NASDAQ-100 Trust, Series 1, et al., 9594-9599 [E7-3677]
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Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Notices
government procurement opportunities
and trade finance.
Tiffany M. Moore,
Assistant U.S. Trade Representative for
Intergovernmental Affairs and Public Liaison.
[FR Doc. E7–3711 Filed 3–1–07; 8:45 am]
BILLING CODE 3190–W7–P
RAILROAD RETIREMENT BOARD
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Proposed Collection; Comment
Request
Summary: In accordance with the
requirement of Section 3506(c)(2)(A) of
the Paperwork Reduction Act of 1995
which provides opportunity for public
comment on new or revised data
collections, the Railroad Retirement
Board (RRB) will publish periodic
summaries of proposed data collections.
Comments are invited on: (a) Whether
the proposed information collection is
necessary for the proper performance of
the functions of the agency, including
whether the information has practical
utility; (b) the accuracy of the RRB’s
estimate of the burden of the collection
of the information; (c) ways to enhance
the quality, utility, and clarity of the
information to be collected; and (d)
ways to minimize the burden related to
the collection of information on
respondents, including the use of
automated collection techniques or
other forms of information technology.
Title and purpose of information
collection:
Pay Rate Report; OMB 3220–0097.
Under Section 2(a) of the Railroad
Unemployment Insurance Act, the daily
benefit rate for unemployment and
sickness benefits depends on the
claimant’s last daily rate of pay in the
base year. The procedures pertaining to
the use of a claimant’s daily pay rate in
determining the daily benefit rate are
prescribed in 20 CFR part 330.
The RRB utilizes Form UI–1e, Request
for Pay Rate Information, to obtain
information from a claimant about their
last railroad employer and pay rate,
when it is not available from other RRB
records. Form UI–1e also explains the
possibility of receiving a higher daily
benefit rate if claimants report their
daily rate of pay for railroad work in the
base year. Completion is required to
obtain or retain benefits. One response
is requested of each respondent.
The RRB proposes no changes to
Form UI–1e. The completion time for
Form UI–1e is estimated at 5 minutes
per response. The RRB estimates that
350 Form UI–1e’s are completed
annually.
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Additional Information or Comments:
To request more information or to
obtain a copy of the information
collection justification, forms, and/or
supporting material, please call the RRB
Clearance Officer at (312) 751–3363 or
send an e-mail request to
Charles.Mierzwa@RRB.GOV. Comments
regarding the information collection
should be addressed to Ronald J.
Hodapp, Railroad Retirement Board, 844
North Rush Street, Chicago, Illinois
60611–2092 or send an e-mail to
Ronald.Hodapp@RRB.GOV. Written
comments should be received within 60
days of this notice.
Charles Mierzwa,
Clearance Officer.
[FR Doc. E7–3666 Filed 3–1–07; 8:45 am]
BILLING CODE 7905–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. IC—27740; 812–13345]
NASDAQ–100 Trust, Series 1, et al.;
Notice of Application
February 27, 2007.
Securities and Exchange
Commission.
ACTION: Notice of application for an
order under section 6(c) of the
Investment Company Act of 1940
(‘‘Act’’) for an exemption from sections
2(a)(32), 4(2), 22(d), 24(d) and
26(a)(2)(C) of the Act and rule 22c–1
under the Act; under sections 6(c) and
17(b) of the Act for an exemption from
sections 17(a)(1) and (a)(2) of the Act;
and under section 17(d) of the Act and
rule 17d–1 under the Act to permit
certain joint transactions.
AGENCY:
Applicants
request an order to permit (a) Nasdaq100 Trust, Series 1 (‘‘Trust’’), a unit
investment trust whose portfolio
consists of the component stocks of the
Nasdaq-100 Index (‘‘Index’’), to issue
shares (‘‘Nasdaq-100 Shares’’) that are
only redeemable in large aggregations;
(b) secondary market transactions in
Nasdaq-100 Shares to occur at
negotiated prices; (c) dealers to sell
Nasdaq-100 Shares to purchasers in the
secondary market unaccompanied by a
prospectus when prospectus delivery is
not required by the Securities Act of
1933 (‘‘Securities Act’’); (d) the Trust,
rather than the Sponsor (defined below),
to bear certain expenses associated with
the maintenance of the Trust; (e) certain
‘‘affiliated persons’’ of the Trust to
deposit securities into, and receive
securities from, the Trust in connection
SUMMARY OF APPLICATION:
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with the purchase and redemption of
Nasdaq-100 Shares; and (f) the Trust to
reimburse the Sponsor for payment of
an annual licensing fee to The Nasdaq
Stock Market, Inc. (‘‘Nasdaq’’).
APPLICANTS: The Trust, PowerShares
Capital Management LLC
(‘‘PowerShares,’’ together with its
successor in interest 1 and with any
person, directly or indirectly,
controlling, controlled by, or under
common control with, PowerShares,
‘‘Sponsor’’), and ALPS Distributors, Inc.
(‘‘Distributor’’).
FILING DATES: The application was filed
on November 20, 2006. Applicants have
agreed to file an amendment during the
notice period, the substance of which is
reflected in this notice.
HEARING OR NOTIFICATION OF HEARING: An
order granting the requested relief will
be issued unless the Commission orders
a hearing. Interested persons may
request a hearing by writing to the
Commission’s Secretary and serving
applicants with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on March 19, 2007, and
should be accompanied by proof of
service on applicants, in the form of an
affidavit or, for lawyers, a certificate of
service. Hearing requests should state
the nature of the writer’s interest, the
reason for the request, and the issues
contested. Persons who wish to be
notified of a hearing may request
notification by writing to the
Commission’s Secretary.
ADDRESSES: Secretary, U.S. Securities
and Exchange Commission, 100 F
Street, NE., Washington, DC 20549–
1090. Applicants: H. Bruce Bond,
PowerShares Capital Management LLC,
301 West Roosevelt Road, Wheaton, IL
60187.
FOR FURTHER INFORMATION CONTACT: Jaea
F. Hahn, Senior Counsel, at (202) 551–
6870, 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. 202–551–5850).
Applicants’ Representations
1. The Trust is a unit investment trust
(‘‘UIT’’) organized under the laws of the
1 ‘‘Successors in interest’’ means any entity or
entities that result from a reorganization into
another jurisdiction or a change in the type of
business organization.
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state of New York. The Sponsor is a
wholly owned subsidiary of AIM
Management Group Inc.2 The Bank of
New York acts as trustee to the Trust
(‘‘Trustee’’) pursuant to a trust
agreement entered into by and between
the Trustee and the Initial Sponsor of
the Trust, as amended (the ‘‘Trust
Agreement’’).3 The Distributor is
registered as a broker-dealer under the
Securities Exchange Act of 1934
(‘‘Exchange Act’’) and serves, on an
agency basis, as principal underwriter of
the Trust.
2. The Trust holds a portfolio of
securities (‘‘Portfolio Securities’’)
consisting of substantially all of the
securities in substantially the same
weighting as the component securities
of the Index (the ‘‘Index Securities’’).
The Index is a ‘‘modified capitalizationweighted’’ index of securities issued by
the 100 largest and most actively traded
non-financial companies listed on the
Nasdaq Global Select Market or the
Nasdaq Global Market. The Index was
first published in 1985.
3. Nasdaq-100 Shares, units of
beneficial interest in the Trust, are
designed to provide investors with an
instrument that closely tracks the Index,
trades like a share of common stock, and
pays periodic dividends proportionate
to those paid by the Portfolio
Securities.4 Applicants believe that
Nasdaq-100 Shares afford significant
benefits in the public interest.
Applicants state that the Trust is able to
track the Index more closely than
certain other index products and, unlike
shares of open-end index funds,
Nasdaq-100 Shares trade at negotiated
prices throughout the Business Day.5
2 On October 18, 2006, PowerShares entered into
a Transaction Agreement (‘‘Transaction
Agreement’’) with Nasdaq, the parent of Nasdaq
Global Funds, Inc. (formerly named Nasdaq AMEX
Investment Product Services, Inc., and later
renamed Nasdaq Financial Product Services, Inc.,
the ‘‘Initial Sponsor’’) pursuant to which the Initial
Sponsor will transfer sponsorship of the Trust to
PowerShares. In connection with the Transaction
Agreement, PowerShares is seeking exemptive relief
substantially identical to the relief granted to the
Trust pursuant to a Commission order (Investment
Company Act Release No. 25795 (Feb. 22, 1999), as
amended by Investment Company Act Release No.
26415 (Apr. 9, 2004)). The transfer of sponsorship
of the Trust from the Initial Sponsor to PowerShares
is contingent upon receipt of the exemptive relief
requested in the application.
3 If the relief requested herein is granted, the
Initial Sponsor will assign its duties under the Trust
Agreement to PowerShares.
4 The Trust makes quarterly distributions of an
amount representing the dividends accumulated on
Portfolio Securities during each quarter, net of fees
and expenses, if any.
5 A ‘‘Business Day’’ is any day that the Nasdaq or
any other exchange that lists Nasdaq-100 Shares is
open for business and any day that the Trust is
open for business as required by section 22(e) of the
Act.
