HealthShares, Inc., et al.; Notice of Application, 42447-42449 [E7-15021]

Download as PDF Federal Register / Vol. 72, No. 148 / Thursday, August 2, 2007 / Notices connection with the reorganization were paid by applicant. Filing Date: The application was filed on July 2, 2007. Applicant’s Address: 95 Wall St., New York, NY 10005. Value Line Hedged Opportunity Fund, Inc. [File No. 811–8607]. Huntington VA Funds Value Line Smaller Companies Fund, Inc. [File No. 811–9481] [File No. 811–21608]. Value Line Value Fund, Inc. [File No. 811–21639]. Summary: Each applicant seeks an order declaring that it has ceased to be an investment company. Applicants have never made a public offering of their securities and do not propose to make a public offering or engage in business of any kind. Filing Dates: The applications were filed on May 30, 2007, and amended on July 11, 2007. Applicants’ Address: 220 East 42nd St., New York, NY 10017. Vestaur Securities Fund [File No. 811–2320] Summary: Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On May 23, 2005, applicant transferred its assets to Evergreen Fixed Income Trust, based on net asset value. Expenses of $147,380 incurred in connection with the reorganization were paid by applicant and Evergreen Investment Management Company, LLC, investment adviser to both applicant and the acquiring fund. Filing Dates: The application was filed on October 12, 2006, and amended on July 13, 2007. Applicant’s Address: 200 Berkeley St., Boston, MA 02116. mstockstill on PROD1PC66 with NOTICES For the Commission, by the Division of Investment Management, pursuant to delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7–14913 Filed 8–1–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. IC–27916; 812–13358] HealthShares, Inc., et al.; Notice of Application Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of application to amend a prior order under section 6(c) of the Investment Company Act of 1940 (‘‘Act’’) for an exemption from sections 2(a)(32), 5(a)(1), 22(d), and 24(d) of the Act and rule 22c–1 under the Act, and under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and (a)(2) of the Act. AGENCY: [File No. 811–3641] Summary: Applicant seeks an order declaring that it has ceased to be an investment company. On March 29, 2007, three series of 40|86 Series Trust, Fixed Income Portfolio, Government Securities Portfolio and Money Market Portfolio, were liquidated and cash was distributed to each series’ respective shareholders pro rata based on share ownership. On May 2, 2007, the shares of the two remaining series of 40|86 Series Trust, Equity Portfolio and Balanced Portfolio, were redeemed in kind by the sole shareholder of each series, which is unaffiliated with the investment adviser of 40|86 Series Trust. Expenses of approximately $ 177,500 17:42 Aug 01, 2007 Summary: Applicant seeks an order declaring that it has ceased to be an investment company. On June 23, 2006, Applicant made a distribution of its assets to its shareholders, based on net asset value, in connection with the merger of Applicant (a Massachusetts business trust) into the Huntington Funds (a Delaware statutory trust). Expenses of $138,306.12 were incurred in connection with the merger. These expenses were shared pro-rata among all portfolios of Applicant and the Huntington Funds. Filing Dates: The application was filed on March 6, 2007, and amended on June 28, 2007. Applicant’s Address: Huntington VA Funds, 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237–7010. July 27, 2007. 4086 Series Trust VerDate Aug<31>2005 incurred in connection with the liquidation were paid by 40|86 Advisors, Inc., applicant’s investment adviser. Filing Dates: The application was filed on June 13, 2007, and amended on July 18, 2007 and July 20, 2007. Applicant’s Address: 11825 N. Pennsylvania Street, Carmel, IN 46032. Jkt 211001 Summary of Application: Applicants request an order to amend a prior order that permits: (a) Open-end management investment companies, whose series are based on certain equity securities indices created by an affiliate of the investment adviser, to issue shares PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 42447 redeemable only in large aggregations; (b) secondary market transactions in the shares of the series to occur at negotiated prices; (c) dealers to sell 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’’); and (d) certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of aggregations of the series’ shares (‘‘Prior Order’’).1 Applicants seek to amend the Prior Order in order to offer additional series that would hold equity and fixed income securities and to provide that certain representations and undertakings contained in the Prior Order shall not apply to a series where an entity that creates, compiles, sponsors, or maintains an underlying index is not an affiliated person, or an affiliated person of an affiliated person, of the series, its investment adviser, distributor, promoter, or any sub-adviser to the series. In addition, the order would delete a condition related to future relief in the Prior Order. Applicants: HealthShares, Inc., XShares Advisors LLC (formerly, X– Shares Advisors, LLC) (the ‘‘Advisor’’), XShares Group LLC (formerly, Ferghana-Wellspring LLC) and TDAX Funds, Inc. Filing Dates: The application was filed on January 19, 2007 and amended on June 4, 2007 and on July 20, 2007. 