Van Kampen Asset Management, et al.; Notice of Application, 28890-28892 [E6-7567]

Download as PDF 28890 Federal Register / Vol. 71, No. 96 / Thursday, May 18, 2006 / Notices 24, 2006, and with the Minnesota State official, Ms. D. Pile of the Commerce Department, on April 26, 2006, regarding the environmental impact of the proposed actions. The State officials had no comments. Finding of No Significant Impact On the basis of the environmental assessment, the NRC concludes that the proposed actions will not have a significant effect on the quality of the human environment. Accordingly, the NRC has determined not to prepare an environmental impact statement for the proposed actions. For further details with respect to the proposed actions, see the licensee’s letter dated October 12, 2005. Documents may be examined, and/or copied for a fee, at the NRC’s Public Document Room (PDR), located at One White Flint North, Public File Area O1 F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible electronically from the Agencywide Documents Access and Management System (ADAMS) Public Electronic Reading Room on the Internet at the NRC Web site, http://www.nrc.gov/reading-rm/ adams.html. Persons who do not have access to ADAMS or who encounter problems in accessing the documents located in ADAMS should contact the NRC PDR Reference staff by telephone at 1–800–397–4209 or 301–415–4737, or send an e-mail to pdr@nrc.gov. Dated at Rockville, Maryland, this 11th day of May 2006. For the Nuclear Regulatory Commission. Carl F. Lyon, Project Manager, Plant Licensing Branch III– 1, Division of Operating Reactor Licensing, Office of Nuclear Reactor Regulation. [FR Doc. E6–7572 Filed 5–17–06; 8:45 am] BILLING CODE 7590–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 27317; 812–13156] Van Kampen Asset Management, et al.; Notice of Application May 12, 2006. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of application for an order under sections 6(c) and 23(c)(3) of the Investment Company Act of 1940 (the ‘‘Act’’) for an exemption from rule 23c–3 under the Act. wwhite on PROD1PC61 with NOTICES AGENCY: Van Kampen Asset Management (the ‘‘VK Adviser’’), Van APPLICANTS: VerDate Aug<31>2005 18:14 May 17, 2006 Jkt 208001 Kampen Funds Inc. (the ‘‘VK Distributor’’), Van Kampen Senior Loan Fund (formerly known as Van Kampen Prime Rate Income Trust) (the ‘‘VK Trust’’), Morgan Stanley Investment Advisors Inc. (the ‘‘MS Adviser’’), Morgan Stanley Distributors Inc. (the ‘‘MS Distributor’’) and Morgan Stanley Prime Income Trust (the ‘‘MS Trust’’, and, together with the VK Trust, the ‘‘Trusts’’). SUMMARY OF APPLICATION: Applicants request an order under sections 6(c) and 23(c)(3) of the Act for an exemption from certain provisions of rule 23c–3 to permit certain registered closed-end investment companies to make repurchase offers on a monthly basis. FILING DATES: The application was filed on January 25, 2005 and amended on December 29, 2005 and May 5, 2006. HEARING OR NOTIFICATION OF HEARING: An order granting the application 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 June 6, 2006, and should be accompanied by proof of service on the 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 Charles B. Taylor, Esq., Skadden, Arps, Slate, Meagher & Flom LLP, 333 West Wacker Drive, Chicago, Illinois 60606. FOR FURTHER INFORMATION CONTACT: Shannon Conaty, Senior Counsel, at (202) 551–6827, or Janet M. Grossnickle, Branch Chief, at (202) 551–6821 (Division of Investment Management, Office of Investment Company Regulation). The following is a summary of the application. The complete application may be obtained for a fee at the Commission’s Public Reference Branch, 100 F Street, NE., Washington, DC 20549–0102 (tel. (202) 551–8090). SUPPLEMENTARY INFORMATION: Applicants’ Representations 1. Each of the Trusts is a closed-end management investment company registered under the Act and organized PO 00000 Frm 00041 Fmt 4703 Sfmt 4703 as a Massachusetts business trust. The VK Adviser and the MS Adviser, both investment advisers registered under the Investment Advisers Act of 1940 (the ‘‘Advisers Act’’), serve as investment adviser to the VK Trust and the MS Trust, respectively. The VK Distributor, a broker-dealer registered under the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’), distributes the VK Trust’s shares and serves as the VK Trust’s administrator. The MS Distributor, a broker-dealer registered under the Exchange Act, distributes the MS Trust’s shares. The VK Adviser, the VK Distributor, the MS Adviser and the MS Distributor are all direct or indirect wholly-owned subsidiaries of Morgan Stanley. Applicants request that any relief granted also apply to any registered closed-end management investment company that operates as an interval fund pursuant to rule 23c–3 for which the VK Adviser, the VK Distributor, the MS Adviser, the MS Distributor or any entity controlling, controlled by or under common control (within the meaning of section 2(a)(9) of the Act) with the VK Adviser, the VK Distributor, the MS Adviser or the MS Distributor acts as investment adviser, principal underwriter or administrator (collectively, the ‘‘Other Trusts’’).1 2. The VK Trust’s investment objective is to provide a high level of current income, consistent with the preservation of capital. The VK Trust invests primarily in adjustable rate senior loans made to corporations and other borrowers. Under normal market conditions, the VK Trust invests at least 80% of its net assets (plus any borrowings for investment purposes) in adjustable rate senior loans. The VK Trust may also invest up to 20% of its total assets in senior loans that are not secured by any specific collateral, senior loans made to borrowers located outside the U.S. (provided no more than 5% of these loans or other assets are non-U.S. dollar denominated), and in any combination of warrants and equity securities incidental to investment in senior loans, junior debt securities, high quality short-term debt securities, credit-linked deposits and Treasury Inflation Protected Securities (or other inflation-indexed bonds issued by the U.S. government, its agencies or instrumentalities). 