First Investors Equity Funds, et al.; Notice of Application, 30403-30404 [E7-10364]

Download as PDF Federal Register / Vol. 72, No. 104 / Thursday, May 31, 2007 / Notices Commission, Office of Filings and Information Services, Washington, DC 20549. sroberts on PROD1PC70 with NOTICES Extension: Rule 15Ba2–1 and Form MSD; SEC File No. 270–88; OMB Control No. 3235–0083 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’’) is soliciting comments on the collection of information summarized below. The Commission plans to submit this existing collection of information to the Office of Management and Budget for extension and approval. Rule 15Ba2–1 (17 CFR 240.15Ba2–1) under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) provides that an application for registration with the Commission by a bank municipal securities dealer must be filed on Form MSD. The Commission uses the information contained in Form MSD to determine whether bank municipal securities dealers meet the standards for registration set forth in the Exchange Act, to develop a central registry where members of the public may obtain information about particular bank municipal securities dealers, and to develop statistical information about bank municipal securities dealers. Based upon past submissions, the staff estimates that approximately 32 respondents will utilize this application procedure annually, with a total burden of 48 hours. The staff estimates that the average number of hours necessary to comply with the requirements of Rule 15Ba2–1 is 1.5 hours. The average cost per hour is approximately $67. Therefore, the total cost of compliance for the respondents is approximately $3,216. Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency’s estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Direct your written comments to R. Corey Booth, Director/Chief Information VerDate Aug<31>2005 16:01 May 30, 2007 Jkt 211001 Officer, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312 or send an e-mail to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 60 days of this notice. May 16, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7–10378 Filed 5–30–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 27826; 812–13350] 30403 Secretary, Commission, 100 F Street, NE., Washington, DC 20549– 1090. Applicants, First Investors Equity Funds et al, Kirkpatrick & Lockhart Preston Gates, LLP, 1601 K Street, NW., Washington, D.C. 20006. FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel at (202) 551–6876, or Nadya Roytblat, Assistant Director, 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 from the Commission’s Public Reference Branch, 100 F Street, NE., Washington, DC 20549–0102 (telephone (202) 551–5850). ADDRESSES: Applicants’ Representations: 1. The Trusts, each a Delaware statutory trust, are registered under the May 23, 2007. Act as open-end management AGENCY: Securities and Exchange investment companies. Each Trust Commission (‘‘Commission’’). currently offers one or more series ACTION: Notice of an application under (‘‘Funds’’), each of which has its own section 6(c) of the Investment Company investment objectives, policies and Act of 1940 (the ‘‘Act’’) for an restrictions.1 exemption from section 15(a) of the Act 2. The Advisor is registered under the and rule 18f–2 under the Act. Investment Advisers Act of 1940 (the ‘‘Advisers Act’’) and serves as Summary of Application: The investment adviser to each Fund requested order would permit certain pursuant to an investment advisory registered open-end management investment companies to enter into and agreement with the respective Trust (‘‘Advisory Agreement’’) that was materially amend subadvisory approved by the board of trustees of the agreements with subadvisers Trust (the ‘‘Board’’), including a (‘‘Subadvisors’’) without shareholder majority of the trustees who are not approval. ‘‘interested persons,’’ as defined in Applicants: First Investors Equity section 2(a)(19) of the Act Funds, First Investors Income Funds, (‘‘Independent Trustees’’), and the First Investors Tax Exempt Funds, and shareholders of each Fund. Under the First Investors Life Series Fund (the Advisory Agreement, the Advisor ‘‘Trusts’’) and First Investors receives a fee from each Fund based on Management Company, Inc. (the the average daily net assets of the Fund. ‘‘Advisor’’). Under the Advisory Agreement, the DATES: Filing Dates: The