or excessive trading in open-end FT Funds.
For open-end FT Funds within the Franklin Templeton Group of Funds, the Trade Control Team of each FT Fund’s transfer agent will monitor trading activity in shares of the FT Funds by Covered Employees and will report any trading patterns or behaviors that may constitute short-term or excessive trading to the Code of Ethics Department. These reports will include descriptions of any actions taken and any sanctions or penalties imposed in response to such trading activity. This policy applies to the open-end FT Funds including those FT Funds purchased through a 401(k) plan, but does not apply to purchases and sales of money market funds.
2.5 Additional Prohibitions and Requirements for Access Persons and Portfolio Persons
Initial Public Offerings
Access Persons are prohibited from investing in securities sold in an initial public offering or a secondary offering (including Initial Coin Offerings (“ICOs”)) by an issuer except for offerings of securities made by closed-end FT Funds advised or sub-advised by Franklin Templeton. However, IPOs may be permissible in certain circumstances or jurisdictions. Please contact the Code of Ethics department or your local Compliance Officer in advance of executing any IPO.
Short Sales of Securities
Portfolio Persons are prohibited from selling short any security held by the FT Funds, including “short sales against the box.” This prohibition also applies to effecting economically equivalent transactions, including, but not limited to, sales of uncovered call options, sales of put options while not owning the underlying security, and short sales of bonds that are convertible into equity positions, swaps or other derivatives where the security is held by FT Funds.
Short Swing Rule
Portfolio Persons are subject to a short swing rule whereby they cannot profit from the purchase and sale or sale and purchase of any security within a 60 calendar day period, including transactions in derivatives and transactions that may occur in margin and option accounts. For purposes of this rule, profits will be determined based upon the maximum gain that could be realized on the purchases and sales (or sales and purchases) occurring during the 60 calendar day period. Please consult the Code of Ethics Department about how profits are calculated for purposes of this rule.
Disclosure of Interest in Securities or Private Investments
Portfolio Persons are required to disclose any interest they have in the securities of an issuer or direct investment in any company if they are involved in either analysis or investment decisions related to the issuer or company.
Portfolio Persons must re-disclose any such interest if they participate in later recommendations or investment decisions related to the issuer or company.
Portfolio Persons must also disclose any personal transactions they are contemplating in the securities referenced above, any position they hold with the issuer and any proposed business relationship between the issuer and the Portfolio Person or any party in which the Portfolio Person has an interest.
The disclosures above must be made to their Chief Investment Officer and /or Director of Research.
2.6 Reporting Requirements
All Covered Employees must complete an Initial Code of Ethics Certification no later than 10 calendar days after the date the person is notified by a member of the Human Resources Department of the requirement to do so.
Additionally, by February 15th of each subsequent year they must complete an annual certification that they have complied with and will comply with the Policy.
Access Persons must also file an Initial Broker Accounts Certification and Initial Holdings Certification no later than 10 calendar days after the date the person is notified by a member of the Human Resources Department of the requirement to do so. Additionally, by February 15th of each subsequent year, Access Persons must file a then current annual report of all personal securities accounts and securities holdings and must certify that they have complied with and will comply with the Policy.
On a quarterly basis, and no later than 30 calendar days after the end of each calendar quarter, every Access Person must report all transactions in securities covered by this Policy, except for those executed through an Automatic Investment Plan or that would duplicate information already provided in broker confirmations or statements sent to the Code of Ethics Department directly from the broker.
No later than 30 calendar days after the calendar quarter, Access Persons must report any account established in which any securities were held during that calendar quarter.
2.7 Pre-Clearance Requirements
Pre-Clearance of Securities Transactions
Access Persons must obtain pre-clearance from the Code of Ethics Department before buying or selling any security (other than those not requiring pre-clearance, a full list of which is available from the Code of Ethics Department) and are always prohibited from executing transactions in a security if aware that the FT Funds or Client Accounts are active or contemplate being active in the security (even if the transactions have been pre- cleared). Pre-clearance requests should be submitted via PTA.
Private Investments and Limited Offerings
Access Persons must obtain pre-clearance from the Code of Ethics Department before investing in a private placement or purchasing other securities in a limited offering. For example, investments in private or unregistered funds (i.e., hedge funds) are required to be pre-cleared under the Policy.
Discretionary Accounts
Transactions in discretionary accounts do not need to be pre-cleared if satisfactory evidence has been provided to the Code of Ethics Department that sole investment discretion has been granted to an investment manager. The Access Person must certify initially and annually thereafter that they do not have investment control of the account other than the right to terminate. If the Access Person makes, or participates in, an investment decision for an account that has been reported as discretionary, transactions related to that decision must be pre-cleared. If there
is any uncertainty about whether a particular account would be deemed discretionary for purposes of the Policy, please consult the Code of Ethics Department.
Exemptions from Pre-Clearance
Certain types of securities and transactions are exempt from pre-clearance requirements. Examples of these types of securities and transactions include, but are not limited to, shares issued by FRI; shares of open-end and closed- end funds (including the FT Funds); shares of ETFs; certain government obligations and transactions effected pursuant to dividend reinvestment plans. In addition, transactions in small quantities of securities (e.g., in the case of equity securities, 500 shares within a 30 calendar day period) are not required to be pre-cleared. Please consult the Code of Ethics Department for further information about the types of securities and transactions that are exempt from the pre-clearance requirements of the Policy.
