[Federal Register Volume 78, Number 104 (Thursday, May 30, 2013)]
[Notices]
[Pages 32477-32483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-12797]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30539; 812-13877]


ASA Gold and Precious Metals Limited; Notice of Application

May 22, 2013.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application under section 7(d) of the Investment 
Company Act of 1940 (the ``Act'').

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[[Page 32478]]

SUMMARY: Summary of Application: Applicant, ASA Gold and Precious 
Metals Limited (``ASA''), a Bermuda closed-end management investment 
company registered under section 7(d) of the Act, requests an order 
that would permit ASA to make changes to its custodial arrangements 
without prior Commission approval, hold assets and conduct certain 
securities transactions in specified foreign countries, as well as 
permit ASA and certain other persons to designate CT Corporation System 
(``CT Corp'') in the U.S. to accept service of process.

DATES: Filing Dates: The application was filed on March 9, 2011, and 
amended on March 21, 2012, and February 6, 2013.
    Hearing or Notification of Hearing: An order granting the 
application will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary and serving applicants with a copy of the request, personally 
or by mail. Hearing requests should be received by the Commission by 
5:30 p.m. on June 17, 2013 and should be accompanied by proof of 
service on applicants, 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 who wish to be notified of a hearing may request 
notification by writing to the Commission's Secretary.

ADDRESSES: Elizabeth M. Murphy, Secretary, Securities and Exchange 
Commission, 100 F Street NE., Washington, DC 20549-1090. Applicant, c/o 
Deborah Djeu, 400 S. El Camino Real, Suite 710, San Mateo, CA 94402.

FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, at 
(202) 551-6876, or Daniele Marchesani, Branch Chief, at (202) 551-6747 
(Division of Investment Management, Exemptive Applications Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's Web site by searching for the file number, or an applicant 
using the Company name box, at http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Applicants' Representations

    1. ASA is an internally-managed closed-end management investment 
company organized in 1958 in South Africa and currently organized in 
Bermuda. ASA is registered under the Act.\1\ ASA had $591 million in 
net assets as of February 29, 2012. Shares of ASA trade on the New York 
Stock Exchange (``NYSE''). ASA's main focus is to invest in securities 
of companies involved in the exploration and mining of gold and other 
precious minerals. To this end, ASA's management is seeking to take 
advantage of investment opportunities in non-South African companies 
that are, or in the future may be, listed on the Stock Exchange of Hong 
Kong Limited (the ``HKSE''), the London Stock Exchange (``LSE''), the 
Toronto Stock Exchange (``TSX''), or the Australian Securities Exchange 
(``ASX'').\2\ ASA states that certain conditions of the Existing Order 
have made it difficult for ASA to implement fully a flexible investment 
strategy consistent with its current fundamental investment policy and 
to achieve its desired portfolio diversification outside of South 
Africa. Applicant asserts that with the requested relief ASA will be 
able to better adapt to changes in the gold and other precious minerals 
industry and to pursue the best investment prospects on a global scale, 
for the benefit of its shareholders.
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    \1\ Investment Company Act Release Nos. 2739 (July 3, 1958) 
(notice) and 2756 (Aug. 13, 1958 (order) (the ``Original Order''). 
Since 1958, the Original Order has been amended on a number of 
occasions. See Investment Company Act Release Nos. 26582 (Aug. 27, 
2004) (notice) and 26602 (Sep. 20, 2004) (order) (``Existing 
Order''); Investment Company Act Release Nos. 24321 (Feb. 29, 2000) 
(notice) and 24367 (Mar. 27, 2000) (order) (the ``CSD Order''); 
Investment Company Act Release Nos. 21161 (June 23, 1995) (notice) 
and 21220 (July 20, 1995) (order); Investment Company Act Release 
Nos. 17904 (Dec. 17, 1990) (notice) and 17945 (Jan. 15, 1991) 
