Vanguard STAR Funds, et al.; Notice of Application, 56813-56814 [E7-19639]

Download as PDF Federal Register / Vol. 72, No. 192 / Thursday, October 4, 2007 / Notices Securities’’) 3 and satisfying redemptions with portfolio securities of the New Fund (‘‘Fund Securities’’), including that the Deposit Securities and Fund Securities are sold in transactions that would be exempt from registration under the Securities Act.4 The specified Deposit Securities and Fund Securities generally will correspond pro rata, to the extent practicable, to the Portfolio Securities of a New Fund. 7. Applicants state that the New Funds will operate in a manner identical to the operation of the existing Funds in the Prior Order, except as specifically noted by applicants (and summarized in this notice). The New Funds will comply with the terms and provisions of the Prior Order except as modified by this application. Applicants agree that any amended order granting the requested relief will be subject to the same conditions as those imposed by the Prior Order. Applicants believe that the requested relief continues to meet the necessary exemptive standards. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7–19630 Filed 10–3–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 28009; 812–13412] Vanguard STAR Funds, et al.; Notice of Application September 28, 2007. Securities and Exchange Commission (‘‘Commission’’). pwalker on PROD1PC71 with NOTICES AGENCY: 3 Applicants state that a cash-in-lieu amount will replace any ‘‘to-be-announced’’ (‘‘TBA’’) transaction that is listed as a Deposit Security or Fund Security of any New Fund. 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 generally are determined two days prior to the settlement date. 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 or Fund Security. 4 In accepting Deposit Securities and satisfying redemptions with Fund Securities that are restricted securities eligible for resale pursuant to rule 144A under the Securities Act, the New Funds will comply with the conditions of rule 144A, including in satisfying redemptions with such rule 144A eligible restricted Fund Securities. The prospectus for a New Fund will 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. VerDate Aug<31>2005 16:20 Oct 03, 2007 Jkt 214001 Notice of an application under section 6(c) of the Investment Company Act of 1940 (‘‘Act’’) for an exemption from rule 12d1–2(a) under the Act. ACTION: Applicants request an order to permit funds of funds relying on rule 12d1–2 under the Act to invest in certain financial instruments. APPLICANTS: Vanguard STAR funds, Vanguard Chester Funds, Vanguard Trustees’ Equity Fund, Vanguard Variable Insurance Funds (collectively, the ‘‘Trusts’’), The Vanguard Group, Inc. (‘‘VGI’’) and Vanguard Marketing Corporation (‘‘VMC’’). FILING DATES: The application was filed on August 10, 2007, and amended on September 24 and 28, 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 October 23, 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, Commission, 100 F Street, NE., Washington, DC 20549– 1090; Applicants, c/o Nathan M. Will, The Vanguard Group, Inc., P.O. Box 2600, Valley Forge, PA 19482. FOR FURTHER INFORMATION CONTACT: Donna Tumminio, Law Clerk, at (202) 551–6826, or Michael W. Mundt, Assistant Director, at (202) 551–6821 (Division of Investment Management, Office of Investment Company Regulation). SUMMARY OF APPLICATION: 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 20549–0104 (telephone (202) 551–8090). SUPPLEMENTARY INFORMATION: Applicants’ Representations 1. The Trusts are Delaware statutory trusts and are registered under the Act as open-end management investment companies. The Trusts offer separate series (‘‘Funds’’) that may invest in other registered investment companies PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 56813 in reliance on section 12(d)(1)(G) of the Act and rule 12d1–2 under the Act (‘‘Underlying Funds’’). Applicants propose that the Funds be permitted to invest in futures contracts, options on futures contracts, swap agreements, derivatives, and other financial instruments that may not be securities within the meaning of section 2(a)(36) of the Act (‘‘Other Investments’’), in addition to Underlying Funds.1 2. VGI is a Pennsylvania corporation that is wholly and jointly owned by certain registered investment companies. VGI is registered as an investment adviser under the Investment Advisers Act of 1940 and as a transfer agent under the Securities Exchange Act of 1934 (‘‘Exchange Act’’). VGI provides each of the Funds with corporate management, administrative, transfer agency, and, in some cases, investment advisory services. VMC is a registered broker-dealer under the Exchange Act and is a wholly owned subsidiary of VGI. VMC provides all distribution and marketing services for the Funds. Applicants’ Legal Analysis 1. Section 12(d)(1)(A) of the Act provides that no registered investment company (‘‘acquiring company’’) may acquire securities of another investment company (‘‘acquired company’’) if such securities represent more than 3% of the acquired company’s outstanding voting stock or more than 5% of the acquiring company’s total assets, or if such securities, together with the securities of other investment companies, represent more than 10% of the acquiring company’s total assets. Section 12(d)(1)(B) of the Act provides that no registered open-end investment company may sell its securities to another investment company if the sale will cause the acquiring company to own more than 3% of the acquired company’s voting stock, or cause more than 10% of the acquired company’s voting stock to be owned by investment companies. 