application was Advisor may delegate investment filed on December 4, 2006, and advisory responsibilities to one or more amended on May 17, 2007. Hearing or Subadvisors who have discretionary Notification of Hearing: An order authority to invest all or a portion of the granting the application will be issued Fund’s assets pursuant to a separate unless the Commission orders a hearing. subadvisory agreement (‘‘Subadvisory Interested persons may request a hearing by writing to the Commission’s 1 Applicants also request exemptive relief with Secretary and serving applicants with a respect to any other existing and future registered open-end management investment company or copy of the request, personally or by series thereof that (a) is advised by the Advisor or mail. Hearing requests should be any entity controlling, controlled by or under received by the Commission by 5:30 common control with the Advisor; (b) uses the p.m. on June 19, 2007 and should be advisor/subadvisor structure that is described in the application; and (c) complies with the terms and accompanied by proof of service on applicants, in the form of an affidavit or, conditions of the requested order (included in the term ‘‘Funds’’). The requested relief will not extend for lawyers, a certificate of service. to any subadvisor that is an affiliated person as Hearing requests should state the nature defined in Section 2(a)(3) of the 1940 Act, of the Fund or the Advisor, other than by reason of of the writer’s interest, the reasons for serving as a Subadvisor to one or more of the Funds the request, and the issues contested. (an ‘‘Affiliated Subadvisor’’). If the name of any Persons who wish to be notified of a Fund contains the name of a Subadvisor, the name hearing may request notification by of the Advisor will precede the name of the Subadvisor. writing to the Commission’s Secretary. First Investors Equity Funds, et al.; Notice of Application PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 E:\FR\FM\31MYN1.SGM 31MYN1 30404 Federal Register / Vol. 72, No. 104 / Thursday, May 31, 2007 / Notices Agreement’’). The Advisor selects Subadvisors based on the Advisor’s continuing evaluation of their skills in managing assets pursuant to particular investment styles. Each Subadvisor is and will be an investment adviser registered under the Advisers Act. For its services to a Fund, the Advisor pays each Subadvisor out of the investment advisory fee the Advisor receives from the Fund. Applicants request relief to permit the Advisor, subject to Board approval, to enter into and materially amend Subadvisory Agreements without shareholder approval. sroberts on PROD1PC70 with NOTICES Applicants’ Legal Analysis: 1. Section 15(a) of the Act provides, in relevant part, that it is unlawful for any person to act as an investment adviser to a registered investment company except pursuant to a written contract that has been approved by the vote of a majority of the company’s outstanding voting securities. Rule 18f– 2 under the Act provides that each series or class of stock in a series company affected by a matter must approve such matter if the Act requires shareholder approval. 2. Section 6(c) of the Act provides that the Commission may exempt any person, security, or transaction or any class or classes of persons, securities, or transactions from any provision of the Act, or from any rule thereunder, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policies and provisions of the Act. Applicants believe that their requested relief meets this standard. 3. Applicants state that the Funds’ shareholders rely on the Advisor, subject to oversight by the Board, to select the Subadvisors best suited to achieve a Fund’s investment objectives. Applicants assert that from the perspective of the investor, the role of the Subadvisors is comparable to that of individual portfolio managers employed by traditional investment advisory firms. Applicants contend that requiring shareholder approval of Subadvisory Agreements would impose costs and unnecessary delays on the Funds and may preclude the Advisor from acting promptly in a manner considered advisable by the Board. Applicants also note that the Advisory Agreement will remain subject to the shareholder approval requirements in section 15(a) of the Act and rule 18f–2 under the Act. VerDate Aug<31>2005 16:01 May 30, 2007 Jkt 211001 Applicants’ Conditions Applicants agree that any order granting the requested relief will be subject to the following conditions: 1. Before a Fund may rely on the order requested in the application, the operation of the Fund in the manner described in the application will be approved by a majority of the Fund’s outstanding voting securities, as defined in the Act, or, in the case of a Fund whose public shareholders purchase shares on the basis of a prospectus containing the disclosure contemplated by condition 2 below, by the initial shareholder(s) before offering the Fund’s shares to the public. 