(order); Investment Company Act Release Nos. 14826 (Dec. 4, 1985) 
(notice) and 14878 (Dec. 31, 1985) (order); Investment Company Act 
Release Nos. 11669 (Mar. 6, 1981) (notice) and 11722 (Apr. 7, 1981) 
(order) (collectively with the CSD Order, the ``Custody Orders''); 
Investment Company Act Release Nos. 8278 (Mar. 20, 1974) (notice) 
and 8312 (Apr. 17, 1974) (order); Investment Company Act Release 
Nos. 7860 (June 12, 1973) (notice) and 7894 (July 10, 1973) (order); 
Investment Company Act Release Nos. 2944 (Dec. 14, 1959) (notice) 
and 2957 (Dec. 29, 1959) (order); Investment Company Act Release 
Nos. 2883 (May 22, 1959) (notice) and 2886 (June 9, 1959) (order) 
(``1959 Order''); and Investment Company Act Release Nos. 2817 (Jan. 
5, 1959) (notice) and 2821 (Jan 20, 1959) (order) (collectively with 
the Custody Orders, the ``Subsequent Orders'' and together with the 
Original Order, the ``Prior Orders'').
    \2\ In 2005, with the approval of its shareholders, ASA replaced 
its fundamental investment policies that, among other things, 
required ASA to invest more than 50% of its assets in equity 
securities of gold mining companies in South Africa and no more than 
20% of its assets in equity securities of companies outside of South 
Africa with a new investment policy that no longer contains any 
geographical limitations as to ASA's investments.
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    2. Applicant requests an order that would: (a) permit ASA to 
appoint a primary custodian (``Primary Custodian'') or otherwise amend 
its agreement with the Primary Custodian without prior Commission 
approval; (b) permit ASA to settle purchases and sales of portfolio 
securities outside of the U.S. on an additional ``established 
securities exchange,'' the HKSE; \3\ (c) permit ASA, subject to the 
existing condition that ASA keep at least 20% of its assets in the 
United States in the custody of a U.S. bank (``20% Requirement''), to 
maintain its remaining assets in the custody of an eligible foreign 
custodian or an eligible securities depository in South Africa, Hong 
Kong, the United Kingdom, Canada, or Australia; \4\ (d) permit ASA's 
Primary Custodian to change the eligible foreign custodian or eligible 
securities depository in whose custody it maintains ASA's assets in 
those five countries, and to amend the custodian agreement with ASA to 
reflect the change, without prior Commission approval; (e) permit ASA, 
through its Primary Custodian or its Primary Custodian's agent, to 
exercise in South Africa, Hong Kong, the United Kingdom, Canada, or 
Australia the rights issued to it as a shareholder in other companies 
for the purchase of securities; and (f) require ASA and each of its 
present or future directors, officers or investment advisers who is not 
a resident of the United States (``Non-Resident Persons'') to 
irrevocably designate CT Corp, instead of ASA's Primary Custodian, as 
an agent in the U.S. to accept service of process (``U.S. Service 
Agent'') in any suit, action, or proceeding (collectively, 
``Proceeding'') before the Commission or any appropriate court relating 
to, respectively, the Non-Resident Persons' activities as directors, 
officers or investment advisers of ASA.\5\ As described more fully in 
the application, ASA's foreign subcustodians generally would also 
designate CT Corp as U.S. Service Agent.
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    \3\ The Existing Order defines the term ``established securities 
exchange'' as a national securities exchange as defined in Section 
2(a)(26) of the Act, the JSE Limited South Africa (``JSE''), the 
LSE, the Tokyo Stock Exchange, the TSX, the ASX and the SWX Swiss 
Exchange.
    \4\ If the Commission grants the requested relief, ASA will 
comply with the requirements of Rule 17f-5 and Rule 17f-7 under the 
Act as if ASA were a registered management investment company 
organized or incorporated in the United States (``U.S. Fund''). The 
terms ``eligible foreign custodian'' and ``eligible securities 
depository'' have the same meaning as defined in Rule 17f-5 and Rule 
17f-7.
    \5\ ASA would designate CT Corp as U.S. Service Agent in the 
same city in which ASA's Primary Custodian is located.
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Applicants' Legal Analysis

