SEC Proposes New Rules on Foreign Custody Of Fund Assets

Washington, DC, April 30, 1999 - The Securities and Exchange Commission has proposed a new Rule 17f-7 and amendments to Rule 17f-5 under the Investment Company Act of 1940 to address the custody of investment company assets outside the U.S. The proposals would establish standards governing the maintenance of an investment company's assets with a foreign securities depository. Specifically, proposed Rule 17f-7 would establish four basic standards for foreign depositories to be deemed eligible for use by funds. In addition, the proposed rule would require that one of two "risk-limiting conditions" be met. The comment period on this proposal ends July 15, 1999.