Man-Glenwood Lexington, LLC, et al.; Notice of Application, 14560-14562 [06-2764]
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Federal Register / Vol. 71, No. 55 / Wednesday, March 22, 2006 / Notices
collection of information to the Office of
Management and Budget for review and
approval.
Summary of Proposal(s)
(1) Collection title: Survivor
Questionnaire.
(2) Form(s) submitted: RL–94–F.
(3) OMB Number: 3220–0032.
(4) Expiration date of current OMB
clearance: 5/31/2006.
(5) Type of request: Extension of a
currently approved collection.
(6) Respondents: Individuals or
households.
(7) Estimated annual number of
respondents: 8,000.
(8) Total annual responses: 8,000.
(9) Total annual reporting hours:
1,391.
(10) Collection description: Under
Section 6 of the Railroad Retirement
Act, benefits are payable to the
survivors or the estates of deceased
railroad employees. The collection
obtains information about the survivors
if any, the payment of burial expenses
and administration of estate when
unknown to the Railroad Retirement
Board. The information is used to
determine whether and to whom
benefits are payable.
Additional Information or Comments:
Copies of the forms and supporting
documents can be obtained from
Charles Mierzwa, the agency clearance
officer (312–751–3363) or
Charles.Mierzwa@rrb.gov.
Comments regarding the information
collection should be addressed to
Ronald J. Hodapp, Railroad Retirement
Board, 844 North Rush Street, Chicago,
Illinois, 60611–2092 or
Ronald.Hodapp@rrb.gov and to the
OMB Desk Officer for the RRB, at the
Office of Management and Budget,
Room 10230, New Executive Office
Building, Washington, DC 20503.
Charles Mierzwa,
Clearance Officer.
[FR Doc. E6–4088 Filed 3–21–06; 8:45 am]
BILLING CODE 7905–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. IC–27263; 812–13065]
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Man-Glenwood Lexington, LLC, et al.;
Notice of Application
March 16, 2006.
Securities and Exchange
Commission (‘‘Commission’’)
ACTION: Notice of an application under
section 6(c) of the Investment Company
Act of 1940 (the ‘‘Act’’ for an exemption
AGENCY:
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limited liability companies. Lexington
and TEI (collectively, the ‘‘Feeder
Funds’’) operate as feeder funds in a
master-feeder structure and invest all or
Summary of Application: Applicants
substantially all of their investable
request an order to permit certain
assets in the Portfolio Company. The
registered closed-end management
Portfolio Company, which acts as the
companies to issue multiple classes of
master fund to the Feeder Funds, is a
shares and to impose asset-based
fund of hedge funds.
distribution fees.
2. The Adviser is registered as an
Applicants: Man-Glenwood
investment adviser under the
Lexington, LLC (‘‘Lexington’’), ManInvestment Advisers Act of 1940 and
Glenwood Lexington TEI, LLC (‘‘TEI’’),
serves as investment adviser to the
Glenwood Capital Investments, L.L.C.
Portfolio Company. The Distributor, a
(‘‘Adviser’’), and Man Investments Inc.
broker-dealer registered under the
(‘‘Distributor’’).
Securities Exchange Act of 1934 (‘‘1934
Filing Dates: The application was
Act’’), acts as the principal underwriter
filed on February 11, 2004, and
to the Feeder Funds. The Distributor is
amended on February 24, 2006, and
under common control with the Adviser
March 15, 2006.
and is an affiliated person, as defined in
Hearing or Notification of Hearing: An section 2(a)(3) of the Act, of the Adviser.
order granting the requested relief will
Applicants request that the order also
be issued unless the Commission orders
apply to any other continuously offered
a hearing. Interested persons may
registered closed-end management
request a hearing by writing to the
investment company existing now or in
Commission’s Secretary and serving
the future for which the Adviser, the
applicants with a copy of the request,
Distributor, or any entity controlling,
personally or by mail. Hearing requests
controlled by, or under common control
should be received by the Commission
with the Adviser, the Distributor, or any
by 5:30 p.m. on April 10, 2006, and
entity controlling, controlled by, or
should be accompanied by proof of
under common control with the Adviser
service on applicants, in the form of an
or the Distributor acts as investment
affidavit or, for lawyers, a certificate of
adviser or principal underwriter, and
service. Hearing requests should state
which provides periodic liquidity with
the nature of the writer’s interest, the
respect to its proportionate ownership
reason for the request, and the issues
interests (‘‘Units’’) pursuant to rule 13e–
contested. Persons who wish to be
4 under the 1934 Act (collectively, with
notified of a hearing may request
the Feeder Funds, the ‘‘Funds’’).1
notification by writing to the
3. The Feeder Funds continuously
Commission’s Secretary.
