Federal Register / Vol. 60, No. 103 / Tuesday, May 30, 1995 / Notices 28193

5 15 U.S.C. 78q–1(b)(3)(F) (1988).

6For a detailed description and discussion of the

conversion to a three business day settlement cycle,

refer to Securities Exchange Act Release Nos. 33023

(October 13, 1993) 58 FR 52891 [File No. S7–5–93]

(adoption of Commission Rule 15c6–1) and 34952

(November 9, 1994), 59 FR 59137 (changing

effective date from June 1, 1995, to June 7, 1995). 7 17 CFR 200.30–3(a)(12) (1994).

1 Investment Company Act Release Nos. 18710

(May 15, 1992) (notice) and 18782 (June 12, 1992)

(order).

the interactive receipt and distribution

of certain trade reports will facilitate the

prompt and accurate clearance and

settlement of securities transactions.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

PHILADEP does not believe that the

proposed rule change will impact or

impose a burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants or Others

No written comments have been

solicited or received. PHILADEP will

notify the Commission of any written

comments received.

III. Date of Effectiveness of the

Proposed Rule Changes and Timing for

Commission Action

Section 17A(b)(3)(F) 5 of the Act

requires the rules of a clearing agency be

designed to foster cooperation and

coordination with persons engaged in

the clearance and settlement of

securities transactions and to provide

for the prompt and accurate clearance

and settlement of securities

transactions. The Commission believes

that PHILADEP’s proposal to modify its

interface with DTC’s ID System to

enable interactive communication

should help cooperation and

coordination among PHILADEP and

DTC and the parties involved in

institutional trades. The Commission

further believes that the proposed

interactive capability is consistent with

PHILADEP’s obligation to provide for

the prompt and accurate clearance and

settlement of securities transactions

because it should help PHILADEP

participants to settle institutional trades

in a T+3 settlement cycle, which will be

the standard settlement time for most

broker dealer trades beginning June 7,

1995.6 Currently, institutional trades

settle on a T+5 cycle.

PHILADEP has requested that the

Commission find good cause for

approving the proposed rule change

prior to the thirtieth day after the date

of publication of notice of the filing. The

Commission finds good cause for so

approving the proposed rule change

because timely settlement of

institutional trades is critical to the

successful conversion to T+3 and

accelerated approval of the proposed

rule change will allow PHILADEP

participants to utilize and become

familiar with the interactive capabilities

available through PHILADEP’s modified

interface with DTC’s ID system prior to

the implementation of T+3 settlement.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

Persons making such submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington DC 20549. Copies of the

submission, all subsequent

amendments, all written statements

with respect to the proposed rule

change that are filed with the

Commission, and all written

communications relating to the

proposed rule change between the

Commission and any person, other than

those that may be withheld from the

public in accordance with the

provisions of 5 U.S.C. 552 will be

available for inspection and copying in

the Commission’s Public Reference

Section, 450 Fifth Street, NW.,

Washington, DC 20549. Copies of such

filings will also be available for

inspection and copying at the principal

office of PHILADEP. All submissions

should refer to File No. SR–PHILADEP–

95–02 and should be submitted by June

20, 1995.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act, that the

proposed rule change (File No. SR–

PHILADEP–95–02) be, and hereby is,

approved.

For the Commission by the Division of

Market Regulation pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–13074 Filed 5–26–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. IC—21087; International Series

Release No. 812; 812–7846]

Citibank, NA., et al.; Notice of

Application

May 22, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (‘‘1940 Act’’).

APPLICANTS: Citibank, N.A. (‘‘Citibank’’)

and Citicorp.

RELEVANT 1940 ACT SECTIONS: Exemption

requested under section 6(c) from

section 17(f) and rule 17F–5.

SUMMARY OF APPLICATION: Applicants

seek conditional exemptive relief from

section 17(f) of the 1940 Act and rule

17f–5 thereunder with respect to two

forms of foreign custody arrangements.

The requested exemption would amend

an existing order (the ‘‘1992 Order’’) 1

allowing Citibank, acting as custodian

or subcustodian, to deposit the

securities of United States investment

companies with certain foreign

subsidiaries of the Applicants. The

requested exemption also would allow

Citibank to make available direct

custody arrangements between United

States investment companies and

certain foreign subsidiaries of the

Applicants.