2. Section 12(d)(1)(G) of the Act provides that section 12(d)(1) will not apply to securities of an acquired company purchased by an acquiring company if: (i) The acquiring company and acquired company are part of the 1 Other Investments do not include shares of any registered investment companies that are not part of the ‘‘same group of investment companies,’’ as defined in section 12(d)(1)(G)(ii) of the Act, as the Trusts. Applicants request that the relief also apply to any future Fund, whether organized as an investment company or as a series thereof, which is advised by VGI or any entity controlling, controlled by or under common control with VGI and which is part of the same group of investment companies as the Funds. E:\FR\FM\04OCN1.SGM 04OCN1 pwalker on PROD1PC71 with NOTICES 56814 Federal Register / Vol. 72, No. 192 / Thursday, October 4, 2007 / Notices same group of investment companies; (ii) the acquiring company holds only securities of acquired companies that are part of the same group of investment companies, government securities, and short-term paper; (iii) the aggregate sales loads and distribution-related fees of the acquiring company and the acquired company are not excessive under rules adopted pursuant to section 22(b) or section 22(c) of the Act by a securities association registered under section 15A of the Exchange Act or by the Commission; and (iv) the acquired company has a policy that prohibits it from acquiring securities of registered open-end management investment companies or registered unit investment trusts in reliance on section 12(d)(1)(F) or (G) of the Act. 3. Rule 12d1–2 under the Act permits a registered open-end investment company or a registered unit investment trust that relies on section 12(d)(1)(G) of the Act to acquire, in addition to securities issued by another registered investment company in the same group of investment companies, government securities, and short-term paper: (1) Securities issued by an investment company that is not in the same group of investment companies, when the acquisition is in reliance on section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (2) securities (other than securities issued by an investment company); and (3) securities issued by a money market fund, when the investment is in reliance on rule 12d1–1 under the Act. For the purposes of rule 12d1–2, ‘‘securities’’ means any security as defined in section 2(a)(36) of the Act. 4. Section 6(c) of the Act provides that the Commission may exempt any person, security, or transaction from any provisions of the Act, or from any rule under the Act, if 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. 5. Applicants state that the proposed arrangement would comply with the provisions of rule 12d1–2 under the Act, but for the fact that the Funds may invest a portion of their assets in Other Investments. Applicants request an order under section 6(c) of the Act for an exemption from rule 12d1–2(a) to allow the Funds to invest in Other Investments. Applicants assert that permitting the Funds to invest in Other Investments as described in the application would not raise any of the concerns that the requirements of section 12(d)(1) were designed to address. VerDate Aug<31>2005 16:20 Oct 03, 2007 Jkt 214001 Applicants’ Conditions Applicants agree that the order granting the requested relief will be subject to the following conditions: 1. Prior to approving any investment advisory agreement under section 15 of the Act, the board of trustees of the appropriate Fund, including a majority of the trustees who are not ‘‘interested persons,’’ as defined in section 2(a)(19) of the Act, will find that the advisory fees, if any, charged under the agreement are based on services provided that are in addition to, rather than duplicative of, services provided pursuant to any Underlying Fund’s advisory agreement. Such finding, and the basis upon which the finding is made, will be recorded fully in the minute books of the appropriate Fund. 2. Applicants will comply with all provisions of rule 12d1–2 under the Act, except for paragraph (a)(2), to the extent that it restricts any Fund from investing in Other Investments as described in the application. For the Commission, by the Division of Investment Management, under delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7–19639 Filed 10–3–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56555; File Nos. SR–Amex– 2007–65; SR–BSE–2007–45; SR–CBOE– 2007–64; SR–ISE–2007–44; SR–NYSEArca– 2007–65] Self-Regulatory Organizations; American Stock Exchange LLC; Boston Stock Exchange, Inc; Chicago Board Options Exchange, Incorporated and International Securities Exchange, LLC: Notice of Filing of Proposed Rule Changes Relating to the Definition of a Complex Trade; NYSE Arca, Inc.: Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Relating to the Definition of a Complex Trade September 27, 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 June 27, 2007, September 13, 2007, June 12, 2007, June 1, 2007, and July 6, 2007, the American Stock Exchange LLC (‘‘Amex’’), the Boston Stock Exchange, Inc. (‘‘BSE’’), the Chicago Board Options 1 15 2 17 PO 00000 U.S.C. 78s(b)(l). CFR 240. 19b–4. Frm 00097 Fmt 4703 Sfmt 4703 Exchange, Incorporated (‘‘CBOE’’), the International Securities Exchange, LLC (‘‘ISE’’), and NYSE Arca, Inc. (‘‘NYSE Arca’’) (each, an ‘‘Exchange’’ and, collectively, the ‘‘Exchanges’’), respectively, filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule changes as described in Items I, II and III below, which Items have been substantially prepared by the Exchanges. On July 11, 2007, NYSE Arca filed Amendment No. 1 to its proposed rule change.3 The Commission is publishing this notice to solicit comments on the proposed rule changes, as amended, from interested persons. I. Self-Regulatory Organizations’ Statement of the Terms of Substance of the Proposed Rule Changes The Exchanges propose to amend the definition of ‘‘complex trade’’ set forth in their respective rules pertaining to the Intermarket Options Linkage (‘‘Linkage’’) to include stock-option trades. The text of the proposed rule changes is available at the Exchanges’ Web sites,4 the Exchanges’ principal offices, and at the Commission’s Public Reference Room. II. Self-Regulatory Organizations’ Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Changes In their filings with the Commission, each Exchange included statements concerning the purpose of, and basis for, their proposed rule changes and discussed any comments they received on the proposed rule changes. The text of these statements may be examined at the places specified in Item IV below. The Exchanges have prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organizations’ Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Changes 1. Purpose Under Section 8(c)(iii)(G) of the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage (‘‘Linkage Plan’’),5 the Linkage 3 Amendment No. 1 to SR–NYSEArca–2007–65 effected technical corrections to the proposed rule change. 4 See http://www.amex.com, http:// www.bostonstock.com, http://www.cboe.com, http://www.ise.com, and http://www.nyse.com. 5 On July 28, 2000, the Commission approved a national market system plan for the purpose of creating and operating the Linkage proposed by Amex, CBOE, and ISE. See Securities Exchange Act E:\FR\FM\04OCN1.SGM 04OCN1