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 August 17, 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 1 HealthShares, Inc., et al., Investment Company Act Release Nos. 27553 (November 16, 2006) (notice) and 27594 (December 7, 2006) (order). E:\FR\FM\02AUN1.SGM 02AUN1 42448 Federal Register / Vol. 72, No. 148 / Thursday, August 2, 2007 / Notices Street, NE., Washington, DC 20549– 1090. Applicants: Attn. Anthony F. Dudzinski, Esq., 420 Lexington Avenue, Suite 2550, New York, NY 10170; and Michael R. Rosella, Esq., Paul, Hastings, Janofsky & Walker LLP, Park Avenue Tower, 75 East 55th Street, First Floor, New York, NY 10022. FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, at (202) 551–6876 or Mary Kay Frech, 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). mstockstill on PROD1PC66 with NOTICES Applicants’ Representations 1. HealthShares, Inc. is an open-end management investment company organized as a Maryland corporation and is comprised of multiple series (the ‘‘Initial Funds’’). TDAX Funds, Inc. (the ‘‘Company’’) is an open-end management investment company organized as a Maryland corporation that is comprised of five (5) series of underlying ‘‘lifecycle’’ portfolios (each a ‘‘New Fund’’ and together, the ‘‘New Funds’’). The Advisor, which is registered as an investment adviser under the Investment Advisers Act of 1940 (the ‘‘Advisers Act’’), serves as the investment adviser to the Initial Funds and will serve as investment adviser to the New Funds. The Advisor expects to enter into sub-advisory agreements with Amerivest Investment Management, LLC and BNY Investment Advisors (collectively, ‘‘Sub-Advisors’’) to serve as sub-advisers to the New Funds. Each Sub-Advisor is registered as an investment adviser under the Advisers Act. Neither Sub-Advisor is an affiliated person, or an affiliated person of an affiliated person, of the Advisor or Zacks Investment Research Inc. (‘‘Zacks’’), the creator of the Underlying Indexes (as defined below). ALPS Distributors, Inc. (the ‘‘Distributor’’), a broker-dealer registered under the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’), will serve as the principal underwriter and distributor for the New Funds. 2. The applicants are currently permitted to offer the Initial Funds based on equity securities indices developed by an affiliated person of the Advisor in reliance on the Prior Order. Applicants seek to amend the Prior Order to permit the offering of the New Funds, as well as series that may be VerDate Aug<31>2005 17:42 Aug 01, 2007 Jkt 211001 created in the future that are advised by the Advisor or an entity controlled by or under common control with the Advisor and that comply with the terms and conditions of the Prior Order, as modified by the requested relief (the ‘‘Future Funds,’’ together with the Initial Funds and the New Funds, the ‘‘Funds’’). The New Funds would operate in a manner identical to the Initial Funds that are subject to the Prior Order, except as described in the application. 3. The investment objective of each New Fund is to track the performance, before fees and expenses, of a particular underlying index (‘‘Underlying Index’’) by investing in a portfolio of securities generally consisting of the component securities (‘‘Component Securities’’) of the Underlying Index.2 Each Underlying Index is a ‘‘lifestyle’’ index that rebalances allocations among asset classes over time in an attempt to maximize capital appreciation at a target date. No entity that creates, compiles, sponsors, or maintains an Underlying Index is or will be an affiliated person, as defined in section 2(a)(3) of the Act, or an affiliated person of an affiliated person, of the Company, the Advisor, the Distributor, promoter, or any subadviser to a New Fund. 4. The applicants represent that the Component Securities of each Underlying Index include equity securities of U.S. and international companies (including common stocks and real estate investment trusts), American Depository Receipts based on equity securities of international companies, and fixed-income securities (including bonds, treasury bills and notes, mortgage real estate investment trusts, U.S. government agency mortgage pass-through securities, cash equivalents or short-term money market instruments). The fixed income securities included in the Component Securities will be investment grade fixed income securities and will not include corporate mortgage-backed securities, asset-backed securities, high yield bonds, or Rule 144A securities.3 2 The Underlying Indices for the New Funds are the Zacks 2010 Lifecycle Index, Zacks 2020 Lifecycle Index, Zacks 2030 Lifecycle Index, Zacks 2040 Lifecycle Index, and Zacks In-Target Lifecycle Index. 