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Applicants also state that Nasdaq-100
Shares attract investors and foreign
capital to the U.S. markets.
4. The Trustee adjusts the
composition of the Portfolio Securities
from time to time to reflect changes
made by Nasdaq to the composition and
weighting of the Index Securities.6 All
adjustments to the Portfolio Securities
are made by the Trustee as set forth in
the Trust Agreement and are nondiscretionary.
5. The Trustee is paid a ‘‘Trustee’s
Fee’’ at an annual rate of 0.04% to
0.10% of the net asset value (‘‘NAV’’) of
the Trust, with the minimum fee
amount not to fall below $180,000.7
Until the Sponsor otherwise determines,
the Sponsor has undertaken that the
ordinary operating expenses of the Trust
as calculated by the Trustee will not be
permitted to exceed an amount which is
20/100 of one percent (0.20%) per
annum of the daily NAV of the Trust.8
The Sponsor retains the ability to be
repaid by the Trust to the extent that
subsequently during the fiscal year
expenses fall below the 0.20% per year
level on any given day. Trust fees and
expenses are first paid out of income
received by the Trust in the form of
dividends and other distributions on the
Portfolio Securities.9
6. The Sponsor will be granted a
license to use the Index as a basis for
determining the composition of the
Trust and to use certain trademarks of
Nasdaq in connection with the Trust.
The Sponsor will pay Nasdaq an annual
licensing fee for the Index and will seek
reimbursement from the Trust for the
fee charged in connection with its
Index. The Sponsor will pay the
Distributor a flat annual fee for services
provided to the Trust. The Sponsor will
not seek reimbursement from the Trust
for such payment without first obtaining
prior exemptive relief from the
Commission.
7. Nasdaq-100 Shares are issued in
aggregations of 50,000 shares (‘‘Creation
Units’’). The price of one Portfolio
6 Nasdaq determines, comprises, and calculates
the Index without regard to the Trust.
7 If the amount of the Trustee’s compensation is
less than the minimum annual fee, the Sponsor will
pay the amount of the shortfall.
8 For purposes of this undertaking, ‘‘ordinary
operating expenses’’ will not include taxes,
brokerage commissions and extraordinary nonrecurring expenses.
9 In circumstances where the Trust’s income is
insufficient to pay the fees and expenses of the
Trust, the Trustee will sell Portfolio Securities to
generate sufficient cash to pay the Trust fees and
expenses in excess of Trust income. The Trustee is
ordinarily required to sell Portfolio Securities
whenever the Trustee determines that accrued fees
and expenses exceed dividends and other Trust
accrued income on a projected basis by more than
0.01% of the NAV of the Trust.
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Deposit (defined below), exclusive of
brokerage costs, was approximately
$2,032,500 (based on the market value
of the Index) on September 30, 2006. All
orders to purchase Creation Units must
be delivered through a party that has
executed a Nasdaq-100 participation
agreement with the Distributor and
Trustee and is either (i) a participant in
the Continuous Net Settlement (‘‘CNS’’)
System of the National Securities
Clearing Corporation (‘‘NSCC’’)
(‘‘Nasdaq-100 Clearing Process’’) or (ii)
a Depository Trust Company (‘‘DTC’’)
participant.
8. An investor wishing to purchase a
Creation Unit from the Trust has to
transfer to the Trustee a ‘‘Portfolio
Deposit’’ consisting of: (i) A portfolio of
securities substantially similar in
composition and weighting to the Index
Securities (‘‘Deposit Securities’’); 10 (ii) a
cash payment equal to the dividends
accrued on the Portfolio Securities since
the last dividend payment on the
Portfolio Securities, net of expenses and
liabilities (‘‘Income Net of Expense
Amount’’); and (iii) a cash payment or
credit to equalize any differences
between the market value of the Deposit
Securities and the NAV of the Trust on
a per Creation Unit basis (the
‘‘Balancing Amount’’).11 The Balancing
Amount and the Income Net of Expense
Amount together constitute the ‘‘Cash
Component.’’ An investor making a
Portfolio Deposit will be charged a
service fee (‘‘Transaction Fee’’), paid to
the Trustee, to defray the Trustee’s costs
in processing securities deposited into
the Trust.12 The Sponsor makes
10 The Trust will comply with the federal
securities laws in accepting Deposit Securities and
satisfying redemptions with redemption securities
(‘‘Redemption Securities’’), including that the
Deposit Securities and Redemption Securities are
sold in transactions that would be exempt from
registration under the Securities Act of 1933. The
specified Deposit Securities and Redemption
Securities generally will correspond pro rata to the
Portfolio Securities.
11 At the close of the market on each Business
Day, the Trustee calculates the NAV of the Trust
and then divides the NAV by the number of
outstanding Nasdaq-100 Shares in Creation Unit
size aggregations, resulting in an NAV per Creation
Unit. The Trustee then calculates the required
number of shares of the Index Securities, and the
amount of cash, comprising a Portfolio Deposit for
the following Business Day.
12 The Transaction Fee is (i) $500 per
‘‘Participating Party’’ (defined below) per day for
creations of Creation Units where there are also, in
the same day, separate creations in any number, or
redemptions in an amount not equal to the number
of Nasdaq-100 Shares created, of other similar
exchange-traded funds based on the Index for
which the Trustee or its affiliate acts as trustee,
fund administrator or in any similar capacity, (ii)
no fee per Participating Party where there is, in the
same day, a redemption of an equal number of
shares of another similar exchange-traded fund
based on the Index, for which the Trustee or its
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available each Business Day a list of the
names and the required number of
shares for each of the Deposit Securities
in the current Portfolio Deposit, as well
as the Income Net of Expense Amount
effective through and including the
previous Business Day, per outstanding
Nasdaq-100 Share.13
9. Orders to purchase Creation Units
are placed with the Distributor, who is
responsible for transmitting the orders
to the Trustee. The Distributor issues
confirmations of acceptance, transmits
delivery instructions to the Trustee to
implement the delivery of Creation
Units, and maintain records of the
orders and the confirmations. The
Distributor also is responsible for
delivering prospectuses to purchasers of
Creation Units and may provide certain
other administrative services, such as
those related to state securities law
compliance.
10. Persons purchasing Creation Units
from the Trust may hold the Nasdaq-100
Shares or sell some or all of them in the
secondary market. Nasdaq-100 Shares
are listed on the Nasdaq Global Select
Market and the Nasdaq Global Market,
each part of Nasdaq, and traded in the
secondary market as individual units
(i.e., in less than Creation Units) in the
same manner as other equity securities.
One or more member firms of Nasdaq
will act as market makers (‘‘Market
Makers’’) and maintain a market for
Nasdaq-100 shares.14 Transactions
affiliate acts as the Trustee, fund administrator or
in a similar capacity, and (iii) in all other cases
$1,000 per day, regardless of the number of Creation
Units purchased on that day by such Participating
Party. The Transaction Fee may be changed by the
Trustee with the Sponsor’s consent, but it will not
exceed 0.10% of the value of a Creation Unit. For
purchases of Creation Units outside the Nasdaq-100
Clearing Process, the Transaction Fee will be one
to four times greater. The amount of the Transaction
Fee will be disclosed in the prospectus for the
Trust. A ‘‘Participating Party’’ is a broker-dealer or
other NSCC participant who is a participating party
in the Nasdaq-100 Clearing Process.
13 The cash equivalent of an Index Security may
be included in the Cash Component of a Portfolio
Deposit in lieu of the security if (i) the Trustee
determines that an Index Security is likely to be
unavailable or available in insufficient quantity for
inclusion in a Portfolio Deposit (for example, when
the security is subject to a trading halt or stop order,
or the subject of a tender offer), or (ii) a particular
investor is restricted from investing or engaging in
transactions in the Index Security (for example,
when the investor is a broker-dealer restricted by
regulation or internal policy from investing in
securities issued by a company on whose board of
directors one of its principals serves, or when the
investor is a broker-dealer and the security is on its
‘‘restricted list’’).
14 No particular Market Maker is contractually
obligated to make a market in Nasdaq-100 Shares
although Nasdaq’s listing requirements stipulate
that at least two Market Makers must be registered
in Nasdaq-100 Shares to maintain the listing.
Applicants do not expect that any Market Maker
will be an affiliated person, or an affiliated person
of an affiliated person of the Trust, within the
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involving the sale of Nasdaq-100 Shares
are subject to customary brokerage
commissions and charges. Applicants
state that the price at which Nasdaq-100
Shares trade is disciplined by arbitrage
opportunities created by the ability to
continually purchase or redeem
Creation Units at their NAV, which
should ensure that Nasdaq-100 Shares
do not trade at a material discount or
premium in relation to their NAV.
11. Applicants state that purchasers of
Creation Units include institutional
investors and arbitrageurs (which could
include institutional investors). A
Market Maker also may purchase
Creation Units for use in market making
activities. Applicants also state that
secondary market purchasers of Nasdaq100 Shares include both institutional
and retail investors.15
12. Applicants will make available a
standard product description for
Nasdaq-100 Shares (‘‘Product
Description’’) to Nasdaq members and
member organizations for distribution to
investors purchasing Nasdaq-100 Shares
in accordance with Nasdaq rules. The
purpose of the Product Description is to
provide a brief and readily
understandable description of the
salient aspects of Nasdaq-100 Shares.
