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SEC Proposes Rule 17f-4 Amendments

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  • Baker, John
    The Securities and Exchange Commission recently proposed amendments to Rule 17f-4 under the Investment Company Act of 1940, the rule governing investment
    Message 1 of 1 , Dec 2, 2001
      The Securities and Exchange Commission recently proposed amendments
      to Rule 17f-4 under the Investment Company Act of 1940, the rule governing
      investment companies' use of domestic securities depositories. Release No.
      IC-25266, 66 Fed. Reg. 58412 (Nov. 15, 2001). Rule 17f-4 was adopted in
      1978, and the amendments are intended to reflect changes in custody practice
      and commercial law since then, particularly the changes in Article 8 of the
      Uniform Commercial Code, the article governing investment securities.
      According to the SEC release, approximately 97% of registered investment
      companies maintain assets in securities depositories, most frequently the
      Depository Trust Company.

      The proposed amendments would eliminate the existing segregation,
      earmarking, and confirmation requirements. Instead, the proposed amendments
      would substitute more general contractual requirements for custodians and
      depositories - a change that would require amendments to existing contracts
      with custodians and depositories. The proposed amendments would also
      eliminate the requirement that directors approve all custody arrangements
      and changes to those arrangements. Comments on the proposed amendments are
      due January 31, 2002.

      The SEC release is available online at

      http://www.sec.gov/rules/proposed/ic-25266.htm

      It can also be accessed from the Federal Register, which can be
      searched online at

      http://www.access.gpo.gov/su_docs/aces/aces140.html


      John M. Baker <JBaker@...>
      Stradley, Ronon, Stevens & Young, LLP Http://www.stradley.com
      1220 19th Street, N.W., Suite 700, Washington, DC 20036
      (202) 419-8413 Fax (202) 822-0140
      FundLaw Listowner Http://groups.yahoo.com/group/fundlaw
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