3 If an underlying index of a Future Fund includes restricted securities eligible for resale pursuant to rule 144A under the Securities Act (‘‘Rule 144A securities’’), applicants acknowledge that in accepting deposit securities (‘‘Deposit Securities’’) and satisfying redemptions with securities that are Rule 144A securities, the Future Funds will comply with the conditions of rule 144A. The prospectus for a Future Fund would also state that an authorized participant that is not a ‘‘Qualified Institutional Buyer,’’ as defined in rule 144A under the Securities Act, will not be able to PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 Each New Fund will attempt to track its Underlying Index by investing at least 90%, and typically substantially all, of its assets in the securities that make up the Underlying Index, holding each security in approximately the same proportion as its weighting in the Underlying Index.4 Each New Fund also may invest up to 10% of its assets in futures contracts, options on futures contracts, options, as well as swaps on securities of companies in the Underlying Index. Applicants expect that the returns of each New Fund should be highly correlated with the returns of its Underlying Index, expecting that the correlation coefficient between each New Fund and its Underlying Index will exceed 95% over extended periods. 5. The Prior Order relates to Funds that track indices created by an affiliated person of the Advisor. Because such Funds could introduce potential conflicts of interest, the Prior Order contains certain representations and undertakings relating to the transparency of the methodology for those underlying indices, and the establishment of certain policies and procedures to limit communication between index personnel and employees of the Advisor and any subadviser. Applicants assert that these conflicts of interest do not exist where the index creator is not an affiliated person, or an affiliated person of an affiliated person, of an exchange-traded fund or its investment adviser or any sub-adviser, such as in the case of the New Funds. Applicants therefore seek to amend the Prior Order to provide that the relevant representations and undertakings shall not apply to a Fund where an entity that creates, compiles, sponsors, or maintains the underlying index is not an affiliated person, as defined in section 2(a)(3) of the Act, or an affiliated person of an affiliated person, of the Fund, the Advisor, the Distributor, promoter or any sub-adviser to a Fund. receive, as part of a redemption, restricted securities eligible for resale under rule 144A. 4 The New Funds may seek to track the performance of any U.S. government agency mortgage pass-through securities included in an Underlying Index by investing in ‘‘to-be announced’’ (‘‘TBA’’) transactions on such securities. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount and price. The actual pools delivered are determined two days prior to settlement date. A New Fund may designate the mortgage pass-through TBAs to be included in the Deposit Securities and will accept ‘‘cash in lieu’’ of delivery of the designated mortgage passthrough TBAs. The amount of substituted cash in the case of TBA transactions will be equivalent to the value of the TBA transaction listed as a Deposit Security. E:\FR\FM\02AUN1.SGM 02AUN1 mstockstill on PROD1PC66 with NOTICES Federal Register / Vol. 72, No. 148 / Thursday, August 2, 2007 / Notices 6. Applicants state that the New Funds will operate in a manner identical to the operation of the Initial Funds in the Prior Order, except as specifically noted by applicants (and summarized in this notice), and will comply with all of the terms, provisions and conditions of the Prior Order, as amended by the present application. Applicants believe that the requested relief continues to meet the necessary exemptive standards. 7. Applicants also seek to amend the Prior Order to modify the terms under which the applicants, in the future, may offer Future Funds based on other equity or fixed income indices. The Prior Order is currently subject to a condition that does not permit applicants to register the shares of any Future Fund by means of filing a posteffective amendment to a Fund’s registration statement or by any other means, unless applicants have requested and received with respect to such Future Fund, either exemptive relief from the Commission or a no-action letter from the Division of Investment Management of the Commission, or if the Future Fund could be listed on a national securities exchange (‘‘Exchange’’) without the need for a filing pursuant to rule 19b–4 under the Exchange Act. 8. The order would amend the Prior Order to delete this condition. Any Future Funds will (a) be advised by the Advisor or an entity controlled by or under common control with the Advisor; and (b) comply with the terms and conditions of the Prior Order, as amended by any order issued in connection with the present application. 