The Product Description also advises
investors that a prospectus for Nasdaq100 Shares is available without charge
upon request from the investor’s
account executive. Applicants state that
purchases of Nasdaq-100 Shares through
a non-member broker-dealer in a
transaction away from the Nasdaq do
not constitute a significant portion of
the market activity in Nasdaq-100
Shares.
13. Nasdaq-100 Shares are not
individually redeemable, except upon
termination of the Trust. Nasdaq-100
Shares are only redeemable in Creation
Units through the Trust. To redeem, an
investor has to accumulate enough
Nasdaq-100 Shares to constitute a
Creation Unit. An investor redeeming a
Creation Unit will receive a portfolio of
securities typically identical in
composition and weighting to the
securities portion of a Portfolio Deposit
as of the date the redemption request
was made. An investor may receive the
cash equivalent of an Index Security (i)
when the Trustee determines that an
meaning of section 2(a)(3) of the Act, except
pursuant to section 2(a)(3)(A) or (C) of the Act due
to ownership of Nasdaq-100 Shares, as described
below.
15 Nasdaq-100 Shares are registered in book-entry
form only. DTC or its nominee is the registered
owner of all outstanding Nasdaq-100 Shares.
Records reflecting the beneficial owners of Nasdaq100 Shares are maintained by DTC or its
participants.
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Index Security is likely to be
unavailable or available in insufficient
quantity for delivery by the Trust; (ii)
upon the request of the redeeming
investor; or (iii) upon notice of the
termination of the Trust. A redeeming
investor may receive or may pay an
amount equal to the Income Net of
Expense Amount, plus or minus the
Balancing Amount. A redeeming
investor will pay a Transaction Fee
calculated in the same manner as a
Transaction Fee payable in connection
with the purchase of a Creation Unit.
The Trustee will transfer the securities
and cash to the redeeming investor
within three Business Days of receipt of
the request for redemption.
14. Because the Trust ordinarily
redeems Creation Units in kind, the
Trust does not have to maintain cash
reserves for redemptions. This allows
the assets of the Trust to be committed
as fully as possible to tracking the
Index, enabling the Trust to track the
Index more closely than other
investment products that must allocate
a greater portion of their assets for cash
redemptions.
15. The Trust will terminate on the
earlier of (i) March 4, 2124, or (ii) the
date 20 years after the death of the last
survivor of fifteen persons named in the
trust agreement, the oldest of whom was
born in 1986 and the youngest of whom
was born in 1996. The Trust will also
terminate if (i) Nasdaq-100 Shares are
de-listed from the Nasdaq and are not
subsequently re-listed on a national
securities exchange registered under the
Exchange Act; or (ii) either the Sponsor
or the Trustee resigns or is removed,
and a successor is not appointed. The
Trust may terminate if: (i) 662⁄3% of the
holders of the outstanding Nasdaq-100
Shares agree to terminate it; (ii) the DTC
is unable or unwilling to continue to
perform its functions and a suitable
replacement is unavailable; (iii) NSCC
no longer provides clearance services
with respect to the Nasdaq-100 Shares,
or if the Trustee is no longer a
participant in NSCC; (iv) Nasdaq ceases
to publish the Index; or (v) the license
agreement is terminated.
16. Within a reasonable time after the
Trust’s termination, the Trustee will use
its best efforts to sell all Portfolio
Securities not previously distributed to
investors redeeming Creation Units.
Nasdaq-100 Shares not redeemed prior
to termination will be redeemed in cash
at NAV based on the proceeds from the
sale of the Portfolio Securities.
Applicants’ Legal Analysis
1. Applicants request an order under
section 6(c) of the Act granting an
exemption from sections 2(a)(32), 4(2),
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22(d), 24(d), and 26(a)(2)(C) of the Act
and rule 22c–1 under the Act; under
sections 6(c) and 17(b) of the Act
granting an exemption from sections
17(a)(1) and (2) of the Act; and under
section 17(d) of the Act and rule 17d–
1 under the Act to permit certain joint
transactions.
2. Section 6(c) of the Act provides that
the Commission may exempt any
person, security, or transaction, or any
class of persons, securities, or
transactions, 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.
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Sections 4(2) and 2(a)(32) of the Act
3. Section 4(2) of the Act defines a
UIT as an investment company that,
among other things, issues only
redeemable securities. The term
‘‘redeemable security’’ is defined in
section 2(a)(32) of the Act as any
security, other than short-term paper,
under the terms of which the holder,
upon its presentation to the issuer is
entitled to receive approximately a
proportionate share of the issuer’s
current net assets or the cash equivalent.
Because Nasdaq-100 Shares are not
individually redeemable, applicants
request an order that would permit the
Trust to register and operate as a UIT
and issue Nasdaq-100 Shares that are
redeemable in Creation Units only.
Applicants state that investors may
purchase Nasdaq-100 Shares in Creation
Units from the Trust and redeem
Creation Units. Applicants further state
that because the market price of
Creation Units is disciplined by
arbitrage opportunities, investors should
be able to sell Nasdaq-100 Shares in the
secondary market at approximately their
NAV.
Section 22(d) of the Act and Rule 22c–
1 Under the Act
4. Section 22(d) of the Act, among
other things, prohibits a dealer from
selling a redeemable security that is
being currently offered to the public by
or through an underwriter, except at a
current public offering price described
in the prospectus. Rule 22c–1 under the
Act generally requires that a dealer
selling, redeeming, or repurchasing a
redeemable security do so only at a
price based on its NAV next computed
after receipt of a tender of the security
for redemption or of an order to
purchase or sell the security. Applicants
state that secondary market trading in
Nasdaq-100 Shares takes place at
negotiated prices, not at a current
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offering price described in the
prospectus, and not at a price based on
NAV. Thus, purchases and sales of
Nasdaq-100 Shares in the secondary
market do not comply with section
22(d) and rule 22c–1. Applicants
request an exemption from these
provisions.
5. Applicants assert that the concerns
sought to be addressed by section 22(d)
of the Act and rule 22c–1 under the Act
with respect to pricing are equally
satisfied by the method of pricing
Nasdaq-100 Shares. Applicants
maintain that while there is little
legislative history regarding section
22(d), its provisions, as well as those of
rule 22c–1, appear to have been
designed to (i) prevent dilution caused
by certain riskless-trading schemes by
principal underwriters and contract
dealers; (ii) prevent unjust
discrimination or preferential treatment
among buyers resulting from sales at
different prices; and (iii) assure an
orderly distribution of investment
company shares by eliminating price
competition from dealers offering shares
at less than the published sales price
and repurchasing shares at more than
the published redemption price.
6. Applicants believe that none of
these purposes are thwarted by
permitting Nasdaq-100 Shares to trade
in the secondary market at negotiated
prices. Applicants state (i) that
secondary market trading in Nasdaq-100
Shares does not involve the Trust as a
party and cannot result in dilution of an
investment in Nasdaq-100 Shares; and
(ii) to the extent different prices exist
during a given trading day, or from day
to day, such variances occur as a result
of third-party market forces, such as
supply and demand, not as a result of
unjust or discriminatory manipulation.
Therefore, applicants assert that
secondary market transactions in
Nasdaq-100 Shares do not create
discrimination or preferential treatment
among purchasers. Finally, applicants
contend that the proposed distribution
system is orderly because arbitrage
activity ensures that the difference
between the market price of Nasdaq-100
Shares and their NAV remains narrow.
Section 24(d) of the Act
7. Section 24(d) of the Act provides,
in pertinent part, that the prospectus
delivery exemption provided to dealer
transactions by section 4(3) of the
Securities Act does not apply to any
transaction in a redeemable security
issued by a UIT. Applicants request an
exemption from section 24(d) to permit
dealers in Nasdaq-100 Shares to rely on
the prospectus delivery exemption
provided by section 4(3) of the
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Securities Act.16 Applicants state that
the imposition of prospectus delivery
requirements on dealers in the
secondary market will materially
impede the success of Nasdaq-100
Shares.
8. Applicants state that the secondary
market for Nasdaq-100 Shares is
significantly different from the typical
secondary market for UIT securities,
which is usually maintained by the
sponsor. Nasdaq-100 Shares are listed
on a national securities exchange and
trade in the same manner as listed
securities issued by operating
companies and closed-end investment
companies. Dealers selling shares of
operating companies and closed-end
investment companies in the secondary
market generally are not required to
deliver a prospectus to the purchaser.
9. Applicants contend that Nasdaq100 Shares, as a listed security, merit a
reduction in the compliance costs and
regulatory burdens resulting from the
imposition of prospectus delivery
obligations in the secondary market.
Because Nasdaq-100 Shares are
exchange-listed, prospective investors
have access to several types of market
information about them. Applicants
state that quotations, last sale price, and
volume information are continually
available on a real time basis through
the consolidated tape and are available
throughout the day on brokers’
computer screens and other electronic
services, such as Quotron. The previous
day’s price and volume information is
also published in the financial section
of newspapers. The Sponsor also
publishes daily, on a per Nasdaq-100
Share basis, the amount of accumulated
dividends, net of accrued expenses.
