Allianz RCM Global EcoTrends Fund, et al., 49748-49750 [E7-17076]

Download as PDF 49748 Federal Register / Vol. 72, No. 167 / Wednesday, August 29, 2007 / Notices investors. Thus, the proposed amendment is consistent with, and would further, one of the principal objectives for the national market system set forth in Section 11A(a)(1)(C)(iii) 9 of the Act—increasing the availability of market information to broker-dealers and investors. IV. Conclusion It is therefore ordered, pursuant to Section 11A of the Act,10 and the rules thereunder, that the proposed amendment to the CTA Plan (SR–CTA– 2007–01) is approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–17080 Filed 8–28–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 27936; 812–13364] Allianz RCM Global EcoTrends Fund, et al.; Notice of Application August 23, 2007. 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 sections 18(c) and 18(i) of the Act, under sections 6(c) and 23(c)(3) of the Act for an exemption from rule 23c–3 under the Act, and pursuant to section 17(d) of the Act and rule 17d–1 under the Act. jlentini on PROD1PC65 with NOTICES AGENCY: Summary of Application: Applicants request an order to permit certain registered closed-end management investment companies to issue multiple classes of shares and to impose assetbased distribution fees and early withdrawal charges. Applicants: Allianz RCM Global EcoTrends Fund (the ‘‘EcoTrends Fund’’), Allianz Global Investors Fund Management LLC (the ‘‘Manager’’) and Allianz Global Investors Distributors LLC (the ‘‘Distributor’’). Filing Dates: The application was filed on February 15, 2007, and amended on July 26, 2007. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in this notice. 9 15 U.S.C. 78k–1(a)(1)(C)(iii). U.S.C. 78k–1. 11 17 CFR 200.30–3(a)(27). 10 15 VerDate Aug<31>2005 16:04 Aug 28, 2007 Jkt 211001 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 September 17, 2007, and should be accompanied by proof of service on the applicants, in the form of an affidavit, or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer’s interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission’s Secretary. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549– 1090; Applicants, c/o William V. Healy, Esq., Allianz Global Investors Fund Management, LLC, 1345 Avenue of the Americas, 49th Floor, New York, New York 10105. FOR FURTHER INFORMATION CONTACT: John Yoder, Senior Counsel, at (202) 551– 6878 or Julia Kim Gilmer, 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 Desk, 100 F Street, NE., Washington DC 20549–0102 (telephone (202) 551–5850). Applicants’ Representations 1. The EcoTrends Fund is a continuously offered non-diversified closed-end management investment company registered under the Act and organized as a Massachusetts business trust. The Manager is registered as an investment adviser under the Investment Advisers Act of 1940 and serves as investment adviser to the EcoTrends Fund. The Distributor, a broker-dealer registered under the Securities Exchange Act of 1934, acts as principal underwriter to the EcoTrends Fund. The Distributor is under common control with the Manager and is an affiliated person, as defined in section 2(a)(3) of the Act, of the Manager. 2. Applicants request that the order also apply to any other continuously offered registered closed-end management investment companies existing now or in the future that operate as interval funds pursuant to rule 23c–3 under the Act for which the Manager, the Distributor, or any entity PO 00000 Frm 00056 Fmt 4703 Sfmt 4703 controlling, controlled by or under common control with the Manager or the Distributor acts as investment adviser, principal underwriter or administrator (such investment companies, together with the EcoTrends Fund, the ‘‘Funds’’).1 3. The EcoTrends Fund continuously offers its shares to the public pursuant to rule 415 under the Securities Act of 1933 at net asset value. The shares of the EcoTrends Fund are not listed on any securities exchange and will not be quoted on any quotation medium. Applicants do not expect that any secondary market will develop for the shares of the EcoTrends Fund. The EcoTrends Fund intends to operate as an ‘‘interval fund’’ pursuant to rule 23c– 3 under the Act and to make periodic repurchase offers to its shareholders. 4. The Funds seek the flexibility to be structured as multiple class funds. The EcoTrends Fund currently offers one class of shares and intends to offer additional classes of shares. The EcoTrends Fund currently offers Class A shares at net asset value with a frontend sales charge of up to 4.5% and an annual servicing and/or distribution fee of up to .25% of average daily net assets. The EcoTrends Fund intends to offer Class C shares at net asset value with an annual distribution fee of up to 75% and an annual servicing fee of .25% (each based on average daily net assets) and no front-end sales charge. Class C shares would be subject to an early withdrawal charge (‘‘EWC’’) of 1% for shares repurchased within one year of purchase. The Funds may in the future offer additional classes of shares and/or another sales charge structure. 