Cohen & Steers Advantage Income Realty Fund, Inc., et al.; Notice of Application, 44787-44791 [E8-17539]
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Federal Register / Vol. 73, No. 148 / Thursday, July 31, 2008 / Notices
investment company. On July 13, 2007,
applicant transferred its assets to
Delaware Tax-Free USA Fund, a series
of Delaware Group Tax Free Fund,
based on net asset value. Expenses of
approximately $77,088 incurred in
connection with the reorganization were
paid by applicant, the acquiring fund,
and applicant’s investment adviser,
Delaware Management Company.
Filing Date: The application was filed
on July 16, 2008.
Applicant’s Address: 2005 Market St.,
Philadelphia, PA 19103–7094.
C Funds Group, Inc. [File No. 811–
4246]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. On April 28,
2008, applicant made a liquidating
distribution to its shareholders, based
on net asset value. Applicant incurred
no expenses in connection with the
liquidation. Applicant’s custodian holds
$55.39 in cash for the one remaining
shareholder that applicant has been
unable to locate. The custodian will
hold the unclaimed assets for the period
specified by Florida law, after which
time any unclaimed assets will escheat
to the state of Florida.
Filing Date: The application was filed
on July 17, 2008.
Applicant’s Address: 201 Center Rd.,
Suite Two, Venice, FL 34285.
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SEI Insurance Products Trust [File No.
811–9183]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. On August 29,
2003, applicant made a liquidating
distribution to its shareholders based on
net asset value. Applicant incurred no
expenses in connection with the
liquidation. On April 11, 2008, in
connection with the request for
deregistration, Applicant filed its final
Form 24F–2 Annual Notice of Securities
Sold.
Filing Dates: The application was
filed on March 18, 2004, and an
amended application was filed on April
11, 2007.
Applicant’s Address: SEI Investments
Global Fund Services, 1 Freedom Valley
Drive, Oaks, PA 19456.
Genworth Life of New York VL
Separate Account 1 [File No. 811–9861]
Summary: Applicant, a unit
investment trust, seeks an order
declaring that it has ceased to be an
investment company. Applicant
requests deregistration based on
abandonment of registration. At the time
of filing, sales of policies had been
discontinued and there were less than
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25 policy owners. Applicant will
continue to operate as an unregistered
separate account in reliance on section
3(c)(1) of the Investment Company Act
of 1940.
Filing Dates: The application was
filed on March 28, 2008, and amended
on July 18, 2008 and July 23, 2008.
Applicant’s Address: 6610 West
Broad Street, Richmond, Virginia,
23230.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–17504 Filed 7–30–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
28341; 812–13152]
Cohen & Steers Advantage Income
Realty Fund, Inc., et al.; Notice of
Application
July 24, 2008.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of application under
section 6(c) of the Investment Company
Act of 1940 (‘‘Act’’) for an exemption
from section 19(b) of the Act and rule
19b–1 under the Act.
AGENCY:
Applicants
request an order to permit certain
closed-end investment companies to
make periodic distributions of long-term
capital gains with respect to their
outstanding common stock as frequently
as twelve times each year, and as
frequently as distributions are specified
by or in accordance with the terms of
any outstanding preferred stock that
such investment companies may issue.
APPLICANTS: Cohen & Steers Advantage
Income Realty Fund, Inc., Cohen &
Steers Closed-End Opportunity Fund,
Inc., Cohen & Steers Dividend Majors
Fund, Inc., Cohen & Steers Global
Income Builder, Inc., Cohen & Steers
Premium Income Realty Fund, Inc.,
Cohen & Steers Quality Income Realty
Fund, Inc., Cohen & Steers REIT and
Preferred Income Fund, Inc., Cohen &
Steers REIT and Utility Income Fund,
Inc., Cohen & Steers Select Utility Fund,
Inc., Cohen & Steers Total Return Realty
Fund, Inc. and Cohen & Steers
Worldwide Realty Income Fund, Inc.
(together, the ‘‘Funds’’) and Cohen &
Steers Capital Management, Inc. (the
‘‘Adviser’’).
SUMMARY OF APPLICATION:
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44787
January 3, 2005, April 5,
2007 and July 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 August 18, 2008, 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, Securities and
Exchange Commission, 100 F Street,
NE., Washington, DC 20549–1090;
applicants, 280 Park Avenue, New York,
NY 10017, Attention: Francis C. Poli,
Esq.
FOR FURTHER INFORMATION CONTACT:
Wendy Friedlander, Senior Counsel, at
(202) 551–6837, or James M. Curtis,
Branch Chief, at (202) 551–6825
(Division of Investment Management,
Office of Chief Counsel).
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 Room,
100 F Street, NE., Washington, DC
20549–1520 (telephone (202) 551–5850).
FILING DATES:
Applicants’ Representations
1. The Funds are registered closedend investment companies.1 The
common stock issued by each Fund is
listed on the New York Stock Exchange.
Some of the Funds have issued
preferred stock; such preferred stock is
not listed on any exchange. Applicants
believe that the stockholders of each
Fund are generally conservative,
dividend-sensitive investors who desire
current income periodically and may
favor a fixed distribution policy.
2. The Adviser is registered under the
Investment Advisers Act of 1940 and is
1 Applicants request that any order issued
granting the relief requested in the application also
apply to any closed-end investment company that
in the future: (a) Is advised by the Adviser
(including any successor in interest) or by any
entity controlling, controlled by, or under common
control (within the meaning of section 2(a)(9) of the
Act) with the Adviser; and (b) complies with the
terms and conditions of the requested order. A
successor in interest is limited to entities that result
from a reorganization into another jurisdiction or a
change in the type of business organization.
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responsible for the overall management
of each Fund. The Adviser is a whollyowned subsidiary of Cohen & Steers,
Inc., a publicly traded company whose
common stock is listed on the New York
Stock Exchange under the symbol
‘‘CNS.’’
3. Applicants represent that in
connection with a meeting on March 7,
2007, the Boards of Directors (the
‘‘Boards’’) of each Fund, including a
majority of the members of each of the
Boards who are not ‘‘interested persons’’
of each Fund as defined in section
2(a)(19) of the Act (the ‘‘Independent
Directors’’), reviewed information
regarding, among other things, the
purpose and terms of a proposed
distribution policy and the relationship
between a Fund’s distribution rate on its
common stock under the policy and
such Fund’s total return on net asset
value (‘‘NAV’’) per share. Applicants
state that the Independent Directors of
each Fund also considered what
conflicts of interest the Adviser and the
affiliated persons of the Adviser and
each Fund might have with respect to
the adoption or implementation of such
policy. Applicants further state that
after considering such information the
Board, including the Independent
Directors, of each Fund approved a
distribution policy with respect to its
common stock (the ‘‘Plan’’) and
determined that such Plan is in the best
interests of such Fund and its common
stockholders.