offer their Units to the public pursuant
ADDRESSES: Secretary, U.S. Securities
to rule 415 under the Securities Act of
and Exchange Commission, 100 F
1933 at net asset value and each
Street, NE., Washington, DC 20549–
currently offers a single class of Units
1090. Applicants, c/o Steven Zoric Esq., subject to a front-end sales load as a
Man Investments Inc., 123 N. Wacker
percentage of the public offering price
Drive, 28th Floor, Chicago, IL 60606.
and an investor servicing fee. Units of
FOR FURTHER INFORMATION CONTACT: Julia the Feeder Funds are not listed on any
Kim Gilmer, Senior Counsel, at (202)
securities exchange and do not trade on
551–6871, or Janet M. Grossnickle,
an over-the-counter system such as the
Branch Chief, at (202) 551–6821
National Association of Securities
(Division of Investment Management,
Dealers Automated Quotation System.
Office of Investment Company
Applicants do not expect that any
Regulation).
secondary market will for the Units. To
provide a limited degree of liquidity to
SUPPLEMENTARY INFORMATION: The
investors, the Feeder Funds ordinarily
following is a summary of the
will offer to repurchase Units quarterly
application. The complete application
at their then current net asset value
may be obtained for a fee at the
pursuant to rule 13e–4 under the 1934
Commission’s Public Reference Desk,
Act. The amount, timing and terms of
100 F Street, NE., Washington, DC
any repurchase offer would remain
20549–0102 (tel. 202–551–5850).
within the discretion of each Feeder
Applicants’ Representations
Fund’s Board.
1. Lexington, TEI, and Man-Glenwood
1 Any Fund relying on the requested relief will do
Lexington Associates Portfolio, LLC (the
so in a manner consistent with the terms and
‘‘Portfolio Company’’) are continuously
conditions of the application. Applicants represent
offered closed-end management
that each investment company presently intending
investment companies registered under
to rely on the requested relief is listed as an
applicant.
the Act and organized as Delaware
from sections 18(c) and 18(i) of the Act
and an order pursuant to section 17(d)
of the Act and rule 17d–1 under the Act.
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Federal Register / Vol. 71, No. 55 / Wednesday, March 22, 2006 / Notices
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4. The Feeder Funds seek the
flexibility to be structured as multiple
class funds and propose to offer two
additional classes of Units.2 Class A
Units would be offered at net asset
value, plus a front-end sales charge and
an annual asset-based service and/or
distribution fee of up to 0.25% and
0.75%, respectively, of average monthly
net assets. Class 1 Units would be
offered at net asset value with no frontend sales load or asset-based service
and/or distribution fees and would be
offered only to institutions and
investors who compensate their
financial intermediary directly. The
Funds may in the future adopt these
classes or another sales charge structure.
5. Applicants represent that any assetbased service and distribution fees will
comply with the provisions of rule
2830(d) of the Conduct Rules of the
National Association of Securities
Dealers, Inc. (‘‘NASD Sales Charge
Rule’’) as if that rule applied to the
Feeder Funds. Applicants also represent
that each Fund will disclose in its
prospectus, the fees, expenses and other
characteristics of each class of Units
offered for sale by the prospectus as is
required for open-end multiple class
funds under Form N–1A. As is required
for open-end funds, each Fund will
disclose its expenses in shareholder
reports, and disclose any arrangements
that result in breakpoints in or
elimination of sales loads in its
prospectus.3 Each Fund and the
Distributor will also comply with any
requirements that may be adopted by
the Commission regarding disclosure at
the point of sale and in transaction
confirmations about the costs and
conflicts of interest arising out of the
distribution of open-end investment
company shares, and regarding
prospectus disclosure of sales loads and
revenue sharing arrangements as if those
requirements applied to the Funds and
the Distributor.4
2 The Feeder Funds may designate their existing
Units as Initial Class Units. The Initial Class would
be closed to new investors and would only be
available to those Unit holders who currently hold
Initial Class Units.