5. Applicants represent that any assetbased service and distribution fees will comply with the provisions of rule 2830(d) of the Conduct Rules of the National Association of Securities Dealers, Inc. (‘‘NASD Sales Charge Rule’’). Applicants also represent that each Fund will disclose in its prospectus, the fees, expenses and other characteristics of each class of shares offered for sale by the prospectus as is required for open-end multiple class funds under Form N–1A. As is required for open-end funds, each Fund will disclose its expenses in shareholder reports, and disclose any arrangements that result in breakpoints in or elimination of sales loads in its prospectus.2 Each Fund and the 1 Any Fund relying on this relief in the future will do so in a manner consistent with the terms and conditions of the application. Applicants represent that each entity presently intending to rely on the requested relief is listed as an applicant. 2 See Shareholder Reports and Quarterly Portfolio Disclosure of Registered Management Investment E:\FR\FM\29AUN1.SGM 29AUN1 Federal Register / Vol. 72, No. 167 / Wednesday, August 29, 2007 / Notices jlentini on PROD1PC65 with NOTICES Distributor will also comply with any requirements that may be adopted by the Commission regarding disclosure at the point of sale and in transaction confirmations about the costs and conflicts of interest arising out of the distribution of open-end investment company shares, and regarding prospectus disclosure of sales loads and revenue sharing arrangements as if those requirements applied to the Fund and the Distributor.3 6. Each Fund will allocate all expenses incurred by it among the various classes of shares based on the net assets of the Fund attributable to each class, except that the net asset value and expenses of each class will reflect distribution fees, service fees, and any other incremental expenses of that class. Expenses of a Fund allocated to a particular class of shares will be borne on a pro rata basis by each outstanding share of that class. Applicants state that each Fund will comply with the provisions of rule 18f– 3 under the Act as if it were an openend investment company. 7. Each Fund may waive the EWC for certain categories of shareholders or transactions to be established from time to time. With respect to any waiver of, scheduled variation in, or elimination of the EWC, each Fund will comply with rule 22d–1 under the Act as if the Fund were an open-end investment company. 8. Each Fund may offer its shareholders an exchange feature under which shareholders of the Fund may, during the Fund’s periodic repurchase periods, exchange their shares for shares of the same class of other registered open-end investment companies or registered closed-end investment companies that comply with rule 23c– 3 under the Act and continuously offer their shares at net asset value, and that are in the Fund’s group of investment companies. Fund shares so exchanged will count as part of the repurchase offer amount as specified in rule 23c–3 under the Act. Any exchange option will comply with rule 11a–3 under the Act as if the Funds were open-end investment companies subject to that Companies, Investment Company Act Release No. 26372 (Feb. 27, 2004) (adopting release) (requiring open-end investment companies to disclose fund expenses in shareholder reports); and Disclosure of Breakpoint Discounts by Mutual Funds, Investment Company Act Release No. 26464 (June 7, 2004) (adopting release) (requiring open-end investment companies to provide prospectus disclosure of certain sales load information). 3 Confirmation Requirements and Point of Sale Disclosure Requirements for Transactions in Certain Mutual Funds and Other Securities, and Other Confirmation Requirement Amendments, and Amendments to the Registration Form for Mutual Funds, Investment Company Act Release No. 26341 (Jan. 29, 2004) (proposing release). VerDate Aug<31>2005 16:04 Aug 28, 2007 Jkt 211001 rule. In complying with rule 11a–3, each Fund will treat the EWCs as if they were a contingent deferred sales load (‘‘CDSL’’). Applicants’ Legal Analysis Multiple Classes of Shares 1. Section 18(c) of the Act provides, in relevant part, that a closed-end investment company may not issue or sell any senior security if, immediately thereafter, the company has outstanding more than one class of senior security. Applicants state that the creation of multiple classes of shares of the Funds may be prohibited by section 18(c). 