Agencies

[Federal Register Volume 72, Number 192 (Thursday, October 4, 2007)]
[Notices]
[Pages 56813-56814]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-19639]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 28009; 812-13412]


Vanguard STAR Funds, et al.; Notice of Application

September 28, 2007.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (``Act'') for an exemption from rule 12d1-2(a) 
under the Act.

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

Summary of Application:  Applicants request an order to permit funds of 
funds relying on rule 12d1-2 under the Act to invest in certain 
financial instruments.

Applicants:  Vanguard STAR funds, Vanguard Chester Funds, Vanguard 
Trustees' Equity Fund, Vanguard Variable Insurance Funds (collectively, 
the ``Trusts''), The Vanguard Group, Inc. (``VGI'') and Vanguard 
Marketing Corporation (``VMC'').

Filing Dates: The application was filed on August 10, 2007, and amended 
on September 24 and 28, 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 October 23, 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, Commission, 100 F Street, NE., Washington, DC 
20549-1090; Applicants, c/o Nathan M. Will, The Vanguard Group, Inc., 
P.O. Box 2600, Valley Forge, PA 19482.

FOR FURTHER INFORMATION CONTACT: Donna Tumminio, Law Clerk, at (202) 
551-6826, or Michael W. Mundt, 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 at the 
Commission's Public Reference Branch, 100 F Street, NE., Washington, DC 
20549-0104 (telephone (202) 551-8090).

Applicants' Representations

    1. The Trusts are Delaware statutory trusts and are registered 
under the Act as open-end management investment companies. The Trusts 
offer separate series (``Funds'') that may invest in other registered 
investment companies in reliance on section 12(d)(1)(G) of the Act and 
rule 12d1-2 under the Act (``Underlying Funds''). Applicants propose 
that the Funds be permitted to invest in futures contracts, options on 
futures contracts, swap agreements, derivatives, and other financial 
instruments that may not be securities within the meaning of section 
2(a)(36) of the Act (``Other Investments''), in addition to Underlying 
Funds.\1\
---------------------------------------------------------------------------

