AXA Equitable Life Insurance Company, et al.; Notice of Application, 63360-63366 [E6-18143]
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Federal Register / Vol. 71, No. 209 / Monday, October 30, 2006 / Notices
2006, at the Westin Embassy Row Hotel,
Massachusetts Avenue, NW.,
Washington, DC. The conference will
begin at 6 p.m. on Thursday, November
30 and conclude at 5:30 p.m. on Friday,
December 1. The specific objectives of
the Leadership Conference are: (1) To
enhance awareness of the contribution
substance abuse screening and brief
intervention programs can make to
public health in the United States; (2)
To identify best practices to cope with
emerging patterns of drug-specific
abuse; (3) To receive reports on
improvements in medical education in
drug and alcohol-related disorders; and
(4) To encourage the development of
medical education curricula on alcohol
and other drug related disorders.
Members of the public who wish to
attend the meeting should telephone
ONDCP’s Leadership Conference on
Medical Education telephone line at
(202) 395–6750 to arrange building
access.
FOR FURTHER INFORMATION CONTACT:
´
Martha Gagnea at (202) 395–6750.
Dated: October 24, 2006.
Linda V. Priebe,
Assistant General Counsel.
[FR Doc. E6–18089 Filed 10–27–06; 8:45 am]
BILLING CODE 3180–02–P
SECURITIES AND EXCHANGE
COMMISSION
Submissions for OMB Review;
Comment Request
Upon written request; copies available
from: Securities and Exchange
Commission, Office of Filings and
Information Services, Washington, DC
20549.
sroberts on PROD1PC70 with NOTICES
Extensions:
Form T–1, OMB Control No. 3235–0110,
SEC File No. 270–121.
Form T–2, OMB Control No. 3235–0111,
SEC File No. 270–122.
Form T–3, OMB Control No. 3235–0105,
SEC File No. 270–123.
Form T–4, OMB Control No. 3235–0107,
SEC File No. 270–124.
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.) the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget these
requests for extension of the previously
approved collections of information
discussed below.
Form T–1 (17 CFR 269.1) is a
statement of eligibility and qualification
under the Trust Indenture Act of 1939
(15 U.S.C. 77aaa et seq.) of a corporation
designated to act as a trustee. The
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information is used to determine
whether the trustee is qualified to serve
under the indenture. Form T–1 is filed
on occasion. The information required
by Form T–1 is mandatory. This
information is publicly available on
EDGAR. Form T–1 takes approximately
15 hours per response to prepare and is
filed by 13 respondents. We estimate
that 25% of the 15 hours per response
(4 hours) is prepared by the company
for a total annual reporting burden of 52
hours (4 hours per response × 13
responses). The remaining 75% of the
burden hours is attributed to outside
cost.
Form T–2 (17 CFR 269.2) is a
statement of eligibility of an individual
trustee to serve under an indenture
relating to debt securities offered
publicly. The information is used to
determine whether the trustee is
qualified to serve under the indenture.
Form T–2 is filed on occasion. The
information required by Form T–2 is
mandatory. This information is publicly
available on EDGAR. Form T–2 takes
approximately 9 hours per response to
prepare and is filed by 36 respondents.
We estimate that 25% of the 9 hours per
response (2 hours) is prepared by the
filer for a total annual reporting burden
of 72 hours (2 hours per response × 36
responses). The remaining 75% of the
burden hours is attributed to outside
cost.
Form T–3 (17 CFR 269.3) is an
application for qualification of an
indenture under the Trust Indenture Act
of 1939 (15 U.S.C. 77aaa et seq.). The
information provided by Form T–3 is
used by the staff to decide whether to
qualify an indenture relating to
securities offered to the public in an
offering registered under the Securities
Act of 1933 (15 U.S.C. 77a et seq.). Form
T–3 is filed on occasion. The
information required by Form T–3 is
mandatory. This information is publicly
available on EDGAR. Form T–3 takes
approximately 43 hours per response to
prepare and is filed by 78 respondents.
We estimate that 25% of the 43 hours
per response (11 hours) is prepared by
the filer for a total annual reporting
burden of 858 hours (11 hours per
response × 78 responses). The remaining
75% of the burden hours is attributed to
outside cost.
Form T–4 (17 CFR 269.4) is used to
apply for an exemption pursuant to
Section 304(c) (15 U.S.C. 77ddd(c)) of
the Trust Indenture Act of 1939 (15
U.S.C. 77aaa et seq.) and is transmitted
to shareholders. Form T–4 is filed on
occasion. The information required by
Form T–4 is mandatory. This
information is publicly available on
EDGAR. Form T–4 takes approximately
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5 hours per response to prepare and is
filed by 3 respondents. We estimate that
25% of the 5 hours per response (1
hour) is prepared by the filer for a total
annual reporting burden of 3 hours (1
hour per response × 3 responses). The
remaining 75% of the burden hours is
attributed to outside cost.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
control number.
Written comments regarding the
above information should be directed to
the following persons: (i) Desk Officer
for the Securities and Exchange
Commission, Office of Information and
Regulatory Affairs, Office of
Management and Budget, Room 10102,
New Executive Office Building,
Washington, DC 20503 or send an email to David_Rostker@omb.eop.gov;
and (ii) R. Corey Booth, Director/Chief
Information Officer, Securities and
Exchange Commission, C/O Shirley
Martinson 6432 General Green Way,
Alexandria, Virginia 22312; or send an
e-mail to: PRA_Mailbox@sec.gov.
Comments must be submitted to OMB
within 30 days of this notice.
Dated: October 23, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6–18141 Filed 10–27–06; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. IC–27526; File No. 812–13316]
AXA Equitable Life Insurance
Company, et al.; Notice of Application
October 24, 2006.
Securities and Exchange
Commission (SEC).
ACTION: Notice of application for an
order pursuant to Section 26(c) of the
Investment Company Act of 1940
(‘‘1940 Act’’ or ‘‘Act’’), approving
certain substitutions of securities and
for an order of exemption pursuant to
Section 17(b) of the Act.
AGENCY:
Applicants: AXA Equitable Life
Insurance Company (‘‘AXA Equitable’’),
Separate Account A of AXA Equitable
(‘‘Separate Account A’’), Separate
Account FP of AXA Equitable
(‘‘Separate Account FP’’) and Separate
Account No. 49 of AXA Equitable
(‘‘Separate Account 49’’) (collectively,
the ‘‘Section 26 Applicants’’); and AXA
Equitable, Separate Account A, Separate
Account FP, Separate Account 49,
Separate Account No. 65 of AXA
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Federal Register / Vol. 71, No. 209 / Monday, October 30, 2006 / Notices
Equitable (‘‘Separate Account 65’’) and
the EQ Advisors Trust (the ‘‘Trust’’)
(collectively, the ‘‘Section 17
Applicants,’’ together with the Section
26 Applicants, the ‘‘Applicants’’).
Summary of Application: The Section
26 Applicants request an order pursuant
to Section 26(c) of the 1940 Act,
approving the proposed substitution of
shares of a series of EQ Advisors Trust
(the ‘‘Trust’’) for shares of a comparable
series of an unaffiliated registered
investment company (the
‘‘Substitution’’), which is currently used
as an underlying investment option for
certain variable annuity contracts and/
or variable life insurance policies issued
by AXA Equitable (‘‘Contracts’’), as
more fully described below. The Section
17 Applicants also request an order
pursuant to Section 17(b) of the 1940
Act exempting them from Section 17(a)
of the 1940 Act to the extent necessary
to permit in-kind redemptions of
securities issued by the Removed
Portfolio (as defined herein) and
purchases of securities issued by the
Replacement Portfolio (as defined
herein) (the ‘‘In-Kind Transactions’’) in
connection with the Substitution.
Filing Date: The application was filed
on July 21, 2006, and amended on
October 23, 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 Secretary of
the Commission 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 November 16, 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 requester’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 Secretary of the
Commission.
ADDRESSES: Secretary, Securities and
Exchange Commission, 100 F Street,
NE., Washington, DC 20549–1090.
Applicants, c/o AXA Equitable Life
Insurance Company, 1290 Avenue of the
Americas, New York, NY 10104, Attn:
Steven M. Joenk, Senior Vice President.
FOR FURTHER INFORMATION CONTACT:
Sonny Oh, Staff Attorney, or Zandra
Bailes, Branch Chief, Office of Insurance
Products, Division of Investment
Management at (202) 551–6795.
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
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may be obtained for a fee from the SEC’s
Public Reference Branch, 100 F Street,
NE., Room 1580, Washington, DC 20549
(tel. (202) 551–8090).
Applicants’ Representations
1. AXA Equitable is a New York stock
life insurance company that has been in
business since 1859. AXA Equitable is
authorized to sell life insurance and
annuities in all fifty states, the District
of Columbia, Puerto Rico and the Virgin
Islands. AXA Equitable is an investment
adviser registered under the Investment
Advisers Act of 1940, as amended, and
is a wholly owned subsidiary of AXA
Financial, Inc. (‘‘AXA Financial’’).