2. Section 18(i) of the Act provides that each share of stock issued by a registered management investment company will be a voting stock and have equal voting rights with every other outstanding voting stock. Applicants state that permitting multiple classes of shares of the Funds may violate section 18(i) of the Act because each class would be entitled to exclusive voting rights with respect to matters solely related to that class. 3. 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 under the Act, if and to the extent 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. Applicants request an exemption under section 6(c) from sections 18(c) and 18(i) to permit the Funds to issue multiple classes of shares. 4. Applicants submit that the proposed allocation of expenses and voting rights among multiple classes is equitable and will not discriminate against any group or class of shareholders. Applicants submit that the proposed arrangements would permit a Fund to facilitate the distribution of its shares and provide investors with a broader choice of shareholder services. Applicants assert that the proposed closed-end investment company multiple class structure does not raise the concerns underlying section 18 of the Act to any greater degree than open-end investment companies’ multiple class structures that are permitted by rule 18f–3 under the Act. Applicants state that each Fund will comply with the provisions of rule 18f–3 as if it were an open-end investment company. PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 49749 Early Withdrawal Charges 1. Section 23(c) of the Act provides, in relevant part, that no registered closed-end investment company will purchase securities of which it is the issuer, except: (a) On a securities exchange or other open market; (b) pursuant to tenders, after reasonable opportunity to submit tenders given to all holders of securities of the class to be purchased; or (c) under other circumstances as the Commission may permit by rules and regulations or orders for the protection of investors. 2. Rule 23c–3 under the Act permits a registered closed-end investment company (an ‘‘interval fund’’) to make repurchase offers of between five and twenty-five percent of its outstanding shares at net asset value at periodic intervals pursuant to a fundamental policy of the interval fund. Rule 23c– 3(b)(1) under the Act provides that an interval fund may deduct from repurchase proceeds only a repurchase fee, not to exceed two percent of the proceeds, that is reasonably intended to compensate the fund for expenses directly related to the repurchase. 3. Section 23(c)(3) provides that the Commission may issue an order that would permit a closed-end investment company to repurchase its shares in circumstances in which the repurchase is made in a manner or on a basis that does not unfairly discriminate against any holders of the class or classes of securities to be purchased. As noted above, section 6(c) provides that the Commission may exempt any person, security or transaction from any provision of the Act, if and to the extent that the 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. Because the Funds operate pursuant to rule 23c–3 under the Act, applicants request relief under sections 6(c) and 23(c) from rule 23c–3 to permit the Funds to impose EWCs on shares of the Funds submitted for repurchase that have been held for less than a specified period. 4. Applicants believe that the requested relief meets the standards of sections 6(c) and 23(c)(3). Rule 6c–10 under the Act permits open-end investment companies to impose CDSLs, subject to certain conditions. Applicants state that EWCs are functionally similar to CDSLs imposed by open-end investment companies under rule 6c–10. Applicants state that EWCs may be necessary for the Distributor to recover distribution costs. Applicants will comply with rule 6c–10 E:\FR\FM\29AUN1.SGM 29AUN1 49750 Federal Register / Vol. 72, No. 167 / Wednesday, August 29, 2007 / Notices as if that rule applied to closed-end investment companies. The Funds also will disclose EWCs in accordance with the requirements of Form N–1A concerning CDSLs. Applicants further state that the Funds will apply the EWC (and any waivers or scheduled variations of the EWC) uniformly to all shareholders in a given class and consistently with the requirements of rule 22d–1 under the Act. 1. Section 17(d) of the Act and rule 17d–1 under the Act prohibit an affiliated person of a registered investment company or an affiliated person of such person, acting as principal, from participating in or effecting any transaction in connection with any joint enterprise or joint arrangement in which the investment company participates unless the Commission issues an order permitting the transaction. In reviewing applications submitted under section 17(d) and rule 17d–1, the Commission considers whether the participation of the investment company in a joint enterprise or joint arrangement is consistent with the provisions, policies and purposes of the Act, and the extent to which the participation is on a basis different from or less advantageous than that of other participants. 