4. Applicants state that the purpose of
each Plan is to make fixed periodic
distributions to provide steady cash
flow to Fund common stockholders.
Applicants represent that each Fund
would distribute to its respective
common stockholders periodic, level
distributions as frequently as monthly,
based on a fixed amount per share, a
fixed percentage of market price or a
fixed percentage of the Fund’s NAV per
common share, any of which may be
adjusted from time to time. Applicants
state that the minimum annual
distribution rate with respect to a
Fund’s common stock under each Plan
would be independent of the Fund’s
performance during any particular
period but would be expected to
correlate with the Fund’s performance
over time. Applicants explain that each
distribution on the common stock
would be at the stated rate then in
effect, except for extraordinary
distributions and potential increases or
decreases in the final dividend periods
in light of the Fund’s performance for
the entire calendar year and to enable
the Fund to comply with the
distribution requirements of subchapter
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M of the Internal Revenue Code of 1986
(the ‘‘Code’’) for the calendar year.
5. Applicants state that prior to
relying on the requested order each
Fund’s Board, including a majority of its
Independent Directors, will adopt
policies and procedures under rule
38a–1 under the Act that (a) are
reasonably designed to ensure that all
notices required to be sent to the Fund’s
stockholders pursuant to section 19(a) of
the Act, rule 19a–1 thereunder and
condition IV. below (‘‘Notices’’) include
the disclosure required by rule 19a–1
and by condition II.A below, and that all
other written communications by the
Fund or its agents described in
condition III.A below about the
distributions under the Plan include the
disclosure required by condition III.A
below and (b) require each Fund to keep
records that demonstrate its compliance
with all of the conditions of the
requested order and that are necessary
for such Fund to form the basis for, or
demonstrate the calculation of, the
amounts disclosed in its Notices.2
Applicants’ Legal Analysis
1. Section 19(b) generally makes it
unlawful for any registered investment
company to make long-term capital
gains distributions more than once each
year. Rule 19b–1 limits the number of
capital gains dividends, as defined in
section 852(b)(3)(C) of the Code
(‘‘distributions’’), that a fund may make
with respect to any one taxable year to
one, plus one additional capital gain
dividend made in whole or in part to
avoid the excise tax under section 4982
of the Code, plus a supplemental ‘‘clean
up’’ distribution made pursuant to
section 855 of the Code not exceeding
10% of the total amount distributed for
the year.
2. Section 6(c) provides that the
Commission may exempt any person or
transaction from any provision of the
Act 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.
3. Applicants state that the common
stock of closed-end funds that invest
primarily in equity securities often trade
in the market at a discount to their
NAV. Applicants believe that this
discount may be reduced if the Funds
are permitted to pay relatively frequent
distributions on their common stock at
2 Applicants state that a future fund that relies on
the requested order will satisfy each of the
representations in the application except that such
representations will be made in respect of actions
by the board of directors of such future fund and
will be made at a future time.
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a consistent rate, whether or not those
distributions include an element of
long-term capital gains.
4. Applicants state that the one of the
concerns underlying section 19(b) and
rule 19b–1 is that stockholders might be
unable to distinguish between frequent
distributions of capital gains and
distributions from investment income.
Applicants state, however, that rule
19a–1 effectively addresses this concern
by requiring that a separate statement
showing the sources of a distribution
(e.g., estimated net income, net shortterm capital gains, net long-term capital
gains and/or return of capital)
accompany any distributions (or the
confirmation of the reinvestment of
distributions) estimated to be sourced in
part from capital gains or capital.
Applicants state that the same
information also is included in each
Fund’s annual reports to stockholders
and on its IRS Form 1099–DIV, which
is sent to each common and preferred
stockholder who received distributions
during the year.
5. Applicants further state that each of
the Funds will make the additional
disclosures required by the conditions
set forth below and will adopt
compliance policies and procedures in
accordance with rule 38a–1 prior to
relying on the requested order to ensure
that all required Notices and disclosures
are sent to stockholders. Applicants
argue that rule 19a–1, the Plans and the
compliance policies will ensure that
each Fund’s stockholders would be
provided sufficient information to
understand that their periodic
distributions are not tied to the Fund’s
net investment income (which for this
purpose is the Fund’s taxable income
other than from capital gains) and
realized capital gains to date, and may
not represent yield or investment return.
Accordingly, applicants assert that
continuing to subject the Funds to
section 19(b) and rule 19b–1 would
afford stockholders no extra protection.
6. Applicants assert that the
application of rule 19b–1 to a Plan
actually could have an inappropriate
influence on portfolio management
decisions. Applicants state that, in the
absence of an exemption from rule
19b–1, the adoption of a Plan imposes
pressure on management (i) not to
realize any net long-term capital gains
until the point in the year that the Fund
can pay all of its remaining distributions
in accordance with rule 19b–1, and (ii)
not to realize any long-term capital
gains during any particular year in
excess of the amount of the aggregate
pay-out for the year (since as a practical
matter excess gains must be distributed
and accordingly would not be available
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to satisfy pay-out requirements in
following years), notwithstanding that
purely investment considerations might
favor realization of long-term gains at
different times or in different amounts.
Applicants thus assert that no purpose
is served by the distortion in the normal
operation of a periodic distribution plan
required in order to comply with rule
19b–1, and that the order requested by
the applicants would minimize the
anomalous effects of rule 19b–1 by
enabling the Funds to realize long-term
capital gains as often as investment
considerations dictate without fear of
violating rule 19b–1.
7. Applicants note that section 19(b)
and rule 19b–1 also were intended to
prevent certain improper sales practices,
including, in particular, the practice of
urging an investor to purchase shares of
a fund on the basis of an upcoming
capital gains dividend (‘‘selling the
dividend’’), where the dividend would
result in an immediate corresponding
reduction in NAV and would be in
effect a taxable return of the investor’s
capital. Applicants assert that this
concern should not apply to closed-end
investment companies, such as the
Funds, which do not continuously
distribute shares. According to
applicants, if the underlying concern
extends to secondary market purchases
of stock of closed-end funds that are
subject to a large upcoming capital gains
dividend, adoption of a Plan actually
helps minimize the concern by
avoiding, through periodic
distributions, any buildup of large end
of the year distributions.