FILING DATES: The application was filed

on January 7, 1992, and was amended

and restated on September 8, 1992, May

19, 1993, November 21, 1994, April 24,

1995, and May 22, 1995.

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 Applicants with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

June 16, 1995, 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 SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 5th

Street, NW., Washington, DC 20549.

Applicants, c/o Caroline F. Marks, Esq.,

GTS-Legal, 111 Wall Street, 15th Floor,

Zone 9, New York, New York 10043.

FOR FURTHER INFORMATION CONTRACT:

H.R. Hallock, Jr., Special Counsel, at

(202) 942–0564 (Office of Investment

Company Regulation, Division of

Investment Management) .

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee at the SEC’s

Public Reference Branch.
28194 Federal Register / Vol. 60, No. 103 / Tuesday, May 30, 1995 / Notices

2 Investment Company Act Release Nos. 15580

(Feb. 13, 1987) (notice) and 15617 (Mar 11, 1987)

(order).

3 Investment Company Act Release Nos. 17329

(Feb. 1, 1990) (notice) and 17360 (Feb. 28, 1990)

(order).

4Citibank (Channel Islands) Limited; Citibank,

S.A. in France; Citicorp Investment Bank (The

Netherlands) N.V.; Citibank (Zaire) S.A.R.L.,

Citibank Zambia Limited; Citicorp Nominees Pty.

Limited in Australia; Citibank, Nominees (New

Zealand) Limited; Citibank Portugal, S.A., Banco de

Honduras S.A.; Citibank Budapest Rt.; CitibankMaghreb in Morocco; Citibank (Trinidad & Tobago)

Limited; Cititrust Colombia S.A. Sociedad

Fiduciaria; and Citibank (Poland) S.A.

5Applicants do not request any relief with

respect to Citibank T/O or any other subsidiary or

affiliate of Citibank located in the Russian

Federation. Should the Applicants request

exemptive relief in the future with respect to

Citibank T/O, such request would be the subject of

a separate application.

6Citibank is subject to certain constraints

imposed by the Federal Reserve Act with respect to

its transactions with Citicorp and its subsidiaries.

Accordingly, Applicants presently intend to permit

only the existing and any additional Citibank

Subsidiaries, but not the Citicorp Subsidiaries, to

offer Direct Custody Arrangements.

Applicants’ Representations

A. Background

1. Citibank, a United States national

banking association, is a wholly-owned

subsidiary of Citicorp, a Delaware bank

holding company. Citibank operates an

extensive custodian network through its

branches and through its own

subsidiaries and subsidiaries of

Citicorp, as well as unaffiliated

correspondent banks. As of December

31, 1993, Citibank had approximately

$648 billion in assets under custody.

2. In 1987, the SEC exempted Citibank

(the ‘‘1987 Order’’) 2 from section 17(f)

of the 1940 Act to permit it, as the

custodian of the securities and other

assets (the ‘‘Securities’’) of any

registered management investment

company, other than an investment

company registered under section 7(d)

of the 1940 Act, or as subcustodian of

the Securities of such investment

companies for which any other entity is

acting as custodian, to deposit such

Securities under custodial arrangements

(the ‘‘Agency Custody Arrangements’’)

with certain specified foreign

subsidiaries of Citibank (the ‘‘Citibank

Subsidiaries’’) or Citicorp (the ‘‘Citicorp

Subsidiaries’’ and, together with the

Citibank Subsidiaries, the ‘‘Foreign

Subsidiaries’’).

3. In 1990, the SEC exempted Citibank

(the ‘‘1990 Order’’) 3 from section 17(f)

to permit it, acting as custodian or

subcustodian, to maintain the Securities

of such investment companies with

several additional Foreign Subsidiaries.

In the 1992 Order, the SEC exempted

Citibank to permit it to maintain the

Securities of such investment

companies with certain additional

Foreign Subsidiaries and to eliminate

the requirement of the 1987 and 1990

Orders that each Foreign Subsidiary be

a signatory to the custody agreement.

4. Each of the Foreign Subsidiaries

currently providing custodial services to

U.S. Investment Companies is, and any

additional Foreign Subsidiary providing

such services in the future will be, a

banking institution or trust company

incorporated under the laws of a

country other than the United States

and regulated as such by that country’s

government or an agency thereof. Each

of these Foreign Subsidiaries is, or will

be, experienced, capable and well

qualified to provide such services.

