Matrix Capital Group, Inc. and Matrix Defined Trusts; Notice of Application, 30981-30984 [E8-11943]

Download as PDF jlentini on PROD1PC65 with NOTICES Federal Register / Vol. 73, No. 104 / Thursday, May 29, 2008 / Notices institution of higher education to pay subminimum wages to its full-time students employed by the institution. The reverse side of Form WH–201 also serves as a Notice of Temporary Authority the institution of higher education may post that provides temporary authority allowing it to employ full-time students at subminimum wages for 30 days after forwarding the properly completed application to the Wage and Hour Division (WHD). The authority under Form WH–201 remains in effect for one year-unless the WHD denies the application within 30 days, issues a certificate with modified terms or conditions, or expressly extends the 30day review period. The 1215–0032 information collection is currently approved for use through November 30, 2008, and the 1215–0080 information collection is currently approved for use through December 31, 2008. II. Review Focus: The Department of Labor is particularly interested in comments which: • Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; • Evaluate the accuracy of the agency’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; • Enhance the quality, utility and clarity of the information to be collected; and • Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses. III. Current Actions: The Department of Labor seeks approval for the revision of this currently approved information collection in order to determine whether to grant or deny subminimum wage authority to the applicant(s); to allow employers to request a certificate authorizing payment of subminimum wages to full-time students and thereby increase job opportunities for such students, if approved. Type of Review: Revision. Agency: Employment Standards Administration. Title: Applications to Employ Fulltime Students at Subminimum Wages in Retail or Service Establishments, Agriculture, and Institutions of Higher Education. VerDate Aug<31>2005 17:45 May 28, 2008 Jkt 214001 OMB Number: 1215–0032. Agency Numbers: WH–200, WH–201, WH–202. Affected Public: Business or other forprofit, Farms, Not-for-profit institutions. Total Respondents: 389. Total Annual Responses: 389. Estimated Time per Response: 15 minutes. Estimated Total Burden Hours: 97. Frequency: On occasion. Total Burden Cost (capital/startup): $0. Total Burden Cost (operating/ maintenance): $171.16. Comments submitted in response to this notice will be summarized and/or included in the request for Office of Management and Budget approval of the information collection request; they will also become a matter of public record. Dated: May 22, 2008. Hazel Bell, Acting Chief, Branch of Management Review and Internal Control, Division of Financial Management, Office of Management, Administration and Planning, Employment Standards Administration. [FR Doc. E8–11911 Filed 5–28–08; 8:45 am] BILLING CODE 4510–27–P 30981 Disability, 1331 F Street, NW., Suite 850, Washington, DC 20004; 202–272– 2004 (voice), 202–272–2074 (TTY), 202– 272–2022 (fax), ghawkins@ncd.gov (email). Accommodations: People needing reasonable accommodations should notify NCD at least two weeks before this teleconference meeting. Youth Advisory Committee Mission: The purpose of NCD’s Youth Advisory Committee is to provide advice to NCD on various issues, such as NCD’s planning and priorities. Dated: May 21, 2008. Michael C. Collins, Executive Director. [FR Doc. E8–11935 Filed 5–28–08; 8:45 am] BILLING CODE 6820–MA–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 28284; 812–13475] Matrix Capital Group, Inc. and Matrix Defined Trusts; Notice of Application May 22, 2008. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of an application under (a) section 6(c) of the Investment Company Act of 1940 (‘‘Act’’) for an exemption from sections 2(a)(32), 2(a)(35), 14(a), 19(b), 22(d) and 26(a)(2)(C) of the Act and rules 19b–1 and rule 22c–1 thereunder and (b) sections 11(a) and 11(c) of the Act for approval of certain exchange and rollover privileges. AGENCY: NATIONAL COUNCIL ON DISABILITY Youth Advisory Committee Meeting (Teleconference) National Council on Disability (NCD). Pursuant to the Federal Advisory Committee Act, Public Law 92–463, NCD gives notice that the Youth Advisory Committee will hold a meeting by teleconference on the date and time noted below. This teleconference meeting is open to the public. Date and Time: Friday, June 20, 2008, 4 p.m. EDT. Place: National Council on Disability, 1331 F Street, NW., Suite 850, Washington, DC. Status: All parts of this conference call will be open to the public. People interested in observing the teleconference meeting should contact the appropriate staff member listed below. Due to limited resources, only a few telephone lines will be available for this conference call. Agenda: Roll call, announcements, reports, new business, adjournment. A detailed agenda will be posted 10 days before each meeting at http:// www.ncd.gov/newsroom/advisory/ youth/youth.htm. CONTACT PERSON FOR MORE INFORMATION: Gerrie Drake Hawkins, Ph.D., Senior Program Analyst, National Council on AGENCY: PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 Matrix Capital Group, Inc. (‘‘Matrix’’) and Matrix Defined Trusts.1 SUMMARY OF APPLICATION: Applicants