3 See Shareholder Reports and Quarterly Portfolio
Disclosure of Registered Management Investment
Companies, Investment Company Act Release No.
26372 (February 27, 2004) (adopting release)
(requiring open-end investment companies to
disclose fund expenses in shareholder reports); and
Disclosure of Breakpoint Discounts by Mutual
Funds, Investment Company Act Release No. 26464
(June 7, 2004) (adopting release) (requiring openend investment companies to provide prospectus
disclosure of certain sales load information)
4 Confirmation Requirements and Point of Sale
Disclosure Requirements for Transactions and
Certain Manual Funds and Other Securities, and
Other Confirmation Requirement Amendments, and
Amendments to the Registration Form for Mutual
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14561
6. Each Feeder Fund will allocate all
expenses incurred by it among the
various classes of Units based on the net
assets of the Feeder Fund attributable to
each class, except that the net asset
value and expenses of each class will
reflect distribution fees, service fees,
and any other incremental expenses of
that class. Expenses of a Feeder Fund
allocated to a particular class of Units
will be borne on a pro rata basis by each
outstanding Unit of that class. The
Funds will not offer exchange
privileges. Units will not be subject to
an early withdrawal charge.
closed-end investment company
multiple class structure does not raise
the concerns underlying section 18 of
the Act to any greater degree than openend investment companies’ multiple
class structures that are permitted by
rule 18f–3 under the Act. A Fund may
create additional classes of Units or vary
the characteristics of the proposed Class
A and Class I Units, but each Fund will
comply with the provisions of rule 18f–
3 as if it were an open-end investment
company.
Applicants’ Legal Analysis
1. Section 17(d) of the Act and rule
17d–1 under the Act prohibit an
affiliated person of a registered
investment company or an affiliated
person of such person, acting as
principal, from participating in or
effecting any transaction in connection
with any joint enterprise or joint
arrangement in which the investment
company participates unless the
Commission issues an order permitting
the transaction. In reviewing
applications submitted under section
17(d) and rule 17d–1, the Commission
considers whether the participation of
the investment company in a joint
enterprise or joint arrangement is
consistent with the provisions, policies
and purposes of the Act, and the extent
to which the participation is on a basis
different from or less advantageous than
that of other participants.
2. Rule 17d–3 under the Act provides
an exemption from section 17(d) and
rule 17d–1 to permit open-end
investment companies to enter into
distribution arrangements pursuant to
rule 12b–1 under the Act. Applicants
request an order under section 17(d) and
rule 17d–1 under the Act to permit the
Funds to impose asset-based
distribution fees. Applicants have
agreed to comply with rules 12b–1 and
17d–3 as if those rules applied to
closed-end investment companies.
Multiple Classes of Units
1. Section 18(c) of the Act provides,
in relevant part, that a closed-end
investment company may not issue or
sell any senior security if, immediately
thereafter, the company has outstanding
more than one class of senior security.
Applicants state that the creation of
multiple classes of Units of the Funds
may be prohibited by section 18(c).
2. Section 18(i) of the Act provides
that each share of stock issued by a
registered management investment
company will be a voting stock and
have equal voting rights with every
other outstanding voting stock.
Applicants state that permitting
multiple classes of Units of the Funds
may violate section 18(i) of the Act
because each class would be entitled to
exclusive voting rights with respect to
matters solely related to that class.
3. Section 6(c) of the Act provides that
the Commission may exempt any
person, security or transaction or any
class or classes of persons, securities or
transactions from any provision of the
Act, or from any rule under the Act, if
and to the extent such exemption is
necessary or appropriate in the public
interest and consistent with the
protection of investors and the purposes
fairly intended by the policy and
provisions of the Act. Applicants
request an exemption under section 6(c)
from sections 18(c) and 18(i) to permit
the Funds to issue multiple classes of
Units.
