[Federal Register Volume 59, Number 196 (Wednesday, October 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25189]
[[Page Unknown]]
[Federal Register: October 12, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-20599; International Series Release No. 725; File No. 812-
9184]
The Standard Bank of South Africa; Notice of Application
October 4, 1994.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of Application for Exemption under the Investment
Company Act of 1940 (the ``Act'').
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APPLICANT: The Standard Bank of South Africa, Ltd. (``SBSA'').
RELEVANT ACT SECTIONS: Order requested under section 6(c) of the Act
granting an exemption from section 17(f) of the Act.
SUMMARY OF APPLICATION: SBSA requests an order that would permit
certain of its subsidiaries to act as custodian or subcustodian for
investment company assets in certain African countries.
FILING DATE: The Application was filed on August 19, 1994.
HEARING OR NOTIFICATION OF HEARING: An order granting the application
will be issued unless the SEC orders a hearing. Interested persons may
request a hearing by writing to the SEC's Secretary and serving
applicant with a copy of the request, personally or by mail. Hearing
requests should be received by the SEC by 5:30 p.m. on October 31,
1994, and should be accompanied by proof of service on applicant, in
the form of an affidavit, or for lawyers, a certificate of service.
Hearing requests should state the nature of the writer's interest, the
reason for the request, and the issues contested. Persons may request
notification of a hearing by writing to the SEC's Secretary.
ADDRESSES: Secretary, SEC, 450 Fifth Street, NW., Washington, DC 20549.
Applicant, Standard Bank Centre, 9th Floor--5 Simmonds Street,
Johannesburg 2001, South Africa; c/o Wallace L. Timmeny, Esq., and
Clive R.G. O'Grady, Esq., McGuire, Woods, Battle & Boothe, 1627 Eye
Street, NW., Suite 1000, Washington, DC 20006.
FOR FURTHER INFORMATION CONTACT:
Bradley W. Paulson, Staff Attorney, at (202) 942-0147 or Robert A.
Robertson, Branch Chief, at (202) 942-0564 (Division of Investment
Management, Office of Investment Company Regulation).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application is available for a fee from the
SEC's Public Reference Branch.
Applicant's Representations
1. SBSA is a company organized and existing under the laws of South
Africa. SBSA is authorized and regulated in South Africa by the Office
of Banks, Registrar of Banks of South Africa. As of December 31, 1993,
SBSA had shareholders' equity of 3.3 billion South African Rand (U.S.
$925 million).
2. SBSA requests an order to permit it, as the custodian or
subcustodian of foreign securities, cash, and cash equivalents
(collectively the ``Assets'') of investment companies (other than
investment companies registered under section 7(d) of the Act), to
maintain such assets in the custody of the following entities: Stanbic
Bank Botswana, Ltd., Stanbic Bank Kenya, Ltd., Standard Bank Namibia,
Ltd., Stanbic Bank Uganda, Ltd., Stanbic Bank Swaziland, Ltd., Stanbic
Bank Zaire, s.z.a.r.l., Stanbic Bank Zambia, Ltd., and Stanbic Bank
Zimbabwe, Ltd. (collectively, the ``Foreign Affiliates'').
3. The Foreign Affiliates are direct subsidiaries of Applicant or
SBIC Africa Holdings, Ltd. (``SBIC Africa''). SBSA is a wholly-owned
subsidiary of Standard Bank Investment Corporation, Ltd. (``SBIC'') and
SBIC Africa is a wholly-owned, direct subsidiary of SBIC. Each Foreign
Affiliate is a bank incorporated under the laws of a country other than
the United States and is regulated as such by the relevant country's
government or an agency thereof.
Applicant's Legal Analysis
1. Section 17(f) of the Act provides that a registered investment
company may place and maintain its securities and similar assets in the
custody of a bank or banks meeting the requirements of section 26(a) of
the Act, a member firm of a national securities exchange, the
investment company itself, or a system for the central handling of
securities established by a national securities exchange. Section
2(a)(5) of the Act defines ``bank'' to include banking institutions
organized under the laws of the United States, member banks of the
Federal Reserve System, and certain other banking institutions or trust
companies doing business under the laws of any state or the United
States. Neither SBSA nor the Foreign Affiliates falls within the
definition of ``bank'' as that term is defined in the Act.
2. Rule 17F-5 specifies entities located outside the United States
that are eligible to serve as custodian for investment company assets.
One such entity is a banking institution or trust company incorporated
or organized under the laws of a country other than the United States
that is regulated as such by the country's government or an agency
thereof and that has shareholders' equity in excess of U.S. $200
million. SBSA qualifies as a an eligible foreign custodian. The Foreign
Affiliates do not qualify as eligible foreign custodian under rule 17f-
5 only because they do not meet the minimum shareholders' equity
requirement.
Applicant's Conditions
SBSA agrees that an order granting the requested relief may be
conditioned upon the following:
1. The proposed foreign custody arrangements regarding the Foreign
Affiliates satisfy the requirements of rule 17f-5 in all respects other
than the Foreign Affiliates' level of shareholders' equity.
2. SBSA will deposit the Assets with a Foreign Affiliate only in
accordance with an agreement (the ``Agreement'') required to remain in
effect at all times during which the Foreign Affiliate fails to satisfy
the requirements of rule 17f-5. Each Agreement will be a three-party
agreement among SBSA, the Foreign Affiliate and the U.S. investment
company (or its custodian). Under the Agreement, SBSA will undertake to
provide specified custodial or subcustodial services for a U.S.
investment company or its custodian, and will delegate to the Foreign
Affiliate such of the duties and obligations of SBSA as will be
necessary to permit the Foreign Affiliate to hold in custody the U.S.
investment company's Assets in the relevant country. The Agreement will
further provide that SBSA will be liable for any loss, damage, cost,
expense, liability, or claim arising out of or in connection with the
performance by the Foreign Affiliate of its responsibilities under the
Agreement to the same extent as if SBSA had been required to provide
custody services under such agreement.
3. SBSA currently satisfies and will continue to satisfy the
minimum shareholders equity requirement set forth in rule 17f-
5(C)(2)(i) under the Act.
For the SEC, by the Division of Investment Management, pursuant
to delegated authority.
Margaret H. McFarland
Deputy Secretary.
[FR Doc. 94-25189 Filed 10-11-94; 8:45 am]
BILLING CODE 8010-01-M