request an order to permit certain unit investment trusts to: (a) Impose sales charges on a deferred basis and waive the deferred sales charge in certain cases; (b) offer unitholders certain exchange and rollover options; (c) publicly offer units without requiring the Depositor to take for its own account or place with others $100,000 worth of units; and (d) distribute capital gains resulting from the sale of portfolio APPLICANTS: 1 1 Applicants also request relief for existing and future series (collectively, ‘‘Series’’) of Matrix Defined Trusts and of other unit investment trusts sponsored by a Depositor (‘‘Trusts’’). The ‘‘Depositors’’ are Matrix and any entity controlling, controlled by or under common control with Matrix. Any future Trust and Series that relies on the requested order will comply with the terms and conditions of the application. All presently existing Trusts that currently intend to rely on the requested order are named as applicants. E:\FR\FM\29MYN1.SGM 29MYN1 30982 Federal Register / Vol. 73, No. 104 / Thursday, May 29, 2008 / Notices jlentini on PROD1PC65 with NOTICES securities within a reasonable time after receipt. FILING DATES: The application was filed on January 15, 2008 and amended on May 21, 2008. HEARING OR NOTIFICATION OF HEARING: An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission’s Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on June 16, 2008, 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, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090; Applicants, 335 Madison Avenue, 11th Floor, New York, NY 10017. FOR FURTHER INFORMATION CONTACT: Laura L. Solomon, Senior Counsel, at (202) 551–6915, or Julia Kim Gilmer, Branch Chief, at (202) 551–6821 (Office of Investment Company Regulation, Division of Investment Management). 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 20549–1520 (telephone (202) 551–5850). Applicants’ Representations 1. Matrix Defined Trusts is a unit investment trust (‘‘UIT’’) registered under the Act Any future Trust will be a UIT that will be registered under the Act. Matrix, a New York corporation, is registered under the Securities Exchange Act of 1934 as a broker-dealer and is the depositor of Matrix Defined Trusts. Each Trust will be sponsored by a Depositor. Each Series will be created by a trust indenture between the Depositor and a banking institution or trust company as trustee (‘‘Trustee’’). 2. The Depositor acquires a portfolio of securities, which it deposits with the Trustee in exchange for certificates representing units of fractional undivided interest in the Series’ portfolio (‘‘Units’’). The Units are offered to the public through the Depositor and dealers at a price which, during the initial offering period, is based upon the aggregate market value VerDate Aug<31>2005 17:45 May 28, 2008 Jkt 214001 of the underlying securities, or, the aggregate offering side evaluation of the underlying securities if the underlying securities are not listed on a securities exchange, plus a front-end sales charge. The Depositor may reduce the sales charge in compliance with rule 22d–1 under the Act in certain circumstances, which are disclosed in the Series’ prospectus. 3. The Depositor currently intends, but is not legally obligated to maintain a secondary market for Units of outstanding Series. Other broker-dealers may or may not maintain a secondary market for Units of a Series. If a secondary market is maintained, investors will be able to purchase Units on the secondary market at the current public offering price plus a front-end sales charge. If such a market is not maintained at any time for any Series, holders of the Units (‘‘Unitholders’’) of that Series may redeem their Units through the Trustee. A. Deferred Sales Charge and Waiver of Deferred Sales Charge under Certain Circumstances 1. Applicants request an order to the extent necessary to permit one or more Series to impose a sales charge on a deferred basis (‘‘DSC’’). For each Series, the Depositor would set a maximum sales charge per Unit, a portion of which may be collected ‘‘up front’’ (i.e., at the time an investor purchases the Units). The DSC would be collected subsequently in installments (‘‘Installment Payments’’) as described in the application. The Depositor would not add any amount for interest or any similar or related charge to adjust for such deferral. 2. When a Unitholder redeems or sells Units, the Depositor intends to deduct any unpaid DSC from the redemption or sale proceeds. When calculating the amount due, the Depositor will assume that Units on which the DSC has been paid in full are redeemed or sold first. With respect to Units on which the DSC has not been paid in full, the Depositor will assume that the Units held for the longest time are redeemed or sold first. Applicants represent that the DSC collected at the time of redemption or sale, together with the Installment Payments and any amount collected up front, will not exceed the maximum sales charge per Unit. Under certain circumstances, the Depositor may waive the collection of any unpaid DSC in connection with redemptions or sales of Units. These circumstances will be disclosed in the prospectus for the relevant Series and implemented in accordance with rule 22d–1 under the Act. PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 3. Each Series offering Units subject to a