3. The MS Trust’s investment objective is to provide a high level of current income, consistent with the preservation of capital. The MS Trust 1 All entities currently intending to rely on the requested relief have been named as applicants. Any entity that relies on the requested order in the future will do so only in accordance with the terms and conditions of the application. E:\FR\FM\18MYN1.SGM 18MYN1 Federal Register / Vol. 71, No. 96 / Thursday, May 18, 2006 / Notices wwhite on PROD1PC61 with NOTICES invests primarily in collateralized senior loans made to corporations, partnerships or other entities. Under normal market conditions, the MS Trust invests at least 80% of its total assets in collateralized senior loans. The MS Trust may also invest up to 20% of its total assets in cash or short-term high quality money market instruments, credit-linked deposits, junior debt securities or securities with a lien on collateral that is lower than a senior claim on collateral, and in loans that hold the most senior position in a borrower’s capital structure, but are unsecured. 4. The VK Trust continuously offers three classes of shares to the public at net asset value. The VK Trust currently operates as an ‘‘interval fund’’ pursuant to rule 23c–3 under the Act, and makes quarterly tender offers to repurchase its shares.2 The MS Trust continuously offers one class of shares to the public at net asset value, but it intends to add multiple classes of shares. The MS Trust also intends to operate as an ‘‘interval fund’’ pursuant to rule 23c–3 under the Act, and make quarterly tender offers to repurchase its shares.3 Applicants request an order to permit each of the VK Trust and the MS Trust (and any Other Trust) to offer to repurchase a portion of its common shares at one– month intervals, rather than the three, six, or twelve–month intervals specified by rule 23c–3. Shares of the VK Trust and the MS Trust are offered with initial or deferred sales charges and certain classes of the VK Trust’s shares also carry asset-based distribution and service fees.4 The Trusts or any Other Trust may in the future offer additional 2 From its inception in 1989 until February 2005, the VK Trust considered each quarter to offer to repurchase a portion of its outstanding shares at their then-current net asset value pursuant to rule 13e–4 of the Exchange Act. In February 2005, the VK Trust began operating as an interval fund making quarterly repurchases pursuant to Rule 23c–3. 3 From its inception in 1989, the MS Trust has considered each quarter to offer to repurchase a portion of its outstanding shares at their thencurrent net asset value pursuant to rule 13e–4 of the Exchange Act. The MS Trust is currently in the process of converting to an interval fund making quarterly repurchases pursuant to Rule 23c–3. 4 The VK Trust currently offers Class A, B and C shares. (The VK Trust also has IB shares and IC shares which are not continuously offered.) Each class of continuously offered shares is subject to annual asset-based distribution and service fees. Class B and C shares are subject to early withdrawal charges (‘‘EWCs’’). The MS Trust’s single class of shares is not subject to any annual asset-based distribution and service fees, but is subject to an EWC. The applicants previously obtained exemptive relief from the Commission as it relates to the imposition of EWCs. See In the Matter of Van Kampen Investment Advisory Corp., et al., Investment Company Act Rel. Nos. 25924 (February 3, 2003) (notice) and 25951 (March 3, 2003) (order). VerDate Aug<31>2005 17:06 May 17, 2006 Jkt 208001 classes of common shares with a frontend sales charge, an EWC and/or assetbased distribution or service fees. The Trusts’ common shares are not offered or traded in the secondary market and are not listed on any exchange or quoted on any quotation medium. 5. Each of the Trusts and any Other Trust will disclose in its prospectus and annual reports its fundamental policy to make monthly offers to repurchase a portion of its common shares at net asset value, less deduction of a repurchase fee, if any, as permitted by rule 23c–3(b)(1), and the imposition of EWCs as permitted pursuant to exemptive relief previously granted by the Commission. The fundamental policy will be changeable only by a majority vote of the holders of such trust’s outstanding voting securities. Under the fundamental policy, the repurchase offer amount will be determined by the board of trustees of the relevant Trust or Other Trust (‘‘Board’’) prior to each repurchase offer. The Trusts and any Other Trust will comply with rule 23c–3(b)(8)’s requirements with respect to its trustees who are not interested persons of the VK Trust, the MS Trust or Other Trust, as applicable, within the meaning of section 2(a)(19) of the Act (‘‘Disinterested Trustees’’) and their legal counsel. Under its fundamental policy, each Trust and Other Trust will make monthly offers to repurchase not less than 5% of its outstanding shares at the time of the repurchase request deadline. The repurchase offer amounts for the then-current monthly period, plus the repurchase offer amounts for the two monthly periods immediately preceding the then-current monthly period, will not exceed 25% of the outstanding common shares of the relevant Trust or Other Trust. 