    1. Section 7(d) of the Act prohibits an investment company 
organized outside the U.S. (``foreign fund'') from making a

[[Page 32479]]

public offering of its securities in the U.S., but authorizes the 
Commission by order to permit a foreign fund to register under the Act 
and make a public offering of its securities in the U.S. if the 
Commission finds that ``by reason of special circumstances or 
arrangements, it is both legally and practically feasible effectively 
to enforce the provisions of [the Act] against such company and that 
the issuance of such order is otherwise consistent with the public 
interest and protection of investors.'' Rule 7d-1 under the Act sets 
forth the conditions that an investment company organized in Canada 
must satisfy in order to receive an order under section 7(d) of the 
Act.\6\ Applicant seeks an order under section 7(d) as discussed above, 
subject to conditions that, among other things, would require ASA to 
comply with many of the requirements of rule 7d-1 under the Act, 
including the requirement that its charter and bylaws contain the Act's 
substantive provisions.
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    \6\ Although rule 7d-1 by its terms applies only to Canadian 
funds, the Commission generally has required other foreign funds 
seeking section 7(d) orders to comply with the rule's conditions.
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    2. ASA believes that it would be legally and practically feasible 
effectively to enforce the provisions of the Act against it and that 
the issuance of the requested order would be consistent with the public 
interest and the protection of investors. In particular, Applicant 
states that (i) applicable law provides substantial certainty that 
appropriate U.S. courts would exercise personal jurisdiction over ASA; 
(ii) a U.S. Federal court would possess subject matter jurisdiction in 
a case brought by the Commission because such a case would be based 
upon alleged violations of the federal securities laws; and (iii) the 
doctrine of forum non conveniens would not present an impediment to the 
Commission's or another party's ability to bring appropriate claims 
against ASA.\7\ Applicant also asserts that the analysis of whether a 
plaintiff would be able to enforce in Hong Kong, the United Kingdom, 
Canada, or Australia a judgment obtained in the United States or 
Bermuda would be the same with respect to ASA as with a U.S. Fund. 
Thus, Applicant claims that placing assets in those countries does not 
involve any greater jurisdictional concerns in the case of ASA than it 
does in the case of U.S. funds, which, in addition, are not subject to 
the 20% Requirement. In addition, ASA has agreed to perform every 
action and thing necessary to cause and assist its shareholders or the 
Commission to collect (i) any monetary amount specified in a Commission 
order or (i) a final judgment entered by a court of competent 
jurisdiction.
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    \7\ Applicant notes that (i) unlike a U.S. Fund, ASA must 
maintain at least 20% of its assets in the U.S.; (ii) ASA will 
appoint a U.S. bank as its Primary Custodian; (iii) ASA's principal 
offices are located in the U.S. and a majority of its directors, 
executive officers, and employees would be both citizens and 
residents of the U.S.; and (iv) ASA would stipulate that personal 
jurisdiction exists in any Commission action brought against ASA in 
the U.S. and waive any defense of forum non conveniens in any such 
action. ASA also represents that its agreement with its Primary 
Custodian would contain provisions stipulating that the United 
States is the proper venue for disputes arising under the agreement.
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    3. Under the terms and conditions of the Existing Order, ASA agreed 
that JPMorgan Chase Bank, N.A. (``Chase'') will serve as ASA's Primary 
Custodian and will continue to meet the qualifications of a custodian 
under Section 17(f) of the Act.\8\ Furthermore, one of the conditions 
of the Existing Order requires ASA to seek an order of the Commission 
prior to any amendment of its custodian agreement with its Primary 
Custodian. ASA seeks an order to permit it to appoint a Primary 
Custodian or otherwise amend its custodian agreement without prior 
Commission approval. ASA states that requiring Commission approval 
imposes on ASA an unfair and unnecessary burden not imposed on U.S. 
Funds, as well as diminishes ASA's ability effectively and efficiently 
to deal with business issues regarding its custody arrangements. ASA 
represents that (i) a U.S. bank eligible to serve as custodian under 
section 17(f) would serve as ASA's Primary Custodian, and (ii) ASA 
would request an order of the Commission prior to any amendment of its 
agreement with its Primary Custodian if the amendment conflicts with 
any of the representations or conditions of the requested order.
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    \8\ Section 17(f) of the Act provides that ``every registered 
management investment company shall place and maintain its 
securities and similar investments in the custody of: (A) a bank or 
banks having the qualifications prescribed in paragraph (1) of 
Section 26(a) of [the Act]. . . .''
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    4. Under the terms and conditions of the Existing Order, ASA is 
required to settle its purchases and sales of portfolio securities, 
other than purchases and sales on an ``established securities 
exchange,'' in the U.S.\9\ ASA requests an order expanding the 
definition of ``established securities exchange'' to permit it to 
settle purchases and sales of portfolio securities on the HKSE. 
Applicant states that the Act does not limit the securities exchanges 
on which U.S. Funds may settle securities transactions. Applicant 
asserts that the requirement that ASA's purchases and sales of 
portfolio securities, other than purchases and sales on an 
``established securities exchange'' as currently defined, be settled in 
the U.S. renders it impracticable for ASA to purchase portfolio 
securities on the HKSE, and prevents ASA from taking advantage of 
certain investment opportunities to the detriment of its shareholders.
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    \9\ See supra note 3.
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    5. Under the terms and conditions of the Existing Order, ASA is 
required to keep at least 20% of its assets in the U.S. in the custody 
of a U.S. bank. ASA's remaining assets are also required to be kept in 
the custody of such U.S. custodian, except that, subject to the 20% 
Requirement, ASA may keep, through its custodian or South African 
subcustodian, in the central securities depository for equity 
securities in South Africa (``CSD'') up to 100% of its securities 
eligible for deposit at the CSD.\10\ In addition, ASA is permitted to 
keep up to 33% of its assets in countries other than South Africa 
outside of the U.S. in the custody of an eligible foreign custodian or 
overseas branch of a U.S. bank under certain circumstances.\11\ ASA 
seeks an order to permit it, subject to the 20% Requirement, to 
maintain up to 80% of its assets in the custody of an eligible foreign 
custodian, as defined in Rule 17f-5 under the Act, or an eligible 
securities depository, as defined in Rule 17f-7 under the Act, in South 
Africa, Hong Kong, the United Kingdom, Canada or Australia. ASA's 
management is seeking to take advantage of investment opportunities in 
non-South African companies that are, or in the future may be, listed 
on the HKSE, the LSE, the TSX, or the ASX.\12\ ASA states

[[Page 32480]]