B. Relief Requested

1. Applicants seek exemptive relief to

allow 14 Citibank Subsidiaries that were

granted relief in the 1992 Order 4 to act

as custodians for any registered

management investment company,

incorporated or organized under the

laws of the United States or a state

thereof (a ‘‘U.S. Investment Company’’)

under direct contractual arrangements

with such U.S. Investment Companies

or their custodians (the ‘‘Direct Custody

Arrangements’’), as well as under the

Agency Custody Arrangements referred

to above. Applicants also seek

exemptive relief for the Direct and

Agency Custody Arrangements with

respect to one additional Citibank

Subsidiary, Citibank a.s. in the Czech

Republic. Each of these 15 Citibank

Subsidiaries is a majority-owned or

wholly-owned subsidiary of Citibank.

2. In addition, Applicants seek relief

to modify the Agency Custody

Arrangements permitted by the 1992

Order to provide for the Citicorp

guarantee described in paragraphs 9

through 11 below and set forth in

Conditions 3(b), 5(c) and 9 below.

Finally, Applicants seek to have any

order granting relief with respect to the

Agency or Direct Custody Arrangements

apply to any other Foreign Subsidiary in

the future that does not meet the

minimum shareholders’ equity

requirement of rule 17f-5,5 except that

the Direct Custody Arrangements would

apply to the Citicorp Subsidiaries only

at such time as direct custody services

are to be offered by them in accordance

with applicable law.6

3. Applicants intend that may order

granting the relief requested by the

application supersede the 1987, 1990,

and 1992 Orders and provide a single

comprehensive order covering both the

Direct and Agency Custody

Arrangements.

4. Under the Agency Custody

Arrangements, the Securities are

maintained in the custody of the

Foreign Subsidiaries only in accordance

with a custody agreement among (a) the

U.S. Investment Company or its

custodian, (b) Citibank, and (c) Citicorp

(the ‘‘Agency Custody Agreement’’).

Citibank acts as the custodian or

subcustodian of the Securities and

delegates its responsibilities to the

Foreign Subsidiaries in accordance with

the terms of a subcustodian agreement

(the ‘‘Subcustodian Agreement’’).

5. The Agency Custody Agreement

provides that the delegation by Citibank

to a Foreign Subsidiary does not relieve

Citibank of any responsibility to the

U.S. Investment Company or its

custodian for any loss due to such

delegation except such loss as may

result from political risk (e.g., exchange

control restrictions, confiscation,

expropriation, nationalization,

insurrection, civil strife or armed

hostilities), and other risk of loss for

which neither Citibank nor the Foreign

Subsidiary would be liable under rule

17f-5 (e.g., despite the exercise of

reasonable care, loss due to Act of God,

nuclear incident and the like). The

Agency Custody Agreement also

provides that Citicorp is liable, in

accordance with the terms of the

guarantee described below, for losses of

Securities resulting from the bankruptcy

or insolvency of the Foreign

Subsidiaries.

6. There may be instances in which a

U.S. Investment Company would prefer

having a Foreign Subsidiary be engaged

as a direct custodian, receive direct

instruction, and maintain separate

accounts for it without the involvement

of Citibank. In addition, certain United

States banks that serve as custodians of

U.S. Investment Companies do not

require the custody services of another

United States custodian, but

nonetheless do require the services of

foreign subcustodians in certain foreign

countries.

7. The Direct Custody Arrangements

for which an exemption is being sought

would enable the Citibank Subsidiaries

referred to in paragraph 1 and note 4

above to act as direct custodians in

accordance with either a master custody

agreement under which a U.S.

Investment Company or its custodian

would enter into a direct custodian

relationship with a number of Citibank

Subsidiaries or an individual custody

agreement under which a U.S.

Investment Company or its custodian

would enter into a direct custodial

relationship with a particular Citibank

Subsidiary (either, a ‘‘Direct Custody

Agreement’’). The Direct Custody
Federal Register / Vol. 60, No. 103 / Tuesday, May 30, 1995 / Notices 28195

Agreement would be among (i) the U.S.