9. Applicants believe that the modification of the future relief available under the Prior Order would be consistent with sections 6(c) and 17(b) of the Act and that granting the requested relief will facilitate the timely creation of Future Funds and the commencement of secondary market trading of such Future Funds by removing the need to seek additional exemptive relief. Applicants submit that the terms and conditions of the Prior Order, as amended by the requested order, are appropriate for the Funds and would remain appropriate for Future Funds. Applicants also submit that tying exemptive relief under the Act to the ability of a Future Fund to be listed on an Exchange without the need for a rule 19b–4 filing under the Exchange Act is not necessary to meet the standards under sections 6(c) and 17(b) of the Act. VerDate Aug<31>2005 17:42 Aug 01, 2007 Jkt 211001 Applicants’ Condition Applicants agree that any amended order granting the requested relief will be subject to the same conditions as those imposed by the Prior Order, except for condition 1 to the Prior Order, which will be deleted. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Jill M. Peterson, Assistant Secretary. [FR Doc. E7–15021 Filed 8–1–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. IC–27915; 812–13394] The BISYS Group, Inc., et al.; Temporary Order July 27, 2007. Securities and Exchange Commission (‘‘Commission’’). ACTION: Temporary order under section 9(c) of the Investment Company Act of 1940 (‘‘Act’’). AGENCY: SUMMARY: Applicants have received a temporary order exempting them from section 9(a) of the Act, with respect to an injunction entered against The BISYS Group, Inc. (‘‘BISYS’’) on or about July 27, 2007 by the United States District Court for the Southern District of New York (the ‘‘Injunction’’), until the Commission takes final action on an application for a permanent order or, if earlier, September 24, 2007. Applicants: BISYS, BISYS Fund Services Limited Partnership, BNY Hamilton Distributors, Inc., Funds Distributor, Inc., Heartland Investor Services, LLC, Mercantile Investment Services, Inc., Performance Funds Distributor, Inc., ProFunds Distributors, Inc. and Victory Capital Advisers, Inc. (collectively, other than BISYS, the ‘‘Underwriter Applicants’’, and, together with BISYS, the ‘‘Applicants’’).1 Filing Date: The application was filed on June 6, 2007. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549– 1090. Applicants, BISYS, 105 Eisenhower Parkway, Roseland, New Jersey 07068, the Underwriter Applicants, 100 Summer Street, 15th Floor, Boston, Massachusetts 02110. 1 Applicants request that any relief granted pursuant to the application also apply to any other company of which BISYS is an affiliated person or may become an affiliated person in the future (together with the Applicants, the ‘‘Covered Persons’’). PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 42449 FOR FURTHER INFORMATION CONTACT: Shannon Conaty, Senior Counsel, at (202) 551–6827, or Janet M. Grossnickle, Branch Chief, at (202) 551–6821, (Division of Investment Management, Office of Investment Company Regulation). SUPPLEMENTARY INFORMATION: The application may be obtained for a fee at the Commission’s Public Reference Desk, 100 F Street, NE., Washington, DC 20549–0102 (tel. 202–551–8090). Applicants’ Representations 1. BISYS, a Delaware corporation, directly and through wholly-owned subsidiaries, provides products and support services to financial institutions, including insurance companies, banks and mutual funds. Each of the Underwriter Applicants is an indirect, wholly-owned subsidiary of BISYS and serves as principal underwriter for one or more registered management investment companies (‘‘Funds’’). Each Underwriter Applicant is registered with the Commission as a broker-dealer under section 15 of the Securities Exchange Act of 1934 (‘‘Exchange Act’’). 2. On or about July 27, 2007, the United States District Court for the Southern District of New York entered the Injunction against BISYS in a matter brought by the Commission.2 The Commission alleged in the complaint (‘‘Complaint’’) that BISYS violated sections 13(a) and 13(b)(2)(A) and (B) of the Exchange Act and rules 12b–20, 13a–1, 13a–11 and 13a–13 thereunder when it engaged in improper accounting practices that resulted in an overstatement of BISYS’s financial results for fiscal years 2001 through 2003 by about $180 million. Without admitting or denying the allegations in the Complaint, except as to jurisdiction, BISYS consented to the entry of the Injunction and the payment of disgorgement and prejudgment interest. Applicants’ Legal Analysis 1. Section 9(a)(2) of the Act, in relevant part, prohibits a person who has been enjoined from engaging in or continuing any conduct or practice in connection with the purchase or sale of a security from acting, among other things, as an investment adviser or depositor of any registered investment company or a principal underwriter for any registered open-end investment company, registered unit investment trust or registered face-amount certificate company. Section 9(a)(3) of 2 United States Securities and Exchange Commission v. The BISYS Group, Inc., 07–CIV– 4010 (KMK) (S.D.N.Y. May 23, 2007). E:\FR\FM\02AUN1.SGM 02AUN1

