Extension of Rule 17f-5 Information Collection
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
The rule ensures registered investment funds can store assets with foreign custodians under certain conditions, requiring oversight and regular reporting. This affects fund boards and foreign custody managers by imposing responsibilities to review and monitor custodian arrangements, ensuring that asset protection measures are in place.
AI-generated summary. May contain errors. Refer to official sources for legal decisions.
Key Changes
- Enables funds to use foreign custodians by meeting specific conditions.
- Mandates fund boards to ensure proper evaluation and monitoring of foreign custodians.
- Introduces reporting requirements for updates on custody arrangements.
Obligations
What this law requires
Fund boards must make a written determination that it is reasonable to rely on each foreign custody manager delegate selected to act on behalf of the fund
Foreign custody managers must provide written reports to the fund board notifying when fund assets are placed with a foreign custodian and when any material change occurs in custody arrangements
Foreign custody managers must agree to exercise reasonable care, prudence, and diligence, or adhere to a higher standard of care, in performing delegated custody services
Foreign custody managers must determine that fund assets will be subject to reasonable care if maintained with the selected eligible foreign custodian
Custody contracts between foreign custody managers and eligible foreign custodians must contain specified provisions or equivalent provisions that provide reasonable care for fund assets