Investment Company or custodian for

which the Foreign Subsidiary acts as

custodian or subcustodian, (ii) the

Foreign Subsidiary, (iii) Citicorp, and

(iv) Citibank. The terms of each Direct

Custody Agreement would include a

confirmation by the Foreign Subsidiary

that it will act as the custodian or

subcustodian, as the case may be, of the

Securities under the requested order, an

agreement by Citicorp that it is liable, in

accordance with the terms of its

guarantee, for losses of Securities

resulting from the bankruptcy or

insolvency of the Foreign Subsidiary,

and an agreement by Citibank to be

liable for any loss resulting from the

performance of the Foreign Subsidiary,

except such loss as may result from

political risk (e.g., exchange control

restrictions, confiscation, expropriation,

nationalization, insurrection, civil strife

or armed hostilities), and other risk of

loss for which neither Citibank nor the

Foreign Subsidiary would be liable

under rule 17f-5 (e.g., despite the

exercise of reasonable care, loss due to

Act of God, nuclear incident and the

like).

8. The extent of Citibank’s liability for

losses attributable to a Foreign

Subsidiary under the Direct Custody

Arrangements would be the same as that

provided for under the Agency Custody

Arrangements. Under both the Agency

Custody Arrangements and the Direct

Custody Arrangements, Citibank would

be liable for the negligent acts or

omissions of the Foreign Subsidiaries.

9. Both the Agency and Direct

Custody Agreements would provide that

Citicorp will be liable in accordance

with the terms of a guarantee for losses

of Securities resulting from bankruptcy

or insolvency of any of the Foreign

Subsidiaries. Under the 1987, 1990, and

1992 Orders, Citicorp has issued a

guarantee for losses resulting from the

bankruptcy or insolvency of each

Foreign Subsidiary (the ‘‘Guarantee’’). If

the requested order is issued, the

Guarantee will be amended to cover all

the Securities held by the Foreign

Subsidiaries pursuant to an Agency

Custody Agreement or a Direct Custody

Agreement. The dollar amount of the

Guarantee applicable to all Foreign

Subsidiaries will equal or exceed the

aggregate market value of the Securities

held in the custody of the Foreign

Subsidiaries.

10. The value of the Securities held

under Agency Custody Agreement will

be calculated by Citibank based on

records maintained by Citibank, as

custodian, and reports by the Foreign

Subsidiaries. The total amount also will

be reported to Citicorp. In addition,

each Foreign Subsidiary will submit to

Citicorp monthly its calculation, and the

basis on which it was made, of the value

of the Securities held by it under Direct

Custody Agreements. After review of the

results of the monthly monitoring,

Citicorp will take the necessary steps to

adjust the amount of the Guarantee to

cover the aggregate value of the

Securities.

11. In the event that at the time of an

insolvency a Foreign Subsidiary holds

Securities having an aggregate value in

excess of the aggregate value of

Securities which such Foreign

Subsidiary held at the time of the

previous adjustment of the Guarantee,

Citicorp will immediately take such

steps as may be necessary to increase

the size of the Guarantee to cover the

amount of such excess. This coverage

will remain in place until such time as

the Foreign Subsidiary’s bankruptcy

estate is settled, the amount of any loss

to the U.S. Investment Company

attributable to the bankruptcy or

insolvency is calculated, and payment

under the Guarantee, if necessary, is

made.

Applicants’ Legal Analysis

1. Applicants seek the requested

exemptive relief because the Foreign

Subsidiaries do not qualify to serve as

custodians for U.S. Investment

Companies under the terms of section

17(f) of the 1940 Act or rule 17f–5

thereunder. Section 17(f) provides, in

relevant part, that a registered

management 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 1940 Act. The

Foreign Subsidiaries, however, do not

fall within the definition of a ‘‘bank’’ as

that term is defined in section 2(a)(5) of

the 1940 Act.

2. Rule 17f–5 would permit a U.S.

Investment Company to deposit

securities, cash and cash equivalents

with an ‘‘eligible foreign custodian,’’ a

term that is defined to include, as here

relevant, a majority-owned direct or

indirect subsidiary of a qualified U.S.

bank or bank holding company that is

incorporated or organized under the

laws of a country other than the United

States and that has shareholders’ equity

in excess of $100,000,000 (U.S. $ or

equivalent). None of the Foreign

Subsidiaries currently meets or in the

future will meet the minimum

shareholders’ equity requirement of rule

17f–5.

3. Citibank believes that permitting

U.S. Investment Companies and their

custodians to enter into direct custodial

arrangements with the Foreign

Subsidiaries adequately would protect

U.S. Investment Companies and their

shareholders against loss while

permitting the Foreign Subsidiaries to

serve the needs of U.S. Investment

Companies more efficiently by being

able to interact directly with the U.S.