DSC will state the maximum charge per Unit in its prospectus. In addition, the prospectus for such Series will include the table required by Form N– 1A (modified as appropriate to reflect the difference between UITs and openend management investment companies) and a schedule setting forth the number and date of each Installment Payment, along with the duration of the collection period. The prospectus also will disclose that portfolio securities may be sold to pay an Installment Payment if distribution income is insufficient and that securities will be sold pro rata or a specific security will be designated for sale. B. Exchange Option and Rollover Option 1. Applicants request an order to the extent necessary to permit Unitholders of a Series to exchange their Units for Units of another Series (‘‘Exchange Option’’) and Unitholders of a Series that is terminating to exchange their Units for Units of a new Series of the same type (‘‘Rollover Option’’). The Exchange Option and Rollover Option would apply to all exchanges of Units sold with a front-end sales charge or DSC. 2. A Unitholder who purchases Units under the Exchange Option or Rollover Option would pay a lower sales charge than that which would be paid for the Units by a new investor. The reduced sales charge will be reasonably related to the expenses incurred in connection with the administration of the DSC program, which may include an amount that will fairly and adequately compensate the Depositor and participating underwriters and brokers for their services in providing the DSC program. 3. Pursuant to the Exchange Option, an adjustment would be made if Units of any Series are exchanged within five months of their acquisition for Units of a Series with a higher sales charge (‘‘Five Months Adjustment’’). An adjustment also would be made if Units on which a DSC is collected are exchanged for Units of a Series that imposes a front-end sales charge and the exchange occurs before the DSC collected (plus any amount collected up front on the exchanged Units) at least equals the per Unit sales charge on the acquired Units (‘‘DSC Front-End Exchange Adjustment’’). If an exchange involves either the Five Months Adjustment or the DSC Front-End Exchange Adjustment, the Unitholder would pay the greater of the reduced sales charge or an amount which, together with the sales charge already E:\FR\FM\29MYN1.SGM 29MYN1 Federal Register / Vol. 73, No. 104 / Thursday, May 29, 2008 / Notices paid on the exchanged Units, equals the normal sales charge on the acquired Units on the date of the exchange. With appropriate disclosures, the Depositor may waive such payment. Further, the Depositor would reserve the right to vary the sales charge normally applicable to a Series and the charge applicable to exchanges, as well as to modify, suspend, or terminate the Exchange Option as set forth in the conditions to the application. jlentini on PROD1PC65 with NOTICES Applicants’ Legal Analysis A. DSC and Waiver of DSC 1. Section 4(2) of the Act defines a ‘‘unit investment trust’’ as an investment company that issues only redeemable securities. Section 2(a)(32) of the Act defines a ‘‘redeemable security’’ as a security that, upon its presentation to the issuer, entitles the holder to receive approximately his or her proportionate share of the issuer’s current net assets or the cash equivalent of those assets. Rule 22c–1 under the Act requires that the price of a redeemable security issued by a registered investment company for purposes of sale, redemption or repurchase be based on the security’s current net asset value (‘‘NAV’’). Because the collection of any unpaid DSC may cause a redeeming Unitholder to receive an amount less than the NAV of the redeemed Units, applicants request relief from section 2(a)(32) and rule 22c–1. 2. Section 22(d) of the Act and rule 22d–1 under the Act require a registered investment company and its principal underwriter and dealers to sell securities only at the current public offering price described in the investment company’s prospectus, with the exception of sales of redeemable securities at prices that reflect scheduled variations in the sales load. Section 2(a)(35) of the Act defines the term ‘‘sales load’’ as the difference between the sales price and the portion of the proceeds invested by the depositor or trustee. Applicants request relief from section 2(a)(35) and section 22(d) to permit waivers, deferrals or other scheduled variations of the sales load. 3. Under section 6(c) of the Act, the Commission may exempt classes of transactions, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants state that their proposal meets the standards of section 6(c). Applicants state that the provisions VerDate Aug<31>2005 17:45 May 28, 2008 Jkt 214001 of section 22(d) are intended to prevent (a) riskless trading in investment company securities due to backward pricing, (b) disruption of orderly distribution by dealers selling shares at a discount, and (c) discrimination among investors resulting from different prices charged to different investors. Applicants assert that the proposed DSC program will present none of these abuses. Applicants further state that all scheduled variations in the sales load will be disclosed in the prospectus of each Series and applied uniformly to all investors, and that applicants will comply with all the conditions set forth in rule 22d–1. 