2. Rule 17d–3 under the Act provides an exemption from section 17(d) and rule 17d–1 to permit open-end investment companies to enter into distribution arrangements pursuant to rule 12b–1 under the Act. Applicants request an order under section 17(d) and rule 17d–1 under the Act to permit the Funds to impose asset-based distribution fees. Applicants have agreed to comply with rules 12b–1 and 17d–3 as if those rules applied to closed-end investment companies. jlentini on PROD1PC65 with NOTICES Applicants’ Condition Applicants agree that any order granting the requested relief will be subject to the following condition: Each Fund relying on the order will comply with the provisions of rules 6c– 10, 11a–3, 12b–1, 17d–3, 18f–3 and 22d–1 under the Act, as amended from time to time, as if those rules applied to closed-end management investment companies, and will comply with the NASD Sales Charge Rule, as amended from time to time. 16:04 Aug 28, 2007 Jkt 211001 BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56307; File No. SR–Amex– 2007–96] Asset-Based Distribution Fees VerDate Aug<31>2005 For the Commission, by the Division of Investment Management, under delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7–17076 Filed 8–28–07; 8:45 am] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Proposed Rule Change Relating to an Extension of the Options Penny Quoting Pilot Program August 22, 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 August 21, 2007, the American Stock Exchange LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which items have been substantially prepared by Amex.3 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to (i) Expand the current pilot program for the quoting of a limited number of options classes in pennies (the ‘‘Penny Quoting Pilot Program’’ or ‘‘Pilot Program’’) and (ii) extend the Pilot Program through March 27, 2009. The text of the proposed rule change is available at http:// www.amex.com, at the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 The Commission notes that the proposed rule change submitted by the Exchange contained nonsubstantive errors, which, for the purpose of this notice, have been corrected. The Exchange has committed to address these errors formally in an amendment to the proposed rule change following publication of this notice. Telephone conversation between Jeffrey Burns, Vice President and Associate General Counsel and Jennifer Colihan, Special Counsel, Division of Market Regulation, Commission on August 22, 2007. 2 17 PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 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 Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Amex is proposing to expand the current Penny Pilot Quoting Pilot Program 4 which commenced on January 26, 2007. The Exchange believes that expanding the current Pilot Program, as proposed in this rule filing, will allow further analysis and review of the impact of penny quoting based on a greater number of actively-traded options classes. The current Penny Quoting Pilot Program includes thirteen (13) options classes. The Pilot Program was recently extended by the Exchange through September 27, 2007.5 The Exchange intends to roll-out the proposed expansion of the Pilot Program in two (2) phases. First, commencing on September 28, 2007, the Exchange will include the twenty-two (22) most actively-traded, multiply-listed options classes (excluding Google (GOOG), Nasdaq–100 Index (NDX) and the Russell 2000 Index (RUT)) in the Penny Quoting Pilot Program. The Exchange also proposes to set forth in a Regulatory Circular the list of the options classes subject to the proposed expansion of the Pilot Program. In addition to the thirteen (13) options classes that are currently part of the Pilot Program, this would expand the Penny Quoting Pilot Program to include approximately 35% of total industry options volume. Second, the Exchange on March 28, 2008 would further commence an expansion of the Pilot Program to last for one (1) year through March 27, 2009. Amex anticipates that an additional twenty-eight (28) option classes will be added to the Penny Quoting Pilot Program at that time such that the Pilot would include the Top 50 multiplylisted options classes by national volume. As a result, the Pilot Program would then consist of sixty-three (63) options classes. The Exchange will 4 See Securities Exchange Act Release No. 55162 (January 24, 2007), 72 FR 4738 (February 1, 2007). 5 See Securities Exchange Act Release No. 56159 (July 27, 2007), 72 FR 43300 (August 3, 2007). E:\FR\FM\29AUN1.SGM 29AUN1