4. Applicants submit that the
proposed allocation of expenses and
voting rights among multiple classes is
equitable and will not discriminate
against any group or class of Unit
holders. Applicants submit that the
proposed arrangements would permit
the Funds to facilitate the distribution of
their Units and provide investors with
a broader choice of Unit holder options.
Applicants assert that the proposed
Funds, Investment Company Act Release No. 26341
(January 29, 2004) (proposing release).
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Asset-Based Distribution Fees
Applicants’ Condition
Applicants agree that any order
granting the requested relief will be
subject to the following condition:
Applicants will comply with the
provisions of rules 12b–1, 17d–3, and
18f–3 under the Act, as amended from
time to time, as if those rules applied to
closed-end management investment
companies, and will comply with the
NASD Sales Charge Rule, as amended
from time to time, as if that rule applied
to all closed-end management
investment companies.
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Federal Register / Vol. 71, No. 55 / Wednesday, March 22, 2006 / Notices
For the Commission, by the Division of
Investment Management, under delegated
authority.
Nancy M. Morris,
Secretary.
[FR Doc. 06–2764 Filed 3–21–06; 8:45 am]
Delisting of Securities
Section 3.
3.1. Suspension and/or Delisting by
Exchange
BILLING CODE 8010–01–M
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53508; File No. SR–NSX–
2005–09]
Self-Regulatory Organizations;
National Stock Exchange; Notice of
Filing of Proposed Rule Change To
Amend Exchange Delisting Rules To
Conform to Recent Amendments to
Commission Rules Regarding Removal
from Listing and Withdrawal from
Registration
March 17, 2006.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
24, 2005, the National Stock
Exchange SM (‘‘NSX’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been substantially prepared by the
Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
text of Article IV, section 3 of the
Exchange’s By-Laws to allow its
delisting rules to be set forth in
sufficient detail to be in conformity with
the recently adopted Rule 12d2–2 under
the Act.3
The text of the proposed rule change
is below. Proposed new language is in
italics; proposed deletions are in
[brackets].
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CODE OF REGULATIONS (BY-LAWS)
OF NATIONAL STOCK EXCHANGE
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ARTICLE IV.
Securities Listed on the Exchange
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1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 17 CFR 240.12d2–2.
2 17
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14:47 Mar 21, 2006
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(a) No Change.
(b) Whenever the Board determines
that it no longer is appropriate for a
security to continue to be traded on the
Exchange, it may institute proceedings
to delist such security by filing the
appropriate application with the
Commission (the ‘‘Delisting
Application’’) to strike a class of
securities from listing on the Exchange
or from registration under Section 12(b)
of the Exchange Act within a reasonable
time after the Exchange makes the
decision to suspend or delist a security.
The Exchange shall provide: (1) notice
to the issuer of the Exchange’s decision
to delist the issuer’s securities; (2) an
opportunity for the issuer to file an
appeal [Any issuer or any other person
aggrieved by such action may seek
relief] pursuant to the Exchange Rules
governing adverse actions; (3) public
notice, no fewer than ten days before the
delisting becomes effective, of the
Exchange’s final determination to delist
the security via a press release and
posting on the Exchange’s website and
(4) the prompt delivery of a copy of the
Delisting Application to the issuer.
(c) The securities of an issuer will be
subject to suspension and/or
withdrawal from listing and registration
as a listed issue if any of the following
conditions are found to exist:
(1) failure to comply with the listing
standards and agreements; or
(2) sustained loss so that financial
condition becomes so impaired that it is
questionable to the Exchange whether
the company can continue operations
and/or meet its obligations as they
mature or
(3) the entire class of securities has
been called for redemption, maturity or
retirement; appropriate notice thereof
has been given; funds sufficient for the
payment of all such securities have been
deposited with an agency authorized to
make such payments, and such funds
have been made available to security
holders; or
(4) the entire class of security has
been redeemed or paid at maturity or
retirement; or
(5) the instruments representing the
securities comprising the entire class
have come to evidence, by operation of
law or otherwise, other securities in
substitution therefore and represent no
other right, except, if such be the fact,
the right to receive an immediate cash
payment (the right of dissenters to
receive the appraised or fair value of
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their holdings shall not prevent the
application of this provision); or
(6) all rights pertaining to the entire
class of the security have been
extinguished; provided, however, that
where such an event occurs as a result
of an order of a court or other
governmental authority, the orders shall
be final, all applicable appeals periods
shall have expired and no appeals shall
be pending.