Majority-owned publicly traded
subsidiaries of AXA Financial currently
include AllianceBernstein, L.P. AXA
Financial, a holding company, is an
indirect, wholly owned subsidiary of
AXA. AXA is a French holding
company for an international group of
insurance and related financial services
companies and is publicly traded.
2. AXA Equitable serves as sponsor
and depositor for Separate Account A,
Separate Account FP, Separate Account
49 and Separate Account 65 (sometimes
referred to herein collectively as the
‘‘Separate Accounts’’ and individually
as a ‘‘Separate Account’’). Separate
Account A was established in 1968
pursuant to authority granted by AXA
Equitable’s Board of Directors and funds
certain variable annuity contracts.
Separate Account FP was established in
1995 pursuant to authority granted by
the Board of Directors of AXA Equitable
in connection with the merger of
Equitable Variable Life Insurance
Company with and into AXA Equitable
and funds certain variable life insurance
policies. Separate Account 49 was
established in 1996 pursuant to
authority granted by AXA Equitable’s
Board of Directors and funds certain
variable annuity contracts. Separate
Account 65 was established in 1996
pursuant to authority granted by AXA
Equitable’s Board of Directors and funds
group pension and profit-sharing plans
under group annuity contracts issued by
AXA Equitable.
3. Each Separate Account is a
segregated asset account of AXA
Equitable. Each Separate Account, with
the exception of Separate Account 65, is
registered with the Commission as a
unit investment trust under the 1940
Act. Separate Account 65 is excluded
from registration under the 1940 Act
pursuant to Section 3(c)(11) of the 1940
Act. Units of interest in the Separate
Accounts, except for Separate Account
65, under the Contracts are registered
under the Securities Act of 1933, as
amended (‘‘1933 Act’’). Units of interest
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in Separate Account 65 are exempt from
registration under the 1933 Act,
pursuant to Section 3(a)(2) of the 1933
Act. As noted above, the Separate
Accounts fund the respective variable
benefits available under the Contracts
issued by AXA Equitable.
4. That portion of the respective assets
of the Separate Accounts that is equal to
the reserves and other Contract
liabilities with respect to the respective
Separate Accounts is not chargeable
with liabilities arising out of any other
business of AXA Equitable, as the case
may be. In accordance with the
respective Contracts for those Separate
Accounts, any income, gains or losses,
realized or unrealized, from assets
allocated to the respective Separate
Accounts are credited or charged against
the Separate Accounts, without regard
to other income, gains or losses of AXA
Equitable.
5. The Trust is organized as a
Delaware statutory trust. It is registered
as an open-end management investment
company under the 1940 Act, and its
shares are registered under the 1933 Act
on Form N–1A. It commenced
operations on May 1, 1997. The Trust is
a series investment company and
currently offers 63 separate series (each
a ‘‘Portfolio’’ and collectively, the
‘‘Portfolios’’). AXA Equitable currently
serves as investment manager
(‘‘Manager’’) of each of the Portfolios.
The Trust has received an exemptive
order from the Commission (‘‘MultiManager Order’’) that permits the
Manager, or any entity controlling,
controlled by, or under common control
(within the meaning of Section 2(a)(9) of
the 1940 Act) with the Manager, subject
to certain conditions, including
approval of the Board of Trustees of the
Trust, and without the approval of
shareholders to appoint, dismiss, or
replace investment sub-advisers
(‘‘Advisers’’) and to amend Investment
Advisory Agreements (‘‘Advisory
Agreements’’).1 If a new Adviser is
retained for a Portfolio, Contract owners
would receive notice of any such action.
6. The variable annuity Contracts
(‘‘Annuity Contracts’’) subject to the
application include flexible premium
deferred variable annuity contracts and
single premium immediate variable
annuity contracts with a variety of sales
charge structures. Some of the Annuity
Contracts are issued as group contracts
where the owner of the Annuity
Contract is the employer, sponsor or
trustee of a group retirement plan.
1 See EQ Advisors Trust and EQ Financial
Consultants, Inc., 1940 Act Rel. Nos. 23093 (March
30, 1998) (notice) and 23128 (April 24, 1998)
(order).
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Members of the group (‘‘participants’’)
acquire an interest in the Annuity
Contract and have certain rights as
determined by the Annuity Contract
and/or, if applicable, the retirement
plan covering the participants’ interest.
The remaining Annuity Contracts are
issued to or on behalf of individuals. All
Annuity Contracts allow the Contract
owner or, in the case of group Annuity
Contracts, the participants, to allocate
contributions by participants or
premium payments by Contract owners
among the variable and any fixed
investment options available under the
Annuity Contracts where contributions
or premium payments allocated to
variable funding options are held in
corresponding divisions of the
appropriate Separate Accounts.
7. Variable life insurance policies
issued by the Section 26 Applicants
include flexible premium, scheduled
premium and single premium
individual variable life, second to die
and corporate variable life policies.
Insurance charges are deducted on a
monthly basis by redeeming shares of
the underlying investment options if
necessary. Premium payments under
these Contracts accumulate in variable
and any fixed investment options.
Accumulated amounts are used to fund
death benefits, loans, surrenders and
withdrawals payable under these
Contracts.
8. AXA Equitable, on its own behalf
and on behalf of the Separate Accounts,
proposes to exercise its contractual right
to substitute a different eligible
investment fund for one of the current
investment funds offered as a funding
option under the Contracts. In
particular, the Section 26 Applicants
propose to substitute Class IB shares of
the EQ/AXA Rosenberg Value Long
/Short Equity Portfolio (‘‘Replacement
Portfolio’’) for Class 2 shares of Laudus
Variable Insurance Trust—Laudus
Rosenberg VIT Value Long/Short Equity
Fund (‘‘Removed Portfolio’’).
9. The Section 26 Applicants believe
that, as set forth below, the Replacement
Portfolio’s investment objective,
investment policies and principal risks
are substantially identical to those of the
Removed Portfolio and that the essential
objective and risk expectations of
Contract owners and participants can
continue to be met.
Removed portfolio
Replacement portfolio
Laudus Variable Insurance Trust—Laudus Rosenberg VIT Value Long/
Short Equity Fund (Class 2 shares): The Portfolio seeks to increase
value through bull markets and bear markets using strategies that
are designed to limit exposure to general equity market risk. Under
normal circumstances, the Portfolio will invest at least 80% of its net
assets, plus borrowings for investment purposes, in equity securities.
The Portfolio attempts to achieve its objective by taking long positions in stocks of companies in certain capitalization ranges principally traded in U.S. markets that the Adviser has identified as undervalued and short positions in such stocks that the Adviser has
identified as overvalued. The Portfolio will invest primarily in stocks
of small- and mid-capitalization companies, but also may invest in
stocks of large-capitalization companies. The Portfolio also may purchase shares of ETFs to a limited extent and may engage in active
and frequent trading.
EQ/AXA Rosenberg Value Long/Short Equity Portfolio (Class IB
shares): Same.
Principal Risks:
• Adviser Selection Risk
• Asset Class Risk
• Equity Risk
• Large-Cap Company Risk
• Leveraging Risk
• Market Risk
• Portfolio Turnover Risk
• Real Estate Investing Risk
• Security Risk
• Security Selection Risk
• Short Sales Risk
• Small- and Mid-Cap Companies Risk
• Value Investing Risk
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Principal Risks:
• Exchange-Traded Funds Risk
• Investment Risk
• Large-Size Company Risk
• Management Risk
• Market Risk
• Short Sales Risk
• Small and Mid-Size Company Risk
• Style Risk
10. The Section 26 Applicants
propose the Substitution as part of a
continued and overall business plan by
AXA Equitable to make its Contracts
more competitive and thus more
attractive to existing Contract owners
and participants or to prospective
purchasers, as the case may be, and
more efficient to administer and
oversee. AXA Equitable represents that
it has carefully reviewed its Contracts
and each of the investment options
offered under the Contracts with the
goal of providing a superior choice of
investment options.
11. The Section 26 Applicants assert
that the Substitution is intended to
2 The annual management fee rate for the
Replacement Portfolio as a percentage of the
Portfolio’s average daily net assets is equal to 1.40%
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on the first $1 billion; 1.35% on the next $1 billion,
1.325% on the next $3 billion; 1.30% on the next
$5 billion; and 1.275% thereafter. The annual
management fee rate for the Removed Portfolio as
a percentage of the Portfolio’s average daily net
assets is equal to 1.50% on the first $500 million
and 1.45% thereafter.
3 Class 2 shares of the Removed Portfolio and
Class IB shares of the Replacement Portfolio are
each subject to a plan adopted pursuant to Rule
12b–1 under the 1940 Act where the maximum
Rule 12b-1 fee for the Removed Portfolio’s Class 2
shares is 0.25% and that of the Replacement
Portfolio’s Class IB shares is 0.50%. However,
under an arrangement approved by the Trust’s
Board of Trustees, the Rule 12b–1 fee currently is
limited to 0.25% of the average daily net assets
attributable to the Portfolio’s Class IB shares and
will be in effect at least until April 30, 2008.