8. In addition, applicants assert that
rule 19b–1 may force the fixed regular
periodic distributions under a Plan to be
funded with returns of capital 3 (to the
extent net investment income and
realized short-term capital gains are
insufficient to fund the distribution),
even though realized net long-term
capital gains otherwise could be
available. To distribute all of a fund’s
long-term capital gains within the limits
in rule 19b–1, a fund may be required
to make total distributions in excess of
the annual amount called for by its Plan,
or to retain and pay taxes on the excess
amount. Applicants believe that the
application of rule 19b–1 to a fund’s
periodic distribution plan may create
pressure to limit the realization of longterm capital gains based on
considerations unrelated to investment
goals.
9. Applicants state that Revenue
Ruling 89–81 under the Code requires
3 Return of capital as used in the application
means return of capital for financial accounting
purposes and not for tax accounting purposes.
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that a fund that has both common stock
and preferred stock outstanding
designate the types of income, e.g.,
investment income and capital gains, in
the same proportion as the total
distributions distributed to each class
for the tax year. To satisfy the
proportionate designation requirements
of Revenue Ruling 89–81, whenever a
fund has realized a long-term capital
gain with respect to a given tax year, the
fund must designate the required
proportionate share of such capital gain
to be included in common and preferred
stock dividends. Applicants state that
although rule 19b–1 allows a fund some
flexibility with respect to the frequency
of capital gains distributions, a fund
might use all of the exceptions available
under the rule for a tax year and still
need to distribute additional capital
gains allocated to the preferred stock to
comply with Revenue Ruling 89–81.
10. Applicants assert that the
potential abuses addressed by section
19(b) and rule 19b–1 do not arise with
respect to preferred stock issued by a
closed-end fund. Applicants assert that
such distributions are fixed or
determined in periodic auctions by
reference to short-term interest rates
rather than by reference to performance
of the issuer, and Revenue Ruling 89–
81 determines the proportion of such
distributions that are comprised of the
long-term capital gains.
11. Applicants also submit that the
‘‘selling the dividend’’ concern is not
applicable to preferred stock, which
entitles a holder to no more than a
periodic dividend at a fixed rate or the
rate determined by the market, and, like
a debt security, is priced based upon its
liquidation value, dividend rate, credit
quality, and frequency of payment.
Applicants state that investors buy
preferred shares for the purpose of
receiving payments at the frequency
bargained for, and do not expect the
liquidation value of their shares to
change.
12. Applicants request an order under
section 6(c) granting an exemption from
section 19(b) and rule 19b–1 to permit
each Fund’s common stock to distribute
periodic capital gains dividends (as
defined in section 852(b)(3)(C) of the
Code) as often as monthly in any one
taxable year in respect of its common
stock and as often as specified by or
determined in accordance with the
terms thereof in respect of its preferred
stock.
Applicants’ Conditions
Applicants agree that, with respect to
each Fund seeking to rely on the order,
the order will be subject to the following
conditions:
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44789
I. Compliance Review and Reporting:
The Fund’s chief compliance officer
will: (a) Report to the Fund Board, no
less frequently than once every three
months or at the next regularly
scheduled quarterly board meeting,
whether (i) the Fund and the Adviser
have complied with the conditions to
the requested order, and (ii) a Material
Compliance Matter, as defined in rule
38a–1(e)(2), has occurred with respect to
compliance with such conditions; and
(b) review the adequacy of the policies
and procedures adopted by the Fund no
less frequently than annually.
II. Disclosures to Fund Stockholders:
A. Each Notice to the holders of the
Fund’s common stock, in addition to the
information required by section 19(a)
and rule 19a–1:
1. Will provide, in a tabular or
graphical format:
(a) The amount of the distribution, on
a per common share basis, together with
the amounts of such distribution
amount, on a per common share basis
and as a percentage of such distribution
amount, from estimated: (A) Net
investment income; (B) net realized
short-term capital gains; (C) net realized
long-term capital gains; and (D) return
of capital or other capital source;
(b) The fiscal year-to-date cumulative
amount of distributions, on a per
common share basis, together with the
amounts of such cumulative amount, on
a per common share basis and as a
percentage of such cumulative amount
of distributions, from estimated: (A) Net
investment income; (B) net realized
short-term capital gains; (C) net realized
long-term capital gains; and (D) return
of capital or other capital source;
(c) The average annual total return in
relation to the change in NAV for the 5year period (or, if the Fund’s history of
operations is less than five years, the
time period commencing immediately
following the Fund’s first public
offering) ending on the last day of the
month prior to the most recent
distribution declaration date compared
to the current fiscal period’s annualized
distribution rate expressed as a
percentage of NAV as of the last day of
the month prior to the most recent
distribution declaration date; and
(d) The cumulative total return in
relation to the change in NAV from the
last completed fiscal year to the last day
of the month prior to the most recent
distribution declaration date compared
to the fiscal year-to-date cumulative
distribution rate expressed as a
percentage of NAV as of the last day of
the month prior to the most recent
distribution declaration date.
Such disclosure shall be made in a
type size at least as large and as
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prominent as the estimate of the sources
of the current distribution; and
2. Will include the following
disclosure:
(a) ‘‘You should not draw any
conclusions about the Fund’s
investment performance from the
amount of this distribution or from the
terms of the Fund’s Plan’’;
(b) ‘‘The fund estimates that it has
distributed more than its income and
net realized capital gains; therefore, a
portion of your distribution may be a
return of capital. A return of capital may
occur for example, when some or all of
the money that you invested in the
Fund is paid back to you. A return of
capital distribution does not necessarily
reflect the Fund’s investment
performance and should not be
confused with ‘yield’ or ‘income’ ’’; and
(c) ‘‘The amounts and sources of
distributions reported in this Notice are
only estimates and are not being
provided for tax reporting purposes. The
actual amounts and sources of the
amounts for [accounting and] tax
reporting purposes will depend upon
the Fund’s investment experience
during the remainder of its fiscal year
and may be subject to changes based on
tax regulations. The Fund will send you
a Form 1099–DIV for the calendar year
that will tell you how to report these
distributions for federal income tax
purposes.’’