6. The prospectus of each Trust and Other Trust will state the means to determine the repurchase request deadline and the maximum number of days between each repurchase request deadline and the repurchase pricing date. Each Trust’s or Other Trust’s repurchase pricing date normally will be the same date as the repurchase request deadline and pricing will be determined after close of business on that date. 7. Pursuant to rule 23c–3(b)(1), each Trust and any Other Trust will repurchase shares for cash on or before the repurchase payment deadline, which will be no later than seven calendar days after the repurchase pricing date. Each Trust and Other Trust currently intends to make payment by the third business day following the repurchase pricing date. Each Trust and PO 00000 Frm 00042 Fmt 4703 Sfmt 4703 28891 Other Trust will make payment for shares repurchased in the previous month’s repurchase offer at least five business days before sending notification of the next repurchase offer. The VK Trust has not and currently does not intend to deduct any repurchase fees from the repurchase proceeds payable to tendering shareholders, but the Trusts and Other Trusts reserve the right to do so in compliance with rule 23c–3(b)(1). 8. Each Trust and Other Trust will provide common shareholders with notification of each repurchase offer no less than seven days and no more than fourteen days prior to the repurchase request deadline. The notification will include all information required by rule 23c–3(b)(4)(i). Each Trust and Other Trust will file the notification and the Form N–23c–3 with the Commission within three business days after sending the notification to its respective common shareholders. 9. Each Trust and Other Trust will not suspend or postpone a repurchase offer except pursuant to the vote of a majority of its Disinterested Trustees, and only under the limited circumstances specified in rule 23c–3(b)(3)(i). The Trusts and any Other Trust will not condition a repurchase offer upon tender of any minimum amount of shares. In addition, each of the Trusts and any Other Trust will comply with the pro ration and other allocation requirements of rule 23c–3(b)(5) if common shareholders tender more than the repurchase offer amount. Further, each Trust and any Other Trust will permit tenders to be withdrawn or modified at any time until the repurchase request deadline, but will not permit tenders to be withdrawn or modified thereafter. 10. From the time a Trust or any Other Trust sends its notification to shareholders of the repurchase offer until the repurchase pricing date, a percentage of such trust’s assets equal to at least 100% of the repurchase offer amount will consist of: (a) Assets that can be sold or disposed of in the ordinary course of business at approximately the price at which such trust has valued such investment within a period equal to the period between the repurchase request deadline and the repurchase payment deadline; or (b) assets that mature by the next repurchase payment deadline. In the event the assets of a Trust or Other Trust fail to comply with this requirement, the Board will cause such trust to take such action as it deems appropriate to ensure compliance. 11. In compliance with the asset coverage requirements of section 18 of E:\FR\FM\18MYN1.SGM 18MYN1 28892 Federal Register / Vol. 71, No. 96 / Thursday, May 18, 2006 / Notices wwhite on PROD1PC61 with NOTICES the Act, any senior security issued by, or other indebtedness of, each of the Trusts and any Other Trust will either mature by the next repurchase pricing date or provide for such trust’s ability to call, repay or redeem such senior security or other indebtedness by the next repurchase pricing date, either in whole or in part, without penalty or premium, as necessary to permit that trust to complete the repurchase offer in such amounts determined by its Board. 12. The Board of each Trust and any Other Trust will adopt written procedures to ensure that such trust’s portfolio assets are sufficiently liquid so that it can comply with its fundamental policy on repurchases and the liquidity requirements of rule 23c–3(b)(10)(i). The Board will review the overall composition of the portfolio and make and approve such changes to the procedures as it deems necessary. Applicants’ Legal Analysis 1. 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 rule thereunder, if and to the extent that 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. 