4. Section 26(a)(2)(C) of the Act, in relevant part, prohibits a trustee or custodian of a UIT from collecting from the trust as an expense any payment to the trust’s depositor or principal underwriter. Because the Trustee’s payment of the DSC to the Depositor may be deemed to be an expense under section 26(a)(2)(C), applicants request relief under section 6(c) from section 26(a)(2)(C) to the extent necessary to permit the Trustee to collect Installment Payments and disburse them to the Depositor. Applicants submit that the relief is appropriate because the DSC is more properly characterized as a sales load. B. Exchange Option and Rollover Option 1. Sections 11(a) and 11(c) of the Act prohibit any offer of exchange by a UIT for the securities of another investment company unless the terms of the offer have been approved in advance by the Commission. Applicants request an order under sections 11(a) and 11(c) for Commission approval of the Exchange Option and the Rollover Option. Applicants state that the Five Months Adjustment and the DSC Front-End Exchange Adjustment in certain circumstances are appropriate to maintain the equitable treatment of various investors in each Series. C. Net Worth Requirement 1. Section 14(a) of the Act requires that a registered investment company have $100,000 of net worth prior to making a public offering. Applicants state that each Series will comply with this requirement because the Depositor will deposit more than $100,000 of securities. Applicants assert, however, that the Commission has interpreted section 14(a) as requiring that the initial capital investment in an investment company be made without any intention to dispose of the investment. Applicants state that, under this interpretation, a Series would not satisfy section 14(a) PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 30983 because of the Depositor’s intention to sell all the Units of the Series. 2. Rule 14a–3 under the Act exempts UITs from section 14(a) if certain conditions are met, one of which is that the UIT invest only in ‘‘eligible trust securities,’’ as defined in the rule. Applicants state that they may not rely on rule 14a–3 because certain Series (collectively, ‘‘Equity Series’’) will invest all or a portion of their assets in equity securities or shares of registered investment companies which do not satisfy the definition of eligible trust securities. 3. Applicants request an exemption under section 6(c) of the Act to the extent necessary to exempt the Equity Series from the net worth requirement in section 14(a). Applicants state that the Series and the Depositor will comply in all respects with the requirements of rule 14a–3, except that the Equity Series will not restrict their portfolio investments to ‘‘eligible trust securities.’’ D. Capital Gains Distribution 1. Section 19(b) of the Act and rule 19b–1 under the Act provide that, except under limited circumstances, no registered investment company may distribute long-term gains more than once every twelve months. Rule 19b– 1(c), under certain circumstances, exempts a UIT investing in eligible trust securities (as defined in rule 14a–3) from the requirements of rule 19b–1. Because the Equity Series do not limit their investments to eligible trust securities, however, the Equity Series will not qualify for the exemption in paragraph (c) of rule 19b–1. Applicants therefore request an exemption under section 6(c) from section 19(b) and rule 19b–1 to the extent necessary to permit capital gains earned in connection with the sale of portfolio securities to be distributed to Unitholders along with the Equity Series’ regular distributions. In all other respects, applicants will comply with section 19(b) and rule 19b–1. 2. Applicants state that their proposal meets the standards of section 6(c). Applicants assert that any sale of portfolio securities would be triggered by the need to meet Trust expenses, Installment Payments, or by redemption requests, events over which the Depositor and the Equity Series do not have control. Applicants further state that, because principal distributions must be clearly indicated in accompanying reports to Unitholders as a return of principal and will be relatively small in comparison to normal dividend distributions, there is E:\FR\FM\29MYN1.SGM 29MYN1 30984 Federal Register / Vol. 73, No. 104 / Thursday, May 29, 2008 / Notices little danger of confusion from failure to differentiate among distributions. Applicants’ Conditions Applicants agree that any order granting the requested relief will be subject to the following conditions: jlentini on PROD1PC65 with NOTICES A. DSC Relief and Exchange and Rollover Options 1. Whenever the Exchange Option or the Rollover Option is to be terminated or its terms are to be amended materially, any holder of a security subject to that privilege will be given prominent notice of the impending termination or amendment at least 60 days prior to the date of termination or the effective date of the amendment, provided that: (a) no such notice need be given if the only material effect of an amendment is to reduce or eliminate the sales charge payable at the time of an exchange, to add one or more new Series eligible for the Exchange Option or the Rollover Option, or to delete a Series which has terminated; and (b) no notice need be given if, under extraordinary circumstances, either (i) there is a suspension of the redemption of Units of the Series under section 22(e) of the Act and the rules and regulations promulgated thereunder, or (ii) a Series temporarily delays or ceases the sale of its Units because it is unable to invest amounts effectively in accordance with applicable investment objectives, policies and restrictions. 