16 Applicants state that persons purchasing
Creation Units will be cautioned in the prospectus
that some activities on their part may, depending
on the circumstances, result in their being deemed
statutory underwriters and subject them to the
prospectus delivery and liability provisions of the
Securities Act. For example, a broker-dealer firm
and/or its client may be deemed a statutory
underwriter if it takes Creation Units after placing
an order with the Distributor, breaks them down
into the constituent Nasdaq-100 Shares, and sells
Nasdaq-100 Shares directly to its customers; or if
it chooses to couple the creation of a supply of new
Nasdaq-100 Shares with an active selling effort
involving solicitation of secondary market demand
for Nasdaq-100 Shares. The prospectus will state
that whether a person is an underwriter depends
upon all the facts and circumstances pertaining to
that person’s activities. The prospectus also will
state that broker-dealer firms should also note that
dealers who are not ‘‘underwriters’’ but are
participating in a distribution (as contrasted to
ordinary secondary trading transactions), and thus
dealing with Nasdaq-100 Shares that are part of an
‘‘unsold allotment’’ within the meaning of section
4(3)(C) of the Securities Act, would be unable to
take advantage of the prospectus delivery
exemption provided by section 4(3) of the
Securities Act.
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10. Investors also receive Product
Descriptions. Applicants state that,
while not intended as a substitute for a
prospectus, the Product Description
contains pertinent information about
Nasdaq-100 Shares. Applicants also
note that Nasdaq-100 Shares are readily
understandable to retail investors as a
product that tracks the Nasdaq-100
Index, which is well known to most
investors and widely recognized.
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Section 26(a)(2)(C) of the Act
11. Section 26(a)(2)(C) of the Act
requires, among other things, that a
UIT’s trust indenture prohibit payments
to the trust’s depositor (in the case of
the Trust, the Sponsor), and any
affiliated person of the depositor, except
payments for performing certain
administrative services. Applicants
request an exemption from section
26(a)(2)(C) to permit the Trust to
reimburse the Sponsor for certain
licensing, registration, and marketing
expenses.
12. Applicants state that, ordinarily, a
sponsor of a UIT has several sources of
income in connection with the creation
of the trust. Applicants assert, however,
that under the structure of the Trust, the
usual sources of income are not
available because the Sponsor will not
impose a sales load, maintain a
secondary market, or deposit Index
Securities into the Trust. Applicants
contend that the abuse sought to be
remedied by section 26(a)(2)(C) of the
Act—‘‘double dipping’’ by UIT sponsors
collecting money from their captive
trusts in addition to the profits already
generated by sales charges and other
sources—will not be present if the
requested exemption is granted.
13. Applicants contend that
permitting the Trust to reimburse the
Sponsor for certain expenses would be
no more disadvantageous to the holders
of Nasdaq-100 Shares than allowing the
expenses to be imposed indirectly as
offsets to sales loads and other charges,
as is done by typical UITs. Applicants
state that the Trust pays the Sponsor
only its actual out-of-pocket expenses
and no component of profit is included.
Finally, applicants state that the
payment is capped at 20 basis points of
the Trust’s NAV on an annualized basis,
with any expenses in excess of that
amount absorbed by the Sponsor.
Section 17(a) of the Act
14. Section 17(a) of the Act generally
prohibits an affiliated person of a
registered investment company, or an
affiliated person of such person, from
selling any security to or purchasing any
security from the company. Section
2(a)(3) defines ‘‘affiliated person’’ to
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include any person directly or indirectly
owning, controlling, or holding with
power to vote, 5% or more of the
outstanding voting securities of the
other person, and any person
controlling, controlled by or under
common control with the other person.
Section 2(a)(9) provides that a control
relationship will be presumed where
one person owns 25% or more of
another person’s voting securities.
Applicants state that, because the
definition of ‘‘affiliated person’’
includes any person owning 5% or
more, or more than 25%, of an issuer’s
outstanding voting securities, every
purchaser of a Creation Unit will be an
affiliated person of the Trust so long as
20 or fewer Creation Units are in
existence. Applicants request an
exemption from section 17(a) under
sections 6(c) and 17(b) to permit persons
that are affiliated persons solely by
virtue of a 5% or more, or more than
25%, ownership interest in the Trust (or
affiliated persons of such person that are
not otherwise affiliated with the Trust)
to purchase and redeem Creation Units
through in-kind transactions.
15. Section 17(b) authorizes the
Commission to exempt a proposed
transaction from section 17(a) if
evidence establishes that the terms of
the transaction, including the
consideration to be paid or received, are
reasonable and fair and do not involve
overreaching, and the proposed
transaction is consistent with the
policies of the registered investment
company and the general provisions of
the Act. Applicants contend that no
useful purpose would be served by
prohibiting affiliated persons of the
Trust from purchasing or redeeming
Creation Units. The composition of a
Portfolio Deposit made by a purchaser
or given to a redeeming investor is the
same regardless of the investor’s
identity, and is valued under the same
objective standards applied to valuing
the Portfolio Securities. Therefore,
applicants state that ‘‘in kind’’
purchases and redemptions will afford
no opportunity for an affiliated person
of the Trust to effect a transaction
detrimental to the other holders of
Nasdaq-100 Shares. Applicants also
believe that ‘‘in kind’’ purchases and
redemptions do not result in abusive
self-dealing or overreaching by affiliated
persons of the Trust.
affiliated person or the principal
underwriter, acting as principal, from
effecting any transaction in connection
with any joint enterprise or other
arrangement or profit-sharing plan in
which the investment company
participates, unless an application
regarding the joint transaction has been
filed with the Commission and granted
by order. Under rule 17d–1, in passing
upon such applications, the
Commission considers whether the
participation of the registered
investment company in the joint
transaction is consistent with the
provisions, policies and purposes of the
Act and the extent to which such
participation is on a basis different or
less advantageous than that of other
participants.
17. Applicants request an order under
rule 17d–1 that would permit the Trust
to reimburse the Sponsor for the
payment to Nasdaq of an annual license
fee under a license agreement.
Applicants believe that relief is
necessary because the Trust’s
undertaking to reimburse the Sponsor
might be deemed a joint enterprise or
other joint arrangement in which the
Trust is a participant, in contravention
of section 17(d) of the Act and rule 17d–
1.
18. The license agreement allows
applicants to use the Index as a basis for
Nasdaq-100 Shares and to use certain of
Nasdaq’s trade name and trademark
rights. Applicants believe that Nasdaq is
a valuable name that is well-known to
investors and that investors will desire
to invest in an instrument that closely
mirrors the Index. In view of this,
applicants state that it is necessary to
obtain from Nasdaq the abovementioned license agreement so that
appropriate reference to Nasdaq and
Nasdaq-100 Shares may be made in
materials describing Nasdaq-100 Shares
and the Trust. Applicants assert that the
terms and provisions of the license
agreement are comparable to the terms
and provisions of other similar license
agreements and that the annual license
fee is for fair value and is in an amount
comparable to that which would be
charged by Nasdaq for similar
arrangements. For these reasons,
applicants state that the proposed
license fee arrangement satisfies the
standards of section 17(d) and rule 17d–
1.
Section 17(d) of the Act and Rule 17d–
1 Under the Act
16. Section 17(d) of the Act and rule
17d–1 under the Act prohibit any
affiliated person of, or principal
underwriter for, a registered investment
company, or any affiliated person of the
Applicants’ Conditions
Applicants agree that the order
granting the requested relief will be
subject to the following conditions:
1. Applicants will not register a new
series of the Trust by means of filing a
post-effective amendment to the Trust’s
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registration statement or by any other
means, unless applicants have requested
and received with respect to such new
series, either exemptive relief from the
Commission or a no-action position
from the Division of Investment
Management of the Commission.
2. The Trust’s prospectus and the
Product Description clearly disclose
that, for purposes of the Act, Nasdaq100 Shares are issued by the Trust and
that the acquisition of Nasdaq-100
Shares by investment companies is
subject to the restrictions of section
12(d)(1) of the Act, except as permitted
by an exemptive order that permits
registered investment companies to
invest in the Trust beyond the limits of
Section 12(d)(1)(A), subject to certain
terms and conditions, including that the
investment company enter into an
agreement with the Trust regarding the
terms of the investment.
3. As long as the Trust operates in
reliance on the requested order, the
Nasdaq-100 Shares will be listed on an
Exchange.
4. The website for the Trust, which
will be publicly accessible at no charge,
will contain the following information,
on a per Nasdaq-100 Share basis, for the
Trust: (a) The prior Business Day’s NAV
and the reported closing price, and a
calculation of the premium or discount
of such price against such NAV; and (b)
data in chart format displaying the
frequency distribution of discounts and
premiums of the daily closing price
against the NAV, within appropriate
ranges, for each of the four previous
calendar quarters. In addition, the
Product Description for the Trust will
state that the website for the Trust has
information about premiums and
discounts at which the Nasdaq-100
Shares have traded.