2. Section 23(c) of the Act provides in relevant part that no registered closedend investment company shall purchase any securities of any class of which it is the issuer except: (a) On a securities exchange or other open market; (b) pursuant to tenders, after reasonable opportunity to submit tenders given to all holders of securities of the class to be purchased; or (c) under such other circumstances as the Commission may permit by rules and regulations or orders for the protection of investors. 3. Rule 23c–3 under the Act permits a registered closed-end investment company to make repurchase offers for its common stock at net asset value at periodic intervals pursuant to a fundamental policy of the investment company. ‘‘Periodic interval’’ is defined in rule 23c–3(a)(1) as an interval of three, six, or twelve months. Rule 23c– 3(b)(4) requires that notification of each repurchase offer be sent to shareholders no less than 21 calendar days and no more than 42 calendar days before the repurchase request deadline. 4. Applicants request an order pursuant to sections 6(c) and 23(c) of the Act exempting them from rule 23c– 3(a)(1) to the extent necessary to permit the Trusts and any Other Trust to make VerDate Aug<31>2005 17:06 May 17, 2006 Jkt 208001 monthly repurchase offers. Applicants also request an exemption from the notice provisions of rule 23c–3(b)(4) to the extent necessary to permit the Trusts and any Other Trust to send notification of an upcoming repurchase offer to shareholders at least seven days but no more than fourteen calendar days in advance of the repurchase request deadline. 5. Applicants contend that monthly repurchase offers are in the shareholders’ best interests and consistent with the policies underlying rule 23c–3. Applicants assert that monthly repurchase offers will provide investors with more liquidity than quarterly repurchase offers. Applicants assert that shareholders will be better able to manage their investments and plan transactions, because if they decide to forego a repurchase offer, they will only need to wait one month for the next offer. Applicants also contend that the portfolios of the Trusts and any Other Trust will be managed to provide ample liquidity for monthly repurchase offers. Applicants do not believe that a change to monthly repurchases would necessitate any change in portfolio management practices of the Trusts or any Other Trust in order to satisfy rule 23c–3. In fact, applicants expect limited or no impact on overall portfolio management or performance of such trusts upon converting to monthly offers and believe that it may be easier to manage the cash of the portfolio for the smaller monthly offers compared to the larger quarterly ones. 6. Applicants propose to send notification to shareholders at least seven days, but no more than fourteen calendar days, in advance of a repurchase request deadline. Applicants assert that, because the Trusts and any Other Trust intend to price on the repurchase request deadline and pay by the third business day following the pricing date, the entire procedure can be completed before the next notification is sent out to shareholders; thus avoiding any overlap. Applicants believe that these procedures will eliminate any possibility of investor confusion. Applicants also state that monthly repurchase offers will be a fundamental feature of the Trusts and any Other Trust, and their prospectuses will provide a clear explanation of the repurchase program. 7. Applicants submit that for the reasons given above the requested relief is appropriate in the public interest and is consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. PO 00000 Frm 00043 Fmt 4703 Sfmt 4703 Applicants’ Conditions Applicants agree that any order granting the requested relief shall be subject to the following conditions: 1. Each Trust (and any Other Trust relying on this relief) will make a repurchase offer pursuant to rule 23c– 3(b) for a repurchase offer amount of not less than 5% in any one-month period. In addition, the repurchase offer amount for the then-current monthly period, plus the repurchase offer amounts for the two monthly periods immediately preceding the then-current monthly period, will not exceed 25% of the Trust’s (or Other Trust’s) outstanding shares. Each Trust (or Other Trust relying on this relief) may repurchase additional tendered shares pursuant to rule 23c–3(b)(5) only to the extent the percentage of additional shares so repurchased does not exceed 2% in any three-month period. 2. Payment for repurchased shares will occur at least five business days before notification of the next repurchase offer is sent to shareholders of any Trust (or Other Trust relying on this relief). For the Commission, by the Division of Investment Management, under delegated authority. J. Lynn Taylor, Assistant Secretary. [FR Doc. E6–7567 Filed 5–17–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meetings Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold the following meetings during the week of May 22, 2006: An Open Meeting will be held on Monday, May 22, 2006 at 10 a.m. in the Auditorium, Room LL–002 and Closed Meetings will be held on Monday, May 22, 2006 at 11 a.m. and on Thursday, May 25, 2006 at 2 p.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the Closed Meetings. Certain staff members who have an interest in the matters may also be present. The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (7), (8), (9)(B), (10) and 17 CFR 200.402(a)(3), (5), (7), (8), (9)(ii), and (10) permit consideration of E:\FR\FM\18MYN1.SGM 18MYN1