that the requested relief would not change the total percentage of 
assets that ASA is currently permitted to maintain outside of the U.S. 
Rather, it would permit ASA to allocate that total percentage among, 
and maintain that total percentage in five countries, rather than 
maintain that total percentage all in one country. Moreover, as 
discussed more fully in the application, Applicant represents that the 
difficulty in enforcing a judgment obtained in the United States or 
Bermuda against ASA in South Africa does not exist in Hong Kong, the 
United Kingdom, Canada or Australia. Applicant represents that if the 
Commission grants the requested relief, ASA will comply with Rule 17f-5 
\13\ and Rule 17f-7 \14\ under the Act as if ASA were a U.S. Fund.
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    \10\ Under the Existing Order, ASA agreed that Standard Bank 
would serve as Chase's subcustodian in South Africa. Subsequent 
staff no-action relief permitted ASA's Primary Custodian to change 
the subcustodian to First National Bank. See ASA (Bermuda) Limited, 
SEC No-Action Letter (December 13, 2006) (``2006 Letter'').
    \11\ ASA may keep: (i) up to 3% of its assets in South Africa in 
short-term rand-denominated investments issued or guaranteed by the 
Republic of South Africa; (ii) up to 5% of its assets in rand-
denominated interest bearing bank accounts with eligible foreign 
custodians or overseas branches of U.S. banks; and (iii) up to 5% of 
its assets with an eligible foreign custodian or overseas branch of 
ASA's Primary Custodian in each of London, Japan, Australia, 
Switzerland, and Canada, if removal of securities purchased on the 
established exchanges becomes either prohibited by law or regulation 
or financially impracticable.
    \12\ Under the terms and conditions of the Existing Order, ASA 
is permitted to settle securities transactions on the LSE, the TSX, 
and the ASX (and ASA is seeking an order to permit it to settle 
securities transactions on the HKSE as well), but if ASA does so it 
must then satisfy the requirement that such securities be maintained 
in the U.S. with ASA's Primary Custodian. Applicant asserts that the 
only way it may meet this requirement is by moving physical 
securities away from their primary trading markets or purchasing 
American Depositary Receipts for those foreign securities in the 
U.S. market, neither of which is an effective and efficient means 
for ASA to achieve its desired international portfolio 
diversification.
    \13\ Rule 17f-5 permits a U.S. Fund to maintain foreign assets 
with an ``eligible foreign custodian.'' The fund's board of 
directors, its investment adviser, or custodian bank (``foreign 
custody manager'') must determine that the fund's assets in custody 
will be subject to reasonable care, based upon the standards 
applicable to custodians in the relevant market after considering 
certain factors. Rule 17f-5 also requires that the custody 
arrangement be governed by a written contract, including certain 
specified (or equivalent) provisions, that the foreign custody 
manager determines will provide reasonable care for fund assets. The 
foreign custody manager must establish a system to monitor the 
appropriateness of maintaining the fund's assets with the eligible 
foreign custodian and the performance of the contract. ASA's board 
of directors (the ``Board'') will serve as foreign custody manager 
and will not delegate such function.
    \14\ Rule 17f-7 permits a fund, including a registered Canadian 
fund, to maintain foreign assets with a foreign ``eligible 
securities depository'' that acts as or operates a system for the 
central handling of securities that is regulated by a foreign 
financial regulatory authority. Rule 17f-7 also requires a fund's 
primary custodian, or its agent, to furnish the fund or its 
investment adviser with an analysis of the custody risks of using an 
eligible securities depository before the fund places its assets 
with the depository. In addition, the fund's contract with its 
primary custodian must require the custodian, or its agent, to 
monitor these risks on a continuing basis and promptly notify the 
fund of any material change in these risks. Prior to use of an 
``eligible securities depository'' for ASA's overseas assets, the 
Board will review the proposed arrangements to ensure they meet the 
requirements of Rule 17f-7.
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    6. ASA requests an order to permit its Primary Custodian to change 
the eligible foreign custodian or eligible securities depository in 
whose custody it maintains ASA's assets, and to amend the custodian 
agreement with ASA to reflect the change, without prior Commission 
approval. Applicant contends that requiring it to seek Commission 
approval before its Primary Custodian changes the eligible foreign 
custodian or eligible securities depository in whose custody it 
maintains ASA's assets imposes on ASA and its Primary Custodian an 
unfair burden that is not imposed upon U.S. Funds. ASA also asserts 