5. The prospectus and annual report
for the Trust will also include: (a) The
information listed in condition 4(b), (i)
in the case of the prospectus, for the
most recently completed year (and the
most recently completed quarter or
quarters, as applicable) and (ii) in the
case of the annual report, for the
immediately preceding five years, as
applicable; and (b) the following data,
calculated on a per Nasdaq-100 Share
basis for one-, five- and ten-year periods
(or life of the Trust), (i) the cumulative
total return and the average annual total
return based on NAV and closing price,
and (ii) the cumulative total return of
the Index.
6. Before the Trust may rely on the
order, the Commission will have
approved pursuant to rule 19b–4 under
the Exchange Act, an Exchange rule
requiring Exchange members and
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member organizations effecting
transactions in Nasdaq-100 Shares to
deliver a Product Description to
purchasers of Nasdaq-100 Shares.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–3677 Filed 3–1–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release Nos. 33–8782, 34–55350; File No.
4–532]
Roundtable on International Financial
Reporting Standards ‘‘Roadmap’’
Securities and Exchange
Commission.
ACTION: Notice of roundtable meeting.
AGENCY:
SUMMARY: On Tuesday, March 6, 2007
the Securities and Exchange
Commission will hold a roundtable
discussion on the ‘‘roadmap’’ regarding
International Financial Reporting
Standards (IFRS). The roadmap
describes the path toward eliminating
the need for non-U.S. companies to
reconcile to U.S. GAAP financial
statements they prepare pursuant to
IFRS issued by the International
Accounting Standards Board in filings
with the Commission. The subject
matter of the roundtable will be the
effect on the capital raising process in
the U.S. capital markets with respect to
the roadmap, the effect on investors in
the U.S. capital markets with respect to
the roadmap, and the effect on issuers
in the U.S capital markets with respect
to the roadmap. Representative(s) of the
following have been invited to
participate: Issuers, investors, securities
counsel, underwriters, credit rating
agencies, stock exchanges, academia,
and audit firms.
The roundtable will take place at the
Commission’s headquarters at 100 F
Street, NE., Auditorium, Room L–002,
Washington, DC at 10 a.m. The public
is invited to observe the roundtable
discussions. Seating is available on a
first-come, first-serve basis.
FOR FURTHER INFORMATION CONTACT:
Katrina Kimpel at (202) 551–5313.
Dated: February 26, 2007.
By the Commission.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–3645 Filed 3–1–07; 8:45 am]
BILLING CODE 8010–01–P
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9599
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55352; File No. SR–NYSE–
2006–71]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change To
List and Trade Nine Series of
Exchange-Traded Notes of Barclays
Bank PLC Linked to the Performance
of Sub-Indices of the Dow Jones—AIG
Commodity IndexSM
February 26, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Exchange Act’’),1 and Rule 19b–4
thereunder,2 notice is hereby given that
on February 20, 2007, the New York
Stock Exchange LLC (‘‘Exchange’’ or
‘‘NYSE’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule changes as described
in Items I, II, and III below, which items
have been substantially prepared by the
Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule changes
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The NYSE proposes to list and trade
nine series of Exchange-Traded Notes of
Barclays Bank PLC (‘‘Barclays’’) linked
to the performance of sub-indices of the
Dow Jones—AIG Commodity Index SM.
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
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
NYSE has prepared summaries, set forth
in Sections A, B and C below, of the
most significant aspects of such
statements.
The text of the proposed rule change
is available at the NYSE, the
Commission’s Public Reference Room,
and https://www.nyse.com.
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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]]>Agencies
[Federal Register Volume 72, Number 41 (Friday, March 2, 2007)]
[Notices]
[Pages 9594-9599]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-3677]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. IC--27740; 812-13345]
NASDAQ-100 Trust, Series 1, et al.; Notice of Application
February 27, 2007.
AGENCY: Securities and Exchange Commission.
ACTION: Notice of application for an order under section 6(c) of the
Investment Company Act of 1940 (``Act'') for an exemption from sections
2(a)(32), 4(2), 22(d), 24(d) and 26(a)(2)(C) of the Act and rule 22c-1
under the Act; under sections 6(c) and 17(b) of the Act for an
exemption from sections 17(a)(1) and (a)(2) of the Act; and under
section 17(d) of the Act and rule 17d-1 under the Act to permit certain
joint transactions.
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Summary of Application: Applicants request an order to permit (a)
Nasdaq-100 Trust, Series 1 (``Trust''), a unit investment trust whose
portfolio consists of the component stocks of the Nasdaq-100 Index
(``Index''), to issue shares (``Nasdaq-100 Shares'') that are only
redeemable in large aggregations; (b) secondary market transactions in
Nasdaq-100 Shares to occur at negotiated prices; (c) dealers to sell
Nasdaq-100 Shares to purchasers in the secondary market unaccompanied
by a prospectus when prospectus delivery is not required by the
Securities Act of 1933 (``Securities Act''); (d) the Trust, rather than
the Sponsor (defined below), to bear certain expenses associated with
the maintenance of the Trust; (e) certain ``affiliated persons'' of the
Trust to deposit securities into, and receive securities from, the
Trust in connection with the purchase and redemption of Nasdaq-100
Shares; and (f) the Trust to reimburse the Sponsor for payment of an
annual licensing fee to The Nasdaq Stock Market, Inc. (``Nasdaq'').
Applicants: The Trust, PowerShares Capital Management LLC
(``PowerShares,'' together with its successor in interest \1\ and with
any person, directly or indirectly, controlling, controlled by, or
under common control with, PowerShares, ``Sponsor''), and ALPS
Distributors, Inc. (``Distributor'').
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\1\ ``Successors in interest'' means any entity or entities that
result from a reorganization into another jurisdiction or a change
in the type of business organization.
Filing Dates: The application was filed on November 20, 2006.
Applicants have agreed to file an amendment during the notice period,
---------------------------------------------------------------------------
the substance of which is reflected in this notice.
Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on March 19, 2007, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.
ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-1090. Applicants: H. Bruce Bond,
PowerShares Capital Management LLC, 301 West Roosevelt Road, Wheaton,
IL 60187.
FOR FURTHER INFORMATION CONTACT: Jaea F. Hahn, Senior Counsel, at (202)
551-6870, 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. 202-551-5850).
Applicants' Representations
1. The Trust is a unit investment trust (``UIT'') organized under
the laws of the
[[Page 9595]]
state of New York. The Sponsor is a wholly owned subsidiary of AIM
Management Group Inc.\2\ The Bank of New York acts as trustee to the
Trust (``Trustee'') pursuant to a trust agreement entered into by and
between the Trustee and the Initial Sponsor of the Trust, as amended
(the ``Trust Agreement'').\3\ The Distributor is registered as a
broker-dealer under the Securities Exchange Act of 1934 (``Exchange
Act'') and serves, on an agency basis, as principal underwriter of the
Trust.
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\2\ On October 18, 2006, PowerShares entered into a Transaction
Agreement (``Transaction Agreement'') with Nasdaq, the parent of
Nasdaq Global Funds, Inc. (formerly named Nasdaq AMEX Investment
Product Services, Inc., and later renamed Nasdaq Financial Product
Services, Inc., the ``Initial Sponsor'') pursuant to which the
Initial Sponsor will transfer sponsorship of the Trust to
PowerShares. In connection with the Transaction Agreement,
PowerShares is seeking exemptive relief substantially identical to
the relief granted to the Trust pursuant to a Commission order
(Investment Company Act Release No. 25795 (Feb. 22, 1999), as
amended by Investment Company Act Release No. 26415 (Apr. 9, 2004)).
The transfer of sponsorship of the Trust from the Initial Sponsor to
PowerShares is contingent upon receipt of the exemptive relief
requested in the application.
\3\ If the relief requested herein is granted, the Initial
Sponsor will assign its duties under the Trust Agreement to
PowerShares.
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2. The Trust holds a portfolio of securities (``Portfolio
Securities'') consisting of substantially all of the securities in
substantially the same weighting as the component securities of the
Index (the ``Index Securities''). The Index is a ``modified
capitalization-weighted'' index of securities issued by the 100 largest
and most actively traded non-financial companies listed on the Nasdaq
Global Select Market or the Nasdaq Global Market. The Index was first
published in 1985.
3. Nasdaq-100 Shares, units of beneficial interest in the Trust,
are designed to provide investors with an instrument that closely
tracks the Index, trades like a share of common stock, and pays
periodic dividends proportionate to those paid by the Portfolio
Securities.\4\ Applicants believe that Nasdaq-100 Shares afford
significant benefits in the public interest. Applicants state that the
Trust is able to track the Index more closely than certain other index
products and, unlike shares of open-end index funds, Nasdaq-100 Shares
trade at negotiated prices throughout the Business Day.\5\ Applicants
also state that Nasdaq-100 Shares attract investors and foreign capital
to the U.S. markets.
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\4\ The Trust makes quarterly distributions of an amount
representing the dividends accumulated on Portfolio Securities
during each quarter, net of fees and expenses, if any.
\5\ A ``Business Day'' is any day that the Nasdaq or any other
exchange that lists Nasdaq-100 Shares is open for business and any
day that the Trust is open for business as required by section 22(e)
of the Act.