Investment Company or its custodian.

The proposed arrangements would

enable the Foreign Subsidiaries, as

direct custodians, to carry out their

custodial duties and to respond to their

customers’ instructions, inquiries and

other operational needs without

communications being processed

through Citibank, thereby reducing the

cost and time involved in administering

custodial accounts.

4. Although Citibank would not be in

an agency relationship with the Foreign

Subsidiaries under the Direct Custody

Arrangements, it nonetheless would

provide the necessary review and

independent oversight of their

performance and capabilities.

Applicants submit that Citibank’s

ongoing review insures that safeguards

substantially equal to those provided by

its United States operations are in place

and provides for uniformity in

procedures for custodial administration.

Because Citibank would be a party to

each Direct Custody Agreement and

would agree to be responsible for

negligent acts or omissions of the

Foreign Subsidiaries, Citibank would

have a vested interest in verifying that

each Foreign Subsidiary maintained

adequate standards for the safekeeping

of securities.

5. Under the Direct Custody

Arrangements, Citibank will be in

privity of contract with the U.S.

Investment Company or its custodian.

While it would be necessary for a U.S.

Investment Company or its custodian to

establish the negligence of the

applicable Foreign Subsidiary in the

action against Citibank, obtaining a

judgment against the particular Foreign

Subsidiary would not be a condition

precedent to bringing an action against

Citibank.

6. Under the Agency Custody

Arrangements, Citibank, in its capacity

as custodian, would have custodial

obligations to the U.S. Investment

Company or its custodian. In that case,

the Foreign Subsidiary would be the

subcustodian and an agent of Citibank.

Applicants assert that any distinction

between the agency and direct custodial

relationships, however, is not of

consequence to U.S. Investment

Companies and their custodians, since

in either case they would be able to seek

recovery for losses caused by the

Foreign Subsidiaries’ negligence from,
28196 Federal Register / Vol. 60, No. 103 / Tuesday, May 30, 1995 / Notices

and bring an action directly against,

Citibank.

7. Applicants assert that provision of

the Guarantee by Citicorp (rather than

by Citibank) under the Agency and

Direct Custody Arrangements does not

negatively affect the level of protection

afforded the U.S. Investment Companies

and custodians whose Securities are

held in the custody of the Foreign

Subsidiaries. Since the total Guarantee

amount is available to cover one or more

Foreign Subsidiaries, Applicants assert

that the Guarantee should be more than

sufficient to cover losses attributable to

the bankruptcy of any one particular

Foreign Subsidiary.

8. Applicants submit that, as required

by section 6(c) of the 1940 Act, the

exemptions requested are (i) necessary

or appropriate in the public interest, (ii)

consistent with the protection of

investors, and (iii) consistent with the

purposes fairly intended by the policy

and provisions of the 1940 Act.

Applicants’ Conditions

If the requested order is granted,

Applicants agree to the following

conditions:

1. The foreign custody arrangements

proposed with respect to the Foreign

Subsidiaries will satisfy the

requirements of rule 17f–5 in all

respects other than with regard to

shareholders’ equity.

2. Securities of U.S. Investment

Companies and their custodians

entering into Direct Custody

Arrangements will be maintained with a

Foreign Subsidiary only in accordance

with a Direct Custody Agreement,

required to remain in effect at all times

during which the Foreign Subsidiary

fails to satisfy the requirements of rule

17f–5 relating to shareholders’ equity.

3. The Direct Custody Agreement will

be among (i) each U.S. Investment

Company or custodian for which the

Foreign Subsidiary serves as custodian

or subcustodian, (ii) the Foreign

Subsidiary, (iii) Citibank, and (iv)

Citicorp. The Direct Custody Agreement

will provide the following:

(a) confirmation by the Foreign

Subsidiary that it will act as the

custodian or subcustodian, as the case

may be, of the Securities of the U.S.

Investment Company pursuant to the

requested order;

(b) Citicorp will be liable, in

accordance with the terms of the

Guarantee, for losses of the Securities of

the U.S. Investment Companies

resulting from the bankruptcy or

insolvency of the particular Foreign

Subsidiary; and

(c) Citibank will be liable for any loss

resulting from the performance of the

Foreign Subsidiary, except such loss as

may result from (i) political risk (e.g.,

exchange control restrictions,

confiscation, expropriation,

nationalization, insurrection, civil strife,

or armed hostilities) and (ii) other risks

of loss for which the Foreign Subsidiary

would not be liable under rule 17f–5.