Agencies

[Federal Register Volume 71, Number 96 (Thursday, May 18, 2006)]
[Notices]
[Pages 28890-28892]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-7567]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 27317; 812-13156]


Van Kampen Asset Management, et al.; Notice of Application

May 12, 2006.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order under sections 6(c) and 
23(c)(3) of the Investment Company Act of 1940 (the ``Act'') for an 
exemption from rule 23c-3 under the Act.

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Applicants: Van Kampen Asset Management (the ``VK Adviser''), Van 
Kampen Funds Inc. (the ``VK Distributor''), Van Kampen Senior Loan Fund 
(formerly known as Van Kampen Prime Rate Income Trust) (the ``VK 
Trust''), Morgan Stanley Investment Advisors Inc. (the ``MS Adviser''), 
Morgan Stanley Distributors Inc. (the ``MS Distributor'') and Morgan 
Stanley Prime Income Trust (the ``MS Trust'', and, together with the VK 
Trust, the ``Trusts'').

Summary of Application: Applicants request an order under sections 6(c) 
and 23(c)(3) of the Act for an exemption from certain provisions of 
rule 23c-3 to permit certain registered closed-end investment companies 
to make repurchase offers on a monthly basis.

Filing Dates: The application was filed on January 25, 2005 and amended 
on December 29, 2005 and May 5, 2006.

Hearing or Notification of Hearing: An order granting the application 
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 June 6, 2006, and should be accompanied by proof of service on 
the 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 Charles B. 
Taylor, Esq., Skadden, Arps, Slate, Meagher & Flom LLP, 333 West Wacker 
Drive, Chicago, Illinois 60606.

FOR FURTHER INFORMATION CONTACT: Shannon Conaty, Senior Counsel, at 
(202) 551-6827, 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 Branch, 100 F Street, NE., Washington, DC 
20549-0102 (tel. (202) 551-8090).

Applicants' Representations

    1. Each of the Trusts is a closed-end management investment company 
registered under the Act and organized as a Massachusetts business 
trust. The VK Adviser and the MS Adviser, both investment advisers 
registered under the Investment Advisers Act of 1940 (the ``Advisers 
Act''), serve as investment adviser to the VK Trust and the MS Trust, 
respectively. The VK Distributor, a broker-dealer registered under the 
Securities Exchange Act of 1934 (the ``Exchange Act''), distributes the 
VK Trust's shares and serves as the VK Trust's administrator. The MS 
Distributor, a broker-dealer registered under the Exchange Act, 
distributes the MS Trust's shares. The VK Adviser, the VK Distributor, 
the MS Adviser and the MS Distributor are all direct or indirect 
wholly-owned subsidiaries of Morgan Stanley. Applicants request that 
any relief granted also apply to any registered closed-end management 
investment company that operates as an interval fund pursuant to rule 
23c-3 for which the VK Adviser, the VK Distributor, the MS Adviser, the 
MS Distributor or any entity controlling, controlled by or under common 
control (within the meaning of section 2(a)(9) of the Act) with the VK 
Adviser, the VK Distributor, the MS Adviser or the MS Distributor acts 
as investment adviser, principal underwriter or administrator 
(collectively, the ``Other Trusts'').\1\
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    \1\ All entities currently intending to rely on the requested 
relief have been named as applicants. Any entity that relies on the 
requested order in the future will do so only in accordance with the 
terms and conditions of the application.
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    2. The VK Trust's investment objective is to provide a high level 
of current income, consistent with the preservation of capital. The VK 
Trust invests primarily in adjustable rate senior loans made to 
corporations and other borrowers. Under normal market conditions, the 
VK Trust invests at least 80% of its net assets (plus any borrowings 
for investment purposes) in adjustable rate senior loans. The VK Trust 
may also invest up to 20% of its total assets in senior loans that are 
not secured by any specific collateral, senior loans made to borrowers 
located outside the U.S. (provided no more than 5% of these loans or 
other assets are non-U.S. dollar denominated), and in any combination 
of warrants and equity securities incidental to investment in senior 
loans, junior debt securities, high quality short-term debt securities, 
credit-linked deposits and Treasury Inflation Protected Securities (or 
other inflation-indexed bonds issued by the U.S. government, its 
agencies or instrumentalities).
    3. The MS Trust's investment objective is to provide a high level 
of current income, consistent with the preservation of capital. The MS 
Trust