“Intent” Is Important
While pre-clearance of Access Persons’ transactions is a cornerstone of Franklin Templeton’s compliance efforts, it cannot detect inappropriate or illegal transactions where the intent conflicts with the principles of the Policy. Thus, the fact that a proposed transaction received pre-clearance is not a defense against a charge of violating the Policy or the securities laws. For example, even if an Access Person received pre-clearance for a transaction, that transaction might constitute front-running if it occurred shortly before a transaction by an FT Fund or Client Account that the Access Person was aware of. In cases like this, the intent may not be evident when a particular transaction request is analyzed for pre-clearance.
2.8 Requirements for Independent Directors
Pre-clearance and Reporting Requirements
An Independent Director is subject to the pre-clearance and transaction reporting requirements of the Policy only if such Independent Director, at the time of his or her transaction, knew or should have known that, during the 15 calendar day period before or after the date of the Independent Director’s transaction, the security was purchased or sold or considered for purchase or sale by an FT Fund or Client Account. The pre-clearance and reporting requirements of the Policy do not apply to securities transactions conducted in an account where an Independent Director has granted full investment discretion to a brokerage firm, bank or investment adviser or conducted in a trust account in which the trustee has full investment discretion. Independent Directors are not required to disclose any securities holdings or brokerage accounts, including brokerage accounts where he/she has granted discretionary authority to a brokerage firm, bank or investment adviser.
Initial and Annual Acknowledgment Reports
An Independent Director must complete and return an executed Acknowledgment Form to the Code of Ethics Department no later than 10 calendar days after the date the person becomes an Independent Director.
Independent Directors will be asked to certify by February 15th of each year that they have complied with and will comply with the Policy by filing the Acknowledgment Form with the Code of Ethics Department.
SECTION 3. INSIDER TRADING
3.1 Policy on Insider Trading
Insider trading, or trading on material non-public information, is against the law and penalties are severe, both for individuals involved in such unlawful conduct and their employers. No Covered Employee may (1) trade, either personally or on behalf of the FT Funds or Client Accounts, while in possession of material non-public information, or (2) communicate material non-public information to others.
Material non-public information may be obtained by many means, both in connection with a Covered Employee’s job functions (e.g., from meetings with company executives or consultations with expert networks) or independent of the Covered Employee’s employment or relationship with Franklin Templeton (e.g., from friends or relatives).
Before trading for themselves or others (including FT Funds and Client Accounts) in the securities of a company about which a Covered Employee potentially may have material non-public information, the Covered Employee should consider the following questions:
• First, is the information material? Information is considered material if there is a substantial likelihood that a reasonable investor would consider the information to be important in making his or her investment decision, or if it is reasonably certain to have a substantial effect on the price of the company’s securities.
• Second, is the information non-public? Information is non-public until it has been effectively communicated to the marketplace. For example, information in a report filed with the U.S. Securities and Exchange Commission, or that appears in a publication of general circulation (e.g., The Wall Street Journal or Reuters) would be considered public. If the information has been obtained from someone who is betraying an obligation not to share the information (e.g., a company insider), that information is very likely to be non-public.
If, after consideration of these questions, the Covered Employee believes that the information that they have about a company may be material and non-public, or if the Covered Employee has questions as to whether the information is material or non-public, he or she must report the matter immediately to Trading Desk Compliance/IC, the designated Compliance Officer or Legal Department. In addition, the Covered Employee must not purchase or sell any securities issued by such company on behalf of themselves or others (including on behalf of any FT Fund or Client Account), or communicate the information inside or outside Franklin Templeton.
Trading Desk Compliance/IC or the Compliance Officer will promptly contact the Legal Department for advice. After review of the facts, the Legal Department, Trading Desk Compliance/IC or the Compliance Officer will provide instructions to the Covered Employee. If the information in the Covered Employee’s possession is determined to be material and non-public, the Covered Employee is required to keep the information confidential and secure. Those securities for which the Covered Employee has material non-public information will be placed on restricted trading lists for a timeframe determined by the Compliance Officer.
SECTION 4. RELATED POLICIES AND REQUIREMENTS
4.1 Statement on Other Policies and Requirements
In addition to the Policy, Covered Employees are required to observe the applicable policies and procedures prescribed in the Code of Ethics and Business Conduct, the policies contained in the U.S. and non-U.S. employee handbooks (as applicable), and various other policies adopted by Franklin Templeton.
SECTION 5. ADMINISTRATION OF THE POLICY, WAIVERS & REPORTING VIOLATIONS
5.1 Code of Ethics Committee; Reporting to FT Fund Boards
The Code of Ethics Committee is responsible for the administration of the Policy and provides oversight of compliance with the personal trading requirements of the Policy. Among other things, the Committee has the authority and responsibility to review the Policy periodically, review sanction guidelines for violations of the Policy and review trading violations and waivers granted.