2. An investor who purchases Units under the Exchange Option or the Rollover Option will pay a lower sales charge than that which would be paid for the Units by a new investor. 3. The prospectus of each Series offering exchanges or rollovers and any sales literature or advertising that mentions the existence of the Exchange Option or Rollover Option will disclose that the Exchange Option and the Rollover Option are subject to modification, termination or suspension without notice, except in certain limited cases. 4. Any DSC imposed on a Series’ Units will comply with the requirements of subparagraphs (1), (2) and (3) of rule 6c–10(a) under the Act. 5. Each Series offering Units subject to a DSC will include in its prospectus the disclosure required by Form N–1A relating to deferred sales charges (modified as appropriate to reflect the differences between UITs and open-end management investment companies) and a schedule setting forth the number and date of each Installment Payment. VerDate Aug<31>2005 17:45 May 28, 2008 Jkt 214001 B. Net Worth Requirement 1. Applicants will comply in all respects with the requirements of rule 14a–3, except that the Equity Series will not restrict their portfolio investments to ‘‘eligible trust securities.’’ For the Commission, by the Division of Investment Management, under delegated authority. Nancy M. Morris, Secretary. [FR Doc. E8–11943 Filed 5–28–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. IA–2736 / 803–189] Slick Enterprises, Inc.; Notice of Application May 22, 2008. Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’). ACTION: Notice of application for exemption under the Investment Advisers Act of 1940 (‘‘Advisers Act’’). AGENCY: Applicant: Slick Enterprises, Inc. (‘‘Applicant’’). Relevant Advisers Act Sections: Exemption requested under section 202(a)(11)(G) of the Advisers Act from section 202(a)(11) of the Advisers Act. Summary of Application: Applicant requests that the Commission issue an order declaring it and its employees acting within the scope of their employment to be persons not within the intent of section 202(a)(11) of the Advisers Act, which defines the term ‘‘investment adviser.’’ Filing Dates: The application was filed on October 25, 2005, and was amended and restated on March 23, 2007, March 18, 2008, and May 19, 2008. 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 Applicant with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on June 20, 2008 and should be accompanied by proof of service on Applicant, 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 may request notification of a hearing by writing to the Commission’s Secretary. PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549. Applicant, Slick Enterprises, Inc., c/o Phyllis Slick Cowell, President, P.O. Box 5958, Winston-Salem, North Carolina 27113. FOR FURTHER INFORMATION CONTACT: Daniel S. Kahl, Branch Chief, or David W. Blass, Assistant Director, at (202) 551–6787 (Office of Investment Adviser Regulation, Division of Investment Management). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained for a fee at the SEC’s Public Reference Branch, 100 F Street, NE., Washington DC 20549–0102 (telephone (202) 551–5850). ADDRESSES: Applicant’s Representations 1. Applicant was incorporated in 2002 and operates as the ‘‘family office’’ for the members of the Slick family. Applicant provides investment advisory services to: (i) The estate of Earl Slick, his widow Jane Pierce Slick, and Earl and Jane Slick’s lineal descendants (including by adoption) and spouses of their lineal descendants (collectively the ‘‘Slick Family’’); (ii) entities wholly owned by the member of the Slick Family and trusts all of the beneficiaries of which are members of the Slick Family (each such entity or trust is a ‘‘Slick Family Investment Entity’’); and (iii) foundations created and funded by the Slick Family (‘‘Slick Family Foundations’’ and, together with the Slick Family and the Slick Family Investment Entities, the ‘‘Slick Family Clients’’). Applicant also provides services, such as management, administrative, and tax services which do not constitute investment advice under the Advisers Act to various partnerships, limited liability companies, limited liability partnerships, and other entities that were created by members of the Slick Family to invest in or to operate other businesses or real estate, but which are not wholly owned by Slick Family Clients (each a ‘‘Slick Single Purpose Entity’’). 2. Applicant is owned exclusively by one or more members of the Slick Family, and its Board of Directors is composed entirely of members of the Slick Family as of the date of this notice. Applicant represents that it may have directors in the future that are not members of the Slick Family, but that at all times a majority of the Directors will be members of the Slick Family. 3. Applicant represents that, as a ‘‘family office,’’ it provides to Slick Family Clients advice on investments in E:\FR\FM\29MYN1.SGM 29MYN1