[[Page 28891]]

invests primarily in collateralized senior loans made to corporations, 
partnerships or other entities. Under normal market conditions, the MS 
Trust invests at least 80% of its total assets in collateralized senior 
loans. The MS Trust may also invest up to 20% of its total assets in 
cash or short-term high quality money market instruments, credit-linked 
deposits, junior debt securities or securities with a lien on 
collateral that is lower than a senior claim on collateral, and in 
loans that hold the most senior position in a borrower's capital 
structure, but are unsecured.
    4. The VK Trust continuously offers three classes of shares to the 
public at net asset value. The VK Trust currently operates as an 
``interval fund'' pursuant to rule 23c-3 under the Act, and makes 
quarterly tender offers to repurchase its shares.\2\ The MS Trust 
continuously offers one class of shares to the public at net asset 
value, but it intends to add multiple classes of shares. The MS Trust 
also intends to operate as an ``interval fund'' pursuant to rule 23c-3 
under the Act, and make quarterly tender offers to repurchase its 
shares.\3\ Applicants request an order to permit each of the VK Trust 
and the MS Trust (and any Other Trust) to offer to repurchase a portion 
of its common shares at one-month intervals, rather than the three, 
six, or twelve-month intervals specified by rule 23c-3. Shares of the 
VK Trust and the MS Trust are offered with initial or deferred sales 
charges and certain classes of the VK Trust's shares also carry asset-
based distribution and service fees.\4\ The Trusts or any Other Trust 
may in the future offer additional classes of common shares with a 
front-end sales charge, an EWC and/or asset-based distribution or 
service fees. The Trusts' common shares are not offered or traded in 
the secondary market and are not listed on any exchange or quoted on 
any quotation medium.
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    \2\ From its inception in 1989 until February 2005, the VK Trust 
considered each quarter to offer to repurchase a portion of its 
outstanding shares at their then-current net asset value pursuant to 
rule 13e-4 of the Exchange Act. In February 2005, the VK Trust began 
operating as an interval fund making quarterly repurchases pursuant 
to Rule 23c-3.
    \3\ From its inception in 1989, the MS Trust has considered each 
quarter to offer to repurchase a portion of its outstanding shares 
at their then-current net asset value pursuant to rule 13e-4 of the 
Exchange Act. The MS Trust is currently in the process of converting 
to an interval fund making quarterly repurchases pursuant to Rule 
23c-3.
    \4\ The VK Trust currently offers Class A, B and C shares. (The 
VK Trust also has IB shares and IC shares which are not continuously 
offered.) Each class of continuously offered shares is subject to 
annual asset-based distribution and service fees. Class B and C 
shares are subject to early withdrawal charges (``EWCs''). The MS 
Trust's single class of shares is not subject to any annual asset-
based distribution and service fees, but is subject to an EWC. The 
applicants previously obtained exemptive relief from the Commission 
as it relates to the imposition of EWCs. See In the Matter of Van 
Kampen Investment Advisory Corp., et al., Investment Company Act 
Rel. Nos. 25924 (February 3, 2003) (notice) and 25951 (March 3, 
2003) (order).
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    5. Each of the Trusts and any Other Trust will disclose in its 
prospectus and annual reports its fundamental policy to make monthly 
offers to repurchase a portion of its common shares at net asset value, 
less deduction of a repurchase fee, if any, as permitted by rule 23c-
3(b)(1), and the imposition of EWCs as permitted pursuant to exemptive 
relief previously granted by the Commission. The fundamental policy 
will be changeable only by a majority vote of the holders of such 
trust's outstanding voting securities. Under the fundamental policy, 
the repurchase offer amount will be determined by the board of trustees 
of the relevant Trust or Other Trust (``Board'') prior to each 
repurchase offer. The Trusts and any Other Trust will comply with rule 
23c-3(b)(8)'s requirements with respect to its trustees who are not 
interested persons of the VK Trust, the MS Trust or Other Trust, as 
applicable, within the meaning of section 2(a)(19) of the Act 
(``Disinterested Trustees'') and their legal counsel. Under its 
fundamental policy, each Trust and Other Trust will make monthly offers 