Notwithstanding the foregoing, the
Board may determine that the
suspension or delisting of an issue is
necessary for the protection of investors
and the public interest.
3.2. Delisting by Issuer
A security, which in the opinion of
the Board is eligible for continued
listing, may be removed from listing
upon the request or application of the
issuer provided that the issuer: (a)
submits a certified copy of a resolution
adopted by the board of directors of the
issuer authorizing withdrawal from
listing and registration; [and] (b) a
statement setting forth in detail the
reasons for the proposed withdrawal
and the facts in support thereof; (c)
certifies its compliance with the
Exchange’s rules for delisting and
applicable state laws; (d) submits a
written notification to the Exchange no
fewer than ten days before the issuer
files the appropriate form with the
Commission of its intent to withdraw its
securities from listing and/or
registration on the Exchange setting
forth a description of the security
involved, together with a statement of
all the material facts relating to the
reasons for the withdrawal and another
notice to the Exchange, immediately
after its withdrawal from listing
becomes effective pursuant to the rules
of the Commission; and (e)
contemporaneous with providing
written notice to the Exchange, the
issuer issues a public notice of its intent
to delist, and/or withdraw its securities
from Section 12(b) registration, via a
press release and, if it has a publicly
accessible web site, post such notice on
such website.
[The issuer may be required to submit
the proposed withdrawal to the security
holders for their vote at a meeting for
which proxies are solicited provided the
stock is not also listed on another
national securities exchange registered
under Section 6 of the Act having
similar requirements or on a facility of
a national securities association
registered under Section 15A of the Act
having similar requirements.]
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]]>Agencies
[Federal Register Volume 71, Number 55 (Wednesday, March 22, 2006)]
[Notices]
[Pages 14560-14562]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-2764]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-27263; 812-13065]
Man-Glenwood Lexington, LLC, et al.; Notice of Application
March 16, 2006.
AGENCY: Securities and Exchange Commission (``Commission'')
ACTION: Notice of an application under section 6(c) of the Investment
Company Act of 1940 (the ``Act'' for an exemption from sections 18(c)
and 18(i) of the Act and an order pursuant to section 17(d) of the Act
and rule 17d-1 under the Act.
-----------------------------------------------------------------------)
Summary of Application: Applicants request an order to permit
certain registered closed-end management companies to issue multiple
classes of shares and to impose asset-based distribution fees.
Applicants: Man-Glenwood Lexington, LLC (``Lexington''), Man-
Glenwood Lexington TEI, LLC (``TEI''), Glenwood Capital Investments,
L.L.C. (``Adviser''), and Man Investments Inc. (``Distributor'').
Filing Dates: The application was filed on February 11, 2004, and
amended on February 24, 2006, and March 15, 2006.
Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on April 10, 2006, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.
ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-1090. Applicants, c/o Steven Zoric
Esq., Man Investments Inc., 123 N. Wacker Drive, 28th Floor, Chicago,
IL 60606.
FOR FURTHER INFORMATION CONTACT: Julia Kim Gilmer, Senior Counsel, at
(202) 551-6871, or Janet M. Grossnickle, Branch Chief, at (202) 551-
6821 (Division of Investment Management, Office of Investment Company
Regulation).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee at the
Commission's Public Reference Desk, 100 F Street, NE., Washington, DC
20549-0102 (tel. 202-551-5850).
Applicants' Representations
1. Lexington, TEI, and Man-Glenwood Lexington Associates Portfolio,
LLC (the ``Portfolio Company'') are continuously offered closed-end
management investment companies registered under the Act and organized
as Delaware limited liability companies. Lexington and TEI
(collectively, the ``Feeder Funds'') operate as feeder funds in a
master-feeder structure and invest all or substantially all of their
investable assets in the Portfolio Company. The Portfolio Company,
which acts as the master fund to the Feeder Funds, is a fund of hedge
funds.