Agencies

[Federal Register Volume 73, Number 104 (Thursday, May 29, 2008)]
[Notices]
[Pages 30981-30984]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-11943]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 28284; 812-13475]


Matrix Capital Group, Inc. and Matrix Defined Trusts; Notice of 
Application

May 22, 2008.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under (a) section 6(c) of the 
Investment Company Act of 1940 (``Act'') for an exemption from sections 
2(a)(32), 2(a)(35), 14(a), 19(b), 22(d) and 26(a)(2)(C) of the Act and 
rules 19b-1 and rule 22c-1 thereunder and (b) sections 11(a) and 11(c) 
of the Act for approval of certain exchange and rollover privileges.

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Applicants: Matrix Capital Group, Inc. (``Matrix'') and Matrix Defined 
Trusts.\1\
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    \1\ 1 Applicants also request relief for existing and future 
series (collectively, ``Series'') of Matrix Defined Trusts and of 
other unit investment trusts sponsored by a Depositor (``Trusts''). 
The ``Depositors'' are Matrix and any entity controlling, controlled 
by or under common control with Matrix. Any future Trust and Series 
that relies on the requested order will comply with the terms and 
conditions of the application. All presently existing Trusts that 
currently intend to rely on the requested order are named as 
applicants.

Summary of Application: Applicants request an order to permit certain 
unit investment trusts to: (a) Impose sales charges on a deferred basis 
and waive the deferred sales charge in certain cases; (b) offer 
unitholders certain exchange and rollover options; (c) publicly offer 
units without requiring the Depositor to take for its own account or 
place with others $100,000 worth of units; and (d) distribute capital 
gains resulting from the sale of portfolio

[[Page 30982]]

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securities within a reasonable time after receipt.

Filing Dates: The application was filed on January 15, 2008 and amended 
on May 21, 2008.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving applicants with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. on June 16, 2008, 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, Securities and Exchange Commission, 100 F Street, 
NE., Washington, DC 20549-1090; Applicants, 335 Madison Avenue, 11th 
Floor, New York, NY 10017.

FOR FURTHER INFORMATION CONTACT: Laura L. Solomon, Senior Counsel, at 
(202) 551-6915, or Julia Kim Gilmer, Branch Chief, at (202) 551-6821 
(Office of Investment Company Regulation, Division of Investment 
Management).

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 
20549-1520 (telephone (202) 551-5850).

Applicants' Representations

    1. Matrix Defined Trusts is a unit investment trust (``UIT'') 
registered under the Act Any future Trust will be a UIT that will be 
registered under the Act. Matrix, a New York corporation, is registered 
under the Securities Exchange Act of 1934 as a broker-dealer and is the 
depositor of Matrix Defined Trusts. Each Trust will be sponsored by a 
Depositor. Each Series will be created by a trust indenture between the 
Depositor and a banking institution or trust company as trustee 
(``Trustee'').
    2. The Depositor acquires a portfolio of securities, which it 
deposits with the Trustee in exchange for certificates representing 
units of fractional undivided interest in the Series' portfolio 
(``Units''). The Units are offered to the public through the Depositor 
and dealers at a price which, during the initial offering period, is 
based upon the aggregate market value of the underlying securities, or, 
the aggregate offering side evaluation of the underlying securities if 
the underlying securities are not listed on a securities exchange, plus 
a front-end sales charge. The Depositor may reduce the sales charge in 
compliance with rule 22d-1 under the Act in certain circumstances, 
which are disclosed in the Series' prospectus.
    3. The Depositor currently intends, but is not legally obligated to 
maintain a secondary market for Units of outstanding Series. Other 
broker-dealers may or may not maintain a secondary market for Units of 
a Series. If a secondary market is maintained, investors will be able 
to purchase Units on the secondary market at the current public 
offering price plus a front-end sales charge. If such a market is not 
maintained at any time for any Series, holders of the Units 
(``Unitholders'') of that Series may redeem their Units through the 
Trustee.

A. Deferred Sales Charge and Waiver of Deferred Sales Charge under 
Certain Circumstances

    1. Applicants request an order to the extent necessary to permit 
one or more Series to impose a sales charge on a deferred basis 
(``DSC''). For each Series, the Depositor would set a maximum sales 
charge per Unit, a portion of which may be collected ``up front'' 
(i.e., at the time an investor purchases the Units). The DSC would be 
collected subsequently in installments (``Installment Payments'') as 
described in the application. The Depositor would not add any amount 
for interest or any similar or related charge to adjust for such 
deferral.
    2. When a Unitholder redeems or sells Units, the Depositor intends 
to deduct any unpaid DSC from the redemption or sale proceeds. When 
calculating the amount due, the Depositor will assume that Units on 
which the DSC has been paid in full are redeemed or sold first. With 
respect to Units on which the DSC has not been paid in full, the 
Depositor will assume that the Units held for the longest time are 
redeemed or sold first. Applicants represent that the DSC collected at 
the time of redemption or sale, together with the Installment Payments 
and any amount collected up front, will not exceed the maximum sales 
charge per Unit. Under certain circumstances, the Depositor may waive 
the collection of any unpaid DSC in connection with redemptions or 
sales of Units. These circumstances will be disclosed in the prospectus 
for the relevant Series and implemented in accordance with rule 22d-1 
under the Act.
    3. Each Series offering Units subject to a DSC will state the 
maximum charge per Unit in its prospectus. In addition, the prospectus 
for such Series will include the table required by Form N-1A (modified 
as appropriate to reflect the difference between UITs and open-end 
management investment companies) and a schedule setting forth the 
number and date of each Installment Payment, along with the duration of 
the collection period. The prospectus also will disclose that portfolio 
securities may be sold to pay an Installment Payment if distribution 
income is insufficient and that securities will be sold pro rata or a 
specific security will be designated for sale.