to repurchase not less than 5% of its outstanding shares at the time of 
the repurchase request deadline. The repurchase offer amounts for the 
then-current monthly period, plus the repurchase offer amounts for the 
two monthly periods immediately preceding the then-current monthly 
period, will not exceed 25% of the outstanding common shares of the 
relevant Trust or Other Trust.
    6. The prospectus of each Trust and Other Trust will state the 
means to determine the repurchase request deadline and the maximum 
number of days between each repurchase request deadline and the 
repurchase pricing date. Each Trust's or Other Trust's repurchase 
pricing date normally will be the same date as the repurchase request 
deadline and pricing will be determined after close of business on that 
date.
    7. Pursuant to rule 23c-3(b)(1), each Trust and any Other Trust 
will repurchase shares for cash on or before the repurchase payment 
deadline, which will be no later than seven calendar days after the 
repurchase pricing date. Each Trust and Other Trust currently intends 
to make payment by the third business day following the repurchase 
pricing date. Each Trust and Other Trust will make payment for shares 
repurchased in the previous month's repurchase offer at least five 
business days before sending notification of the next repurchase offer. 
The VK Trust has not and currently does not intend to deduct any 
repurchase fees from the repurchase proceeds payable to tendering 
shareholders, but the Trusts and Other Trusts reserve the right to do 
so in compliance with rule 23c-3(b)(1).
    8. Each Trust and Other Trust will provide common shareholders with 
notification of each repurchase offer no less than seven days and no 
more than fourteen days prior to the repurchase request deadline. The 
notification will include all information required by rule 23c-
3(b)(4)(i). Each Trust and Other Trust will file the notification and 
the Form N-23c-3 with the Commission within three business days after 
sending the notification to its respective common shareholders.
    9. Each Trust and Other Trust will not suspend or postpone a 
repurchase offer except pursuant to the vote of a majority of its 
Disinterested Trustees, and only under the limited circumstances 
specified in rule 23c-3(b)(3)(i). The Trusts and any Other Trust will 
not condition a repurchase offer upon tender of any minimum amount of 
shares. In addition, each of the Trusts and any Other Trust will comply 
with the pro ration and other allocation requirements of rule 23c-
3(b)(5) if common shareholders tender more than the repurchase offer 
amount. Further, each Trust and any Other Trust will permit tenders to 
be withdrawn or modified at any time until the repurchase request 
deadline, but will not permit tenders to be withdrawn or modified 
thereafter.
    10. From the time a Trust or any Other Trust sends its notification 
to shareholders of the repurchase offer until the repurchase pricing 
date, a percentage of such trust's assets equal to at least 100% of the 
repurchase offer amount will consist of: (a) Assets that can be sold or 
disposed of in the ordinary course of business at approximately the 
price at which such trust has valued such investment within a period 
equal to the period between the repurchase request deadline and the 
repurchase payment deadline; or (b) assets that mature by the next 
repurchase payment deadline. In the event the assets of a Trust or 
Other Trust fail to comply with this requirement, the Board will cause 
such trust to take such action as it deems appropriate to ensure 
compliance.
    11. In compliance with the asset coverage requirements of section 
18 of

[[Page 28892]]

the Act, any senior security issued by, or other indebtedness of, each 
of the Trusts and any Other Trust will either mature by the next 
repurchase pricing date or provide for such trust's ability to call, 
repay or redeem such senior security or other indebtedness by the next 
repurchase pricing date, either in whole or in part, without penalty or 
premium, as necessary to permit that trust to complete the repurchase 
offer in such amounts determined by its Board.
    12. The Board of each Trust and any Other Trust will adopt written 
procedures to ensure that such trust's portfolio assets are 
sufficiently liquid so that it can comply with its fundamental policy 
on repurchases and the liquidity requirements of rule 23c-3(b)(10)(i). 
The Board will review the overall composition of the portfolio and make 
and approve such changes to the procedures as it deems necessary.