4 The Manager of the Replacement Portfolio has
agreed to make payments or waive its management,
administrative and other fees to limit the expenses
of the Portfolio through April 30, 2008, pursuant to
an expense limitation agreement, so that the Total
Annual Operating Expenses of the Class IB shares
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simplify the prospectuses and related
materials with respect to the Contracts
and the investment options available
through the Separate Accounts. The
Contracts offer investment alternatives
from multiple fund complexes, each
with its own prospectus and disclosure
format, which significantly increases the
volume and complexity of information
that is received by Contract owners and
participants. AXA Equitable believes
of the Portfolio do not exceed an annual rate of
1.99% (excluding dividend expenses on securities
sold short). The adviser of the Removed Portfolio
has agreed to waive its management fee and bear
certain expenses through April 30, 2008, pursuant
to an expense limitation agreement, so that the
ordinary operating expenses of the Class 2 shares
of the Portfolio do not exceed an annual rate of
1.99% (does not include dividend expenses sold
short).
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that this situation may be confusing to
Contract owners and participants. By
substituting the Replacement Portfolio
for the Removed Portfolio, AXA
Equitable anticipates that it would
simplify the Contract prospectuses and
related materials provided to Contract
owners and participants and thereby
reduce the potential for Contract owner
and participant confusion.
12. The Section 26 Applicants also
maintain that the Removed Portfolio has
a substantially identical investment
objective, policies and risks as those of
the Replacement Portfolio. This fact is
expected to simplify the process of
explaining the Substitution to Contract
owners and participants, including an
explanation of the relevant differences
in the policies of the Replacement and
Removed Portfolio, and should facilitate
their understanding of the effect of the
Substitution on them.
13. The Section 26 Applicants also
argue that the Substitution would
replace an outside Portfolio with a
Portfolio for which AXA Equitable
serves as Manager and, thus, would
permit AXA Equitable, under the MultiManager Order, to appoint, dismiss and
replace Advisers and amend Advisory
Agreements as necessary to seek optimal
performance from the Portfolio and its
portfolio managers. Notwithstanding the
Multi-Manager Order, after the
Substitution Date (as defined herein),
the Section 26 Applicants agree not to
change the Replacement Portfolio’s
Adviser without first obtaining
shareholder approval of either (a) the
Adviser change or (b) AXA Equitable’s
continued ability to rely on the MultiManager Order.
14. The replacement of an outside
Portfolio with a Portfolio that is
managed by AXA Equitable will provide
AXA Equitable with more influence
over the administrative aspects of the
Portfolio, while providing Contract
owners and participants with the benefit
of third party asset management.
Influence is important because changes
to the Removed Portfolio can result in
costly, off-cycle communications and
mailings to Contract owners and
participants. Conversely, for the
Replacement Portfolio, AXA Equitable
has greater influence over the pace and
timing of such changes. AXA Equitable
believes that the Substitution will
enable it to exercise more influence over
the management and administration of
the Portfolio, thereby reducing costs and
customer confusion. The added
influence will give AXA Equitable the
ability to react more quickly to changes
and problems it encounters in its
oversight of the Replacement Portfolio.
15. The Section 26 Applicants note
that the Substitution is designed to
provide Contract owners and
participants with an opportunity to
continue their investment in a similar
Portfolio without interruption and
without any cost to them. In this regard,
AXA Equitable has agreed to bear all
63363
expenses incurred in connection with
the Substitution and related filings and
notices, including legal, accounting,
brokerage and other fees and expenses.
On the effective date of the Substitution,
the amount of any Contract owner’s or
participant’s Contract value or the dollar
value of a Contract owner’s or
participant’s investment in the relevant
Contract will not change as a result of
the Substitution.
16. As provided in the chart below, it
is also anticipated that the Replacement
Portfolio’s net annual operating expense
ratio for the Class IB shares (before
dividend expenses on securities sold
short) will be the same as the Removed
Portfolio’s net annual operating expense
ratio for the Class 2 shares (before
dividend expenses on securities sold
short) immediately after the
Substitution due primarily to a lower
management fee rate and the contractual
expense limitation arrangement in
effect. Accordingly, the Section 26
Applicants represent that the proposed
Substitution of the Replacement
Portfolio for the Removed Portfolio will
benefit the Contract owners and
participants by maintaining an annual
operating expense ratio (before dividend
expenses on securities sold short) for
the Class IB shares of the Replacement
Portfolio that is no higher than that of
the Class 2 shares of the Removed
Portfolio.
Laudus Variable Insurance
Trust—Laudus Rosenberg VIT
Value Long/Short Equity Fund
(Class 2)
(percent)
Management Fee 2 ..........................................................................................
Rule 12b–1 Fee 3 .............................................................................................
Other Expenses ...............................................................................................
Total Annual Operating Expenses ...................................................................
Less Fee Waiver/Expense Reimbursement 4 ..................................................
Net Annual Operating Expenses .....................................................................
Dividend Expenses on Securities Sold Short ..................................................
Net Annual Operating Expenses .....................................................................
1.50
0.25
0.26
2.01
(0.02)
1.99
1.22
3.21
EQ/AXA Rosenberg Value
Long/Short Equity Portfolio
(Class IB) *
(percent)
1.40
0.25
0.36
2.01
(0.02)
1.99
1.22
3.21
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* The EQ/AXA Rosenberg Value Long/Short Equity Portfolio is a newly created Portfolio; therefore, the fees and expenses presented in the
table above are estimates for the current fiscal period.
17. The Section 26 Applicants
currently expect that the proposed
Substitution will be carried out on or
about November 17, 2006 (‘‘Substitution
Date’’) and by supplements to the
prospectuses for the Contracts and
Separate Accounts, AXA Equitable has
notified Contract owners and
participants of its intention to take the
necessary actions, including seeking the
order requested by the application, to
substitute shares of the Replacement
Portfolio for the Removed Portfolio as
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described herein. The supplements
advised Contract owners and
participants, as applicable, that from the
date of the supplement until the date of
the proposed Substitution, owners are
permitted to make transfers of Contract
value (or annuity unit value) out of each
Removed Portfolio subaccount to
another subaccount without the transfer
(or exchange) being treated as one of a
limited number of permitted transfers
(or exchanges) or a limited number of
transfers (or exchanges) permitted
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without a transfer charge. The
supplements also informed Contract
owners and participants that AXA
Equitable will not exercise any rights
reserved under any Contract to impose
additional restrictions on transfers until
at least 30 days after the proposed
Substitution.5 The supplements also
5 One exception to this is that AXA Equitable may
impose restrictions on transfers to prevent or limit
disruptive transfer and other ‘‘market timing’’
activities by Contract owners, participants or agents
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advised Contract owners and
participants that for at least 30 days
following the proposed Substitution,
AXA Equitable will permit Contract
owners and participants affected by the
Substitution to make transfers of
Contract value (or annuity unit value)
out of each Replacement Portfolio
subaccount to another subaccount
without the transfer (or exchange) being
treated as one of a limited number of
permitted transfers (or exchanges) or a
limited number of transfers (or
exchanges) permitted without a transfer
charge, as applicable.
18. The Section 26 Applicants have
sent or will send the appropriate
prospectus supplement containing this
disclosure to all existing and new
Contract owners and participants as
applicable. New purchasers of Contracts
will be provided with a Contract
prospectus and/or supplement
containing disclosure regarding the
Substitution, as well as a prospectus
and/or supplement for the Replacement
Portfolio. The Contract prospectus and/
or supplement and the prospectus and/
or supplement for the Replacement
Portfolio will be delivered to purchasers
of new Contracts in accordance with all
applicable legal requirements.
19. In addition to the prospectus
supplements distributed to Contract
owners and participants, within five
business days after the proposed
Substitution, Contract owners and
participants will be sent a written notice
of the Substitution informing them that
the Substitution was carried out and
that they may transfer all Contract value
or cash value under a Contract invested
in any one of the subaccounts on the
date of the notice to another subaccount
available under their Contract at no cost
and without regard to the usual limit on
the frequency of transfers among the
variable account options. The notice
will also reiterate that (other than with
respect to implementing policies and
procedures designed to prevent
disruptive transfer and other market
timing activity) AXA Equitable will not
exercise any rights reserved by it under
the Contracts to impose additional
restrictions on transfers or to impose
any charges on transfers until at least 30
days after the proposed Substitution.
AXA Equitable will also send each
affected Contract owner and participant
a current prospectus for the
Replacement Portfolio.
20. AXA Equitable also is seeking
approval of the proposed Substitution
from any state insurance regulators
of Contract owners and participants as described in
the prospectuses for the Separate Accounts and the
Portfolios.
VerDate Aug<31>2005
02:16 Oct 28, 2006
Jkt 211001
whose approval may be necessary or
appropriate and states that the proposed
Substitution will take place at relative
net asset value with no change in the
amount of any Contract owner’s or
participant’s Contract value, cash value,
or death benefit or in the dollar value of
his or her investment in the Separate
Accounts. The Substitution will be
effected by redeeming shares of the
Removed Portfolio in cash and/or inkind on the Substitution Date at their
net asset value and using the proceeds
of those redemptions to purchase shares
of the Replacement Portfolio at their net
asset value on the same date
21. Moreover, the Section 26
Applicants state that Contract owners
and participants will not incur any fees
or charges as a result of the proposed
Substitution, nor will their rights or
AXA Equitable’s obligations under the
Contracts be altered in any way.