B. Exchange Option and Rollover Option

    1. Applicants request an order to the extent necessary to permit 
Unitholders of a Series to exchange their Units for Units of another 
Series (``Exchange Option'') and Unitholders of a Series that is 
terminating to exchange their Units for Units of a new Series of the 
same type (``Rollover Option''). The Exchange Option and Rollover 
Option would apply to all exchanges of Units sold with a front-end 
sales charge or DSC.
    2. A Unitholder who purchases Units under the Exchange Option or 
Rollover Option would pay a lower sales charge than that which would be 
paid for the Units by a new investor. The reduced sales charge will be 
reasonably related to the expenses incurred in connection with the 
administration of the DSC program, which may include an amount that 
will fairly and adequately compensate the Depositor and participating 
underwriters and brokers for their services in providing the DSC 
program.
    3. Pursuant to the Exchange Option, an adjustment would be made if 
Units of any Series are exchanged within five months of their 
acquisition for Units of a Series with a higher sales charge (``Five 
Months Adjustment''). An adjustment also would be made if Units on 
which a DSC is collected are exchanged for Units of a Series that 
imposes a front-end sales charge and the exchange occurs before the DSC 
collected (plus any amount collected up front on the exchanged Units) 
at least equals the per Unit sales charge on the acquired Units (``DSC 
Front-End Exchange Adjustment''). If an exchange involves either the 
Five Months Adjustment or the DSC Front-End Exchange Adjustment, the 
Unitholder would pay the greater of the reduced sales charge or an 
amount which, together with the sales charge already

[[Page 30983]]

paid on the exchanged Units, equals the normal sales charge on the 
acquired Units on the date of the exchange. With appropriate 
disclosures, the Depositor may waive such payment. Further, the 
Depositor would reserve the right to vary the sales charge normally 
applicable to a Series and the charge applicable to exchanges, as well 
as to modify, suspend, or terminate the Exchange Option as set forth in 
the conditions to the application.

Applicants' Legal Analysis

A. DSC and Waiver of DSC

    1. Section 4(2) of the Act defines a ``unit investment trust'' as 
an investment company that issues only redeemable securities. Section 
2(a)(32) of the Act defines a ``redeemable security'' as a security 
that, upon its presentation to the issuer, entitles the holder to 
receive approximately his or her proportionate share of the issuer's 
current net assets or the cash equivalent of those assets. Rule 22c-1 
under the Act requires that the price of a redeemable security issued 
by a registered investment company for purposes of sale, redemption or 
repurchase be based on the security's current net asset value 
(``NAV''). Because the collection of any unpaid DSC may cause a 
redeeming Unitholder to receive an amount less than the NAV of the 
redeemed Units, applicants request relief from section 2(a)(32) and 
rule 22c-1.
    2. Section 22(d) of the Act and rule 22d-1 under the Act require a 
registered investment company and its principal underwriter and dealers 
to sell securities only at the current public offering price described 
in the investment company's prospectus, with the exception of sales of 
redeemable securities at prices that reflect scheduled variations in 
the sales load. Section 2(a)(35) of the Act defines the term ``sales 
load'' as the difference between the sales price and the portion of the 
proceeds invested by the depositor or trustee. Applicants request 
relief from section 2(a)(35) and section 22(d) to permit waivers, 
deferrals or other scheduled variations of the sales load.
    3. Under section 6(c) of the Act, the Commission may exempt classes 
of transactions, if and to the extent that such exemption is necessary 
or appropriate in the public interest and consistent with the 
protection of investors and the purposes fairly intended by the policy 
and provisions of the Act. Applicants state that their proposal meets 
the standards of section 6(c). Applicants state that the provisions of 
section 22(d) are intended to prevent (a) riskless trading in 
investment company securities due to backward pricing, (b) disruption 
of orderly distribution by dealers selling shares at a discount, and 
(c) discrimination among investors resulting from different prices 
charged to different investors. Applicants assert that the proposed DSC 
program will present none of these abuses. Applicants further state 
that all scheduled variations in the sales load will be disclosed in 
the prospectus of each Series and applied uniformly to all investors, 
and that applicants will comply with all the conditions set forth in 
rule 22d-1.
    4. Section 26(a)(2)(C) of the Act, in relevant part, prohibits a 
trustee or custodian of a UIT from collecting from the trust as an 
expense any payment to the trust's depositor or principal underwriter. 
Because the Trustee's payment of the DSC to the Depositor may be deemed 
to be an expense under section 26(a)(2)(C), applicants request relief 
under section 6(c) from section 26(a)(2)(C) to the extent necessary to 
permit the Trustee to collect Installment Payments and disburse them to 
the Depositor. Applicants submit that the relief is appropriate because 
the DSC is more properly characterized as a sales load.

B. Exchange Option and Rollover Option

    1. Sections 11(a) and 11(c) of the Act prohibit any offer of 
exchange by a UIT for the securities of another investment company 
unless the terms of the offer have been approved in advance by the 
Commission. Applicants request an order under sections 11(a) and 11(c) 
for Commission approval of the Exchange Option and the Rollover Option. 
Applicants state that the Five Months Adjustment and the DSC Front-End 
Exchange Adjustment in certain circumstances are appropriate to 
maintain the equitable treatment of various investors in each Series.