2. Each Fund relying on the requested order will disclose in its prospectus the existence, substance, and effect of any order granted pursuant to this application. In addition, each Fund will hold itself out to the public as employing the management structure described in the application. The prospectus will prominently disclose that the Advisor has ultimate responsibility, subject to oversight by the Board, to oversee the Subadvisors and recommend their hiring, termination and replacement. 3. Within 90 days of the hiring of any new Subadvisor, the Advisor will furnish shareholders of the affected Fund all information about the new Subadvisor that would be included in a proxy statement. To meet this obligation, the Advisor will provide shareholders of the applicable Fund with an information statement meeting the requirements of Regulation 14C, Schedule 14C and Item 22 of Schedule 14A under the Securities Exchange Act of 1934. 4. The Advisor will not enter into a Subadvisory Agreement with any Affiliated Subadvisor without that Subadvisory Agreement, including the compensation to be paid thereunder, being approved by the shareholders of the applicable Fund. 5. At all times, at least a majority of each Fund’s Board will be Independent Trustees, and the nomination of new or additional Independent Trustees will be at the discretion of the then-existing Independent Trustees. 6. When a Subadvisor change is proposed for a Fund with an Affiliated Subadvisor, the Board, including a majority of the Independent Trustees, will make a separate finding, reflected in the Board minutes, that the change is in the best interests of the Fund and its shareholders and does not involve a conflict of interest from which the Advisor or the Affiliated Subadvisor derives an inappropriate advantage. PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 7. The Advisor will have overall supervisory responsibility for the general management and investment of the Fund’s assets, and, subject to review and approval by the Board, will (i) set each Fund’s overall investment strategies, (ii) evaluate, select and recommend Subadvisors to manage all or a part of a Fund’s assets, (iii) when appropriate, allocate and reallocate a Fund’s assets among multiple Subadvisors, (iv) monitor and evaluate the performance of the Subadvisors, and (v) implement procedures reasonably designed to ensure that the Subadvisors comply with each Fund’s investment objective, policies and restrictions. 8. No trustee or officer of a Trust, or director or officer of the Advisor will own directly or indirectly (other than through a pooled investment vehicle that is not controlled by such person) any interest in a Subadvisor, except for (a) ownership of interests in the Advisor or any entity that controls, is controlled by, or is under common control with the Advisor, or (b) ownership of less than 1% of the outstanding securities of any class of equity or debt of a publiclytraded company that is either a Subadvisor or an entity that controls, is controlled by or is under common control with a Subadvisor. 9. The requested order will expire on the effective date of rule 15a–5 under the Act, if adopted. For the Commission, by the Division of Investment Management, under delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7–10364 Filed 5–30–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55810; File No. SR–NASD– 2007–034] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change Creating NASD Rule 1160 (Firm Contact Information) Regarding the Reporting and Annual Review of Designated Contact Information to NASD May 24, 2007. 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 May 11, 2007, the National Association of Securities Dealers, Inc. (‘‘NASD’’) filed 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\31MYN1.SGM 31MYN1