Consequently, all expenses incurred in
connection with the proposed
Substitution, including any brokerage,
legal, accounting, and other fees and
expenses, will be paid by AXA
Equitable. In addition, the proposed
Substitution will not impose any tax
liability on Contract owners or
participants. The proposed Substitution
will not cause the Contract fees and
charges currently being paid by Contract
owners and participants to be greater
after the proposed Substitution than
before the proposed Substitution. All
Contract-level fees will remain the same
after the proposed Substitution. No fees
will be charged on the transfers made at
the time of the proposed Substitution
because the proposed Substitution will
not be treated as a transfer for purposes
of assessing transfer charges or
computing the number of permissible
transfers under the Contracts.
22. The Section 26 Applicants
represent that with respect to those who
were Contract owners or participants on
the date of the proposed Substitution,
AXA Equitable will reimburse, on the
last business day of each fiscal period
(not to exceed a fiscal quarter) during
the two years following the date of the
proposed Substitution, the subaccounts
investing in the Replacement Portfolio
such that the sum of the Replacement
Portfolio’s applicable net operating
expense ratio (taking into account any
expense waivers or reimbursements and
before dividend expenses on securities
sold short) and subaccount expense
ratio (asset-based fees and charges
deducted on a daily basis from
subaccount assets and reflected in the
calculations of subaccount unit value)
for such period will not exceed, on an
annualized basis, the sum of the
Removed Portfolio’s applicable net
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
operating expense ratio (taking into
account any expense waivers or
reimbursements and before dividend
expenses on securities sold short) and
subaccount expense ratio for fiscal year
2005.
23. In addition, the Section 26
Applicants further represent that the
Rule 12b–1 fees for the Replacement
Portfolio’s Class IB shares will not be
raised above the Removed Portfolio’s
Class 2 shares’ maximum Rule 12b–1 fee
(0.25%) without first obtaining
shareholder approval.
Applicants’ Legal Analysis
1. Section 26(c) of the 1940 Act
prohibits the depositor of a registered
unit investment trust that invests in the
securities of a single issuer from
substituting the securities of another
issuer without Commission approval.
Section 26(c) provides that ‘‘[t]he
Commission shall issue an order
approving such substitution if the
evidence establishes that it is consistent
with the protection of investors and the
purposes fairly intended by the policy
and provisions of this title.’’
2. The Section 26 Applicants assert
that the proposed Substitution involves
a substitution of securities within the
meaning of Section 26(c) of the 1940 Act
and therefore request an order from the
Commission pursuant to Section 26(c)
approving the proposed Substitution.
3. The Section 26 Applicants state
that they have reserved the right under
the Contracts to substitute shares of
another eligible investment fund for any
of the current investment funds offered
as a funding option under the Contracts
both to protect themselves and their
Contract owners and participants in
situations where either might be harmed
or disadvantaged by events affecting the
issuer of the securities held by a
Separate Account and to preserve the
opportunity to replace such shares in
situations where a substitution could
benefit AXA Equitable and its Contract
owners and participants.
4. The Section 26 Applicants also
argue that the Replacement Portfolio
and the Removed Portfolio have
substantially identical investment
objectives, policies and risks. In
addition, the proposed Substitution
retains for Contract owners and
participants the investment flexibility
that is a central feature of the Contracts.
The Section 26 Applicants assert that
any impact on the investment programs
of affected Contract owners and
participants, including the
appropriateness of the available
investment options, should therefore be
negligible.
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5. Furthermore, the Substitution will
permit AXA Equitable to present
information to its Contract owners and
participants in a simpler and more
concise manner. It is anticipated that,
after the proposed Substitution,
Contract owners and participants will
be provided with disclosure documents
that contain a simpler presentation of
the available investment options under
their Contracts.
6. In addition, the Section 26
Applicants point out that as a result of
the proposed Substitution, Contract
owners and participants with
subaccount balances invested in the
Replacement Portfolio will have the
same net operating expenses. In this
regard, AXA Equitable has agreed to
impose a two year expense limit so that
the sum of the Replacement Portfolio’s
applicable net operating expense ratio
(taking into account any expense
waivers and reimbursements and before
dividend expenses on securities sold
short) and subaccount expense ratio
(asset-based charges deducted on a daily
basis from subaccount assets and
reflected in the calculation of
subaccount unit values) for each fiscal
period (not to exceed a fiscal quarter)
will not exceed, on an annualized basis,
the sum of the Removed Portfolio’s
applicable net operating expense ratio
and subaccount expense ratio for fiscal
year 2005.
7. In addition to the foregoing, the
Section 26 Applicants generally submit
that the proposed Substitution meets the
standards that the Commission and its
staff have applied to similar
substitutions that the Commission
previously has approved. The Section
26 Applicants also submit that the
proposed Substitution is not of the type
that Section 26(c) was designed to
prevent as the Contracts provide each
Contract owner and participant with the
right to exercise his or her own
judgment, and transfer Contract values
and cash values into and among other
investment options available to Contract
owners and participants under their
Contracts. Additionally, the
Substitution will not, in any manner,
reduce the nature or quality of the
available investment options. In this
regard, the proposed Substitution
retains for Contract owners and
participants the investment flexibility
which is a central feature of the
Contracts.
8. Moreover, the Section 26
Applicants state they will offer Contract
owners and participants the opportunity
to transfer amounts out of the affected
subaccounts without any cost or other
penalty (other than with respect to
implementing policies and procedures
VerDate Aug<31>2005
02:16 Oct 28, 2006
Jkt 211001
designed to prevent disruptive transfer
and other market timing activity) that
may otherwise have been imposed for a
period beginning on the date of the
supplement notifying Contract owners
and participants of the proposed
Substitution and ending no earlier than
thirty (30) days after the proposed
Substitution. The Substitution,
therefore, will not result in the type of
costly forced redemption that Section
26(c) was designed to prevent.
9. The Section 26 Applicants also
note that the proposed Substitution is
also unlike the type of substitution
which Section 26(c) was designed to
prevent in that by purchasing a
Contract, Contract owners and
participants select much more than a
particular underlying fund in which to
invest their Contract values. They also
select the specific type of insurance
coverage offered by the Section 26
Applicants under the applicable
Contract, as well as numerous other
rights and privileges set forth in the
Contract. Contract owners and
participants also may have considered
the Insurance Company’s size, financial
condition, and its reputation for service
in selecting their Contract. These factors
will not change as a result of the
proposed Substitution, nor will the
annuity, life or tax benefits afforded
under the Contracts held by any of the
affected Contract owners or participants.
10. Section 17(a)(1) of the 1940 Act
prohibits any affiliated person (as
defined in Section 2(a)(3) of the 1940
Act) of a registered investment
company, or any affiliated person of
such a person, acting as principal, from
knowingly selling any security or other
property to that company. Section
17(a)(2) of the 1940 Act generally
prohibits the same persons, acting as
principals, from knowingly purchasing
any security or other property from the
registered investment company.
11. Section 17(b) of the 1940 Act
provides that the Commission may,
upon application, issue an order
exempting any proposed transaction
from Section 17(a) if: (i) The terms of
the proposed transactions are reasonable
and fair and do not involve
overreaching on the part of any person
concerned; (ii) the proposed
transactions are consistent with the
policy of each registered investment
company concerned; and (iii) the
proposed transactions are consistent
with the general purposes of the 1940
Act.
12. The Section 17 Applicants request
an order pursuant to Section 17(b) of the
1940 Act exempting them from the
provisions of Section 17(a) to the extent
necessary to permit them to carry out
PO 00000
Frm 00087
Fmt 4703
Sfmt 4703
63365
the In-Kind Transactions in connection
with the proposed Substitution.
13. The Section 17 Applicants submit
that the terms of the proposed In-Kind
Transactions, including the
consideration to be paid and received
are reasonable and fair and do not
involve overreaching on the part of any
person concerned. The In-Kind
Transactions will be effected at the
respective net asset values of the
Removed Portfolio and the Replacement
Portfolio, as determined in accordance
with the procedures disclosed in the
registration statement for the relevant
investment company and as required by
Rule 22c–1 under the 1940 Act. The InKind Transactions will not change the
dollar value of any Contract owner’s or
participant’s investment in any of the
Separate Accounts, the value of any
Contract, the accumulation value or
other value credited to any Contract, or
the death benefit payable under any
Contract. After the proposed In-Kind
Transactions, the value of a Separate
Account’s investment in the
Replacement Portfolio will equal the
value of its investment in the Removed
Portfolio (together with the value of any
pre-existing investments in the
Replacement Portfolio) immediately
before the In-Kind Transactions.
14. Section 17 Applicants state that
they will assure themselves that the InKind Transactions will be in substantial
compliance with the conditions of Rule
17a–7 under the 1940 Act. The Section
17 Applicants will assure themselves
that the investment companies will
carry out the proposed In-Kind
Transactions in conformity with the
conditions of Rule 17a–7 (or, as
applicable, the Removed Portfolio’s and
the Replacement Portfolio’s normal
valuation procedures, as set forth in the
relevant investment company’s
registration statement), except that the
consideration paid for the securities
being purchased or sold will not be
cash.