At least annually, the Franklin Templeton Fund Boards will be provided with a report describing any issues arising under the Policy.
5.2 Violations of the Policy
A Covered Employee that violates this Policy will be sanctioned in a manner commensurate with the violation. Prescribed sanctions range from warning memos for a first time failure to pre-clear a transaction to the immediate
sale of positions, disgorgement of profits, personal trading suspensions and other sanctions, up to and including termination and reporting to regulatory authorities for more serious violations.
5.3 Waivers of the Policy
The Director of Global Compliance or the Chief Compliance Officer may, in his or her discretion, waive compliance by any Covered Employee with the provisions of the Policy, if he or she finds that such a waiver:
(1) is necessary to alleviate undue hardship or in view of unforeseen circumstances or is otherwise appropriate under all the relevant facts and circumstances;
(2) will not be inconsistent with the purposes and objectives of the Policy;
(3) will not adversely affect the interests of the FT Funds or Client Accounts or the interests of Franklin Templeton; and
(4) will not result in a transaction or conduct that would violate provisions of applicable laws or regulations.
Any waiver will be in writing, will contain a statement of the basis for it, and any waivers granted by the Chief Compliance Officer of the relevant investment adviser will be reported to the Director of Global Compliance.
5.4 Reporting Violations
Covered Employees are required to report violations of the Policy or the related Procedures, whether by themselves or by others.
Franklin Templeton is dedicated to providing Covered Employees with the means and opportunity to report violations of the Policy or the related Procedures, or other instances of wrongdoing, or any concerns they may have regarding ethical violations or accounting, internal control or auditing matters, including fraud. Several means are provided by which reports can be made including:
Compliance and Ethics Hotline: | 1-800-636-6592 | http://intranet/codeofethics/hotline/op_principles.htm |
Funds Compliance Hotline: | 1-888-678-8852 | http://intranet/codeofethics/hotline/op_principles.htm |
Corporate Ombudsman: | 1-650-312-2832 | http://intranet/codeofethics/ombudsman/index.htm |
Franklin Templeton will not allow retaliation against any Covered Employee who has submitted a report of a violation of the Policy or the related Procedures in good faith.
Appendix
Covered Employees | Access Persons | Portfolio Persons | Independent Directors | |
Prohibited Activities (Section 1.3) | X | X | X | X |
Prohibited Transactions and Other Requirements (Sections 2.4 and 2.5) | ||||
Prohibition on Trading Activity that Conflicts with FT Funds or Client Accounts | X | X | X | X |
Prohibition on Short Sales of FRI and Closed-end FT Funds | X | X | X | X |
Trading in Shares of the FT Funds When in Possession of Material Non-Public Information | X | X | X | X |
Short-Term Trading in Open-end FT Funds | X | X | X | X |
Prohibition on Investments in Initial Public Offerings | X | X | ||
Prohibition on Short Sales of All Securities | X | |||
Short Swing Rule | X | |||
Disclosure of Interest in Securities | X | |||
Reporting Requirements (Section 2.6) | ||||
Initial Certification/Acknowledgment | X | X | X | X |
Initial Disclosure of Accounts and Holdings | X | X | ||
Annual Disclosure of Accounts and Holdings | X | X | ||
Annual Certification of Compliance | X | X | X | X |
Quarterly Disclosure of Transactions | X | X | X* | |
Quarterly Disclosure of New Accounts | X | X | ||
Pre-Clearance Requirements (Section 2.7) | X | X | X* | |
Insider Trading (Section 3) | X | X | X | X |
Requirement to Report Violations (Section 5.4) | X | X | X | X |
*Only applicable if the Independent Director, at the time of his or her transaction, knew or should have known that, during the 15 calendar day period before or after the date of the Independent Director’s transaction, the security was purchased or sold or considered for purchase or sale by an FT Fund or Client Account.
POWER OF ATTORNEY
The undersigned officer of TEMPLETON INSTITUTIONAL FUNDS (the "Registrant"), hereby appoint Craig S. Tyle, Alison E. Baur, Steven J. Gray, Lori A. Weber, Bruce G. Leto, Alison M. Fuller, Kristin H. Ives, and Marguerite C. Bateman (with full power to each of them to act alone) his attorney-in-fact and agent, in all capacities, to execute, deliver and file in the names of the undersigned, any and all instruments that said attorneys and agents may deem necessary or advisable to enable the Registrant to comply with or register any security issued by the Registrant under the Securities Act of 1933, as amended, and/or the Investment Company Act of 1940, as amended, and the rules, regulations and interpretations thereunder, including but not limited to, any registration statement, including any and all pre- and post-effective amendments thereto, any other document to be filed with the U.S. Securities and Exchange Commission and any and all documents required to be filed with respect thereto with any other regulatory authority. The undersigned grants to each of said attorneys, full authority to do every act necessary to be done in order to effectuate the same as fully, to all intents and purposes, as he could do if personally present, thereby ratifying all that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue hereof.
The undersigned officer hereby executes this Power of Attorney as of the 10th day of December, 2021.
/s/ Christopher King
Christopher King
Treasurer, Chief Financial Officer and Chief Accounting Officer
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