Section 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.