Agencies

[Federal Register Volume 72, Number 104 (Thursday, May 31, 2007)]
[Notices]
[Pages 30403-30404]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-10364]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 27826; 812-13350]


First Investors Equity Funds, et al.; Notice of Application

May 23, 2007.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (the ``Act'') for an exemption from section 15(a) 
of the Act and rule 18f-2 under the Act.

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    Summary of Application: The requested order would permit certain 
registered open-end management investment companies to enter into and 
materially amend subadvisory agreements with subadvisers 
(``Subadvisors'') without shareholder approval.
    Applicants: First Investors Equity Funds, First Investors Income 
Funds, First Investors Tax Exempt Funds, and First Investors Life 
Series Fund (the ``Trusts'') and First Investors Management Company, 
Inc. (the ``Advisor'').

DATES: Filing Dates: The application was filed on December 4, 2006, and 
amended on May 17, 2007. Hearing or Notification of Hearing: An order 
granting the application will be issued unless the Commission orders a 
hearing. Interested persons may request a hearing by writing to the 
Commission's Secretary and serving applicants with a copy of the 
request, personally or by mail. Hearing requests should be received by 
the Commission by 5:30 p.m. on June 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 reasons 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, Commission, 100 F Street, NE., Washington, DC 
20549-1090. Applicants, First Investors Equity Funds et al, Kirkpatrick 
& Lockhart Preston Gates, LLP, 1601 K Street, NW., Washington, D.C. 
20006.

FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel at (202) 
551-6876, or Nadya Roytblat, Assistant Director, 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 from 
the Commission's Public Reference Branch, 100 F Street, NE., 
Washington, DC 20549-0102 (telephone (202) 551-5850).

Applicants' Representations:

    1. The Trusts, each a Delaware statutory trust, are registered 
under the Act as open-end management investment companies. Each Trust 
currently offers one or more series (``Funds''), each of which has its 
own investment objectives, policies and restrictions.\1\
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    \1\ Applicants also request exemptive relief with respect to any 
other existing and future registered open-end management investment 
company or series thereof that (a) is advised by the Advisor or any 
entity controlling, controlled by or under common control with the 
Advisor; (b) uses the advisor/subadvisor structure that is described 
in the application; and (c) complies with the terms and conditions 
of the requested order (included in the term ``Funds''). The 
requested relief will not extend to any subadvisor that is an 
affiliated person as defined in Section 2(a)(3) of the 1940 Act, of 
the Fund or the Advisor, other than by reason of serving as a 
Subadvisor to one or more of the Funds (an ``Affiliated 
Subadvisor''). If the name of any Fund contains the name of a 
Subadvisor, the name of the Advisor will precede the name of the 
Subadvisor.
---------------------------------------------------------------------------

    2. The Advisor is registered under the Investment Advisers Act of 
1940 (the ``Advisers Act'') and serves as investment adviser to each 
Fund pursuant to an investment advisory agreement with the respective 
Trust (``Advisory Agreement'') that was approved by the board of 
trustees of the Trust (the ``Board''), including a majority of the 
trustees who are not ``interested persons,'' as defined in section 
2(a)(19) of the Act (``Independent Trustees''), and the shareholders of 
each Fund. Under the Advisory Agreement, the Advisor receives a fee 
from each Fund based on the average daily net assets of the Fund. Under 
the Advisory Agreement, the Advisor may delegate investment advisory 
responsibilities to one or more Subadvisors who have discretionary 
authority to invest all or a portion of the Fund's assets pursuant to a 
separate subadvisory agreement (``Subadvisory

[[Page 30404]]

Agreement''). The Advisor selects Subadvisors based on the Advisor's 
continuing evaluation of their skills in managing assets pursuant to 
particular investment styles. Each Subadvisor is and will be an 
investment adviser registered under the Advisers Act. For its services 
to a Fund, the Advisor pays each Subadvisor out of the investment 
advisory fee the Advisor receives from the Fund. Applicants request 
relief to permit the Advisor, subject to Board approval, to enter into 
and materially amend Subadvisory Agreements without shareholder 
approval.

Applicants' Legal Analysis:

    1. Section 15(a) of the Act provides, in relevant part, that it is 
unlawful for any person to act as an investment adviser to a registered 
investment company except pursuant to a written contract that has been 
approved by the vote of a majority of the company's outstanding voting 
securities. Rule 18f-2 under the Act provides that each series or class 
of stock in a series company affected by a matter must approve such 
matter if the Act requires shareholder approval.
    2. Section 6(c) of the Act provides that the Commission may exempt 
any person, security, or transaction or any class or classes of 
persons, securities, or transactions from any provision of the Act, or 
from any rule thereunder, if and to the extent that such exemption is 
necessary or appropriate in the public interest and consistent with the 
protection of investors and the purposes fairly intended by the 
policies and provisions of the Act. Applicants believe that their 
requested relief meets this standard.
    3. Applicants state that the Funds' shareholders rely on the 
Advisor, subject to oversight by the Board, to select the Subadvisors 
best suited to achieve a Fund's investment objectives. Applicants 
assert that from the perspective of the investor, the role of the 
Subadvisors is comparable to that of individual portfolio managers 
employed by traditional investment advisory firms. Applicants contend 
that requiring shareholder approval of Subadvisory Agreements would 
impose costs and unnecessary delays on the Funds and may preclude the 
Advisor from acting promptly in a manner considered advisable by the 
Board. Applicants also note that the Advisory Agreement will remain 
subject to the shareholder approval requirements in section 15(a) of 
the Act and rule 18f-2 under the Act.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. Before a Fund may rely on the order requested in the 
application, the operation of the Fund in the manner described in the 
application will be approved by a majority of the Fund's outstanding 
voting securities, as defined in the Act, or, in the case of a Fund 
whose public shareholders purchase shares on the basis of a prospectus 
containing the disclosure contemplated by condition 2 below, by the 
initial shareholder(s) before offering the Fund's shares to the public.
    2. Each Fund relying on the requested order will disclose in its 
prospectus the existence, substance, and effect of any order granted 
pursuant to this application. In addition, each Fund will hold itself 
out to the public as employing the management structure described in 
the application. The prospectus will prominently disclose that the 
Advisor has ultimate responsibility, subject to oversight by the Board, 
to oversee the Subadvisors and recommend their hiring, termination and 
replacement.
    3. Within 90 days of the hiring of any new Subadvisor, the Advisor 
will furnish shareholders of the affected Fund all information about 
the new Subadvisor that would be included in a proxy statement. To meet 
this obligation, the Advisor will provide shareholders of the 
applicable Fund with an information statement meeting the requirements 
of Regulation 14C, Schedule 14C and Item 22 of Schedule 14A under the 
Securities Exchange Act of 1934.
    4. The Advisor will not enter into a Subadvisory Agreement with any 
Affiliated Subadvisor without that Subadvisory Agreement, including the 
compensation to be paid thereunder, being approved by the shareholders 
of the applicable Fund.
    5. At all times, at least a majority of each Fund's Board will be 
Independent Trustees, and the nomination of new or additional 
Independent Trustees will be at the discretion of the then-existing 
Independent Trustees.
    6. When a Subadvisor change is proposed for a Fund with an 
Affiliated Subadvisor, the Board, including a majority of the 
Independent Trustees, will make a separate finding, reflected in the 
Board minutes, that the change is in the best interests of the Fund and 
its shareholders and does not involve a conflict of interest from which 
the Advisor or the Affiliated Subadvisor derives an inappropriate 
advantage.
    7. The Advisor will have overall supervisory responsibility for the 
general management and investment of the Fund's assets, and, subject to 
review and approval by the Board, will (i) set each Fund's overall 
investment strategies, (ii) evaluate, select and recommend Subadvisors 
to manage all or a part of a Fund's assets, (iii) when appropriate, 
allocate and reallocate a Fund's assets among multiple Subadvisors, 
(iv) monitor and evaluate the performance of the Subadvisors, and (v) 
implement procedures reasonably designed to ensure that the Subadvisors 
comply with each Fund's investment objective, policies and 
restrictions.
    8. No trustee or officer of a Trust, or director or officer of the 
Advisor will own directly or indirectly (other than through a pooled 
investment vehicle that is not controlled by such person) any interest 
in a Subadvisor, except for (a) ownership of interests in the Advisor 
or any entity that controls, is controlled by, or is under common 
control with the Advisor, or (b) ownership of less than 1% of the 
outstanding securities of any class of equity or debt of a publicly-
traded company that is either a Subadvisor or an entity that controls, 
is controlled by or is under common control with a Subadvisor.
    9. The requested order will expire on the effective date of rule 
15a-5 under the Act, if adopted.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-10364 Filed 5-30-07; 8:45 am]
BILLING CODE 8010-01-P