Such disclosure shall be made in a
type size at least as large as and as
prominent as any other information in
the Notice and placed on the same page
in close proximity to the amount and
the sources of the distribution.
B. On the inside front cover of each
report to shareholders under rule
30e–1 under the Act, the Fund will:
1. Describe the terms of the Plan
(including the fixed amount or fixed
percentage of the distributions and the
frequency of the distributions);
2. Include the disclosure required by
condition II.A.2.a above;
3. State, if applicable, that the Plan
provides that the Board may amend or
terminate the Plan at any time without
prior notice to Fund shareholders; and
4. Describe any reasonably foreseeable
circumstances that might cause the
Fund to terminate the Plan and any
reasonably foreseeable consequences of
such termination.
C. Each report provided to
stockholders under rule 30e–1 and in
each prospectus filed with the
Commission on Form N–2 under the
Act, will provide the Fund’s total return
in relation to changes in NAV in the
financial highlights table and in any
discussion about the Fund’s total return.
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III. Disclosure to Stockholders,
Prospective Stockholders and Third
Parties:
A. The Fund will include the
information contained in the relevant
Notice, including the disclosure
required by condition II.A.2 above, in
any written communication (other than
a Form 1099) about the Plan or
distributions under the Plan by the
Fund, or agents that the Fund has
authorized to make such
communication on the Fund’s behalf, to
any Fund common stockholder,
prospective common stockholder or
third-party information provider;
B. The Fund will issue,
contemporaneously with the issuance of
any Notice, a press release containing
the information in the Notice and will
file with the Commission the
information contained in such Notice,
including the disclosure required by
condition II.A.2 above, as an exhibit to
its next filed Form N–CSR; and
C. The Fund will post prominently a
statement on its (or its adviser’s) Web
site containing the information in each
Notice, including the disclosure
required by condition II.A.2 above, and
will maintain such information on such
Web site for at least 24 months.
IV. Delivery of 19(a) Notices to
Beneficial Owners: If a broker, dealer,
bank or other person (‘‘financial
intermediary’’) holds common stock
issued by the Fund in nominee name, or
otherwise, on behalf of a beneficial
owner, the Fund: (a) Will request that
the financial intermediary, or its agent,
forward the Notice to all beneficial
owners of the fund’s stock held through
such financial intermediary; (b) will
provide, in a timely manner, to the
financial intermediary, or its agent,
enough copies of the Notice assembled
in the form and at the place that the
financial intermediary, or its agent,
reasonably requests to facilitate the
financial intermediary’s sending of the
Notice to each beneficial owner of the
fund’s stock; and (c) upon the request of
any financial intermediary, or its agent,
that receives copies of the Notice, will
pay the financial intermediary, or its
agent, the reasonable expenses of
sending the Notice to such beneficial
owners.
V. Additional Board Determinations
for Funds Whose Stock Trades at a
Premium: If:
A. The Fund’s common stock has
traded on the exchange that it primarily
trades on at the time in question at an
average premium to NAV equal to or
greater than 10%, as determined on the
basis of the average of the discount or
premium to NAV of the Fund’s common
stock as of the close of each trading day
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over a 12-week rolling period (each such
12-week rolling period ending on the
last trading day of each week); and
B. The Fund’s annualized distribution
rate for such 12-week rolling period,
expressed as a percentage of NAV as of
the ending date of such 12-week rolling
period, is greater than the Fund’s
average annual total return in relation to
the change in NAV over the 2-year
period ending on the last day of such
12-week rolling period; then:
1. At the earlier of the next regularly
scheduled meeting or within four
months of the last day of such 12-week
rolling period, the Board including a
majority of the Independent Directors:
(a) Will request and evaluate, and the
Adviser will furnish, such information
as may be reasonably necessary to make
an informed determination of whether
the Plan should be continued or
continued after amendment;
(b) Will determine whether
continuation, or continuation after
amendment, of the Plan is consistent
with the Fund’s investment objective(s)
and policies and in the best interests of
the Fund and its stockholders, after
considering the information in
condition V.B.1.a above; including,
without limitation:
(1) Whether the Plan is accomplishing
its purpose(s);
(2) The reasonably foreseeable effects
of the Plan on the Fund’s long-term total
return in relation to the market price
and NAV of the Fund’s common shares;
and
(3) The Fund’s current distribution
rate, as described in condition V.B
above, compared to with the Fund’s
average annual total return over the 2year period, as described in condition
V.B, or such longer period as the Board
deems appropriate; and
(c) Based upon that determination,
will approve or disapprove the
continuation, or continuation after
amendment, of the Plan; and
2. The Board will record the
information considered by it and the
basis for its approval or disapproval of
the continuation, or continuation after
amendment, of the Plan in its meeting
minutes, which must be made and
preserved for a period of not less than
six years from the date of such meeting,
the first two years in an easily accessible
place.
VI. Public Offerings: The Fund will
not make a public offering of the Fund’s
common stock other than:
A. A rights offering below net asset
value to holders of the Fund’s common
stock;
B. An offering in connection with a
dividend reinvestment plan, merger,
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Federal Register / Vol. 73, No. 148 / Thursday, July 31, 2008 / Notices
consolidation, acquisition, spin-off or
reorganization of the Fund; or
C. An offering other than an offering
described in conditions VI.A and VI.B
above, unless, with respect to such other
offering:
1. The Fund’s average annual
distribution rate for the six months
ending on the last day of the month
ended immediately prior to the most
recent distribution declaration date 4,
expressed as a percentage of NAV per
share as of such date, is no more than
1 percentage point greater than the
Fund’s average annual total return for
the 5-year period ending on such date 5;
and
2. The transmittal letter
accompanying any registration
statement filed with the Commission in
connection with such offering discloses
that the Fund has received an order
under section 19(b) to permit it to make
periodic distributions of long-term
capital gains with respect to its common
stock as frequently as twelve times each
year, and as frequently as distributions
are specified in accordance with the
terms of any outstanding preferred stock
that such Fund may issue.
VII. Amendments to Rule 19b–1: The
requested relief will expire on the
effective date of any amendment to rule
19b–1 that provides relief permitting
certain closed-end investment
companies to make periodic
distributions of long-term capital gains
with respect to their outstanding
common stock as frequently as twelve
times each year.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–17539 Filed 7–30–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
jlentini on PROD1PC65 with NOTICES
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a Roundtable on
International Financial Reporting
Standards on Monday, August 4, 2008
beginning at 1 p.m.