15. The Section 17 Applicants also
assert that the proposed In-Kind
Transactions by the Section 17
Applicants do not involve overreaching
on the part of any person concerned.
Furthermore, the Section 17 Applicants
represent that the proposed Substitution
will be consistent with the policies of
the Removed Portfolio and the
Replacement Portfolio, as recited in
their respective current registration
statements, and that the proposed InKind Transactions are consistent with
the general purposes of the 1940 Act
and do not present any conditions or
abuses that the 1940 Act was designed
to prevent.
E:\FR\FM\30OCN1.SGM
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63366
Federal Register / Vol. 71, No. 209 / Monday, October 30, 2006 / Notices
Conclusion
For the reasons set forth in the
application, the Applicants each
respectfully request that the
Commission issue an order of approval
pursuant to Section 26(c) of the 1940
Act and an order of exemption pursuant
to Section 17(b) of the 1940 Act.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Nancy M. Morris,
Secretary.
[FR Doc. E6–18143 Filed 10–27–06; 8:45 am]
By the Commission.
Nancy M. Morris,
Secretary.
[FR Doc. E6–18088 Filed 10–27–06; 8:45 am]
Jean
E. Minarick, Senior Counsel, at (202)
551–6811, or Mary Kay Frech, Branch
Chief, at (202) 551–6821 (Office of
Investment Company Regulation,
Division of Investment Management).
BILLING CODE 8011–01–P
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
The
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
27522; 812–13309]
Self-Regulatory Organizations; Boston
Stock Exchange, Inc.; Notice of Filing
of Proposed Rule Change Relating to
Correction of Erroneous Cross
References
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
17, 2006, the Boston Stock Exchange
Inc. (‘‘BSE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by BSE. The Exchange
filed the proposal pursuant to Section
19(b)(3)(A) of the Act,3 and Rule 19b–
4(f)(6) thereunder,4 which renders the
proposed rule change effective upon
filing with the Commission.5 The
Commission is publishing this notice to
solicit comments on the proposed rule
from interested persons.
SUMMARY OF THE APPLICATION:
Applicants request an order to rescind
a prior order dated April 21, 1987 (the
‘‘Prior Order’’).1
APPLICANTS: Integrated ARROs Fund I,
Integrated ARROs Fund II, and IR Passthrough Corporation (‘‘IRPT’’).
FILING DATE: The application was filed
on June 23, 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 November 17, 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, Securities and
Exchange Commission, 100 F Street,
1 Integrated ARROs Fund I, et al., Investment
Company Act Rel. Nos. 15492 (Dec. 22, 1986)
(notice) and 15693 (Apr. 21, 1987) (order).
2 Investment Company Act Rel. Nos. 27308 (Apr.
28, 2006) (notice) and 27376 and 27377 (May 24,
2006) (orders).
Integrated ARROs Fund I, et al.; Notice
of Application
October 23, 2006.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of application for an
order under section 38(a) of the
Investment Company Act of 1940
(‘‘Act’’).
AGENCY:
02:16 Oct 28, 2006
Jkt 211001
[Release No. 34–54641; File No. SR–BSE–
2006–45]
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 (telephone (202) 551–5850).
1. The Funds were organized in 1987
as grantor trusts by IRPT, a Delaware
corporation and a wholly-owned
subsidiary of Integrated Resources, Inc.
The Funds were registered with the
Commission as closed-end investment
companies. On October 17, 2005, the
Funds made final payment to all of their
unitholders after the maturity, sale or
other disposition of all their securities
assets. Pursuant to the terms of the
Funds’ trust indentures, the Funds
terminated automatically upon the final
payments. On November 18, 2005, each
Fund filed an application under section
8(f) of the Act for an order of
deregistration. On May 24, 2006, the
Commission issued orders under section
8(f) declaring that each Fund had ceased
to be an investment company.2
2. On April 21, 1987, the Commission
issued the Prior Order under sections
6(c), 17(b) and 17(d) of the Act
exempting the Funds, IRPT and certain
future similarly organized closed-end
investment companies (‘‘Future Funds’’)
from various provisions of the Act. The
Applicants state they have not
organized, and do not intend to
organize, any Future Funds in reliance
on the Prior Order.
3. Applicants request an order under
section 38(a) of the Act rescinding the
Prior Order. Section 38(a) of the Act
states, in relevant part, that the
Commission shall have authority to
rescind such orders as are necessary or
appropriate to the exercise of the
powers conferred upon the Commission
elsewhere in the Act. Applicants submit
that the requested order is appropriate
to the exercise of the Commission’s
powers under the Act.
VerDate Aug<31>2005
SECURITIES AND EXCHANGE
COMMISSION
Applicants’ Representations and Legal
Analysis
BILLING CODE 8011–01–P
sroberts on PROD1PC70 with NOTICES
NE., Washington, DC 20549–1090.
Applicants: c/o Barbara Leary, Winthrop
Management LLC, 7 Bullfinch Place,
Suite 500, Boston, MA 02114.
PO 00000
Frm 00088
Fmt 4703
Sfmt 4703
October 23, 2006.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The BSE proposes to amend Section
3 (Designation of an Index) of Chapter
XIV of the Rules of the Boston Options
Exchange, Inc. (‘‘BOX Rules’’) to correct
an erroneous cross reference and
erroneous numbering. The text of the
proposed rule change is available on the
BSE’s Web site (https://
www.bostonstock.com), at the
Exchange’s principal office and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
5 The Exchange requested the Commission to
waive the five-day pre-filing notice requirement and
the 30-day operative delay, as specified in Rule
19b–4(f)(6)(iii). 17 CFR 240.19b–4(f)(6)(iii).
2 17
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]]>Agencies
[Federal Register Volume 71, Number 209 (Monday, October 30, 2006)]
[Notices]
[Pages 63360-63366]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-18143]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-27526; File No. 812-13316]
AXA Equitable Life Insurance Company, et al.; Notice of
Application
October 24, 2006.
AGENCY: Securities and Exchange Commission (SEC).
ACTION: Notice of application for an order pursuant to Section 26(c) of
the Investment Company Act of 1940 (``1940 Act'' or ``Act''), approving
certain substitutions of securities and for an order of exemption
pursuant to Section 17(b) of the Act.
-----------------------------------------------------------------------
Applicants: AXA Equitable Life Insurance Company (``AXA
Equitable''), Separate Account A of AXA Equitable (``Separate Account
A''), Separate Account FP of AXA Equitable (``Separate Account FP'')
and Separate Account No. 49 of AXA Equitable (``Separate Account 49'')
(collectively, the ``Section 26 Applicants''); and AXA Equitable,
Separate Account A, Separate Account FP, Separate Account 49, Separate
Account No. 65 of AXA
[[Page 63361]]
Equitable (``Separate Account 65'') and the EQ Advisors Trust (the
``Trust'') (collectively, the ``Section 17 Applicants,'' together with
the Section 26 Applicants, the ``Applicants'').
Summary of Application: The Section 26 Applicants request an order
pursuant to Section 26(c) of the 1940 Act, approving the proposed
substitution of shares of a series of EQ Advisors Trust (the ``Trust'')
for shares of a comparable series of an unaffiliated registered
investment company (the ``Substitution''), which is currently used as
an underlying investment option for certain variable annuity contracts
and/or variable life insurance policies issued by AXA Equitable
(``Contracts''), as more fully described below. The Section 17
Applicants also request an order pursuant to Section 17(b) of the 1940
Act exempting them from Section 17(a) of the 1940 Act to the extent
necessary to permit in-kind redemptions of securities issued by the
Removed Portfolio (as defined herein) and purchases of securities
issued by the Replacement Portfolio (as defined herein) (the ``In-Kind
Transactions'') in connection with the Substitution.
Filing Date: The application was filed on July 21, 2006, and
amended on October 23, 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 Secretary of
the Commission 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 November 16, 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 requester'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 Secretary of the Commission.
ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street,
NE., Washington, DC 20549-1090. Applicants, c/o AXA Equitable Life
Insurance Company, 1290 Avenue of the Americas, New York, NY 10104,
Attn: Steven M. Joenk, Senior Vice President.
FOR FURTHER INFORMATION CONTACT: Sonny Oh, Staff Attorney, or Zandra
Bailes, Branch Chief, Office of Insurance Products, Division of
Investment Management at (202) 551-6795.
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee from
the SEC's Public Reference Branch, 100 F Street, NE., Room 1580,
Washington, DC 20549 (tel. (202) 551-8090).
Applicants' Representations
1. AXA Equitable is a New York stock life insurance company that
has been in business since 1859. AXA Equitable is authorized to sell
life insurance and annuities in all fifty states, the District of
Columbia, Puerto Rico and the Virgin Islands. AXA Equitable is an
investment adviser registered under the Investment Advisers Act of
1940, as amended, and is a wholly owned subsidiary of AXA Financial,
Inc. (``AXA Financial''). Majority-owned publicly traded subsidiaries
of AXA Financial currently include AllianceBernstein, L.P. AXA
Financial, a holding company, is an indirect, wholly owned subsidiary
of AXA. AXA is a French holding company for an international group of
insurance and related financial services companies and is publicly
traded.
