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NOTICE AND CONSENT CONCERNING PARTICIPATION OF COLLECTIVE FUNDS IN EQUILEND IN ACCORDANCE WITH THE EQIILEND PROHIBITED TRANSACTION EXEMPTION NOTICE AND CONSENT CONCERNING PARTICIPATION OF COLLECTIVE FUNDS IN EQUILEND IN ACCORDANCE WITH THE EQUILEND PROHIBITED TRANSACTION EXEMPTION To: The Authorizing Fiduciary of any employee benefit plan ("Plan") that intends to participate in one or more Common or Collective Funds (each, a "Fund" and collectively, the "Funds") of The Northern Trust Company ("Northern") or any affiliate of Northern, for which Northern acts as Lending Fiduciary. This Notice and Consent sets forth the rights of any Plan that intends to invest its assets in one or more Funds with respect to transactions between EquiLend and the Funds. EquiLend is a joint venture of various securities lending agents and securities borrowers, in which Northern has an equity interest. The purpose of EquiLend is to provide a common electronic "platform" for the negotiation of securities lending and borrowing transactions. A description of EquiLend and its platform is attached hereto as Attachment A. The Fund currently participates in the EquiLend platform. EquiLend's activities will be offered in two stages: in the first phase the Fund will participate in EquiLend's common electronic platform for information sharing and negotiation of loans; in the second phase, EquiLend will offer to the Fund for sale or licensing specific ancillary services and products as described in Attachment A. The Fund will not be charged any additional fee for utilizing EquiLend's platform or for ancillary products used by the Fund; rather the fees charged by EquiLend for participation in its platform and the cost of purchasing or licensing lending-related products will be paid by Northern. The fees for participation in the platform will include an initiation fee and an annual fee (payable by both lenders and borrowers) that will be structured on a tiered basis. Each annual fee level will entitle each participant at that level to a certain number of transactions, with excess transactions being subject to additional charges. Participants paying the highest annual fee level will be entitled to an unlimited number of transactions. Northern, as an equity owner of EquiLend, will not be required to pay the initiation fee. Northern expects its annual fee to be at the highest level which will entitle Northern to an unlimited number of transactions with no incremental cost. As one of the equity owners of EquiLend, Northern has a financial interest in the successful operation of EquiLend. As a result, EquiLend has obtained Prohibited Transaction Exemption 2002-30 from the u.s. Department of Labor which (a) enables Northern (and the other securities lending agents with equity interests in EquiLend) to utilize EquiLend's platform for lending the securities of Plans and (b) permits EquiLend to sell or license ancillary products to Northern or to a Plan to which EquiLend is a party in interest. The final form of the exemption was published on June 6, 2002 in the Federal Register, and is retroactively effective to March 29, 2002. The exemption requires that an Authorizing Fiduciary of a Plan, the assets of which are proposed to be invested in the Fund, and which has not previously been given 30 days' prior notice of the intention of the Fund to participate in EquiLend, or not less than 15 days' prior notice of an intended purchase or licensing by the Fund of any ancillary product from EquiLend, must approve in advance the participation of the Fund in EquiLend and the purchase or licensing by the Fund of each ancillary product. In connection with the foregoing, Northern has provided the Authorizing Fiduciary with such reasonably available information as it reasonably believes is necessary for the Authorizing Fiduciary to determine whether Northern's use of EquiLend on behalf of the Fund and EquiLend's proposed sale or licensing of products to the Fund should be authorized. In addition, Northern will provide any other reasonably available information that the Authorizing Fiduciary may reasonably request. As used in this Notice and Consent, (1) "Authorizing Fiduciary" shall mean a Plan fiduciary who is independent of and not affiliated with Northern and receives no direct or indirect consideration from Northern or an affiliate of Northern in connection with any securities lending transaction involving the Plan; and (2) "Plan" shall mean a "plan" within the meaning of section 3(3) of ERISA subject to Part 4 of Subtitle B of Title I of ERISA, a "plan" within the meaning of section 4975(e)(1) of the Internal Revenue Code of 1986 (as amended), or The Federal Thrift Savings Fund. By signing this Notice and Consent on behalf of the Plan, the Authorizing Fiduciary of the Plan hereby agrees to and approves the participation of the Funds in EquiLend and the terms governing the sale or licensing of ancillary products by EquiLend to the Funds, all as set forth herein. BOARD OF TRUSTEES OF THE EMPLOYEES' PENSION PLAN OF THE CITY OF CLEARWATER, FLORIDA .-L-/ ~~~ ~ By: -=t~ / ~ "-./ Frank V. Hibbard Chairperson Attest: Attachment A EQUILEND DESCRIPTION On May 22, 2001, Northern Trust Corporation, as part of a consortium of leading financial institutions, announced the creation of EquiLend, a global platform designed to meet industry demand for efficient processes in securities lending. EquiLend's primary objective is to develop a standards-based global equity borrowing and lending platform intended to streamline the trading, processing, and monitoring of securities lending transactions. The platform connects participants through a common standards-based process and infrastructure, which creates both efficiencies and liquidity, and reduces the levels of potential problems and risks. EquiLend delivered four key components to participants in its first phase: (i) availability, (ii) auto borrow, (iii) one-to-one negotiations and (iv) contract, billing and mark to markets comparisons. EquiLend's platform has also been designed to provide the industry with a set of objective benchmarks. The first phase of functionality was rolled out to members and subscribing participants on June 25, 2002, following receipt of applicable regulatory approvals. In subsequent phases, EquiLend expanded it's capabilities in August 2003 to include automated recalls and returns and dividend comparison and claiming. The EquiLend platform provides a borrower or agent lender with the option of initiating an order to one or many counterparties. When an offer is approved, EquiLend matches the parties' settlement instructions and sends a shared trade ticket to each of the participants' proprietary trading and settlement systems. EquiLend is not itself a principal in any transactions but rather facilitates securities lending transactions between borrowers and agent lenders. The platform also provides a suite of functions that provide for the ongoing maintenance of the securities lending transactions. EquiLend is subsidiary of EquiLend Holdings, which is a holding company owned by Barclays Global Investors; Bear, Steams & Co. Inc.; The Goldman Sachs Group, Inc.; J.P. Morgan Chase & Co.; Lehman Brothers; Merrill Lynch; Morgan Stanley; Northern Trust Corporation; State Street Corporation; and DBS.