4 If the Fund has been in operation fewer than two
years, the measured period will begin immediately
following the Fund’s first public offering.
5 If the Fund has been in operation fewer than five
years, the measured period will begin immediately
following the Fund’s first public offering.
VerDate Aug<31>2005
15:53 Jul 30, 2008
Jkt 214001
44791
The Roundtable will take place in the
Auditorium of the Commission’s
headquarters at 100 F Street, NE.,
Washington DC. The Roundtable will be
open to the public with seating on a
first-come, first-served basis. Doors will
open at 12:30 p.m. Visitors will be
subject to security checks.
The roundtable will consist of an
open discussion on International
Financial Reporting Standards (IFRS)
and an update on IFRS developments,
including the experience with use of
IFRS during the recent period of market
turmoil. The roundtable will be
organized as two panels, each consisting
of investors, issuers, auditors and other
parties with experience in IFRS
reporting.
For further information, please
contact the Office of the Secretary at
(202) 551–5400.
comments on the proposed rule change
from interested persons.
Dated: July 28, 2008.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E8–17600 Filed 7–30–08; 8:45 am]
In its filing with the Commission,
FINRA included statements 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. FINRA has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58226; File No. SR–FINRA–
2008–037]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Amendments
to NASD Rule 11890 (Clearly
Erroneous Transactions)
July 25, 2008.
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 July 8,
2008, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) (f/k/a
National Association of Securities
Dealers, Inc. (‘‘NASD’’)) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by FINRA. FINRA designated the
proposed rule change as ‘‘noncontroversial’’ under Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b-4(f)(6) thereunder,4 which renders
the proposal effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
PO 00000
15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
Frm 00090
Fmt 4703
Sfmt 4703
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing to amend NASD
Rule 11890 (Clearly Erroneous
Transactions) to: (1) Extend the time
limit that FINRA has to take action on
a transaction under the rule; and (2)
clarify the circumstances under which
FINRA initiates a review of a
transaction. The text of the proposed
rule change is available at FINRA, the
Commission’s Public Reference Room,
and https://www.finra.org.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
NASD Rule 11890 provides that, in
the event of a disruption or malfunction
in the use or operation of any quotation,
communication, or trade reporting
system owned or operated by FINRA, or
under extraordinary market conditions,
officers of FINRA can review an overthe-counter (‘‘OTC’’) transaction arising
out of or reported through any such
quotation, communication, or trade
reporting system, and may declare the
transaction null and void or modify the
terms if any such officer determines that
the transaction is clearly erroneous or
such action is necessary for the
maintenance of a fair and orderly
market or the protection of investors
and the public interest. Rule 11890
requires a FINRA officer acting pursuant
to the rule to cancel or adjust an
erroneous transaction to do so ‘‘within
thirty (30) minutes of detection of the
transaction,’’ except in the case of
extraordinary circumstances, in which
case the FINRA officer has until 3 p.m.,
Eastern Time (ET), on the next trading
day after the date of the transaction at
issue.
E:\FR\FM\31JYN1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 148 (Thursday, July 31, 2008)]
[Notices]
[Pages 44787-44791]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-17539]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 28341; 812-13152]
Cohen & Steers Advantage Income Realty Fund, Inc., et al.; Notice
of Application
July 24, 2008.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of application under section 6(c) of the Investment
Company Act of 1940 (``Act'') for an exemption from section 19(b) of
the Act and rule 19b-1 under the Act.
-----------------------------------------------------------------------
Summary of Application: Applicants request an order to permit certain
closed-end investment companies to make periodic distributions of long-
term capital gains with respect to their outstanding common stock as
frequently as twelve times each year, and as frequently as
distributions are specified by or in accordance with the terms of any
outstanding preferred stock that such investment companies may issue.
Applicants: Cohen & Steers Advantage Income Realty Fund, Inc., Cohen &
Steers Closed-End Opportunity Fund, Inc., Cohen & Steers Dividend
Majors Fund, Inc., Cohen & Steers Global Income Builder, Inc., Cohen &
Steers Premium Income Realty Fund, Inc., Cohen & Steers Quality Income
Realty Fund, Inc., Cohen & Steers REIT and Preferred Income Fund, Inc.,
Cohen & Steers REIT and Utility Income Fund, Inc., Cohen & Steers
Select Utility Fund, Inc., Cohen & Steers Total Return Realty Fund,
Inc. and Cohen & Steers Worldwide Realty Income Fund, Inc. (together,
the ``Funds'') and Cohen & Steers Capital Management, Inc. (the
``Adviser'').
Filing Dates: January 3, 2005, April 5, 2007 and July 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 August 18, 2008, 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, Securities and Exchange Commission, 100 F Street,
NE., Washington, DC 20549-1090; applicants, 280 Park Avenue, New York,
NY 10017, Attention: Francis C. Poli, Esq.
FOR FURTHER INFORMATION CONTACT: Wendy Friedlander, Senior Counsel, at
(202) 551-6837, or James M. Curtis, Branch Chief, at (202) 551-6825
(Division of Investment Management, Office of Chief Counsel).
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 Room, 100 F Street, NE., Washington, DC
20549-1520 (telephone (202) 551-5850).
Applicants' Representations
1. The Funds are registered closed-end investment companies.\1\ The
common stock issued by each Fund is listed on the New York Stock
Exchange. Some of the Funds have issued preferred stock; such preferred
stock is not listed on any exchange. Applicants believe that the
stockholders of each Fund are generally conservative, dividend-
sensitive investors who desire current income periodically and may
favor a fixed distribution policy.
---------------------------------------------------------------------------
\1\ Applicants request that any order issued granting the relief
requested in the application also apply to any closed-end investment
company that in the future: (a) Is advised by the Adviser (including
any successor in interest) or by any entity controlling, controlled
by, or under common control (within the meaning of section 2(a)(9)
of the Act) with the Adviser; and (b) complies with the terms and
conditions of the requested order. A successor in interest is
limited to entities that result from a reorganization into another
jurisdiction or a change in the type of business organization.
---------------------------------------------------------------------------
2. The Adviser is registered under the Investment Advisers Act of
1940 and is
[[Page 44788]]
responsible for the overall management of each Fund. The Adviser is a
wholly-owned subsidiary of Cohen & Steers, Inc., a publicly traded
company whose common stock is listed on the New York Stock Exchange
under the symbol ``CNS.''