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4. The Trustee adjusts the composition of the Portfolio Securities
from time to time to reflect changes made by Nasdaq to the composition
and weighting of the Index Securities.\6\ All adjustments to the
Portfolio Securities are made by the Trustee as set forth in the Trust
Agreement and are non-discretionary.
---------------------------------------------------------------------------
\6\ Nasdaq determines, comprises, and calculates the Index
without regard to the Trust.
---------------------------------------------------------------------------
5. The Trustee is paid a ``Trustee's Fee'' at an annual rate of
0.04% to 0.10% of the net asset value (``NAV'') of the Trust, with the
minimum fee amount not to fall below $180,000.\7\ Until the Sponsor
otherwise determines, the Sponsor has undertaken that the ordinary
operating expenses of the Trust as calculated by the Trustee will not
be permitted to exceed an amount which is 20/100 of one percent (0.20%)
per annum of the daily NAV of the Trust.\8\ The Sponsor retains the
ability to be repaid by the Trust to the extent that subsequently
during the fiscal year expenses fall below the 0.20% per year level on
any given day. Trust fees and expenses are first paid out of income
received by the Trust in the form of dividends and other distributions
on the Portfolio Securities.\9\
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\7\ If the amount of the Trustee's compensation is less than the
minimum annual fee, the Sponsor will pay the amount of the
shortfall.
\8\ For purposes of this undertaking, ``ordinary operating
expenses'' will not include taxes, brokerage commissions and
extraordinary non-recurring expenses.
\9\ In circumstances where the Trust's income is insufficient to
pay the fees and expenses of the Trust, the Trustee will sell
Portfolio Securities to generate sufficient cash to pay the Trust
fees and expenses in excess of Trust income. The Trustee is
ordinarily required to sell Portfolio Securities whenever the
Trustee determines that accrued fees and expenses exceed dividends
and other Trust accrued income on a projected basis by more than
0.01% of the NAV of the Trust.
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6. The Sponsor will be granted a license to use the Index as a
basis for determining the composition of the Trust and to use certain
trademarks of Nasdaq in connection with the Trust. The Sponsor will pay
Nasdaq an annual licensing fee for the Index and will seek
reimbursement from the Trust for the fee charged in connection with its
Index. The Sponsor will pay the Distributor a flat annual fee for
services provided to the Trust. The Sponsor will not seek reimbursement
from the Trust for such payment without first obtaining prior exemptive
relief from the Commission.
7. Nasdaq-100 Shares are issued in aggregations of 50,000 shares
(``Creation Units''). The price of one Portfolio Deposit (defined
below), exclusive of brokerage costs, was approximately $2,032,500
(based on the market value of the Index) on September 30, 2006. All
orders to purchase Creation Units must be delivered through a party
that has executed a Nasdaq-100 participation agreement with the
Distributor and Trustee and is either (i) a participant in the
Continuous Net Settlement (``CNS'') System of the National Securities
Clearing Corporation (``NSCC'') (``Nasdaq-100 Clearing Process'') or
(ii) a Depository Trust Company (``DTC'') participant.
8. An investor wishing to purchase a Creation Unit from the Trust
has to transfer to the Trustee a ``Portfolio Deposit'' consisting of:
(i) A portfolio of securities substantially similar in composition and
weighting to the Index Securities (``Deposit Securities''); \10\ (ii) a
cash payment equal to the dividends accrued on the Portfolio Securities
since the last dividend payment on the Portfolio Securities, net of
expenses and liabilities (``Income Net of Expense Amount''); and (iii)
a cash payment or credit to equalize any differences between the market
value of the Deposit Securities and the NAV of the Trust on a per
Creation Unit basis (the ``Balancing Amount'').\11\ The Balancing
Amount and the Income Net of Expense Amount together constitute the
``Cash Component.'' An investor making a Portfolio Deposit will be
charged a service fee (``Transaction Fee''), paid to the Trustee, to
defray the Trustee's costs in processing securities deposited into the
Trust.\12\ The Sponsor makes
[[Page 9596]]
available each Business Day a list of the names and the required number
of shares for each of the Deposit Securities in the current Portfolio
Deposit, as well as the Income Net of Expense Amount effective through
and including the previous Business Day, per outstanding Nasdaq-100
Share.\13\
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\10\ The Trust will comply with the federal securities laws in
accepting Deposit Securities and satisfying redemptions with
redemption securities (``Redemption Securities''), including that
the Deposit Securities and Redemption Securities are sold in
transactions that would be exempt from registration under the
Securities Act of 1933. The specified Deposit Securities and
Redemption Securities generally will correspond pro rata to the
Portfolio Securities.
\11\ At the close of the market on each Business Day, the
Trustee calculates the NAV of the Trust and then divides the NAV by
the number of outstanding Nasdaq-100 Shares in Creation Unit size
aggregations, resulting in an NAV per Creation Unit. The Trustee
then calculates the required number of shares of the Index
Securities, and the amount of cash, comprising a Portfolio Deposit
for the following Business Day.
\12\ The Transaction Fee is (i) $500 per ``Participating Party''
(defined below) per day for creations of Creation Units where there
are also, in the same day, separate creations in any number, or
redemptions in an amount not equal to the number of Nasdaq-100
Shares created, of other similar exchange-traded funds based on the
Index for which the Trustee or its affiliate acts as trustee, fund
administrator or in any similar capacity, (ii) no fee per
Participating Party where there is, in the same day, a redemption of
an equal number of shares of another similar exchange-traded fund
based on the Index, for which the Trustee or its affiliate acts as
the Trustee, fund administrator or in a similar capacity, and (iii)
in all other cases $1,000 per day, regardless of the number of
Creation Units purchased on that day by such Participating Party.
The Transaction Fee may be changed by the Trustee with the Sponsor's
consent, but it will not exceed 0.10% of the value of a Creation
Unit. For purchases of Creation Units outside the Nasdaq-100
Clearing Process, the Transaction Fee will be one to four times
greater. The amount of the Transaction Fee will be disclosed in the
prospectus for the Trust. A ``Participating Party'' is a broker-
dealer or other NSCC participant who is a participating party in the
Nasdaq-100 Clearing Process.
\13\ The cash equivalent of an Index Security may be included in
the Cash Component of a Portfolio Deposit in lieu of the security if
(i) the Trustee determines that an Index Security is likely to be
unavailable or available in insufficient quantity for inclusion in a
Portfolio Deposit (for example, when the security is subject to a
trading halt or stop order, or the subject of a tender offer), or
(ii) a particular investor is restricted from investing or engaging
in transactions in the Index Security (for example, when the
investor is a broker-dealer restricted by regulation or internal
policy from investing in securities issued by a company on whose
board of directors one of its principals serves, or when the
investor is a broker-dealer and the security is on its ``restricted
list'').
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9. Orders to purchase Creation Units are placed with the
Distributor, who is responsible for transmitting the orders to the
Trustee. The Distributor issues confirmations of acceptance, transmits
delivery instructions to the Trustee to implement the delivery of
Creation Units, and maintain records of the orders and the
confirmations. The Distributor also is responsible for delivering
prospectuses to purchasers of Creation Units and may provide certain
other administrative services, such as those related to state
securities law compliance.
10. Persons purchasing Creation Units from the Trust may hold the
Nasdaq-100 Shares or sell some or all of them in the secondary market.
Nasdaq-100 Shares are listed on the Nasdaq Global Select Market and the
Nasdaq Global Market, each part of Nasdaq, and traded in the secondary
market as individual units (i.e., in less than Creation Units) in the
same manner as other equity securities. One or more member firms of
Nasdaq will act as market makers (``Market Makers'') and maintain a
market for Nasdaq-100 shares.\14\ Transactions involving the sale of
Nasdaq-100 Shares are subject to customary brokerage commissions and
charges. Applicants state that the price at which Nasdaq-100 Shares
trade is disciplined by arbitrage opportunities created by the ability
to continually purchase or redeem Creation Units at their NAV, which
should ensure that Nasdaq-100 Shares do not trade at a material
discount or premium in relation to their NAV.
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\14\ No particular Market Maker is contractually obligated to
make a market in Nasdaq-100 Shares although Nasdaq's listing
requirements stipulate that at least two Market Makers must be
registered in Nasdaq-100 Shares to maintain the listing. Applicants
do not expect that any Market Maker will be an affiliated person, or
an affiliated person of an affiliated person of the Trust, within
the meaning of section 2(a)(3) of the Act, except pursuant to
section 2(a)(3)(A) or (C) of the Act due to ownership of Nasdaq-100
Shares, as described below.
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11. Applicants state that purchasers of Creation Units include
institutional investors and arbitrageurs (which could include
institutional investors). A Market Maker also may purchase Creation
Units for use in market making activities. Applicants also state that
secondary market purchasers of Nasdaq-100 Shares include both
institutional and retail investors.\15\
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\15\ Nasdaq-100 Shares are registered in book-entry form only.
DTC or its nominee is the registered owner of all outstanding
Nasdaq-100 Shares. Records reflecting the beneficial owners of
Nasdaq-100 Shares are maintained by DTC or its participants.