4. Under the Direct Custody

Arrangements, U.S. Investment

Companies or their custodians, as the

case may be, will be entitled to seek

relief directly against Citibank or the

particular Foreign Subsidiary.

5. Securities of U.S. Investment

Companies custodied pursuant to

Agency Custody Arrangements will be

maintained with a Foreign Subsidiary

only in accordance with an Agency

Custody Agreement, required to remain

in effect at all times during which the

foreign Subsidiary fails to satisfy the

requirements of rule 17f–5 relating to

shareholders’ equity.

6. The Agency Custody Agreement

will be among (i) the U.S. Investment

Companies or custodians for which

Citibank serves as custodian or

subcustodian, (ii) Citibank, and (iii)

Citicorp. The Agency Custody

Agreement will provide the following:

(a) Citibank will act as the custodian

or subcustodian, as the case may be, of

the Securities of the U.S. Investment

Companies and will be able to delegate

its responsibilities to the Foreign

Subsidiaries;

(b) Citibank’s delegation of duties to

a Foreign Subsidiary would not relieve

Citibank of any responsibility to the

U.S. Investment Company or its

custodian for any loss due to such

delegation except such loss as may

result from (i) political risk (e.g.,

exchange control restrictions,

confiscation, expropriation,

nationalization, insurrection, civil strife

or armed hostilities) and (ii) other risks

of loss for which neither Citibank nor

the Foreign Subsidiary would be liable

under rule 17f–5; and

(c) Citicorp will be liable, in

accordance with the terms of the

Guarantee, for losses of U.S. Investment

Company Securities resulting from the

bankruptcy or insolvency of the Foreign

Subsidiary.

7. With respect to the Agency Custody

Arrangements, Citibank has entered, or

will enter, into a Subcustodian

Agreement with each Foreign

Subsidiary pursuant to which Citibank

will delegate to the Foreign Subsidiary

such of its duties and obligations as

would be necessary to permit the

Foreign Subsidiary to hold in custody,

in the country in which it operates, the

Securities of the U.S. Investment

Company. The Subcustodian Agreement

provides, or will provide, an

acknowledgement by the Foreign

Subsidiary that it is acting as a foreign

custodian for U.S. Investment

Companies and their custodians

pursuant to the terms of the exemptive

order requested by the application. The

Subcustodian Agreement provides

explicitly, or will explicitly provide,

that U.S. Investment Companies or their

custodians, as the case may be, that

have entered into an Agency Custody

Agreement with Citibank will be third

party beneficiaries of the Subcustodian

Agreement, will be entitled to enforce

the terms thereof, and will be entitled to

seek relief directly against the Foreign

Subsidiary or against Citibank.

8. Each Subcustodian Agreement is or

will be governed by New York law; or,

if any Subcustodian Agreement were

governed by the local law of the foreign

jurisdiction in which the Foreign

Subsidiary is located, Citibank has

obtained or shall obtain an opinion of

counsel from such foreign jurisdiction

opining as to the enforceability of the

rights of a third party beneficiary under

the laws of such foreign jurisdiction.

9. The dollar value of the Guarantee

applicable to the Foreign Subsidiaries

shall be at least equal to the aggregate

value of the Securities of U.S.

Investment Companies held in the

custody of the Foreign Subsidiaries

pursuant to the Direct Custody

Agreements and the Agency Custody

Agreements, calculated at the close of

the previous calendar month. The value

of U.S. Investment Company Securities

held in the custody of the Foreign

Subsidiaries as Citibank’s subcustodians

will be calculated by Citibank based on

records maintained by Citibank and

reports by the Foreign Subsidiaries at

the end of each calendar month, and

such amount will be reported to

Citicorp. In addition each Foreign

Subsidiary will submit to Citicorp

monthly its calculation, and the basis on

which it was made, of the market value

of U.S. Investment Company Securities

held in custody by it under Direct

Custody Agreements. After reviewing

the results of the monthly monitoring,

Citicorp will take such steps as may be

necessary to adjust the amount of the

Guarantee to cover the aggregate value

of the Securities held under Agency and

direct Custody Agreements. In the event

of the insolvency of a Foreign

Subsidiary at a time when the aggregate

value of U.S. Investment Company

Securities held by such Foreign

Subsidiary is in excess of the amount of

such Securities which such Foreign

Subsidiary held at the prior month’s

end, Citicorp will immediately take

such steps as may be necessary to
Federal Register / Vol. 60, No. 103 / Tuesday, May 30, 1995 / Notices 28197

increase the size of the Guarantee to

cover the amount of such excess.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–13075 Filed 5–26–95; 8:45 am]

BILLING CODE 8010–01–M

[Investment Company Act Release No.