3. Applicants represent that in connection with a meeting on March
7, 2007, the Boards of Directors (the ``Boards'') of each Fund,
including a majority of the members of each of the Boards who are not
``interested persons'' of each Fund as defined in section 2(a)(19) of
the Act (the ``Independent Directors''), reviewed information
regarding, among other things, the purpose and terms of a proposed
distribution policy and the relationship between a Fund's distribution
rate on its common stock under the policy and such Fund's total return
on net asset value (``NAV'') per share. Applicants state that the
Independent Directors of each Fund also considered what conflicts of
interest the Adviser and the affiliated persons of the Adviser and each
Fund might have with respect to the adoption or implementation of such
policy. Applicants further state that after considering such
information the Board, including the Independent Directors, of each
Fund approved a distribution policy with respect to its common stock
(the ``Plan'') and determined that such Plan is in the best interests
of such Fund and its common stockholders.
4. Applicants state that the purpose of each Plan is to make fixed
periodic distributions to provide steady cash flow to Fund common
stockholders. Applicants represent that each Fund would distribute to
its respective common stockholders periodic, level distributions as
frequently as monthly, based on a fixed amount per share, a fixed
percentage of market price or a fixed percentage of the Fund's NAV per
common share, any of which may be adjusted from time to time.
Applicants state that the minimum annual distribution rate with respect
to a Fund's common stock under each Plan would be independent of the
Fund's performance during any particular period but would be expected
to correlate with the Fund's performance over time. Applicants explain
that each distribution on the common stock would be at the stated rate
then in effect, except for extraordinary distributions and potential
increases or decreases in the final dividend periods in light of the
Fund's performance for the entire calendar year and to enable the Fund
to comply with the distribution requirements of subchapter M of the
Internal Revenue Code of 1986 (the ``Code'') for the calendar year.
5. Applicants state that prior to relying on the requested order
each Fund's Board, including a majority of its Independent Directors,
will adopt policies and procedures under rule 38a-1 under the Act that
(a) are reasonably designed to ensure that all notices required to be
sent to the Fund's stockholders pursuant to section 19(a) of the Act,
rule 19a-1 thereunder and condition IV. below (``Notices'') include the
disclosure required by rule 19a-1 and by condition II.A below, and that
all other written communications by the Fund or its agents described in
condition III.A below about the distributions under the Plan include
the disclosure required by condition III.A below and (b) require each
Fund to keep records that demonstrate its compliance with all of the
conditions of the requested order and that are necessary for such Fund
to form the basis for, or demonstrate the calculation of, the amounts
disclosed in its Notices.\2\
---------------------------------------------------------------------------
\2\ Applicants state that a future fund that relies on the
requested order will satisfy each of the representations in the
application except that such representations will be made in respect
of actions by the board of directors of such future fund and will be
made at a future time.
---------------------------------------------------------------------------
Applicants' Legal Analysis
1. Section 19(b) generally makes it unlawful for any registered
investment company to make long-term capital gains distributions more
than once each year. Rule 19b-1 limits the number of capital gains
dividends, as defined in section 852(b)(3)(C) of the Code
(``distributions''), that a fund may make with respect to any one
taxable year to one, plus one additional capital gain dividend made in
whole or in part to avoid the excise tax under section 4982 of the
Code, plus a supplemental ``clean up'' distribution made pursuant to
section 855 of the Code not exceeding 10% of the total amount
distributed for the year.
2. Section 6(c) provides that the Commission may exempt any person
or transaction from any provision of the Act 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.
3. Applicants state that the common stock of closed-end funds that
invest primarily in equity securities often trade in the market at a
discount to their NAV. Applicants believe that this discount may be
reduced if the Funds are permitted to pay relatively frequent
distributions on their common stock at a consistent rate, whether or
not those distributions include an element of long-term capital gains.
4. Applicants state that the one of the concerns underlying section
19(b) and rule 19b-1 is that stockholders might be unable to
distinguish between frequent distributions of capital gains and
distributions from investment income. Applicants state, however, that
rule 19a-1 effectively addresses this concern by requiring that a
separate statement showing the sources of a distribution (e.g.,
estimated net income, net short-term capital gains, net long-term
capital gains and/or return of capital) accompany any distributions (or
the confirmation of the reinvestment of distributions) estimated to be
sourced in part from capital gains or capital. Applicants state that
the same information also is included in each Fund's annual reports to
stockholders and on its IRS Form 1099-DIV, which is sent to each common
and preferred stockholder who received distributions during the year.
5. Applicants further state that each of the Funds will make the
additional disclosures required by the conditions set forth below and
will adopt compliance policies and procedures in accordance with rule
38a-1 prior to relying on the requested order to ensure that all
required Notices and disclosures are sent to stockholders. Applicants
argue that rule 19a-1, the Plans and the compliance policies will
ensure that each Fund's stockholders would be provided sufficient
information to understand that their periodic distributions are not
tied to the Fund's net investment income (which for this purpose is the
Fund's taxable income other than from capital gains) and realized
capital gains to date, and may not represent yield or investment
return. Accordingly, applicants assert that continuing to subject the
Funds to section 19(b) and rule 19b-1 would afford stockholders no
extra protection.
6. Applicants assert that the application of rule 19b-1 to a Plan
actually could have an inappropriate influence on portfolio management
decisions. Applicants state that, in the absence of an exemption from
rule 19b-1, the adoption of a Plan imposes pressure on management (i)
not to realize any net long-term capital gains until the point in the
year that the Fund can pay all of its remaining distributions in
accordance with rule 19b-1, and (ii) not to realize any long-term
capital gains during any particular year in excess of the amount of the
aggregate pay-out for the year (since as a practical matter excess
gains must be distributed and accordingly would not be available
[[Page 44789]]
to satisfy pay-out requirements in following years), notwithstanding
that purely investment considerations might favor realization of long-
term gains at different times or in different amounts. Applicants thus
assert that no purpose is served by the distortion in the normal
operation of a periodic distribution plan required in order to comply
with rule 19b-1, and that the order requested by the applicants would
minimize the anomalous effects of rule 19b-1 by enabling the Funds to
realize long-term capital gains as often as investment considerations
dictate without fear of violating rule 19b-1.