    \1\ Other Investments do not include shares of any registered 
investment companies that are not part of the ``same group of 
investment companies,'' as defined in section 12(d)(1)(G)(ii) of the 
Act, as the Trusts. Applicants request that the relief also apply to 
any future Fund, whether organized as an investment company or as a 
series thereof, which is advised by VGI or any entity controlling, 
controlled by or under common control with VGI and which is part of 
the same group of investment companies as the Funds.
---------------------------------------------------------------------------

    2. VGI is a Pennsylvania corporation that is wholly and jointly 
owned by certain registered investment companies. VGI is registered as 
an investment adviser under the Investment Advisers Act of 1940 and as 
a transfer agent under the Securities Exchange Act of 1934 (``Exchange 
Act''). VGI provides each of the Funds with corporate management, 
administrative, transfer agency, and, in some cases, investment 
advisory services. VMC is a registered broker-dealer under the Exchange 
Act and is a wholly owned subsidiary of VGI. VMC provides all 
distribution and marketing services for the Funds.

Applicants' Legal Analysis

    1. Section 12(d)(1)(A) of the Act provides that no registered 
investment company (``acquiring company'') may acquire securities of 
another investment company (``acquired company'') if such securities 
represent more than 3% of the acquired company's outstanding voting 
stock or more than 5% of the acquiring company's total assets, or if 
such securities, together with the securities of other investment 
companies, represent more than 10% of the acquiring company's total 
assets. Section 12(d)(1)(B) of the Act provides that no registered 
open-end investment company may sell its securities to another 
investment company if the sale will cause the acquiring company to own 
more than 3% of the acquired company's voting stock, or cause more than 
10% of the acquired company's voting stock to be owned by investment 
companies.
    2. Section 12(d)(1)(G) of the Act provides that section 12(d)(1) 
will not apply to securities of an acquired company purchased by an 
acquiring company if: (i) The acquiring company and acquired company 
are part of the

[[Page 56814]]

same group of investment companies; (ii) the acquiring company holds 
only securities of acquired companies that are part of the same group 
of investment companies, government securities, and short-term paper; 
(iii) the aggregate sales loads and distribution-related fees of the 
acquiring company and the acquired company are not excessive under 
rules adopted pursuant to section 22(b) or section 22(c) of the Act by 
a securities association registered under section 15A of the Exchange 
Act or by the Commission; and (iv) the acquired company has a policy 
that prohibits it from acquiring securities of registered open-end 
management investment companies or registered unit investment trusts in 
reliance on section 12(d)(1)(F) or (G) of the Act.
    3. Rule 12d1-2 under the Act permits a registered open-end 
investment company or a registered unit investment trust that relies on 
section 12(d)(1)(G) of the Act to acquire, in addition to securities 
issued by another registered investment company in the same group of 
investment companies, government securities, and short-term paper: (1) 
Securities issued by an investment company that is not in the same 
group of investment companies, when the acquisition is in reliance on 
section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (2) securities (other 
than securities issued by an investment company); and (3) securities 
issued by a money market fund, when the investment is in reliance on 
rule 12d1-1 under the Act. For the purposes of rule 12d1-2, 
``securities'' means any security as defined in section 2(a)(36) of the 
Act.
    4. Section 6(c) of the Act provides that the Commission may exempt 
any person, security, or transaction from any provisions of the Act, or 
from any rule under the Act, if 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.
    5. Applicants state that the proposed arrangement would comply with 
the provisions of rule 12d1-2 under the Act, but for the fact that the 
Funds may invest a portion of their assets in Other Investments. 
Applicants request an order under section 6(c) of the Act for an 
exemption from rule 12d1-2(a) to allow the Funds to invest in Other 
Investments. Applicants assert that permitting the Funds to invest in 
Other Investments as described in the application would not raise any 
of the concerns that the requirements of section 12(d)(1) were designed 
to address.

Applicants' Conditions

    Applicants agree that the order granting the requested relief will 
be subject to the following conditions:
    1. Prior to approving any investment advisory agreement under 
section 15 of the Act, the board of trustees of the appropriate Fund, 
including a majority of the trustees who are not ``interested 
persons,'' as defined in section 2(a)(19) of the Act, will find that 
the advisory fees, if any, charged under the agreement are based on 
services provided that are in addition to, rather than duplicative of, 
services provided pursuant to any Underlying Fund's advisory agreement. 
Such finding, and the basis upon which the finding is made, will be 
recorded fully in the minute books of the appropriate Fund.
    2. Applicants will comply with all provisions of rule 12d1-2 under 
the Act, except for paragraph (a)(2), to the extent that it restricts 
any Fund from investing in Other Investments as described in the 
application.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-19639 Filed 10-3-07; 8:45 am]
BILLING CODE 8011-01-P