Agencies

[Federal Register Volume 72, Number 167 (Wednesday, August 29, 2007)]
[Notices]
[Pages 49748-49750]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-17076]


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

SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 27936; 812-13364]


Allianz RCM Global EcoTrends Fund, et al.; Notice of Application

August 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 sections 18(c) 
and 18(i) of the Act, under sections 6(c) and 23(c)(3) of the Act for 
an exemption from rule 23c-3 under the Act, and pursuant to section 
17(d) of the Act and rule 17d-1 under the Act.

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

    Summary of Application: Applicants request an order to permit 
certain registered closed-end management investment companies to issue 
multiple classes of shares and to impose asset-based distribution fees 
and early withdrawal charges.
    Applicants: Allianz RCM Global EcoTrends Fund (the ``EcoTrends 
Fund''), Allianz Global Investors Fund Management LLC (the ``Manager'') 
and Allianz Global Investors Distributors LLC (the ``Distributor'').
    Filing Dates: The application was filed on February 15, 2007, and 
amended on July 26, 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 
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 September 17, 2007, and should be accompanied by proof of service on 
the applicants, in the form of an affidavit, or, for lawyers, a 
certificate of service. Hearing requests should state the nature of the 
writer's interest, the reason for the request, and the issues 
contested. Persons who wish to be notified of a hearing may request 
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-1090; Applicants, c/o William V. 
Healy, Esq., Allianz Global Investors Fund Management, LLC, 1345 Avenue 
of the Americas, 49th Floor, New York, New York 10105.

FOR FURTHER INFORMATION CONTACT: John Yoder, Senior Counsel, at (202) 
551-6878 or Julia Kim Gilmer, 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 Desk, 100 F Street, NE., Washington DC 
20549-0102 (telephone (202) 551-5850).

Applicants' Representations

    1. The EcoTrends Fund is a continuously offered non-diversified 
closed-end management investment company registered under the Act and 
organized as a Massachusetts business trust. The Manager is registered 
as an investment adviser under the Investment Advisers Act of 1940 and 
serves as investment adviser to the EcoTrends Fund. The Distributor, a 
broker-dealer registered under the Securities Exchange Act of 1934, 
acts as principal underwriter to the EcoTrends Fund. The Distributor is 
under common control with the Manager and is an affiliated person, as 
defined in section 2(a)(3) of the Act, of the Manager.
    2. Applicants request that the order also apply to any other 
continuously offered registered closed-end management investment 
companies existing now or in the future that operate as interval funds 
pursuant to rule 23c-3 under the Act for which the Manager, the 
Distributor, or any entity controlling, controlled by or under common 
control with the Manager or the Distributor acts as investment adviser, 
principal underwriter or administrator (such investment companies, 
together with the EcoTrends Fund, the ``Funds'').\1\
---------------------------------------------------------------------------

    \1\ Any Fund relying on this relief in the future will do so in 
a manner consistent with the terms and conditions of the 
application. Applicants represent that each entity presently 
intending to rely on the requested relief is listed as an applicant.
---------------------------------------------------------------------------

    3. The EcoTrends Fund continuously offers its shares to the public 
pursuant to rule 415 under the Securities Act of 1933 at net asset 
value. The shares of the EcoTrends Fund are not listed on any 
securities exchange and will not be quoted on any quotation medium. 
Applicants do not expect that any secondary market will develop for the 
shares of the EcoTrends Fund. The EcoTrends Fund intends to operate as 
an ``interval fund'' pursuant to rule 23c-3 under the Act and to make 
periodic repurchase offers to its shareholders.
    4. The Funds seek the flexibility to be structured as multiple 
class funds. The EcoTrends Fund currently offers one class of shares 
and intends to offer additional classes of shares. The EcoTrends Fund 
currently offers Class A shares at net asset value with a front-end 
sales charge of up to 4.5% and an annual servicing and/or distribution 
fee of up to .25% of average daily net assets. The EcoTrends Fund 
intends to offer Class C shares at net asset value with an annual 
distribution fee of up to 75% and an annual servicing fee of .25% (each 
based on average daily net assets) and no front-end sales charge. Class 
C shares would be subject to an early withdrawal charge (``EWC'') of 1% 
for shares repurchased within one year of purchase. The Funds may in 
the future offer additional classes of shares and/or another sales 
charge structure.
    5. Applicants represent that any asset-based service and 
distribution fees will comply with the provisions of rule 2830(d) of 
the Conduct Rules of the National Association of Securities Dealers, 
Inc. (``NASD Sales Charge Rule''). Applicants also represent that each 
Fund will disclose in its prospectus, the fees, expenses and other 
characteristics of each class of shares offered for sale by the 
prospectus as is required for open-end multiple class funds under Form 
N-1A. As is required for open-end funds, each Fund will disclose its 
expenses in shareholder reports, and disclose any arrangements that 
result in breakpoints in or elimination of sales loads in its 
prospectus.\2\ Each Fund and the