7. Applicants note that section 19(b) and rule 19b-1 also were
intended to prevent certain improper sales practices, including, in
particular, the practice of urging an investor to purchase shares of a
fund on the basis of an upcoming capital gains dividend (``selling the
dividend''), where the dividend would result in an immediate
corresponding reduction in NAV and would be in effect a taxable return
of the investor's capital. Applicants assert that this concern should
not apply to closed-end investment companies, such as the Funds, which
do not continuously distribute shares. According to applicants, if the
underlying concern extends to secondary market purchases of stock of
closed-end funds that are subject to a large upcoming capital gains
dividend, adoption of a Plan actually helps minimize the concern by
avoiding, through periodic distributions, any buildup of large end of
the year distributions.
8. In addition, applicants assert that rule 19b-1 may force the
fixed regular periodic distributions under a Plan to be funded with
returns of capital \3\ (to the extent net investment income and
realized short-term capital gains are insufficient to fund the
distribution), even though realized net long-term capital gains
otherwise could be available. To distribute all of a fund's long-term
capital gains within the limits in rule 19b-1, a fund may be required
to make total distributions in excess of the annual amount called for
by its Plan, or to retain and pay taxes on the excess amount.
Applicants believe that the application of rule 19b-1 to a fund's
periodic distribution plan may create pressure to limit the realization
of long-term capital gains based on considerations unrelated to
investment goals.
---------------------------------------------------------------------------
\3\ Return of capital as used in the application means return of
capital for financial accounting purposes and not for tax accounting
purposes.
---------------------------------------------------------------------------
9. Applicants state that Revenue Ruling 89-81 under the Code
requires that a fund that has both common stock and preferred stock
outstanding designate the types of income, e.g., investment income and
capital gains, in the same proportion as the total distributions
distributed to each class for the tax year. To satisfy the
proportionate designation requirements of Revenue Ruling 89-81,
whenever a fund has realized a long-term capital gain with respect to a
given tax year, the fund must designate the required proportionate
share of such capital gain to be included in common and preferred stock
dividends. Applicants state that although rule 19b-1 allows a fund some
flexibility with respect to the frequency of capital gains
distributions, a fund might use all of the exceptions available under
the rule for a tax year and still need to distribute additional capital
gains allocated to the preferred stock to comply with Revenue Ruling
89-81.
10. Applicants assert that the potential abuses addressed by
section 19(b) and rule 19b-1 do not arise with respect to preferred
stock issued by a closed-end fund. Applicants assert that such
distributions are fixed or determined in periodic auctions by reference
to short-term interest rates rather than by reference to performance of
the issuer, and Revenue Ruling 89-81 determines the proportion of such
distributions that are comprised of the long-term capital gains.
11. Applicants also submit that the ``selling the dividend''
concern is not applicable to preferred stock, which entitles a holder
to no more than a periodic dividend at a fixed rate or the rate
determined by the market, and, like a debt security, is priced based
upon its liquidation value, dividend rate, credit quality, and
frequency of payment. Applicants state that investors buy preferred
shares for the purpose of receiving payments at the frequency bargained
for, and do not expect the liquidation value of their shares to change.
12. Applicants request an order under section 6(c) granting an
exemption from section 19(b) and rule 19b-1 to permit each Fund's
common stock to distribute periodic capital gains dividends (as defined
in section 852(b)(3)(C) of the Code) as often as monthly in any one
taxable year in respect of its common stock and as often as specified
by or determined in accordance with the terms thereof in respect of its
preferred stock.
Applicants' Conditions
Applicants agree that, with respect to each Fund seeking to rely on
the order, the order will be subject to the following conditions:
I. Compliance Review and Reporting: The Fund's chief compliance
officer will: (a) Report to the Fund Board, no less frequently than
once every three months or at the next regularly scheduled quarterly
board meeting, whether (i) the Fund and the Adviser have complied with
the conditions to the requested order, and (ii) a Material Compliance
Matter, as defined in rule 38a-1(e)(2), has occurred with respect to
compliance with such conditions; and (b) review the adequacy of the
policies and procedures adopted by the Fund no less frequently than
annually.
II. Disclosures to Fund Stockholders:
A. Each Notice to the holders of the Fund's common stock, in
addition to the information required by section 19(a) and rule 19a-1:
1. Will provide, in a tabular or graphical format:
(a) The amount of the distribution, on a per common share basis,
together with the amounts of such distribution amount, on a per common
share basis and as a percentage of such distribution amount, from
estimated: (A) Net investment income; (B) net realized short-term
capital gains; (C) net realized long-term capital gains; and (D) return
of capital or other capital source;
(b) The fiscal year-to-date cumulative amount of distributions, on
a per common share basis, together with the amounts of such cumulative
amount, on a per common share basis and as a percentage of such
cumulative amount of distributions, from estimated: (A) Net investment
income; (B) net realized short-term capital gains; (C) net realized
long-term capital gains; and (D) return of capital or other capital
source;
(c) The average annual total return in relation to the change in
NAV for the 5-year period (or, if the Fund's history of operations is
less than five years, the time period commencing immediately following
the Fund's first public offering) ending on the last day of the month
prior to the most recent distribution declaration date compared to the
current fiscal period's annualized distribution rate expressed as a
percentage of NAV as of the last day of the month prior to the most
recent distribution declaration date; and
(d) The cumulative total return in relation to the change in NAV
from the last completed fiscal year to the last day of the month prior
to the most recent distribution declaration date compared to the fiscal
year-to-date cumulative distribution rate expressed as a percentage of
NAV as of the last day of the month prior to the most recent
distribution declaration date.
Such disclosure shall be made in a type size at least as large and
as
[[Page 44790]]
prominent as the estimate of the sources of the current distribution;
and
2. Will include the following disclosure:
(a) ``You should not draw any conclusions about the Fund's
investment performance from the amount of this distribution or from the
terms of the Fund's Plan'';
(b) ``The fund estimates that it has distributed more than its
income and net realized capital gains; therefore, a portion of your
distribution may be a return of capital. A return of capital may occur
for example, when some or all of the money that you invested in the
Fund is paid back to you. A return of capital distribution does not
necessarily reflect the Fund's investment performance and should not be
confused with `yield' or `income' ''; and
(c) ``The amounts and sources of distributions reported in this
Notice are only estimates and are not being provided for tax reporting
purposes. The actual amounts and sources of the amounts for [accounting
and] tax reporting purposes will depend upon the Fund's investment
experience during the remainder of its fiscal year and may be subject
to changes based on tax regulations. The Fund will send you a Form
1099-DIV for the calendar year that will tell you how to report these
distributions for federal income tax purposes.''