Agencies

[Federal Register Volume 72, Number 148 (Thursday, August 2, 2007)]
[Notices]
[Pages 42447-42449]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-15021]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-27916; 812-13358]


HealthShares, Inc., et al.; Notice of Application

July 27, 2007.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application to amend a prior order under section 6(c) 
of the Investment Company Act of 1940 (``Act'') for an exemption from 
sections 2(a)(32), 5(a)(1), 22(d), and 24(d) of the Act and rule 22c-1 
under the Act, and under sections 6(c) and 17(b) of the Act for an 
exemption from sections 17(a)(1) and (a)(2) of the Act.

-----------------------------------------------------------------------

    Summary of Application: Applicants request an order to amend a 
prior order that permits: (a) Open-end management investment companies, 
whose series are based on certain equity securities indices created by 
an affiliate of the investment adviser, to issue shares redeemable only 
in large aggregations; (b) secondary market transactions in the shares 
of the series to occur at negotiated prices; (c) dealers to sell 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''); and (d) certain affiliated persons of the series 
to deposit securities into, and receive securities from, the series in 
connection with the purchase and redemption of aggregations of the 
series' shares (``Prior Order'').\1\ Applicants seek to amend the Prior 
Order in order to offer additional series that would hold equity and 
fixed income securities and to provide that certain representations and 
undertakings contained in the Prior Order shall not apply to a series 
where an entity that creates, compiles, sponsors, or maintains an 
underlying index is not an affiliated person, or an affiliated person 
of an affiliated person, of the series, its investment adviser, 
distributor, promoter, or any sub-adviser to the series. In addition, 
the order would delete a condition related to future relief in the 
Prior Order.
---------------------------------------------------------------------------

    \1\ HealthShares, Inc., et al., Investment Company Act Release 
Nos. 27553 (November 16, 2006) (notice) and 27594 (December 7, 2006) 
(order).
---------------------------------------------------------------------------

    Applicants: HealthShares, Inc., XShares Advisors LLC (formerly, X-
Shares Advisors, LLC) (the ``Advisor''), XShares Group LLC (formerly, 
Ferghana-Wellspring LLC) and TDAX Funds, Inc.
    Filing Dates: The application was filed on January 19, 2007 and 
amended on June 4, 2007 and on July 20, 2007. 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 August 17, 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

[[Page 42448]]

Street, NE., Washington, DC 20549-1090. Applicants: Attn. Anthony F. 
Dudzinski, Esq., 420 Lexington Avenue, Suite 2550, New York, NY 10170; 
and Michael R. Rosella, Esq., Paul, Hastings, Janofsky & Walker LLP, 
Park Avenue Tower, 75 East 55th Street, First Floor, New York, NY 
10022.

FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, at 
(202) 551-6876 or Mary Kay Frech, 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. HealthShares, Inc. is an open-end management investment company 
organized as a Maryland corporation and is comprised of multiple series 
(the ``Initial Funds''). TDAX Funds, Inc. (the ``Company'') is an open-
end management investment company organized as a Maryland corporation 
that is comprised of five (5) series of underlying ``lifecycle'' 
portfolios (each a ``New Fund'' and together, the ``New Funds''). The 
Advisor, which is registered as an investment adviser under the 
Investment Advisers Act of 1940 (the ``Advisers Act''), serves as the 
investment adviser to the Initial Funds and will serve as investment 
adviser to the New Funds. The Advisor expects to enter into sub-
advisory agreements with Amerivest Investment Management, LLC and BNY 
Investment Advisors (collectively, ``Sub-Advisors'') to serve as sub-
advisers to the New Funds. Each Sub-Advisor is registered as an 
investment adviser under the Advisers Act. Neither Sub-Advisor is an 
affiliated person, or an affiliated person of an affiliated person, of 
the Advisor or Zacks Investment Research Inc. (``Zacks''), the creator 
of the Underlying Indexes (as defined below). ALPS Distributors, Inc. 
(the ``Distributor''), a broker-dealer registered under the Securities 
Exchange Act of 1934 (the ``Exchange Act''), will serve as the 
principal underwriter and distributor for the New Funds.
    2. The applicants are currently permitted to offer the Initial 
Funds based on equity securities indices developed by an affiliated 
person of the Advisor in reliance on the Prior Order. Applicants seek 
to amend the Prior Order to permit the offering of the New Funds, as 
well as series that may be created in the future that are advised by 
the Advisor or an entity controlled by or under common control with the 
Advisor and that comply with the terms and conditions of the Prior 
Order, as modified by the requested relief (the ``Future Funds,'' 
together with the Initial Funds and the New Funds, the ``Funds''). The 
New Funds would operate in a manner identical to the Initial Funds that 
are subject to the Prior Order, except as described in the application.
    3. The investment objective of each New Fund is to track the 
performance, before fees and expenses, of a particular underlying index 
(``Underlying Index'') by investing in a portfolio of securities 
generally consisting of the component securities (``Component 
Securities'') of the Underlying Index.\2\ Each Underlying Index is a 
``lifestyle'' index that rebalances allocations among asset classes 
over time in an attempt to maximize capital appreciation at a target 
date. No entity that creates, compiles, sponsors, or maintains an 
Underlying Index is or will be an affiliated person, as defined in 
section 2(a)(3) of the Act, or an affiliated person of an affiliated 
person, of the Company, the Advisor, the Distributor, promoter, or any 
sub-adviser to a New Fund.
---------------------------------------------------------------------------

    \2\ The Underlying Indices for the New Funds are the Zacks 2010 
Lifecycle Index, Zacks 2020 Lifecycle Index, Zacks 2030 Lifecycle 
Index, Zacks 2040 Lifecycle Index, and Zacks In-Target Lifecycle 
Index.
---------------------------------------------------------------------------

    4. The applicants represent that the Component Securities of each 
Underlying Index include equity securities of U.S. and international 
companies (including common stocks and real estate investment trusts), 
American Depository Receipts based on equity securities of 
international companies, and fixed-income securities (including bonds, 
treasury bills and notes, mortgage real estate investment trusts, U.S. 
government agency mortgage pass-through securities, cash equivalents or 
short-term money market instruments). The fixed income securities 
included in the Component Securities will be investment grade fixed 
income securities and will not include corporate mortgage-backed 
securities, asset-backed securities, high yield bonds, or Rule 144A 
securities.\3\ Each New Fund will attempt to track its Underlying Index 
by investing at least 90%, and typically substantially all, of its 
assets in the securities that make up the Underlying Index, holding 
each security in approximately the same proportion as its weighting in 
the Underlying Index.\4\ Each New Fund also may invest up to 10% of its 
assets in futures contracts, options on futures contracts, options, as 
well as swaps on securities of companies in the Underlying Index. 
Applicants expect that the returns of each New Fund should be highly 
correlated with the returns of its Underlying Index, expecting that the 
correlation coefficient between each New Fund and its Underlying Index 
will exceed 95% over extended periods.
---------------------------------------------------------------------------