that changing the eligible foreign custodian or eligible securities 
depository in whose custody ASA's Primary Custodian maintains ASA's 
assets does not raise any jurisdictional concerns different from than 
those discussed above. Finally, ASA asserts that requiring it to seek 
Commission approval diminishes ASA's (and its Primary Custodian's) 
ability to deal effectively and efficiently with business issues 
regarding ASA's custody arrangements.
    7. ASA also seeks relief to exercise in South Africa, Hong Kong, 
the United Kingdom, Canada, or Australia the rights issued to it as a 
shareholder in other companies for the purchase of securities. Under 
the terms and conditions of the Existing Order, ASA is required to 
settle its purchases and sales of portfolio securities, other than 
purchases on established exchanges, in the U.S.\15\ Applicant contends 
that exercise in South Africa, Hong Kong, the United Kingdom, Canada or 
Australia of the rights issued to ASA as a shareholder in other 
companies for the purchase of securities would not constitute purchases 
and sales ``on'' the established exchanges. ASA asserts that without 
this relief, there could be significant opportunity costs and financial 
harms to ASA and its shareholders because, among other things, ASA 
could be precluded from participating in rights offerings that present 
attractive investment opportunities in companies with which ASA already 
is familiar. As stated in condition 23, applicant states that this 
relief would be limited so that: (a) the rights so exercised are 
offered to ASA as a shareholder in another company on the same basis as 
all other holders of the class or classes of shares of such other 
company to whom such rights are offered, (b) the rights so exercised do 
not exceed 10% of the total amount of such rights so offered, and (c) 
the securities purchased pursuant to such exercise, or securities of 
the same class, are listed on the JSE, the HKSE, the LSE, the TSX, or 
the ASX, or application has been made to such exchange for the listing 
thereon of such securities, or it has been publicly announced that 
application will be made to such exchange for the listing thereon of 
such securities.
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    \15\ See supra note 3.
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    8. Under the terms and conditions of the Existing Order, ASA and 
each of its Non-Resident Persons must designate Chase, ASA's Primary 
Custodian, as U.S. Service Agent in any Proceeding before the 
Commission or any appropriate court relating to their activities as 
directors, officers or investment advisers of ASA. ASA requests that 
ASA and its Non-Resident Persons be required to designate CT Corp, 
instead of ASA's Primary Custodian, as U.S. Service Agent.\16\ ASA's 
foreign custodians generally also would designate CT Corp as U.S. 
Service Agent. Applicant states that CT Corp is a leading registered 
agent in the U.S. and has been in the business of providing registered 
agent services for over 100 years. Applicant states that permitting ASA 
and each of its Non-Resident Persons to designate CT Corp, instead of 
ASA's Primary Custodian, as U.S. Service Agent would eliminate the 
inconvenience and unnecessary expense associated with having to change 
the designated U.S. Service Agent in the event of changes to ASA's 
custodial arrangements. ASA, furthermore, is seeking more flexibility 
with respect to foreign custodians, which are not in privity of 
contract with ASA. ASA asserts that while Chase's current foreign 
subcustodians have agreed to designate CT Corp, future foreign 
subcustodians may not be able or willing to do so. If ASA's foreign 
subcustodians change, ASA will use its best efforts to ensure that the 
new foreign subcustodians will also designate CT Corp as U.S. Service 
Agent.\17\ ASA does not believe that this relief would have an impact 
on the jurisdictional issues discussed above.
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    \16\ ASA notes that the 2006 Letter granted staff no-action 
relief to (i) permit, among other things, ASA to continue relying on 
the Existing Order after Chase's subcustodian changed from Standard 
Bank to First National Bank, and (ii) permit ASA to continue to rely 
on the Existing Order while CT Corp, instead of ASA's custodian, 
served as FirstRand Bank Limited's U.S. Service Agent in any 
Proceeding before the Commission or any appropriate court relating 
to the activities of its subsidiary, First National Bank, as ASA's 
South African subcustodian.
    \17\ If, however, a foreign subcustodian cannot, or remains 
unwilling to, designate CT Corp as U.S. Service Agent, then ASA's 
Board will consider, as part of its decision whether to engage a 
Primary Custodian or use a particular foreign subcustodian, the fact 
that the foreign subcustodian would not designate CT Corp as U.S. 
Service Agent.
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ASA's Conditions