2. AXA Equitable serves as sponsor and depositor for Separate
Account A, Separate Account FP, Separate Account 49 and Separate
Account 65 (sometimes referred to herein collectively as the ``Separate
Accounts'' and individually as a ``Separate Account''). Separate
Account A was established in 1968 pursuant to authority granted by AXA
Equitable's Board of Directors and funds certain variable annuity
contracts. Separate Account FP was established in 1995 pursuant to
authority granted by the Board of Directors of AXA Equitable in
connection with the merger of Equitable Variable Life Insurance Company
with and into AXA Equitable and funds certain variable life insurance
policies. Separate Account 49 was established in 1996 pursuant to
authority granted by AXA Equitable's Board of Directors and funds
certain variable annuity contracts. Separate Account 65 was established
in 1996 pursuant to authority granted by AXA Equitable's Board of
Directors and funds group pension and profit-sharing plans under group
annuity contracts issued by AXA Equitable.
3. Each Separate Account is a segregated asset account of AXA
Equitable. Each Separate Account, with the exception of Separate
Account 65, is registered with the Commission as a unit investment
trust under the 1940 Act. Separate Account 65 is excluded from
registration under the 1940 Act pursuant to Section 3(c)(11) of the
1940 Act. Units of interest in the Separate Accounts, except for
Separate Account 65, under the Contracts are registered under the
Securities Act of 1933, as amended (``1933 Act''). Units of interest in
Separate Account 65 are exempt from registration under the 1933 Act,
pursuant to Section 3(a)(2) of the 1933 Act. As noted above, the
Separate Accounts fund the respective variable benefits available under
the Contracts issued by AXA Equitable.
4. That portion of the respective assets of the Separate Accounts
that is equal to the reserves and other Contract liabilities with
respect to the respective Separate Accounts is not chargeable with
liabilities arising out of any other business of AXA Equitable, as the
case may be. In accordance with the respective Contracts for those
Separate Accounts, any income, gains or losses, realized or unrealized,
from assets allocated to the respective Separate Accounts are credited
or charged against the Separate Accounts, without regard to other
income, gains or losses of AXA Equitable.
5. The Trust is organized as a Delaware statutory trust. It is
registered as an open-end management investment company under the 1940
Act, and its shares are registered under the 1933 Act on Form N-1A. It
commenced operations on May 1, 1997. The Trust is a series investment
company and currently offers 63 separate series (each a ``Portfolio''
and collectively, the ``Portfolios''). AXA Equitable currently serves
as investment manager (``Manager'') of each of the Portfolios. The
Trust has received an exemptive order from the Commission (``Multi-
Manager Order'') that permits the Manager, or any entity controlling,
controlled by, or under common control (within the meaning of Section
2(a)(9) of the 1940 Act) with the Manager, subject to certain
conditions, including approval of the Board of Trustees of the Trust,
and without the approval of shareholders to appoint, dismiss, or
replace investment sub-advisers (``Advisers'') and to amend Investment
Advisory Agreements (``Advisory Agreements'').\1\ If a new Adviser is
retained for a Portfolio, Contract owners would receive notice of any
such action.
---------------------------------------------------------------------------
\1\ See EQ Advisors Trust and EQ Financial Consultants, Inc.,
1940 Act Rel. Nos. 23093 (March 30, 1998) (notice) and 23128 (April
24, 1998) (order).
---------------------------------------------------------------------------
6. The variable annuity Contracts (``Annuity Contracts'') subject
to the application include flexible premium deferred variable annuity
contracts and single premium immediate variable annuity contracts with
a variety of sales charge structures. Some of the Annuity Contracts are
issued as group contracts where the owner of the Annuity Contract is
the employer, sponsor or trustee of a group retirement plan.
[[Page 63362]]
Members of the group (``participants'') acquire an interest in the
Annuity Contract and have certain rights as determined by the Annuity
Contract and/or, if applicable, the retirement plan covering the
participants' interest. The remaining Annuity Contracts are issued to
or on behalf of individuals. All Annuity Contracts allow the Contract
owner or, in the case of group Annuity Contracts, the participants, to
allocate contributions by participants or premium payments by Contract
owners among the variable and any fixed investment options available
under the Annuity Contracts where contributions or premium payments
allocated to variable funding options are held in corresponding
divisions of the appropriate Separate Accounts.
7. Variable life insurance policies issued by the Section 26
Applicants include flexible premium, scheduled premium and single
premium individual variable life, second to die and corporate variable
life policies. Insurance charges are deducted on a monthly basis by
redeeming shares of the underlying investment options if necessary.
Premium payments under these Contracts accumulate in variable and any
fixed investment options. Accumulated amounts are used to fund death
benefits, loans, surrenders and withdrawals payable under these
Contracts.
8. AXA Equitable, on its own behalf and on behalf of the Separate
Accounts, proposes to exercise its contractual right to substitute a
different eligible investment fund for one of the current investment
funds offered as a funding option under the Contracts. In particular,
the Section 26 Applicants propose to substitute Class IB shares of the
EQ/AXA Rosenberg Value Long /Short Equity Portfolio (``Replacement
Portfolio'') for Class 2 shares of Laudus Variable Insurance Trust--
Laudus Rosenberg VIT Value Long/Short Equity Fund (``Removed
Portfolio'').
9. The Section 26 Applicants believe that, as set forth below, the
Replacement Portfolio's investment objective, investment policies and
principal risks are substantially identical to those of the Removed
Portfolio and that the essential objective and risk expectations of
Contract owners and participants can continue to be met.
------------------------------------------------------------------------
Removed portfolio Replacement portfolio
------------------------------------------------------------------------
Laudus Variable Insurance Trust--Laudus EQ/AXA Rosenberg Value Long/
Rosenberg VIT Value Long/Short Equity Short Equity Portfolio (Class
Fund (Class 2 shares): The Portfolio IB shares): Same.
seeks to increase value through bull Principal Risks:
markets and bear markets using Adviser Selection Risk
strategies that are designed to limit Asset Class Risk
exposure to general equity market Equity Risk
risk. Under normal circumstances, the Large-Cap Company Risk
Portfolio will invest at least 80% of Leveraging Risk
its net assets, plus borrowings for Market Risk
investment purposes, in equity Portfolio Turnover
securities. The Portfolio attempts to Risk
achieve its objective by taking long Real Estate Investing
positions in stocks of companies in Risk
certain capitalization ranges Security Risk
principally traded in U.S. markets Security Selection
that the Adviser has identified as Risk
undervalued and short positions in Short Sales Risk
such stocks that the Adviser has Small- and Mid-Cap
identified as overvalued. The Companies Risk
Portfolio will invest primarily in Value Investing Risk
stocks of small- and mid-
capitalization companies, but also may
invest in stocks of large-
capitalization companies. The
Portfolio also may purchase shares of
ETFs to a limited extent and may
engage in active and frequent trading.
Principal Risks:
Exchange-Traded Funds Risk
Investment Risk
Large-Size Company Risk
Management Risk
Market Risk
Short Sales Risk
Small and Mid-Size Company
Risk
Style Risk
------------------------------------------------------------------------
10. The Section 26 Applicants propose the Substitution as part of a
continued and overall business plan by AXA Equitable to make its
Contracts more competitive and thus more attractive to existing
Contract owners and participants or to prospective purchasers, as the
case may be, and more efficient to administer and oversee. AXA
Equitable represents that it has carefully reviewed its Contracts and
each of the investment options offered under the Contracts with the
goal of providing a superior choice of investment options.
11. The Section 26 Applicants assert that the Substitution is
intended to simplify the prospectuses and related materials with
respect to the Contracts and the investment options available through
the Separate Accounts. The Contracts offer investment alternatives from
multiple fund complexes, each with its own prospectus and disclosure
format, which significantly increases the volume and complexity of
information that is received by Contract owners and participants. AXA
Equitable believes
[[Page 63363]]
that this situation may be confusing to Contract owners and
participants. By substituting the Replacement Portfolio for the Removed
Portfolio, AXA Equitable anticipates that it would simplify the
Contract prospectuses and related materials provided to Contract owners
and participants and thereby reduce the potential for Contract owner
and participant confusion.
12. The Section 26 Applicants also maintain that the Removed
Portfolio has a substantially identical investment objective, policies
and risks as those of the Replacement Portfolio. This fact is expected
to simplify the process of explaining the Substitution to Contract
owners and participants, including an explanation of the relevant
differences in the policies of the Replacement and Removed Portfolio,
and should facilitate their understanding of the effect of the
Substitution on them.
13. The Section 26 Applicants also argue that the Substitution
would replace an outside Portfolio with a Portfolio for which AXA
Equitable serves as Manager and, thus, would permit AXA Equitable,
under the Multi-Manager Order, to appoint, dismiss and replace Advisers
and amend Advisory Agreements as necessary to seek optimal performance
from the Portfolio and its portfolio managers. Notwithstanding the
Multi-Manager Order, after the Substitution Date (as defined herein),
the Section 26 Applicants agree not to change the Replacement
Portfolio's Adviser without first obtaining shareholder approval of
either (a) the Adviser change or (b) AXA Equitable's continued ability
to rely on the Multi-Manager Order.