[[Page 49749]]

Distributor will also comply with any requirements that may be adopted 
by the Commission regarding disclosure at the point of sale and in 
transaction confirmations about the costs and conflicts of interest 
arising out of the distribution of open-end investment company shares, 
and regarding prospectus disclosure of sales loads and revenue sharing 
arrangements as if those requirements applied to the Fund and the 
Distributor.\3\
---------------------------------------------------------------------------

    \2\ See Shareholder Reports and Quarterly Portfolio Disclosure 
of Registered Management Investment Companies, Investment Company 
Act Release No. 26372 (Feb. 27, 2004) (adopting release) (requiring 
open-end investment companies to disclose fund expenses in 
shareholder reports); and Disclosure of Breakpoint Discounts by 
Mutual Funds, Investment Company Act Release No. 26464 (June 7, 
2004) (adopting release) (requiring open-end investment companies to 
provide prospectus disclosure of certain sales load information).
    \3\ Confirmation Requirements and Point of Sale Disclosure 
Requirements for Transactions in Certain Mutual Funds and Other 
Securities, and Other Confirmation Requirement Amendments, and 
Amendments to the Registration Form for Mutual Funds, Investment 
Company Act Release No. 26341 (Jan. 29, 2004) (proposing release).
---------------------------------------------------------------------------

    6. Each Fund will allocate all expenses incurred by it among the 
various classes of shares based on the net assets of the Fund 
attributable to each class, except that the net asset value and 
expenses of each class will reflect distribution fees, service fees, 
and any other incremental expenses of that class. Expenses of a Fund 
allocated to a particular class of shares will be borne on a pro rata 
basis by each outstanding share of that class. Applicants state that 
each Fund will comply with the provisions of rule 18f-3 under the Act 
as if it were an open-end investment company.
    7. Each Fund may waive the EWC for certain categories of 
shareholders or transactions to be established from time to time. With 
respect to any waiver of, scheduled variation in, or elimination of the 
EWC, each Fund will comply with rule 22d-1 under the Act as if the Fund 
were an open-end investment company.
    8. Each Fund may offer its shareholders an exchange feature under 
which shareholders of the Fund may, during the Fund's periodic 
repurchase periods, exchange their shares for shares of the same class 
of other registered open-end investment companies or registered closed-
end investment companies that comply with rule 23c-3 under the Act and 
continuously offer their shares at net asset value, and that are in the 
Fund's group of investment companies. Fund shares so exchanged will 
count as part of the repurchase offer amount as specified in rule 23c-3 
under the Act. Any exchange option will comply with rule 11a-3 under 
the Act as if the Funds were open-end investment companies subject to 
that rule. In complying with rule 11a-3, each Fund will treat the EWCs 
as if they were a contingent deferred sales load (``CDSL'').

Applicants' Legal Analysis

Multiple Classes of Shares

    1. Section 18(c) of the Act provides, in relevant part, that a 
closed-end investment company may not issue or sell any senior security 
if, immediately thereafter, the company has outstanding more than one 
class of senior security. Applicants state that the creation of 
multiple classes of shares of the Funds may be prohibited by section 
18(c).
    2. Section 18(i) of the Act provides that each share of stock 
issued by a registered management investment company will be a voting 
stock and have equal voting rights with every other outstanding voting 
stock. Applicants state that permitting multiple classes of shares of 
the Funds may violate section 18(i) of the Act because each class would 
be entitled to exclusive voting rights with respect to matters solely 
related to that class.
    3. 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 under the Act, if and to the extent 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. Applicants request an exemption under section 
6(c) from sections 18(c) and 18(i) to permit the Funds to issue 
multiple classes of shares.
    4. Applicants submit that the proposed allocation of expenses and 
voting rights among multiple classes is equitable and will not 
discriminate against any group or class of shareholders. Applicants 
submit that the proposed arrangements would permit a Fund to facilitate 
the distribution of its shares and provide investors with a broader 
choice of shareholder services. Applicants assert that the proposed 
closed-end investment company multiple class structure does not raise 
the concerns underlying section 18 of the Act to any greater degree 
than open-end investment companies' multiple class structures that are 
permitted by rule 18f-3 under the Act. Applicants state that each Fund 
will comply with the provisions of rule 18f-3 as if it were an open-end 
investment company.