    \3\ If an underlying index of a Future Fund includes restricted 
securities eligible for resale pursuant to rule 144A under the 
Securities Act (``Rule 144A securities''), applicants acknowledge 
that in accepting deposit securities (``Deposit Securities'') and 
satisfying redemptions with securities that are Rule 144A 
securities, the Future Funds will comply with the conditions of rule 
144A. The prospectus for a Future Fund would also state that an 
authorized participant that is not a ``Qualified Institutional 
Buyer,'' as defined in rule 144A under the Securities Act, will not 
be able to receive, as part of a redemption, restricted securities 
eligible for resale under rule 144A.
    \4\ The New Funds may seek to track the performance of any U.S. 
government agency mortgage pass-through securities included in an 
Underlying Index by investing in ``to-be announced'' (``TBA'') 
transactions on such securities. A TBA transaction is a method of 
trading mortgage-backed securities where the buyer and seller agree 
upon general trade parameters such as agency, settlement date, par 
amount and price. The actual pools delivered are determined two days 
prior to settlement date. A New Fund may designate the mortgage 
pass-through TBAs to be included in the Deposit Securities and will 
accept ``cash in lieu'' of delivery of the designated mortgage pass-
through TBAs. The amount of substituted cash in the case of TBA 
transactions will be equivalent to the value of the TBA transaction 
listed as a Deposit Security.
---------------------------------------------------------------------------

    5. The Prior Order relates to Funds that track indices created by 
an affiliated person of the Advisor. Because such Funds could introduce 
potential conflicts of interest, the Prior Order contains certain 
representations and undertakings relating to the transparency of the 
methodology for those underlying indices, and the establishment of 
certain policies and procedures to limit communication between index 
personnel and employees of the Advisor and any sub-adviser. Applicants 
assert that these conflicts of interest do not exist where the index 
creator is not an affiliated person, or an affiliated person of an 
affiliated person, of an exchange-traded fund or its investment adviser 
or any sub-adviser, such as in the case of the New Funds. Applicants 
therefore seek to amend the Prior Order to provide that the relevant 
representations and undertakings shall not apply to a Fund where an 
entity that creates, compiles, sponsors, or maintains the underlying 
index is not an affiliated person, as defined in section 2(a)(3) of the 
Act, or an affiliated person of an affiliated person, of the Fund, the 
Advisor, the Distributor, promoter or any sub-adviser to a Fund.

[[Page 42449]]

    6. Applicants state that the New Funds will operate in a manner 
identical to the operation of the Initial Funds in the Prior Order, 
except as specifically noted by applicants (and summarized in this 
notice), and will comply with all of the terms, provisions and 
conditions of the Prior Order, as amended by the present application. 
Applicants believe that the requested relief continues to meet the 
necessary exemptive standards.
    7. Applicants also seek to amend the Prior Order to modify the 
terms under which the applicants, in the future, may offer Future Funds 
based on other equity or fixed income indices. The Prior Order is 
currently subject to a condition that does not permit applicants to 
register the shares of any Future Fund by means of filing a post-
effective amendment to a Fund's registration statement or by any other 
means, unless applicants have requested and received with respect to 
such Future Fund, either exemptive relief from the Commission or a no-
action letter from the Division of Investment Management of the 
Commission, or if the Future Fund could be listed on a national 
securities exchange (``Exchange'') without the need for a filing 
pursuant to rule 19b-4 under the Exchange Act.
    8. The order would amend the Prior Order to delete this condition. 
Any Future Funds will (a) be advised by the Advisor or an entity 
controlled by or under common control with the Advisor; and (b) comply 
with the terms and conditions of the Prior Order, as amended by any 
order issued in connection with the present application.
    9. Applicants believe that the modification of the future relief 
available under the Prior Order would be consistent with sections 6(c) 
and 17(b) of the Act and that granting the requested relief will 
facilitate the timely creation of Future Funds and the commencement of 
secondary market trading of such Future Funds by removing the need to 
seek additional exemptive relief. Applicants submit that the terms and 
conditions of the Prior Order, as amended by the requested order, are 
appropriate for the Funds and would remain appropriate for Future 
Funds. Applicants also submit that tying exemptive relief under the Act 
to the ability of a Future Fund to be listed on an Exchange without the 
need for a rule 19b-4 filing under the Exchange Act is not necessary to 
meet the standards under sections 6(c) and 17(b) of the Act.

Applicants' Condition

    Applicants agree that any amended order granting the requested 
relief will be subject to the same conditions as those imposed by the 
Prior Order, except for condition 1 to the Prior Order, which will be 
deleted.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E7-15021 Filed 8-1-07; 8:45 am]
BILLING CODE 8010-01-P