14. The replacement of an outside Portfolio with a Portfolio that
is managed by AXA Equitable will provide AXA Equitable with more
influence over the administrative aspects of the Portfolio, while
providing Contract owners and participants with the benefit of third
party asset management. Influence is important because changes to the
Removed Portfolio can result in costly, off-cycle communications and
mailings to Contract owners and participants. Conversely, for the
Replacement Portfolio, AXA Equitable has greater influence over the
pace and timing of such changes. AXA Equitable believes that the
Substitution will enable it to exercise more influence over the
management and administration of the Portfolio, thereby reducing costs
and customer confusion. The added influence will give AXA Equitable the
ability to react more quickly to changes and problems it encounters in
its oversight of the Replacement Portfolio.
15. The Section 26 Applicants note that the Substitution is
designed to provide Contract owners and participants with an
opportunity to continue their investment in a similar Portfolio without
interruption and without any cost to them. In this regard, AXA
Equitable has agreed to bear all expenses incurred in connection with
the Substitution and related filings and notices, including legal,
accounting, brokerage and other fees and expenses. On the effective
date of the Substitution, the amount of any Contract owner's or
participant's Contract value or the dollar value of a Contract owner's
or participant's investment in the relevant Contract will not change as
a result of the Substitution.
16. As provided in the chart below, it is also anticipated that the
Replacement Portfolio's net annual operating expense ratio for the
Class IB shares (before dividend expenses on securities sold short)
will be the same as the Removed Portfolio's net annual operating
expense ratio for the Class 2 shares (before dividend expenses on
securities sold short) immediately after the Substitution due primarily
to a lower management fee rate and the contractual expense limitation
arrangement in effect. Accordingly, the Section 26 Applicants represent
that the proposed Substitution of the Replacement Portfolio for the
Removed Portfolio will benefit the Contract owners and participants by
maintaining an annual operating expense ratio (before dividend expenses
on securities sold short) for the Class IB shares of the Replacement
Portfolio that is no higher than that of the Class 2 shares of the
Removed Portfolio.
----------------------------------------------------------------------------------------------------------------
Laudus Variable Insurance
Trust--Laudus Rosenberg VIT EQ/AXA Rosenberg Value Long/
Value Long/Short Equity Fund Short Equity Portfolio (Class
(Class 2) (percent) IB) * (percent)
----------------------------------------------------------------------------------------------------------------
Management Fee \2\................................ 1.50 1.40
Rule 12b-1 Fee \3\................................ 0.25 0.25
Other Expenses.................................... 0.26 0.36
Total Annual Operating Expenses................... 2.01 2.01
Less Fee Waiver/Expense Reimbursement \4\......... (0.02) (0.02)
Net Annual Operating Expenses..................... 1.99 1.99
Dividend Expenses on Securities Sold Short........ 1.22 1.22
Net Annual Operating Expenses..................... 3.21 3.21
----------------------------------------------------------------------------------------------------------------
* The EQ/AXA Rosenberg Value Long/Short Equity Portfolio is a newly created Portfolio; therefore, the fees and
expenses presented in the table above are estimates for the current fiscal period.
17. The Section 26 Applicants currently expect that the proposed
Substitution will be carried out on or about November 17, 2006
(``Substitution Date'') and by supplements to the prospectuses for the
Contracts and Separate Accounts, AXA Equitable has notified Contract
owners and participants of its intention to take the necessary actions,
including seeking the order requested by the application, to substitute
shares of the Replacement Portfolio for the Removed Portfolio as
described herein. The supplements advised Contract owners and
participants, as applicable, that from the date of the supplement until
the date of the proposed Substitution, owners are permitted to make
transfers of Contract value (or annuity unit value) out of each Removed
Portfolio subaccount to another subaccount without the transfer (or
exchange) being treated as one of a limited number of permitted
transfers (or exchanges) or a limited number of transfers (or
exchanges) permitted without a transfer charge. The supplements also
informed Contract owners and participants that AXA Equitable will not
exercise any rights reserved under any Contract to impose additional
restrictions on transfers until at least 30 days after the proposed
Substitution.\5\ The supplements also
[[Page 63364]]
advised Contract owners and participants that for at least 30 days
following the proposed Substitution, AXA Equitable will permit Contract
owners and participants affected by the Substitution to make transfers
of Contract value (or annuity unit value) out of each Replacement
Portfolio subaccount to another subaccount without the transfer (or
exchange) being treated as one of a limited number of permitted
transfers (or exchanges) or a limited number of transfers (or
exchanges) permitted without a transfer charge, as applicable.
---------------------------------------------------------------------------
\2\ The annual management fee rate for the Replacement Portfolio
as a percentage of the Portfolio's average daily net assets is equal
to 1.40% on the first $1 billion; 1.35% on the next $1 billion,
1.325% on the next $3 billion; 1.30% on the next $5 billion; and
1.275% thereafter. The annual management fee rate for the Removed
Portfolio as a percentage of the Portfolio's average daily net
assets is equal to 1.50% on the first $500 million and 1.45%
thereafter.
\3\ Class 2 shares of the Removed Portfolio and Class IB shares
of the Replacement Portfolio are each subject to a plan adopted
pursuant to Rule 12b-1 under the 1940 Act where the maximum Rule
12b-1 fee for the Removed Portfolio's Class 2 shares is 0.25% and
that of the Replacement Portfolio's Class IB shares is 0.50%.
However, under an arrangement approved by the Trust's Board of
Trustees, the Rule 12b-1 fee currently is limited to 0.25% of the
average daily net assets attributable to the Portfolio's Class IB
shares and will be in effect at least until April 30, 2008.
\4\ The Manager of the Replacement Portfolio has agreed to make
payments or waive its management, administrative and other fees to
limit the expenses of the Portfolio through April 30, 2008, pursuant
to an expense limitation agreement, so that the Total Annual
Operating Expenses of the Class IB shares of the Portfolio do not
exceed an annual rate of 1.99% (excluding dividend expenses on
securities sold short). The adviser of the Removed Portfolio has
agreed to waive its management fee and bear certain expenses through
April 30, 2008, pursuant to an expense limitation agreement, so that
the ordinary operating expenses of the Class 2 shares of the
Portfolio do not exceed an annual rate of 1.99% (does not include
dividend expenses sold short).
\5\ One exception to this is that AXA Equitable may impose
restrictions on transfers to prevent or limit disruptive transfer
and other ``market timing'' activities by Contract owners,
participants or agents of Contract owners and participants as
described in the prospectuses for the Separate Accounts and the
Portfolios.
---------------------------------------------------------------------------
18. The Section 26 Applicants have sent or will send the
appropriate prospectus supplement containing this disclosure to all
existing and new Contract owners and participants as applicable. New
purchasers of Contracts will be provided with a Contract prospectus
and/or supplement containing disclosure regarding the Substitution, as
well as a prospectus and/or supplement for the Replacement Portfolio.
The Contract prospectus and/or supplement and the prospectus and/or
supplement for the Replacement Portfolio will be delivered to
purchasers of new Contracts in accordance with all applicable legal
requirements.
19. In addition to the prospectus supplements distributed to
Contract owners and participants, within five business days after the
proposed Substitution, Contract owners and participants will be sent a
written notice of the Substitution informing them that the Substitution
was carried out and that they may transfer all Contract value or cash
value under a Contract invested in any one of the subaccounts on the
date of the notice to another subaccount available under their Contract
at no cost and without regard to the usual limit on the frequency of
transfers among the variable account options. The notice will also
reiterate that (other than with respect to implementing policies and
procedures designed to prevent disruptive transfer and other market
timing activity) AXA Equitable will not exercise any rights reserved by
it under the Contracts to impose additional restrictions on transfers
or to impose any charges on transfers until at least 30 days after the
proposed Substitution. AXA Equitable will also send each affected
Contract owner and participant a current prospectus for the Replacement
Portfolio.
20. AXA Equitable also is seeking approval of the proposed
Substitution from any state insurance regulators whose approval may be
necessary or appropriate and states that the proposed Substitution will
take place at relative net asset value with no change in the amount of
any Contract owner's or participant's Contract value, cash value, or
death benefit or in the dollar value of his or her investment in the
Separate Accounts. The Substitution will be effected by redeeming
shares of the Removed Portfolio in cash and/or in-kind on the
Substitution Date at their net asset value and using the proceeds of
those redemptions to purchase shares of the Replacement Portfolio at
their net asset value on the same date
21. Moreover, the Section 26 Applicants state that Contract owners
and participants will not incur any fees or charges as a result of the
proposed Substitution, nor will their rights or AXA Equitable's
obligations under the Contracts be altered in any way. Consequently,
all expenses incurred in connection with the proposed Substitution,
including any brokerage, legal, accounting, and other fees and
expenses, will be paid by AXA Equitable. In addition, the proposed
Substitution will not impose any tax liability on Contract owners or
participants. The proposed Substitution will not cause the Contract
fees and charges currently being paid by Contract owners and
participants to be greater after the proposed Substitution than before
the proposed Substitution. All Contract-level fees will remain the same
after the proposed Substitution. No fees will be charged on the
transfers made at the time of the proposed Substitution because the
proposed Substitution will not be treated as a transfer for purposes of
assessing transfer charges or computing the number of permissible
transfers under the Contracts.