    ASA agrees that any order granting the requested relief will be 
subject to the following conditions: \18\
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    \18\ The terms ``eligible foreign custodian,'' ``U.S. bank'' and 
``foreign custody manager'' used in the conditions have the same 
meaning as defined in rule 17f-5 under the Act.
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    1. A U.S. bank, as defined in section 2(a)(5) of the Act and having 
the qualification described in section 26(a)(1) of the Act, will serve 
as ASA's Primary Custodian. In addition, ASA's

[[Page 32481]]

agreement with its Primary Custodian will contain provisions 
stipulating that the United States is the proper venue for disputes 
arising under the agreement.
    2. ASA will seek an order of the Commission prior to any amendment 
of its agreement with its Primary Custodian if the amendment conflicts 
with any of the representations or conditions applicable to the 
Existing Order, as amended by the requested order.
    3. The Board will serve as foreign custody manager and will not 
delegate such functions to ASA's Primary Custodian or any other person.
    4. ASA will comply with Rule 17f-5 and Rule 17f-7 under the Act as 
if ASA were a registered management investment company organized or 
incorporated in the United States. Each eligible foreign custodian that 
ASA uses will be contractually obligated to follow the Primary 
Custodian's instructions with respect to assets the eligible foreign 
custodian holds on behalf of ASA. In each applicable jurisdiction, the 
Board will consider the relationship between an eligible foreign 
custodian and an eligible securities depository (including whether the 
eligible foreign custodian is liable for the eligible securities 
depository's misdeeds to the same extent as if such securities were 
maintained by the eligible foreign custodian) and will determine that 
maintaining assets in the eligible securities depository through the 
eligible foreign custodian is in the best interest of ASA and its 
shareholders.
    5. ASA will cause each present and future officer, director, 
investment adviser, and principal underwriter of ASA to enter into an 
agreement (``Agreement'') (to be filed by ASA with the Commission when 
that person assumes office), which will provide that each person 
agrees: (a) to comply with ASA's charter and bylaws, the Act and the 
rules of the Commission under the Act, and the undertakings and 
agreements contained in the application as applicable to each person 
and as each may be amended from time to time, as applicable to each 
person; (b) to do nothing inconsistent with the undertakings and 
agreements contained in the application, the provisions of the Act, or 
the rules under the Act; (c) that the undertakings described in (a) and 
(b) above constitute representations and inducements to the Commission 
to issue the requested order; and (d) each Agreement constitutes a 
contract between the person and ASA and the shareholders of ASA with 
the intent that ASA's shareholders will be beneficiaries of and will 
have the status of parties to the Agreement so as to enable them to 
maintain actions at law or in equity within the United States or 
Bermuda. In addition, each Agreement of each officer and director of 
ASA will contain provisions similar to those contained in condition 21 
below.\19\
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    \19\ ASA acknowledges that: (a) every agreement and undertaking 
of ASA, its officers, directors, investment adviser, and principal 
underwriters contained in the application constitutes (i) 
inducements to the Commission for the issuance and continuance in 
effect of the requested order, and (ii) a contract among ASA, the 
Commission, and ASA's shareholders with the same intent as set forth 
in condition 5 above; and (b) the failure by ASA or any of the 
persons listed above to comply with any of the agreements or 
undertakings, unless permitted by the Commission, will constitute a 
violation of the requested order.
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    6. So long as ASA is registered under the Act, ASA's charter and 
bylaws, together, will contain in substance the provisions required by 
Rule 7d-1(b)(8) under the Act, and neither the charter nor the bylaws 
will be changed or amended in any manner inconsistent with Rule 7d-
1(b)(8) under the Act and the rules and regulations under the Act, 
unless authorized by the Commission.
    7. ASA's Primary Custodian will not transfer any assets of ASA 
unless the instructions it receives from ASA include the written 
approval of ASA's Chief Compliance Officer. ASA will submit 
instructions relating to any transfer of assets to its Chief Compliance 
Officer, who will review them prior to the submission of any approved 
instructions to ASA's Primary Custodian. ASA's Chief Compliance Officer 
will not approve a transfer of assets if an agent, broker-dealer, or 
counterparty is an affiliated person of ASA or an affiliated person of 
any director, officer, or investment adviser of ASA, unless the 
transaction is of a type permitted by the Act or any regulation under 
the Act or specifically permitted by order of exemption issued under 
the Act. In addition to providing any other information relevant to the 
Chief Compliance Officer's review, ASA will require each of its 
officers, directors, and investment advisers to transmit quarterly a 
list of affiliated persons or a statement that there has been no change 
since the last list so transmitted to ASA's Chief Compliance Officer. 
No person will qualify to serve as a director or officer of ASA until 
he or she has transmitted to ASA a list of his or her affiliated 
persons, as that term is defined in Section 2(a)(3) of the Act.
    8. ASA will furnish to the Commission revisions, if any, to the 
list of persons affiliated with ASA that previously was furnished to 
the Commission concurrently with the filing of periodic reports 
required to be filed under the Act. Such revised lists will include 
persons affiliated with any future investment adviser or principal 
underwriter of ASA.
    9. The Chief Executive Officer of ASA, a majority of the directors 
of ASA, a majority of the officers, and the Chief Compliance Officer of 
ASA will be both citizens and residents of the United States. ASA will 
maintain its principal executive office in the United States.
    10. ASA will hold all of its shareholder meetings in the United 
States.
    11. ASA will maintain in the United States a transfer agent for 
transfer of its shares, and a registrar for the registration of its 
shares.
    12. ASA will file, and will cause each of its present or future 
directors, officers, or investment advisers who is not a resident of 
the United States to file with the Commission irrevocable designation 
of CT Corp as an agent in the United States to accept service of 
process in any suit, action, or proceeding before the Commission or any 
appropriate court to enforce the provisions of the laws administered by 
the Commission, or to enforce any right or liability based upon ASA's 
charter or bylaws, contracts, or the respective undertakings and 
agreements of any of these persons required by the terms and conditions 
of the requested order, or which alleges a liability on the part of any 
of these persons arising out of their services, acts, or transactions 
relating to ASA. Further, ASA will designate CT Corp as U.S. Service 
Agent in the same city in which ASA's Primary Custodian is located.
    13. After receipt of the requested order, ASA will file with the 
Commission (a) a copy of each subcustodian agreement, if that 
subcustodian agreement irrevocably designates CT Corp as an agent in 
the United States to accept service of process in any Proceeding before 
the Commission or any appropriate court to enforce the provisions of 
the laws administered by the Commission in connection with the 
subcustodian agreement, or to enforce any right or liability 
(``Liability'') based on the subcustodian agreement or which alleges a 
liability on the part of the subcustodian arising out of its services, 
acts, or transactions under the subcustodian agreement relating to 
ASA's assets; and (b) a copy of each subcustodian agreement that does 
not contain one or more provisions described in clause (a), along with 
a written explanation as to why ASA determined that it was nonetheless 
appropriate to use that subcustodian notwithstanding the lack of that 
provision or those provisions. This

[[Page 32482]]