C. Net Worth Requirement

    1. Section 14(a) of the Act requires that a registered investment 
company have $100,000 of net worth prior to making a public offering. 
Applicants state that each Series will comply with this requirement 
because the Depositor will deposit more than $100,000 of securities. 
Applicants assert, however, that the Commission has interpreted section 
14(a) as requiring that the initial capital investment in an investment 
company be made without any intention to dispose of the investment. 
Applicants state that, under this interpretation, a Series would not 
satisfy section 14(a) because of the Depositor's intention to sell all 
the Units of the Series.
    2. Rule 14a-3 under the Act exempts UITs from section 14(a) if 
certain conditions are met, one of which is that the UIT invest only in 
``eligible trust securities,'' as defined in the rule. Applicants state 
that they may not rely on rule 14a-3 because certain Series 
(collectively, ``Equity Series'') will invest all or a portion of their 
assets in equity securities or shares of registered investment 
companies which do not satisfy the definition of eligible trust 
securities.
    3. Applicants request an exemption under section 6(c) of the Act to 
the extent necessary to exempt the Equity Series from the net worth 
requirement in section 14(a). Applicants state that the Series and the 
Depositor will comply in all respects with the requirements of rule 
14a-3, except that the Equity Series will not restrict their portfolio 
investments to ``eligible trust securities.''

D. Capital Gains Distribution

    1. Section 19(b) of the Act and rule 19b-1 under the Act provide 
that, except under limited circumstances, no registered investment 
company may distribute long-term gains more than once every twelve 
months. Rule 19b-1(c), under certain circumstances, exempts a UIT 
investing in eligible trust securities (as defined in rule 14a-3) from 
the requirements of rule 19b-1. Because the Equity Series do not limit 
their investments to eligible trust securities, however, the Equity 
Series will not qualify for the exemption in paragraph (c) of rule 19b-
1. Applicants therefore request an exemption under section 6(c) from 
section 19(b) and rule 19b-1 to the extent necessary to permit capital 
gains earned in connection with the sale of portfolio securities to be 
distributed to Unitholders along with the Equity Series' regular 
distributions. In all other respects, applicants will comply with 
section 19(b) and rule 19b-1.
    2. Applicants state that their proposal meets the standards of 
section 6(c). Applicants assert that any sale of portfolio securities 
would be triggered by the need to meet Trust expenses, Installment 
Payments, or by redemption requests, events over which the Depositor 
and the Equity Series do not have control. Applicants further state 
that, because principal distributions must be clearly indicated in 
accompanying reports to Unitholders as a return of principal and will 
be relatively small in comparison to normal dividend distributions, 
there is

[[Page 30984]]

little danger of confusion from failure to differentiate among 
distributions.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:

A. DSC Relief and Exchange and Rollover Options

    1. Whenever the Exchange Option or the Rollover Option is to be 
terminated or its terms are to be amended materially, any holder of a 
security subject to that privilege will be given prominent notice of 
the impending termination or amendment at least 60 days prior to the 
date of termination or the effective date of the amendment, provided 
that: (a) no such notice need be given if the only material effect of 
an amendment is to reduce or eliminate the sales charge payable at the 
time of an exchange, to add one or more new Series eligible for the 
Exchange Option or the Rollover Option, or to delete a Series which has 
terminated; and (b) no notice need be given if, under extraordinary 
circumstances, either (i) there is a suspension of the redemption of 
Units of the Series under section 22(e) of the Act and the rules and 
regulations promulgated thereunder, or (ii) a Series temporarily delays 
or ceases the sale of its Units because it is unable to invest amounts 
effectively in accordance with applicable investment objectives, 
policies and restrictions.
    2. An investor who purchases Units under the Exchange Option or the 
Rollover Option will pay a lower sales charge than that which would be 
paid for the Units by a new investor.
    3. The prospectus of each Series offering exchanges or rollovers 
and any sales literature or advertising that mentions the existence of 
the Exchange Option or Rollover Option will disclose that the Exchange 
Option and the Rollover Option are subject to modification, termination 
or suspension without notice, except in certain limited cases.
    4. Any DSC imposed on a Series' Units will comply with the 
requirements of subparagraphs (1), (2) and (3) of rule 6c-10(a) under 
the Act.
    5. Each Series offering Units subject to a DSC will include in its 
prospectus the disclosure required by Form N-1A relating to deferred 
sales charges (modified as appropriate to reflect the differences 
between UITs and open-end management investment companies) and a 
schedule setting forth the number and date of each Installment Payment.

B. Net Worth Requirement

    1. Applicants will comply in all respects with the requirements of 
rule 14a-3, except that the Equity Series will not restrict their 
portfolio investments to ``eligible trust securities.''

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Nancy M. Morris,
Secretary.
[FR Doc. E8-11943 Filed 5-28-08; 8:45 am]
BILLING CODE 8010-01-P