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12. Applicants will make available a standard product description
for Nasdaq-100 Shares (``Product Description'') to Nasdaq members and
member organizations for distribution to investors purchasing Nasdaq-
100 Shares in accordance with Nasdaq rules. The purpose of the Product
Description is to provide a brief and readily understandable
description of the salient aspects of Nasdaq-100 Shares. The Product
Description also advises investors that a prospectus for Nasdaq-100
Shares is available without charge upon request from the investor's
account executive. Applicants state that purchases of Nasdaq-100 Shares
through a non-member broker-dealer in a transaction away from the
Nasdaq do not constitute a significant portion of the market activity
in Nasdaq-100 Shares.
13. Nasdaq-100 Shares are not individually redeemable, except upon
termination of the Trust. Nasdaq-100 Shares are only redeemable in
Creation Units through the Trust. To redeem, an investor has to
accumulate enough Nasdaq-100 Shares to constitute a Creation Unit. An
investor redeeming a Creation Unit will receive a portfolio of
securities typically identical in composition and weighting to the
securities portion of a Portfolio Deposit as of the date the redemption
request was made. An investor may receive the cash equivalent of an
Index Security (i) when the Trustee determines that an Index Security
is likely to be unavailable or available in insufficient quantity for
delivery by the Trust; (ii) upon the request of the redeeming investor;
or (iii) upon notice of the termination of the Trust. A redeeming
investor may receive or may pay an amount equal to the Income Net of
Expense Amount, plus or minus the Balancing Amount. A redeeming
investor will pay a Transaction Fee calculated in the same manner as a
Transaction Fee payable in connection with the purchase of a Creation
Unit. The Trustee will transfer the securities and cash to the
redeeming investor within three Business Days of receipt of the request
for redemption.
14. Because the Trust ordinarily redeems Creation Units in kind,
the Trust does not have to maintain cash reserves for redemptions. This
allows the assets of the Trust to be committed as fully as possible to
tracking the Index, enabling the Trust to track the Index more closely
than other investment products that must allocate a greater portion of
their assets for cash redemptions.
15. The Trust will terminate on the earlier of (i) March 4, 2124,
or (ii) the date 20 years after the death of the last survivor of
fifteen persons named in the trust agreement, the oldest of whom was
born in 1986 and the youngest of whom was born in 1996. The Trust will
also terminate if (i) Nasdaq-100 Shares are de-listed from the Nasdaq
and are not subsequently re-listed on a national securities exchange
registered under the Exchange Act; or (ii) either the Sponsor or the
Trustee resigns or is removed, and a successor is not appointed. The
Trust may terminate if: (i) 66\2/3\% of the holders of the outstanding
Nasdaq-100 Shares agree to terminate it; (ii) the DTC is unable or
unwilling to continue to perform its functions and a suitable
replacement is unavailable; (iii) NSCC no longer provides clearance
services with respect to the Nasdaq-100 Shares, or if the Trustee is no
longer a participant in NSCC; (iv) Nasdaq ceases to publish the Index;
or (v) the license agreement is terminated.
16. Within a reasonable time after the Trust's termination, the
Trustee will use its best efforts to sell all Portfolio Securities not
previously distributed to investors redeeming Creation Units. Nasdaq-
100 Shares not redeemed prior to termination will be redeemed in cash
at NAV based on the proceeds from the sale of the Portfolio Securities.
Applicants' Legal Analysis
1. Applicants request an order under section 6(c) of the Act
granting an exemption from sections 2(a)(32), 4(2),
[[Page 9597]]
22(d), 24(d), and 26(a)(2)(C) of the Act and rule 22c-1 under the Act;
under sections 6(c) and 17(b) of the Act granting an exemption from
sections 17(a)(1) and (2) of the Act; and under section 17(d) of the
Act and rule 17d-1 under the Act to permit certain joint transactions.
2. Section 6(c) of the Act provides that the Commission may exempt
any person, security, or transaction, or any class of persons,
securities, or transactions, 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.
Sections 4(2) and 2(a)(32) of the Act
3. Section 4(2) of the Act defines a UIT as an investment company
that, among other things, issues only redeemable securities. The term
``redeemable security'' is defined in section 2(a)(32) of the Act as
any security, other than short-term paper, under the terms of which the
holder, upon its presentation to the issuer is entitled to receive
approximately a proportionate share of the issuer's current net assets
or the cash equivalent. Because Nasdaq-100 Shares are not individually
redeemable, applicants request an order that would permit the Trust to
register and operate as a UIT and issue Nasdaq-100 Shares that are
redeemable in Creation Units only. Applicants state that investors may
purchase Nasdaq-100 Shares in Creation Units from the Trust and redeem
Creation Units. Applicants further state that because the market price
of Creation Units is disciplined by arbitrage opportunities, investors
should be able to sell Nasdaq-100 Shares in the secondary market at
approximately their NAV.
Section 22(d) of the Act and Rule 22c-1 Under the Act
4. Section 22(d) of the Act, among other things, prohibits a dealer
from selling a redeemable security that is being currently offered to
the public by or through an underwriter, except at a current public
offering price described in the prospectus. Rule 22c-1 under the Act
generally requires that a dealer selling, redeeming, or repurchasing a
redeemable security do so only at a price based on its NAV next
computed after receipt of a tender of the security for redemption or of
an order to purchase or sell the security. Applicants state that
secondary market trading in Nasdaq-100 Shares takes place at negotiated
prices, not at a current offering price described in the prospectus,
and not at a price based on NAV. Thus, purchases and sales of Nasdaq-
100 Shares in the secondary market do not comply with section 22(d) and
rule 22c-1. Applicants request an exemption from these provisions.
5. Applicants assert that the concerns sought to be addressed by
section 22(d) of the Act and rule 22c-1 under the Act with respect to
pricing are equally satisfied by the method of pricing Nasdaq-100
Shares. Applicants maintain that while there is little legislative
history regarding section 22(d), its provisions, as well as those of
rule 22c-1, appear to have been designed to (i) prevent dilution caused
by certain riskless-trading schemes by principal underwriters and
contract dealers; (ii) prevent unjust discrimination or preferential
treatment among buyers resulting from sales at different prices; and
(iii) assure an orderly distribution of investment company shares by
eliminating price competition from dealers offering shares at less than
the published sales price and repurchasing shares at more than the
published redemption price.
6. Applicants believe that none of these purposes are thwarted by
permitting Nasdaq-100 Shares to trade in the secondary market at
negotiated prices. Applicants state (i) that secondary market trading
in Nasdaq-100 Shares does not involve the Trust as a party and cannot
result in dilution of an investment in Nasdaq-100 Shares; and (ii) to
the extent different prices exist during a given trading day, or from
day to day, such variances occur as a result of third-party market
forces, such as supply and demand, not as a result of unjust or
discriminatory manipulation. Therefore, applicants assert that
secondary market transactions in Nasdaq-100 Shares do not create
discrimination or preferential treatment among purchasers. Finally,
applicants contend that the proposed distribution system is orderly
because arbitrage activity ensures that the difference between the
market price of Nasdaq-100 Shares and their NAV remains narrow.
Section 24(d) of the Act
7. Section 24(d) of the Act provides, in pertinent part, that the
prospectus delivery exemption provided to dealer transactions by
section 4(3) of the Securities Act does not apply to any transaction in
a redeemable security issued by a UIT. Applicants request an exemption
from section 24(d) to permit dealers in Nasdaq-100 Shares to rely on
the prospectus delivery exemption provided by section 4(3) of the
Securities Act.\16\ Applicants state that the imposition of prospectus
delivery requirements on dealers in the secondary market will
materially impede the success of Nasdaq-100 Shares.
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\16\ Applicants state that persons purchasing Creation Units
will be cautioned in the prospectus that some activities on their
part may, depending on the circumstances, result in their being
deemed statutory underwriters and subject them to the prospectus
delivery and liability provisions of the Securities Act. For
example, a broker-dealer firm and/or its client may be deemed a
statutory underwriter if it takes Creation Units after placing an
order with the Distributor, breaks them down into the constituent
Nasdaq-100 Shares, and sells Nasdaq-100 Shares directly to its
customers; or if it chooses to couple the creation of a supply of
new Nasdaq-100 Shares with an active selling effort involving
solicitation of secondary market demand for Nasdaq-100 Shares. The
prospectus will state that whether a person is an underwriter
depends upon all the facts and circumstances pertaining to that
person's activities. The prospectus also will state that broker-
dealer firms should also note that dealers who are not
``underwriters'' but are participating in a distribution (as
contrasted to ordinary secondary trading transactions), and thus
dealing with Nasdaq-100 Shares that are part of an ``unsold
allotment'' within the meaning of section 4(3)(C) of the Securities
Act, would be unable to take advantage of the prospectus delivery
exemption provided by section 4(3) of the Securities Act.
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8. Applicants state that the secondary market for Nasdaq-100 Shares
is significantly different from the typical secondary market for UIT
securities, which is usually maintained by the sponsor. Nasdaq-100
Shares are listed on a national securities exchange and trade in the
same manner as listed securities issued by operating companies and
closed-end investment companies. Dealers selling shares of operating
companies and closed-end investment companies in the secondary market
generally are not required to deliver a prospectus to the purchaser.