2. The Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940 and serves as investment adviser to the
Portfolio Company. The Distributor, a broker-dealer registered under
the Securities Exchange Act of 1934 (``1934 Act''), acts as the
principal underwriter to the Feeder Funds. The Distributor is under
common control with the Adviser and is an affiliated person, as defined
in section 2(a)(3) of the Act, of the Adviser.
Applicants request that the order also apply to any other
continuously offered registered closed-end management investment
company existing now or in the future for which the Adviser, the
Distributor, or any entity controlling, controlled by, or under common
control with the Adviser, the Distributor, or any entity controlling,
controlled by, or under common control with the Adviser or the
Distributor acts as investment adviser or principal underwriter, and
which provides periodic liquidity with respect to its proportionate
ownership interests (``Units'') pursuant to rule 13e-4 under the 1934
Act (collectively, with the Feeder Funds, the ``Funds'').\1\
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\1\ Any Fund relying on the requested relief will do so in a
manner consistent with the terms and conditions of the application.
Applicants represent that each investment company presently
intending to rely on the requested relief is listed as an applicant.
---------------------------------------------------------------------------
3. The Feeder Funds continuously offer their Units to the public
pursuant to rule 415 under the Securities Act of 1933 at net asset
value and each currently offers a single class of Units subject to a
front-end sales load as a percentage of the public offering price and
an investor servicing fee. Units of the Feeder Funds are not listed on
any securities exchange and do not trade on an over-the-counter system
such as the National Association of Securities Dealers Automated
Quotation System. Applicants do not expect that any secondary market
will for the Units. To provide a limited degree of liquidity to
investors, the Feeder Funds ordinarily will offer to repurchase Units
quarterly at their then current net asset value pursuant to rule 13e-4
under the 1934 Act. The amount, timing and terms of any repurchase
offer would remain within the discretion of each Feeder Fund's Board.
[[Page 14561]]
4. The Feeder Funds seek the flexibility to be structured as
multiple class funds and propose to offer two additional classes of
Units.\2\ Class A Units would be offered at net asset value, plus a
front-end sales charge and an annual asset-based service and/or
distribution fee of up to 0.25% and 0.75%, respectively, of average
monthly net assets. Class 1 Units would be offered at net asset value
with no front-end sales load or asset-based service and/or distribution
fees and would be offered only to institutions and investors who
compensate their financial intermediary directly. The Funds may in the
future adopt these classes or another sales charge structure.
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\2\ The Feeder Funds may designate their existing Units as
Initial Class Units. The Initial Class would be closed to new
investors and would only be available to those Unit holders who
currently hold Initial Class Units.
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5. Applicants represent that any asset-based service and
distribution fees will comply with the provisions of rule 2830(d) of
the Conduct Rules of the National Association of Securities Dealers,
Inc. (``NASD Sales Charge Rule'') as if that rule applied to the Feeder
Funds. Applicants also represent that each Fund will disclose in its
prospectus, the fees, expenses and other characteristics of each class
of Units offered for sale by the prospectus as is required for open-end
multiple class funds under Form N-1A. As is required for open-end
funds, each Fund will disclose its expenses in shareholder reports, and
disclose any arrangements that result in breakpoints in or elimination
of sales loads in its prospectus.\3\ Each Fund and the Distributor will
also comply with any requirements that may be adopted by the Commission
regarding disclosure at the point of sale and in transaction
confirmations about the costs and conflicts of interest arising out of
the distribution of open-end investment company shares, and regarding
prospectus disclosure of sales loads and revenue sharing arrangements
as if those requirements applied to the Funds and the Distributor.\4\
---------------------------------------------------------------------------
\3\ See Shareholder Reports and Quarterly Portfolio Disclosure
of Registered Management Investment Companies, Investment Company
Act Release No. 26372 (February 27, 2004) (adopting release)
(requiring open-end investment companies to disclose fund expenses
in shareholder reports); and Disclosure of Breakpoint Discounts by
Mutual Funds, Investment Company Act Release No. 26464 (June 7,
2004) (adopting release) (requiring open-end investment companies to
provide prospectus disclosure of certain sales load information)
\4\ Confirmation Requirements and Point of Sale Disclosure
Requirements for Transactions and Certain Manual Funds and Other
Securities, and Other Confirmation Requirement Amendments, and
Amendments to the Registration Form for Mutual Funds, Investment
Company Act Release No. 26341 (January 29, 2004) (proposing
release).