Such disclosure shall be made in a type size at least as large as
and as prominent as any other information in the Notice and placed on
the same page in close proximity to the amount and the sources of the
distribution.
B. On the inside front cover of each report to shareholders under
rule 30e-1 under the Act, the Fund will:
1. Describe the terms of the Plan (including the fixed amount or
fixed percentage of the distributions and the frequency of the
distributions);
2. Include the disclosure required by condition II.A.2.a above;
3. State, if applicable, that the Plan provides that the Board may
amend or terminate the Plan at any time without prior notice to Fund
shareholders; and
4. Describe any reasonably foreseeable circumstances that might
cause the Fund to terminate the Plan and any reasonably foreseeable
consequences of such termination.
C. Each report provided to stockholders under rule 30e-1 and in
each prospectus filed with the Commission on Form N-2 under the Act,
will provide the Fund's total return in relation to changes in NAV in
the financial highlights table and in any discussion about the Fund's
total return.
III. Disclosure to Stockholders, Prospective Stockholders and Third
Parties:
A. The Fund will include the information contained in the relevant
Notice, including the disclosure required by condition II.A.2 above, in
any written communication (other than a Form 1099) about the Plan or
distributions under the Plan by the Fund, or agents that the Fund has
authorized to make such communication on the Fund's behalf, to any Fund
common stockholder, prospective common stockholder or third-party
information provider;
B. The Fund will issue, contemporaneously with the issuance of any
Notice, a press release containing the information in the Notice and
will file with the Commission the information contained in such Notice,
including the disclosure required by condition II.A.2 above, as an
exhibit to its next filed Form N-CSR; and
C. The Fund will post prominently a statement on its (or its
adviser's) Web site containing the information in each Notice,
including the disclosure required by condition II.A.2 above, and will
maintain such information on such Web site for at least 24 months.
IV. Delivery of 19(a) Notices to Beneficial Owners: If a broker,
dealer, bank or other person (``financial intermediary'') holds common
stock issued by the Fund in nominee name, or otherwise, on behalf of a
beneficial owner, the Fund: (a) Will request that the financial
intermediary, or its agent, forward the Notice to all beneficial owners
of the fund's stock held through such financial intermediary; (b) will
provide, in a timely manner, to the financial intermediary, or its
agent, enough copies of the Notice assembled in the form and at the
place that the financial intermediary, or its agent, reasonably
requests to facilitate the financial intermediary's sending of the
Notice to each beneficial owner of the fund's stock; and (c) upon the
request of any financial intermediary, or its agent, that receives
copies of the Notice, will pay the financial intermediary, or its
agent, the reasonable expenses of sending the Notice to such beneficial
owners.
V. Additional Board Determinations for Funds Whose Stock Trades at
a Premium: If:
A. The Fund's common stock has traded on the exchange that it
primarily trades on at the time in question at an average premium to
NAV equal to or greater than 10%, as determined on the basis of the
average of the discount or premium to NAV of the Fund's common stock as
of the close of each trading day over a 12-week rolling period (each
such 12-week rolling period ending on the last trading day of each
week); and
B. The Fund's annualized distribution rate for such 12-week rolling
period, expressed as a percentage of NAV as of the ending date of such
12-week rolling period, is greater than the Fund's average annual total
return in relation to the change in NAV over the 2-year period ending
on the last day of such 12-week rolling period; then:
1. At the earlier of the next regularly scheduled meeting or within
four months of the last day of such 12-week rolling period, the Board
including a majority of the Independent Directors:
(a) Will request and evaluate, and the Adviser will furnish, such
information as may be reasonably necessary to make an informed
determination of whether the Plan should be continued or continued
after amendment;
(b) Will determine whether continuation, or continuation after
amendment, of the Plan is consistent with the Fund's investment
objective(s) and policies and in the best interests of the Fund and its
stockholders, after considering the information in condition V.B.1.a
above; including, without limitation:
(1) Whether the Plan is accomplishing its purpose(s);
(2) The reasonably foreseeable effects of the Plan on the Fund's
long-term total return in relation to the market price and NAV of the
Fund's common shares; and
(3) The Fund's current distribution rate, as described in condition
V.B above, compared to with the Fund's average annual total return over
the 2-year period, as described in condition V.B, or such longer period
as the Board deems appropriate; and
(c) Based upon that determination, will approve or disapprove the
continuation, or continuation after amendment, of the Plan; and
2. The Board will record the information considered by it and the
basis for its approval or disapproval of the continuation, or
continuation after amendment, of the Plan in its meeting minutes, which
must be made and preserved for a period of not less than six years from
the date of such meeting, the first two years in an easily accessible
place.
VI. Public Offerings: The Fund will not make a public offering of
the Fund's common stock other than:
A. A rights offering below net asset value to holders of the Fund's
common stock;
B. An offering in connection with a dividend reinvestment plan,
merger,
[[Page 44791]]
consolidation, acquisition, spin-off or reorganization of the Fund; or
C. An offering other than an offering described in conditions VI.A
and VI.B above, unless, with respect to such other offering:
1. The Fund's average annual distribution rate for the six months
ending on the last day of the month ended immediately prior to the most
recent distribution declaration date \4\, expressed as a percentage of
NAV per share as of such date, is no more than 1 percentage point
greater than the Fund's average annual total return for the 5-year
period ending on such date \5\; and
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\4\ If the Fund has been in operation fewer than two years, the
measured period will begin immediately following the Fund's first
public offering.
\5\ If the Fund has been in operation fewer than five years, the
measured period will begin immediately following the Fund's first
public offering.
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2. The transmittal letter accompanying any registration statement
filed with the Commission in connection with such offering discloses
that the Fund has received an order under section 19(b) to permit it to
make periodic distributions of long-term capital gains with respect to
its common stock as frequently as twelve times each year, and as
frequently as distributions are specified in accordance with the terms
of any outstanding preferred stock that such Fund may issue.
VII. Amendments to Rule 19b-1: The requested relief will expire on
the effective date of any amendment to rule 19b-1 that provides relief
permitting certain closed-end investment companies to make periodic
distributions of long-term capital gains with respect to their
outstanding common stock as frequently as twelve times each year.
For the Commission, by the Division of Investment Management,
under delegated authority.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-17539 Filed 7-30-08; 8:45 am]
BILLING CODE 8010-01-P