9. Applicants contend that Nasdaq-100 Shares, as a listed security,
merit a reduction in the compliance costs and regulatory burdens
resulting from the imposition of prospectus delivery obligations in the
secondary market. Because Nasdaq-100 Shares are exchange-listed,
prospective investors have access to several types of market
information about them. Applicants state that quotations, last sale
price, and volume information are continually available on a real time
basis through the consolidated tape and are available throughout the
day on brokers' computer screens and other electronic services, such as
Quotron. The previous day's price and volume information is also
published in the financial section of newspapers. The Sponsor also
publishes daily, on a per Nasdaq-100 Share basis, the amount of
accumulated dividends, net of accrued expenses.
[[Page 9598]]
10. Investors also receive Product Descriptions. Applicants state
that, while not intended as a substitute for a prospectus, the Product
Description contains pertinent information about Nasdaq-100 Shares.
Applicants also note that Nasdaq-100 Shares are readily understandable
to retail investors as a product that tracks the Nasdaq-100 Index,
which is well known to most investors and widely recognized.
Section 26(a)(2)(C) of the Act
11. Section 26(a)(2)(C) of the Act requires, among other things,
that a UIT's trust indenture prohibit payments to the trust's depositor
(in the case of the Trust, the Sponsor), and any affiliated person of
the depositor, except payments for performing certain administrative
services. Applicants request an exemption from section 26(a)(2)(C) to
permit the Trust to reimburse the Sponsor for certain licensing,
registration, and marketing expenses.
12. Applicants state that, ordinarily, a sponsor of a UIT has
several sources of income in connection with the creation of the trust.
Applicants assert, however, that under the structure of the Trust, the
usual sources of income are not available because the Sponsor will not
impose a sales load, maintain a secondary market, or deposit Index
Securities into the Trust. Applicants contend that the abuse sought to
be remedied by section 26(a)(2)(C) of the Act--``double dipping'' by
UIT sponsors collecting money from their captive trusts in addition to
the profits already generated by sales charges and other sources--will
not be present if the requested exemption is granted.
13. Applicants contend that permitting the Trust to reimburse the
Sponsor for certain expenses would be no more disadvantageous to the
holders of Nasdaq-100 Shares than allowing the expenses to be imposed
indirectly as offsets to sales loads and other charges, as is done by
typical UITs. Applicants state that the Trust pays the Sponsor only its
actual out-of-pocket expenses and no component of profit is included.
Finally, applicants state that the payment is capped at 20 basis points
of the Trust's NAV on an annualized basis, with any expenses in excess
of that amount absorbed by the Sponsor.
Section 17(a) of the Act
14. Section 17(a) of the Act generally prohibits an affiliated
person of a registered investment company, or an affiliated person of
such person, from selling any security to or purchasing any security
from the company. Section 2(a)(3) defines ``affiliated person'' to
include any person directly or indirectly owning, controlling, or
holding with power to vote, 5% or more of the outstanding voting
securities of the other person, and any person controlling, controlled
by or under common control with the other person. Section 2(a)(9)
provides that a control relationship will be presumed where one person
owns 25% or more of another person's voting securities. Applicants
state that, because the definition of ``affiliated person'' includes
any person owning 5% or more, or more than 25%, of an issuer's
outstanding voting securities, every purchaser of a Creation Unit will
be an affiliated person of the Trust so long as 20 or fewer Creation
Units are in existence. Applicants request an exemption from section
17(a) under sections 6(c) and 17(b) to permit persons that are
affiliated persons solely by virtue of a 5% or more, or more than 25%,
ownership interest in the Trust (or affiliated persons of such person
that are not otherwise affiliated with the Trust) to purchase and
redeem Creation Units through in-kind transactions.
15. Section 17(b) authorizes the Commission to exempt a proposed
transaction from section 17(a) if evidence establishes that the terms
of the transaction, including the consideration to be paid or received,
are reasonable and fair and do not involve overreaching, and the
proposed transaction is consistent with the policies of the registered
investment company and the general provisions of the Act. Applicants
contend that no useful purpose would be served by prohibiting
affiliated persons of the Trust from purchasing or redeeming Creation
Units. The composition of a Portfolio Deposit made by a purchaser or
given to a redeeming investor is the same regardless of the investor's
identity, and is valued under the same objective standards applied to
valuing the Portfolio Securities. Therefore, applicants state that ``in
kind'' purchases and redemptions will afford no opportunity for an
affiliated person of the Trust to effect a transaction detrimental to
the other holders of Nasdaq-100 Shares. Applicants also believe that
``in kind'' purchases and redemptions do not result in abusive self-
dealing or overreaching by affiliated persons of the Trust.
Section 17(d) of the Act and Rule 17d-1 Under the Act
16. Section 17(d) of the Act and rule 17d-1 under the Act prohibit
any affiliated person of, or principal underwriter for, a registered
investment company, or any affiliated person of the affiliated person
or the principal underwriter, acting as principal, from effecting any
transaction in connection with any joint enterprise or other
arrangement or profit-sharing plan in which the investment company
participates, unless an application regarding the joint transaction has
been filed with the Commission and granted by order. Under rule 17d-1,
in passing upon such applications, the Commission considers whether the
participation of the registered investment company in the joint
transaction is consistent with the provisions, policies and purposes of
the Act and the extent to which such participation is on a basis
different or less advantageous than that of other participants.
17. Applicants request an order under rule 17d-1 that would permit
the Trust to reimburse the Sponsor for the payment to Nasdaq of an
annual license fee under a license agreement. Applicants believe that
relief is necessary because the Trust's undertaking to reimburse the
Sponsor might be deemed a joint enterprise or other joint arrangement
in which the Trust is a participant, in contravention of section 17(d)
of the Act and rule 17d-1.
18. The license agreement allows applicants to use the Index as a
basis for Nasdaq-100 Shares and to use certain of Nasdaq's trade name
and trademark rights. Applicants believe that Nasdaq is a valuable name
that is well-known to investors and that investors will desire to
invest in an instrument that closely mirrors the Index. In view of
this, applicants state that it is necessary to obtain from Nasdaq the
above-mentioned license agreement so that appropriate reference to
Nasdaq and Nasdaq-100 Shares may be made in materials describing
Nasdaq-100 Shares and the Trust. Applicants assert that the terms and
provisions of the license agreement are comparable to the terms and
provisions of other similar license agreements and that the annual
license fee is for fair value and is in an amount comparable to that
which would be charged by Nasdaq for similar arrangements. For these
reasons, applicants state that the proposed license fee arrangement
satisfies the standards of section 17(d) and rule 17d-1.
Applicants' Conditions
Applicants agree that the order granting the requested relief will
be subject to the following conditions:
1. Applicants will not register a new series of the Trust by means
of filing a post-effective amendment to the Trust's
[[Page 9599]]
registration statement or by any other means, unless applicants have
requested and received with respect to such new series, either
exemptive relief from the Commission or a no-action position from the
Division of Investment Management of the Commission.
2. The Trust's prospectus and the Product Description clearly
disclose that, for purposes of the Act, Nasdaq-100 Shares are issued by
the Trust and that the acquisition of Nasdaq-100 Shares by investment
companies is subject to the restrictions of section 12(d)(1) of the
Act, except as permitted by an exemptive order that permits registered
investment companies to invest in the Trust beyond the limits of
Section 12(d)(1)(A), subject to certain terms and conditions, including
that the investment company enter into an agreement with the Trust
regarding the terms of the investment.
3. As long as the Trust operates in reliance on the requested
order, the Nasdaq-100 Shares will be listed on an Exchange.
4. The website for the Trust, which will be publicly accessible at
no charge, will contain the following information, on a per Nasdaq-100
Share basis, for the Trust: (a) The prior Business Day's NAV and the
reported closing price, and a calculation of the premium or discount of
such price against such NAV; and (b) data in chart format displaying
the frequency distribution of discounts and premiums of the daily
closing price against the NAV, within appropriate ranges, for each of
the four previous calendar quarters. In addition, the Product
Description for the Trust will state that the website for the Trust has
information about premiums and discounts at which the Nasdaq-100 Shares
have traded.
5. The prospectus and annual report for the Trust will also
include: (a) The information listed in condition 4(b), (i) in the case
of the prospectus, for the most recently completed year (and the most
recently completed quarter or quarters, as applicable) and (ii) in the
case of the annual report, for the immediately preceding five years, as
applicable; and (b) the following data, calculated on a per Nasdaq-100
Share basis for one-, five- and ten-year periods (or life of the
Trust), (i) the cumulative total return and the average annual total
return based on NAV and closing price, and (ii) the cumulative total
return of the Index.
6. Before the Trust may rely on the order, the Commission will have
approved pursuant to rule 19b-4 under the Exchange Act, an Exchange
rule requiring Exchange members and member organizations effecting
transactions in Nasdaq-100 Shares to deliver a Product Description to
purchasers of Nasdaq-100 Shares.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-3677 Filed 3-1-07; 8:45 am]
BILLING CODE 8010-01-P