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6. Each Feeder Fund will allocate all expenses incurred by it among
the various classes of Units based on the net assets of the Feeder Fund
attributable to each class, except that the net asset value and
expenses of each class will reflect distribution fees, service fees,
and any other incremental expenses of that class. Expenses of a Feeder
Fund allocated to a particular class of Units will be borne on a pro
rata basis by each outstanding Unit of that class. The Funds will not
offer exchange privileges. Units will not be subject to an early
withdrawal charge.
Applicants' Legal Analysis
Multiple Classes of Units
1. Section 18(c) of the Act provides, in relevant part, that a
closed-end investment company may not issue or sell any senior security
if, immediately thereafter, the company has outstanding more than one
class of senior security. Applicants state that the creation of
multiple classes of Units of the Funds may be prohibited by section
18(c).
2. Section 18(i) of the Act provides that each share of stock
issued by a registered management investment company will be a voting
stock and have equal voting rights with every other outstanding voting
stock. Applicants state that permitting multiple classes of Units of
the Funds may violate section 18(i) of the Act because each class would
be entitled to exclusive voting rights with respect to matters solely
related to that class.
3. Section 6(c) of the Act provides that the Commission may exempt
any person, security or transaction or any class or classes of persons,
securities or transactions from any provision of the Act, or from any
rule under the Act, if and to the extent such exemption is necessary or
appropriate in the public interest and consistent with the protection
of investors and the purposes fairly intended by the policy and
provisions of the Act. Applicants request an exemption under section
6(c) from sections 18(c) and 18(i) to permit the Funds to issue
multiple classes of Units.
4. Applicants submit that the proposed allocation of expenses and
voting rights among multiple classes is equitable and will not
discriminate against any group or class of Unit holders. Applicants
submit that the proposed arrangements would permit the Funds to
facilitate the distribution of their Units and provide investors with a
broader choice of Unit holder options. Applicants assert that the
proposed closed-end investment company multiple class structure does
not raise the concerns underlying section 18 of the Act to any greater
degree than open-end investment companies' multiple class structures
that are permitted by rule 18f-3 under the Act. A Fund may create
additional classes of Units or vary the characteristics of the proposed
Class A and Class I Units, but each Fund will comply with the
provisions of rule 18f-3 as if it were an open-end investment company.
Asset-Based Distribution Fees
1. Section 17(d) of the Act and rule 17d-1 under the Act prohibit
an affiliated person of a registered investment company or an
affiliated person of such person, acting as principal, from
participating in or effecting any transaction in connection with any
joint enterprise or joint arrangement in which the investment company
participates unless the Commission issues an order permitting the
transaction. In reviewing applications submitted under section 17(d)
and rule 17d-1, the Commission considers whether the participation of
the investment company in a joint enterprise or joint arrangement is
consistent with the provisions, policies and purposes of the Act, and
the extent to which the participation is on a basis different from or
less advantageous than that of other participants.
2. Rule 17d-3 under the Act provides an exemption from section
17(d) and rule 17d-1 to permit open-end investment companies to enter
into distribution arrangements pursuant to rule 12b-1 under the Act.
Applicants request an order under section 17(d) and rule 17d-1 under
the Act to permit the Funds to impose asset-based distribution fees.
Applicants have agreed to comply with rules 12b-1 and 17d-3 as if those
rules applied to closed-end investment companies.
Applicants' Condition
Applicants agree that any order granting the requested relief will
be subject to the following condition:
Applicants will comply with the provisions of rules 12b-1, 17d-3,
and 18f-3 under the Act, as amended from time to time, as if those
rules applied to closed-end management investment companies, and will
comply with the NASD Sales Charge Rule, as amended from time to time,
as if that rule applied to all closed-end management investment
companies.
[[Page 14562]]
For the Commission, by the Division of Investment Management,
under delegated authority.
Nancy M. Morris,
Secretary.
[FR Doc. 06-2764 Filed 3-21-06; 8:45 am]
BILLING CODE 8010-01-M