Early Withdrawal Charges

    1. Section 23(c) of the Act provides, in relevant part, that no 
registered closed-end investment company will purchase securities of 
which it is the issuer, except: (a) On a securities exchange or other 
open market; (b) pursuant to tenders, after reasonable opportunity to 
submit tenders given to all holders of securities of the class to be 
purchased; or (c) under other circumstances as the Commission may 
permit by rules and regulations or orders for the protection of 
investors.
    2. Rule 23c-3 under the Act permits a registered closed-end 
investment company (an ``interval fund'') to make repurchase offers of 
between five and twenty-five percent of its outstanding shares at net 
asset value at periodic intervals pursuant to a fundamental policy of 
the interval fund. Rule 23c-3(b)(1) under the Act provides that an 
interval fund may deduct from repurchase proceeds only a repurchase 
fee, not to exceed two percent of the proceeds, that is reasonably 
intended to compensate the fund for expenses directly related to the 
repurchase.
    3. Section 23(c)(3) provides that the Commission may issue an order 
that would permit a closed-end investment company to repurchase its 
shares in circumstances in which the repurchase is made in a manner or 
on a basis that does not unfairly discriminate against any holders of 
the class or classes of securities to be purchased. As noted above, 
section 6(c) provides that the Commission may exempt any person, 
security or transaction from any provision of the Act, if and to the 
extent that the 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. 
Because the Funds operate pursuant to rule 23c-3 under the Act, 
applicants request relief under sections 6(c) and 23(c) from rule 23c-3 
to permit the Funds to impose EWCs on shares of the Funds submitted for 
repurchase that have been held for less than a specified period.
    4. Applicants believe that the requested relief meets the standards 
of sections 6(c) and 23(c)(3). Rule 6c-10 under the Act permits open-
end investment companies to impose CDSLs, subject to certain 
conditions. Applicants state that EWCs are functionally similar to 
CDSLs imposed by open-end investment companies under rule 6c-10. 
Applicants state that EWCs may be necessary for the Distributor to 
recover distribution costs. Applicants will comply with rule 6c-10

[[Page 49750]]

as if that rule applied to closed-end investment companies. The Funds 
also will disclose EWCs in accordance with the requirements of Form N-
1A concerning CDSLs. Applicants further state that the Funds will apply 
the EWC (and any waivers or scheduled variations of the EWC) uniformly 
to all shareholders in a given class and consistently with the 
requirements of rule 22d-1 under the Act.

Asset-Based Distribution Fees

    1. Section 17(d) of the Act and rule 17d-1 under the Act prohibit 
an affiliated person of a registered investment company or an 
affiliated person of such person, acting as principal, from 
participating in or effecting any transaction in connection with any 
joint enterprise or joint arrangement in which the investment company 
participates unless the Commission issues an order permitting the 
transaction. In reviewing applications submitted under section 17(d) 
and rule 17d-1, the Commission considers whether the participation of 
the investment company in a joint enterprise or joint arrangement is 
consistent with the provisions, policies and purposes of the Act, and 
the extent to which the participation is on a basis different from or 
less advantageous than that of other participants.
    2. Rule 17d-3 under the Act provides an exemption from section 
17(d) and rule 17d-1 to permit open-end investment companies to enter 
into distribution arrangements pursuant to rule 12b-1 under the Act. 
Applicants request an order under section 17(d) and rule 17d-1 under 
the Act to permit the Funds to impose asset-based distribution fees. 
Applicants have agreed to comply with rules 12b-1 and 17d-3 as if those 
rules applied to closed-end investment companies.

Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    Each Fund relying on the order will comply with the provisions of 
rules 6c-10, 11a-3, 12b-1, 17d-3, 18f-3 and 22d-1 under the Act, as 
amended from time to time, as if those rules applied to closed-end 
management investment companies, and will comply with the NASD Sales 
Charge Rule, as amended from time to time.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-17076 Filed 8-28-07; 8:45 am]
BILLING CODE 8010-01-P