§ 518. Payment of claims by investment companies where adverse claim
is asserted; effect of claims or advices originating in, and statutes,
rules or regulations purporting to be in force in occupied territory. 1.
Notice to any investment company of an adverse claim to a credit
standing on its books to the account of any person, or of an adverse
claim to securities or other property held for the account of any
person, shall not be effectual to cause said investment company to
recognize said adverse claimant unless said adverse claimant shall also
either procure a restraining order, injunction or other appropriate
process against said investment company from a court of competent
jurisdiction in the United States in a cause therein instituted by him
wherein the person to whose account the credit stands, or for whose
account the securities or other property are held, or his executor or
administrator is made a party and served with summons, or shall execute
to said investment company, in form and with sureties acceptable to it a
bond, indemnifying said investment company from any and all liability,
loss, damage, costs and expenses, for and on account of the payment of
or delivery pursuant to such adverse claim or the dishonor of the order
of the person to whose account the credit stands on the books of said
investment company or for whose account the securities or other property
are held by said investment company.

2. (a) An investment company need not recognize or give any effect to
(1) any claim to a credit standing on its books to the account of, or
any claim to securities or other property held by it for the account of,
any corporation, firm or association in occupied territory or (2) any
advice, statute, rule or regulation purporting to cancel or to give
notice of the cancellation of the authority of any person at the time
appearing on the books of such investment company as authorized to
withdraw or otherwise dispose of cash, securities or other property of
such corporation, firm or association, unless such investment company is
required so to do by appropriate process procured against it in a court
of competent jurisdiction in the United States in a cause therein
instituted by or in the name of such corporation, firm or association,
or unless the person making such claim or giving such advice or invoking
such statute, rule or regulation, as the case may be, shall execute to
such investment company, in form and with sureties acceptable to it, a
bond indemnifying it from any and all liability, loss, damage, costs and
expenses for and on account of recognizing or giving any effect to such
claim, advice, statute, rule or regulation.

(b) For the purposes of this subdivision (1) the term "occupied
territory" shall mean territory occupied by a dominant authority
asserting governmental, military or police powers of any kind in such
territory, but not recognized by the United States as the de jure
government of such territory, and (2) the term "corporation, firm or
association in occupied territory" shall mean a corporation, firm or
association which has, or at any time has had, a place of business in
territory which has at any time been occupied territory.

(c) The foregoing provisions of this subdivision shall be effective
only in cases where (1) such claim or advice purports or appears to have
been sent from or is reasonably believed to have been sent pursuant to
orders originating in, such occupied territory during the period of
occupation, or (2) such statute, rule or regulation appears to have
emanated from such dominant authority and purports to be or to have been
in force in such occupied territory during the period of occupation.

(d) The foregoing provisions of this subdivision shall apply to
claims, advices, statutes, rules or regulations made, given or invoked
either prior to, or on or subsequent to the effective date of this act.

3. An investment company need not recognize or give any effect to a
claim of authority to order the payment or delivery of any funds or
other property standing on its books to the credit of, or held by it for
the account of, any person, corporation, unincorporated association or
partnership, which claim conflicts with a claim of authority of which
the investment company had prior notice, unless the person or persons
asserting such subsequent claim shall procure a restraining order,
injunction or other appropriate process against said investment company
from a court of competent jurisdiction in the United States, or, in lieu
thereof, at the option of said investment company, shall execute to said
investment company, in form and with sureties acceptable to it, a bond,
indemnifying it for any and all liability, loss, damage, costs and
expenses for or on account of any payment or delivery of such property
by it pursuant to such subsequent claim of authority on for or on
account of the dishonor of any draft or other order of any person or
persons asserting the claim of authority of which such investment
company already had notice at the time the subsequent conflicting claim
of authority is asserted by the person or persons furnishing such bond.