filing requirement will automatically terminate upon a subcustodian 
ceasing to hold ASA's assets, except as to a Proceeding or a Liability 
based on an action or inaction of the subcustodian prior to the 
subcustodian having ceased holding ASA's assets.
    14. ASA will perform every action and thing necessary to cause and 
assist the custodian of its assets to distribute the same, or the 
proceeds, if the Commission or a court of competent jurisdiction will 
have so directed by final order.\20\ ASA also will perform every action 
and thing necessary to cause and assist its shareholders or the 
Commission to collect (a) any monetary amount specified in a Commission 
order or (b) a final judgment entered by a court of competent 
jurisdiction. ASA will assist the Commission in enforcing temporary and 
preliminary injunctions and other orders entered by a court of 
competent jurisdiction, including ``freeze'' orders that would direct 
the company to retain specified funds pending a final disposition of a 
Commission case. To this end, ASA will agree, and will have the right 
under its agreement with the Primary Custodian, to instruct the Primary 
Custodian to freeze specified assets of ASA for a short period of time 
at the request of the Commission, pending the Commission's application 
for a formal court order freezing those assets. During this period, ASA 
will repatriate any cash or cash equivalents from frozen accounts, 
pending final disposition of the case. Further, ASA's agreement with 
its Primary Custodian will include a provision that disputes concerning 
the implementation of any asset freeze are under the jurisdiction of 
the U.S. courts. As soon as practicable, ASA and its Primary Custodian 
will notify an eligible foreign custodian or eligible securities 
depository of any court-ordered asset freeze.
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    \20\ A court of competent jurisdiction means any U.S. federal 
court that has jurisdiction to issue such an order.
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    15. ASA stipulates that personal jurisdiction exists in any 
Commission action brought against ASA in the United States and agrees 
to waive any defense of forum non conveniens to any Commission action.
    16. ASA will take all steps necessary to ensure that it will be 
listed on the NYSE, including the publishing of financial statements 
and other information required by the NYSE for the benefit of holders 
of the shares listed on the NYSE and the performance of all the 
covenants contained in its listing agreement.
    17. The Commission, in its discretion, may revoke its order 
permitting registration of ASA and the public offering of its 
securities if the Commission finds, after notice and opportunity for 
hearing, that there has been a violation of the requested order or the 
Act and may determine whether distribution of ASA's assets is necessary 
or appropriate in the interests of investors and may so direct.
    18. ASA waives any counsel fees to which it may be entitled and 
waives security for costs in any action brought against it in Bermuda 
by any shareholder based on its charter or bylaws or any of the 
undertakings and agreements contained in the application. ASA will 
cause each of its present or future directors who is a non-resident of 
the United States to make similar waivers.
    19. ASA will promptly notify the Commission in the event that there 
is any change in Bermudian law that will be contrary to any provision 
of the Act or detrimental to or inconsistent with the protection 
afforded by the undertakings and agreements contained in the 
application.
    20. Any shareholder of ASA or the Commission, on its own motion or 
on request of any of ASA's shareholders, will have the right to 
initiate a proceeding: (a) before the Commission for the revocation of 
the order permitting registration of ASA; or (b) before a court of 
competent jurisdiction for the liquidation of ASA and a distribution of 
its assets to its shareholders and creditors. The court may enter the 
order in the event that it finds, after notice and opportunity for 
hearing, that ASA, its officers, directors, investment adviser, or 
principal underwriter has violated any provision of the Act or the 
requested order.
    21. Any shareholder of ASA will have the right to bring suit at law 
or equity, in any court of the United States or Bermuda having 
jurisdiction over ASA, its assets, or any of its officers or directors 
to enforce compliance by ASA, its officers and directors with any 
provision of ASA's charter or bylaws, the Act, the rules under the Act, 
or the undertakings and agreements required by the conditions of the 
requested order, insofar as applicable to these persons. The court may 
appoint a trustee or receiver of ASA with all powers necessary to 
implement the purposes of the suit, including the administration of the 
estate, the collection of corporate property including choses-in-
action, and distribution of ASA's assets to its creditors and 
shareholders. ASA and its officers and directors waive any objection 
they may be entitled to raise and any right they may have to object to 
the power and right of any shareholder of ASA to bring such suit, 
reserving, however, their right to maintain that they have complied 
with these provisions, undertakings and agreements, and otherwise to 
dispute the suit on its merits. ASA and its officers and directors also 
agree that any final judgment or decree of any U.S. court may be 
granted full faith and credit by a court of competent jurisdiction of 
Bermuda and consent that the Bermudian court may enter judgment or 
decree on ASA at the request of any shareholder, receiver, or trustee 
of ASA.
    22. ASA will settle its purchases and sales of portfolio securities 
in the United States by use of the mails or means of interstate 
commerce, except for: (a) purchases and sales on an ``established 
securities exchange'' (defined as a national securities exchange as 
defined in Section 2(a)(26) of the Act, the JSE, the HKSE, the LSE, the 
Tokyo Stock Exchange, the TSE, the ASX, and the SIX Swiss Exchange 
(collectively the ``Established Exchanges'')) and (b) purchases and 
sales, through its custodian or its custodian's agent, in South Africa 
of South African Treasury Bills from or to the South African Treasury 
or South African Reserve Bank securities, or CSD-eligible securities. 
Assets purchased on the JSE, the HKSE, the LSE, the TSE, and the ASX 
will be maintained as provided for in condition 25 below. Assets 
purchased on the Tokyo Stock Exchange and the SIX Swiss Exchange will 
be maintained in the United States with ASA's custodian, unless 
prohibited by law or regulation or financially impracticable as 
provided in condition 26 below.
    23. Notwithstanding condition 22, ASA may, through its custodian or 
its custodian's agent, exercise in South Africa, Hong Kong, the United 
Kingdom, Canada, or Australia the rights issued to it as a shareholder 
of other companies for the purchase of securities, provided that, in 
the case of each such exercise, (i) the rights so exercised are offered 
to ASA as a shareholder in another company on the same basis as all 
other holders of the class or classes of shares of such other company 
to whom such rights are offered, (ii) the rights so exercised do not 
exceed 10% of the total amount of such rights so offered, and (iii) the 
securities purchased pursuant to such exercise, or securities of the 
same class, are listed on the JSE, the HKSE, the LSE, the TSE, or the 
ASX, or application has been made to such exchange for the listing 
thereon of such securities, or it