22. The Section 26 Applicants represent that with respect to those
who were Contract owners or participants on the date of the proposed
Substitution, AXA Equitable will reimburse, on the last business day of
each fiscal period (not to exceed a fiscal quarter) during the two
years following the date of the proposed Substitution, the subaccounts
investing in the Replacement Portfolio such that the sum of the
Replacement Portfolio's applicable net operating expense ratio (taking
into account any expense waivers or reimbursements and before dividend
expenses on securities sold short) and subaccount expense ratio (asset-
based fees and charges deducted on a daily basis from subaccount assets
and reflected in the calculations of subaccount unit value) for such
period will not exceed, on an annualized basis, the sum of the Removed
Portfolio's applicable net operating expense ratio (taking into account
any expense waivers or reimbursements and before dividend expenses on
securities sold short) and subaccount expense ratio for fiscal year
2005.
23. In addition, the Section 26 Applicants further represent that
the Rule 12b-1 fees for the Replacement Portfolio's Class IB shares
will not be raised above the Removed Portfolio's Class 2 shares'
maximum Rule 12b-1 fee (0.25%) without first obtaining shareholder
approval.
Applicants' Legal Analysis
1. Section 26(c) of the 1940 Act prohibits the depositor of a
registered unit investment trust that invests in the securities of a
single issuer from substituting the securities of another issuer
without Commission approval. Section 26(c) provides that ``[t]he
Commission shall issue an order approving such substitution if the
evidence establishes that it is consistent with the protection of
investors and the purposes fairly intended by the policy and provisions
of this title.''
2. The Section 26 Applicants assert that the proposed Substitution
involves a substitution of securities within the meaning of Section
26(c) of the 1940 Act and therefore request an order from the
Commission pursuant to Section 26(c) approving the proposed
Substitution.
3. The Section 26 Applicants state that they have reserved the
right under the Contracts to substitute shares of another eligible
investment fund for any of the current investment funds offered as a
funding option under the Contracts both to protect themselves and their
Contract owners and participants in situations where either might be
harmed or disadvantaged by events affecting the issuer of the
securities held by a Separate Account and to preserve the opportunity
to replace such shares in situations where a substitution could benefit
AXA Equitable and its Contract owners and participants.
4. The Section 26 Applicants also argue that the Replacement
Portfolio and the Removed Portfolio have substantially identical
investment objectives, policies and risks. In addition, the proposed
Substitution retains for Contract owners and participants the
investment flexibility that is a central feature of the Contracts. The
Section 26 Applicants assert that any impact on the investment programs
of affected Contract owners and participants, including the
appropriateness of the available investment options, should therefore
be negligible.
[[Page 63365]]
5. Furthermore, the Substitution will permit AXA Equitable to
present information to its Contract owners and participants in a
simpler and more concise manner. It is anticipated that, after the
proposed Substitution, Contract owners and participants will be
provided with disclosure documents that contain a simpler presentation
of the available investment options under their Contracts.
6. In addition, the Section 26 Applicants point out that as a
result of the proposed Substitution, Contract owners and participants
with subaccount balances invested in the Replacement Portfolio will
have the same net operating expenses. In this regard, AXA Equitable has
agreed to impose a two year expense limit so that the sum of the
Replacement Portfolio's applicable net operating expense ratio (taking
into account any expense waivers and reimbursements and before dividend
expenses on securities sold short) and subaccount expense ratio (asset-
based charges deducted on a daily basis from subaccount assets and
reflected in the calculation of subaccount unit values) for each fiscal
period (not to exceed a fiscal quarter) will not exceed, on an
annualized basis, the sum of the Removed Portfolio's applicable net
operating expense ratio and subaccount expense ratio for fiscal year
2005.
7. In addition to the foregoing, the Section 26 Applicants
generally submit that the proposed Substitution meets the standards
that the Commission and its staff have applied to similar substitutions
that the Commission previously has approved. The Section 26 Applicants
also submit that the proposed Substitution is not of the type that
Section 26(c) was designed to prevent as the Contracts provide each
Contract owner and participant with the right to exercise his or her
own judgment, and transfer Contract values and cash values into and
among other investment options available to Contract owners and
participants under their Contracts. Additionally, the Substitution will
not, in any manner, reduce the nature or quality of the available
investment options. In this regard, the proposed Substitution retains
for Contract owners and participants the investment flexibility which
is a central feature of the Contracts.
8. Moreover, the Section 26 Applicants state they will offer
Contract owners and participants the opportunity to transfer amounts
out of the affected subaccounts without any cost or other penalty
(other than with respect to implementing policies and procedures
designed to prevent disruptive transfer and other market timing
activity) that may otherwise have been imposed for a period beginning
on the date of the supplement notifying Contract owners and
participants of the proposed Substitution and ending no earlier than
thirty (30) days after the proposed Substitution. The Substitution,
therefore, will not result in the type of costly forced redemption that
Section 26(c) was designed to prevent.
9. The Section 26 Applicants also note that the proposed
Substitution is also unlike the type of substitution which Section
26(c) was designed to prevent in that by purchasing a Contract,
Contract owners and participants select much more than a particular
underlying fund in which to invest their Contract values. They also
select the specific type of insurance coverage offered by the Section
26 Applicants under the applicable Contract, as well as numerous other
rights and privileges set forth in the Contract. Contract owners and
participants also may have considered the Insurance Company's size,
financial condition, and its reputation for service in selecting their
Contract. These factors will not change as a result of the proposed
Substitution, nor will the annuity, life or tax benefits afforded under
the Contracts held by any of the affected Contract owners or
participants.
10. Section 17(a)(1) of the 1940 Act prohibits any affiliated
person (as defined in Section 2(a)(3) of the 1940 Act) of a registered
investment company, or any affiliated person of such a person, acting
as principal, from knowingly selling any security or other property to
that company. Section 17(a)(2) of the 1940 Act generally prohibits the
same persons, acting as principals, from knowingly purchasing any
security or other property from the registered investment company.
11. Section 17(b) of the 1940 Act provides that the Commission may,
upon application, issue an order exempting any proposed transaction
from Section 17(a) if: (i) The terms of the proposed transactions are
reasonable and fair and do not involve overreaching on the part of any
person concerned; (ii) the proposed transactions are consistent with
the policy of each registered investment company concerned; and (iii)
the proposed transactions are consistent with the general purposes of
the 1940 Act.
12. The Section 17 Applicants request an order pursuant to Section
17(b) of the 1940 Act exempting them from the provisions of Section
17(a) to the extent necessary to permit them to carry out the In-Kind
Transactions in connection with the proposed Substitution.
13. The Section 17 Applicants submit that the terms of the proposed
In-Kind Transactions, including the consideration to be paid and
received are reasonable and fair and do not involve overreaching on the
part of any person concerned. The In-Kind Transactions will be effected
at the respective net asset values of the Removed Portfolio and the
Replacement Portfolio, as determined in accordance with the procedures
disclosed in the registration statement for the relevant investment
company and as required by Rule 22c-1 under the 1940 Act. The In-Kind
Transactions will not change the dollar value of any Contract owner's
or participant's investment in any of the Separate Accounts, the value
of any Contract, the accumulation value or other value credited to any
Contract, or the death benefit payable under any Contract. After the
proposed In-Kind Transactions, the value of a Separate Account's
investment in the Replacement Portfolio will equal the value of its
investment in the Removed Portfolio (together with the value of any
pre-existing investments in the Replacement Portfolio) immediately
before the In-Kind Transactions.
14. Section 17 Applicants state that they will assure themselves
that the In-Kind Transactions will be in substantial compliance with
the conditions of Rule 17a-7 under the 1940 Act. The Section 17
Applicants will assure themselves that the investment companies will
carry out the proposed In-Kind Transactions in conformity with the
conditions of Rule 17a-7 (or, as applicable, the Removed Portfolio's
and the Replacement Portfolio's normal valuation procedures, as set
forth in the relevant investment company's registration statement),
except that the consideration paid for the securities being purchased
or sold will not be cash.
15. The Section 17 Applicants also assert that the proposed In-Kind
Transactions by the Section 17 Applicants do not involve overreaching
on the part of any person concerned. Furthermore, the Section 17
Applicants represent that the proposed Substitution will be consistent
with the policies of the Removed Portfolio and the Replacement
Portfolio, as recited in their respective current registration
statements, and that the proposed In-Kind Transactions are consistent
with the general purposes of the 1940 Act and do not present any
conditions or abuses that the 1940 Act was designed to prevent.
[[Page 63366]]
Conclusion
For the reasons set forth in the application, the Applicants each
respectfully request that the Commission issue an order of approval
pursuant to Section 26(c) of the 1940 Act and an order of exemption
pursuant to Section 17(b) of the 1940 Act.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Nancy M. Morris,
Secretary.
[FR Doc. E6-18143 Filed 10-27-06; 8:45 am]
BILLING CODE 8011-01-P