Applicants' Legal Analysis

    1. 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 
rule thereunder, if and to the extent that 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.
    2. Section 23(c) of the Act provides in relevant part that no 
registered closed-end investment company shall purchase any securities 
of any class of which it is the issuer except: (a) On a securities 
exchange or other open market; (b) pursuant to tenders, after 
reasonable opportunity to submit tenders given to all holders of 
securities of the class to be purchased; or (c) under such other 
circumstances as the Commission may permit by rules and regulations or 
orders for the protection of investors.
    3. Rule 23c-3 under the Act permits a registered closed-end 
investment company to make repurchase offers for its common stock at 
net asset value at periodic intervals pursuant to a fundamental policy 
of the investment company. ``Periodic interval'' is defined in rule 
23c-3(a)(1) as an interval of three, six, or twelve months. Rule 23c-
3(b)(4) requires that notification of each repurchase offer be sent to 
shareholders no less than 21 calendar days and no more than 42 calendar 
days before the repurchase request deadline.
    4. Applicants request an order pursuant to sections 6(c) and 23(c) 
of the Act exempting them from rule 23c-3(a)(1) to the extent necessary 
to permit the Trusts and any Other Trust to make monthly repurchase 
offers. Applicants also request an exemption from the notice provisions 
of rule 23c-3(b)(4) to the extent necessary to permit the Trusts and 
any Other Trust to send notification of an upcoming repurchase offer to 
shareholders at least seven days but no more than fourteen calendar 
days in advance of the repurchase request deadline.
    5. Applicants contend that monthly repurchase offers are in the 
shareholders' best interests and consistent with the policies 
underlying rule 23c-3. Applicants assert that monthly repurchase offers 
will provide investors with more liquidity than quarterly repurchase 
offers. Applicants assert that shareholders will be better able to 
manage their investments and plan transactions, because if they decide 
to forego a repurchase offer, they will only need to wait one month for 
the next offer. Applicants also contend that the portfolios of the 
Trusts and any Other Trust will be managed to provide ample liquidity 
for monthly repurchase offers. Applicants do not believe that a change 
to monthly repurchases would necessitate any change in portfolio 
management practices of the Trusts or any Other Trust in order to 
satisfy rule 23c-3. In fact, applicants expect limited or no impact on 
overall portfolio management or performance of such trusts upon 
converting to monthly offers and believe that it may be easier to 
manage the cash of the portfolio for the smaller monthly offers 
compared to the larger quarterly ones.
    6. Applicants propose to send notification to shareholders at least 
seven days, but no more than fourteen calendar days, in advance of a 
repurchase request deadline. Applicants assert that, because the Trusts 
and any Other Trust intend to price on the repurchase request deadline 
and pay by the third business day following the pricing date, the 
entire procedure can be completed before the next notification is sent 
out to shareholders; thus avoiding any overlap. Applicants believe that 
these procedures will eliminate any possibility of investor confusion. 
Applicants also state that monthly repurchase offers will be a 
fundamental feature of the Trusts and any Other Trust, and their 
prospectuses will provide a clear explanation of the repurchase 
program.
    7. Applicants submit that for the reasons given above the requested 
relief is appropriate in the public interest and is consistent with the 
protection of investors and the purposes fairly intended by the policy 
and provisions of the Act.

Applicants' Conditions

    Applicants agree that any order granting the requested relief shall 
be subject to the following conditions:
    1. Each Trust (and any Other Trust relying on this relief) will 
make a repurchase offer pursuant to rule 23c-3(b) for a repurchase 
offer amount of not less than 5% in any one-month period. In addition, 
the repurchase offer amount for the then-current monthly period, plus 
the repurchase offer amounts for the two monthly periods immediately 
preceding the then-current monthly period, will not exceed 25% of the 
Trust's (or Other Trust's) outstanding shares. Each Trust (or Other 
Trust relying on this relief) may repurchase additional tendered shares 
pursuant to rule 23c-3(b)(5) only to the extent the percentage of 
additional shares so repurchased does not exceed 2% in any three-month 
period.
    2. Payment for repurchased shares will occur at least five business 
days before notification of the next repurchase offer is sent to 
shareholders of any Trust (or Other Trust relying on this relief).

    For the Commission, by the Division of Investment Management, 
under delegated authority.
J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E6-7567 Filed 5-17-06; 8:45 am]
BILLING CODE 8010-01-P