21088; 811–5501]

Kidder, Peabody Corporate Income

Fund; Notice of Application

May 22, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Deregistration under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANT: Kidder, Peabody Corporate

Income Fund.

RELEVANT ACT SECTION: Section 8(f).

SUMMARY OF APPLICATION: Applicant

requests an order declaring it has ceased

to be an investment company.

FILING DATE: The application was filed

on May 4, 1995.

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

June 16, 1995, and should be

accompanied by proof of service on the

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, 60 Broad Street, New York,

New York 10004–2350.

FOR FURTHER INFORMATION CONTACT:

Diane L.Titus, Paralegal Specialist, at

(202) 942–0584, or H.R. Hallock, Jr.,

Senior Special Counsel, 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

may be obtained for a fee from the SEC’s

Public Reference Branch.

Applicant’s Representations

1. Applicant is an open-end, nondiversified management investment

company, organized as a business trust

under the laws of the Commonwealth of

Massachusetts. On March 15, 1988,

applicant registered under the Act and

filed a registration statement under the

Act and the Securities Act of 1933.

Applicant’s registration statement was

never declared effective, an applicant

has made no public offering of its

shares.

2. Applicant never issued or sold any

securities, except to its sole shareholder

and sponsor, Kidder Peabody Asset

Management, Inc. As of the date of filing

of the application, applicant had no

shareholders, liabilities or assets.

Applicant is not a party to any litigation

or administrative proceeding.

3. Pursuant to written consent,

applicant’s sole Trustee determined that

it was advisable and in the best interests

of the applicant to withdraw its

registration statement with the SEC,

cease to be registered as an investment

company and terminate its existence as

a Massachusetts business trust and

liquidate any assets and that the

proceeds from the liquidation of the

shares be returned to Kidder Peabody

Asset Management, Inc.

4. Applicant is not now engaged, nor

does it propose to engage in any

business activities other than those

necessary for the winding-up of its

affairs.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–13076 Filed 5–26–95; 8:45 am]

BILLING CODE 8010–01–M

[Investment Company Act Release No.

21090; 811–7756]

Kidder, Peabody Series Trust; Notice

of Application

May 22, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Deregistration under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANT: Kidder, Peabody Series

Trust.

RELEVANT ACT SECTION: Section 8(f).

SUMMARY OF APPLICATION: Applicant

requests an order declaring it has ceased

to be an investment company.

FILING DATE: The application was filed

on May 4, 1995.

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

June 16, 1995, and should be

accompanied by proof of service on the

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, N.W., Washington, D.C. 20549.

Applicant, 60 Broad Street, New York,

New York 10004–2350.

FOR FURTHER INFORMATION CONTACT:

Diane L. Titus, Paralegal Specialist, at

(202) 942–0584, or H.R. Hallock, Jr.,

Senior Special Counsel, 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

may be obtained for a fee from the SEC’s

Public Reference Branch.

Applicant’s Representations

1. Applicant is an open-end, nondiversified management investment

company, organized as a business trust

under the laws of the Commonwealth of

Massachusetts. On May 27, 1993,

applicant registered under the Act and

filed a registration statement under the

Act and under the Securities Act of

1933. Applicant’s registration statement

was never declared effective, and

applicant has made no public offering of

its shares.

2. Applicant never issued or sold any

securities, except to its sole shareholder

and sponsor, Kidder Peabody Asset

Management, Inc. As of the date of filing

of the application, applicant had no

shareholders, liabilities or assets.

Applicant is not a party to any litigation

or administrative proceeding.

3. Pursuant to written consent,

applicant’s sole Trustee determined that

it was advisable and in the best interests

of the applicant to withdraw its

registration statement with the SEC,

cease to be registered as an investment

company and terminate its existence as

a Massachusetts business trust and

liquidate any assets and that the

proceeds from the liquidation of the

shares be returned to Kidder Peabody

Asset Management, Inc.