[[Page 32483]]

has been publicly announced that application will be made to such 
exchange for the listing thereon of such securities.
    24. Contracts of ASA, other than those executed on an Established 
Exchange which do not involve affiliated persons, will provide that: 
(a) the contracts, irrespective of the place of their execution or 
performance, will be performed in accordance with the requirements of 
the Act, the Securities Act of 1933, and the Securities Exchange Act of 
1934, each as amended, if the subject matter of the contracts is within 
the purview of these Acts; and (b) in effecting the purchase or sale of 
assets, the parties to the contracts will utilize the U.S. mails or 
means of interstate commerce.
    25. ASA will keep at least 20% of its assets in the United States 
in the custody of a U.S. bank. ASA's remaining assets will be kept in 
the custody of (a) an eligible foreign custodian, as defined in rule 
17f-5 under the Act, in South Africa, Hong Kong, the United Kingdom, 
Canada, or Australia; or (b) an eligible securities depository, as 
defined in rule 17f-7 under the Act, in South Africa, Hong Kong, the 
United Kingdom, Canada, or Australia.
    26. If removal of securities purchased on the Tokyo Stock Exchange 
and the SIX Swiss Exchange becomes either prohibited by law or 
regulation or financially impracticable, up to 5% of ASA's assets may 
be held by an eligible foreign custodian or overseas branch of ASA's 
custodian in each of Japan and Switzerland.
    27. ASA will withdraw its assets from the care of a subcustodian as 
soon as practicable, and in any event within 180 days of the date when 
a majority of the Board makes the determination that a particular 
subcustodian may no longer be considered eligible under rule 17f-5 
under the Act or that continuance of the subcustodian arrangement would 
not be consistent with the best interests of ASA and its shareholders.
    28. ASA will cause its custodian to enter into an agreement (to be 
filed by ASA with the Commission when the custodian commences service 
to ASA), which will provide that the custodian agrees: (a) To comply 
with the Act and the rules of the Commission under the Act and the 
undertakings and agreements contained in the application as applicable 
to the custodian and as each may be amended from time to time, as 
applicable to the custodian; (b) to do nothing inconsistent with the 
undertakings and agreements contained in the application, the 
provisions of the Act, or the rules under the Act; and (c) that the 
undertakings described in (a) and (b) above constitute representations 
and inducements to the Commission to issue the requested order.\21\
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    \21\ ASA acknowledges that: (a) Every agreement and undertaking 
of ASA and its custodian contained in the application constitutes 
(i) inducements to the Commission for the issuance and continuance 
in effect of the requested order, and (ii) a contract among ASA, the 
Commission and ASA's shareholders; and (b) the failure by ASA or the 
custodian to comply with any of the agreements or undertakings, 
unless permitted by the Commission, will constitute a violation of 
the requested order.
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    29. So long as ASA is registered under the Act, ASA's custody 
contract with its custodian will provide that the custodian will: (a) 
Consummate all purchases and sales of securities by ASA through the 
delivery of securities and receipt of cash, or vice versa as the case 
may be, within the United States, except for (i) purchases and sales on 
the Established Exchanges, and (ii) purchases and sales, through ASA's 
custodian or custodian's agent, in South Africa of South African 
Treasury Bills from or to the South African Treasury, South African 
Reserve Bank securities, or CSD-eligible securities; and (b) distribute 
ASA's assets, or the proceeds thereof, to ASA's creditors and 
shareholders, upon service upon the custodian of an order of the 
Commission or court directing such distribution as provided in 
conditions 17, 20, and 30.
    30. With respect to an alleged violation of the Act or the 
requested order by ASA's custodian, eligible foreign custodian, or 
eligible securities depository, the Commission, on its own motion, will 
have the right to initiate a proceeding: (a) Before the Commission for 
the revocation of the order permitting registration of ASA; or (b) 
before a court of competent jurisdiction for the liquidation of ASA and 
a distribution of its assets to its shareholders and creditors. The 
court may enter the order in the event that it finds, after notice and 
opportunity for hearing, that ASA's custodian has violated any 
provision of the Act or the requested order.
    31. The Chief Compliance Officer, as defined in Rule 38a-l(a)(4) 
under the Act, shall prepare a report, as part of the annual report to 
the Board, that evaluates ASA's compliance with the terms and 
conditions of the Application and the procedures established to achieve 
such compliance. The Chief Compliance Officer will also annually file a 
certification pursuant to item 77Q3 of Form N-SAR as such Form may be 
revised, amended or superseded from time to time, that certifies that 
ASA and the Board have established procedures reasonably designed to 
achieve compliance with Conditions 22, 25 and 26 regarding location of 
ASA's assets. Additionally, ASA's independent public accountants, in 
connection with their audit examination of ASA, will review the 
operations and procedures pertaining to the location of ASA's assets 
and custody arrangements for compliance with the conditions of the 
Application, and their review will form the basis, in part, of the 
auditor's report on internal accounting controls in Form N-SAR.

    By the Commission.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-12797 Filed 5-29-13; 8:45 am]
BILLING CODE 8011-01-P