Reserve Municipal Money-Market Trust, et al.; Notice of Application and Temporary Order, 64993-64994 [E8-25862]

Download as PDF Federal Register / Vol. 73, No. 212 / Friday, October 31, 2008 / Notices ebenthall on PROD1PC60 with NOTICES securities and have no proxy record to file. The Commission requires the dissemination of this information in order to meet the filing and disclosure requirements of the Investment Company Act and to enable Funds to provide investors with the information necessary to evaluate an investment in the Fund. The information filed with the Commission also permits the verification of compliance with securities law requirements and assures the public availability and dissemination of the information. Requiring a Fund to file its annual reports on Form N–PX has the advantages of making each Fund’s proxy voting record available within a relatively short period of time after the proxy voting season, and of providing disclosure of all Funds’ proxy voting records over a uniform period of time. There are approximately 3,800 Funds registered with the Commission, representing approximately 9,400 Fund portfolios, which are required to file Form N–PX.1 The 9,400 portfolios are comprised of 6,200 portfolios holding equity securities and 3,200 portfolios holding no equity securities. The staff estimates that portfolios holding no equity securities require approximately a 0.17 hour burden per response and those holding equity securities require 14.4 hours per response. The overall estimated annual burden is therefore 89,824 hours ((6,200 responses × 14.4 hours per response for equity holding portfolios) + (3,200 responses × 0.17 hours per response for non-equity holding portfolios)). Written comments are invited on: (a) 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; (b) the accuracy of the agency’s estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted 1 The estimate of 3,800 Funds is based on the number of management investment companies currently registered with the Commission. We estimate, based on data from the Investment Company Institute and other sources, that there are approximately 5,700 Fund portfolios that invest primarily in equity securities, 500 ‘‘hybrid’’ or bond portfolios that may hold some equity securities, 2,400 bond Funds that hold no equity securities, and 800 money market Funds, for a total of 9,400 portfolios required to file Form N–PX. VerDate Aug<31>2005 15:31 Oct 30, 2008 Jkt 217001 in writing within 60 days of this publication. Please direct your written comments to Lewis W. Walker, Acting Director/ CIO, Securities and Exchange Commission, c/o Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312; or send an e-mail to: PRA_Mailbox@sec.gov. Dated: October 22, 2008. Florence E. Harmon, Acting Secretary. [FR Doc. E8–25865 Filed 10–30–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. IC–28466; 812–13585] Reserve Municipal Money-Market Trust, et al.; Notice of Application and Temporary Order October 24, 2008. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of application and a temporary order under Section 22(e)(3) of the Investment Company Act of 1940 (the ‘‘Act’’). AGENCY: Summary of Application: Applicants request a temporary order to permit certain of their series to suspend the right of redemption of their outstanding redeemable securities and to postpone payment for shares which have been submitted for redemption for which payment has not been made. Applicants: Reserve Municipal Money-Market Trust on behalf of two of its series, Arizona Municipal MoneyMarket Fund and Minnesota Municipal Money-Market Fund; Reserve Municipal Money-Market Trust II, on behalf of nine of its series, Interstate Tax-Exempt Fund, California Municipal MoneyMarket Fund, Connecticut Municipal Money-Market Fund, Florida Municipal Money-Market Fund, Michigan Municipal Money-Market Fund, New Jersey Municipal Money-Market Fund, Ohio Municipal Money-Market Fund, Pennsylvania Municipal Money-Market Fund and Virginia Municipal MoneyMarket Fund; Reserve New York Municipal Money-Market Trust on behalf of its single series, New York Municipal Money-Market Fund; and Reserve Short-Term Investment Trust on behalf of one of its series, Reserve Yield Plus Fund (Reserve Municipal MoneyMarket Trust, Reserve Municipal Money-Market Trust II, Reserve New York Municipal Money-Market Trust, and Reserve Short-Term Investment Trust, collectively, the ‘‘Applicants’’ or PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 64993 the ‘‘Trusts,’’ and each such series of Reserve Municipal Money-Market Trust, Reserve Municipal Money-Market Trust II and Reserve New York Municipal Money-Market Trust, a ‘‘Money Market Fund’’). Filing Date: The application was filed on October 14, 2008 and amended on October 24, 2008. Hearing or Notification of 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 November 17, 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, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549– 1090. Applicants, 1250 Broadway, New York, NY 10001–3701. FOR FURTHER INFORMATION CONTACT: Brian P. Murphy, Senior Counsel, at (202) 551–6825 (Division of Investment Management, Office of Chief Counsel). SUPPLEMENTARY INFORMATION: The complete application may be obtained for a fee at the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549–1520 (tel. 202– 551–5850). Applicants’ Representations 1. Each of the Money Market Funds and the Reserve Yield Plus Fund (collectively, the ‘‘Funds’’) is an openend management investment company registered with the Commission under the Act. Each Money Market Fund is a money market fund that operates in a manner consistent with Rule 2a–7 under the Act and that seeks a high level of short-term interest income exempt from certain taxes as is consistent with the preservation of capital and liquidity. The Reserve Yield Plus Fund seeks as high a level of current income as is consistent with the preservation of capital and liquidity. 2. The Funds have been subject to a heavy level of redemption requests. For example, from September 12, 2008 to October 8, 2008, the total net assets of some of the Funds have declined as follows: (1) The Interstate Tax-Exempt Fund’s total net assets declined from $1.78 billion to $154.6 million; (2) the Michigan Municipal Money-Market E:\FR\FM\31OCN1.SGM 31OCN1 ebenthall on PROD1PC60 with NOTICES 64994 Federal Register / Vol. 73, No. 212 / Friday, October 31, 2008 / Notices Fund’s total net assets declined from $29.1 million to $5.3 million; (3) the New Jersey Municipal Money-Market Fund’s total net assets declined from $72.2 million to $20.9 million; (4) the Ohio Municipal Money-Market Fund’s total net assets declined from $30.9 million to $5.6 million; (5) the Pennsylvania Municipal Money-Market Fund’s total net assets declined from $74.4 million to $2.6 million; and (6) the New York Municipal Money-Market Fund’s total net assets declined from $180.7 million to $91.8 million. The decline of each Fund’s total net assets was largely caused by heavy redemption requests and not declining values associated with portfolio holdings. There has been no abatement of the redemptions, and there is no reasonable basis for believing that redemptions will abate. 3. The Funds’ have made efforts to raise cash to satisfy redemptions from the Funds through the sale of certain short-term portfolio securities or maturation of other portfolio securities. The Funds are or soon will be limited in the amount of portfolio securities that can be sold at or above amortized cost or that will mature in seven days or less. The Funds’ other portfolio securities can only be sold at below amortized cost (possibly at fire-sale prices) due to the extreme illiquidity and limited bids in the markets. In the view of the boards of trustees of each Trust, including a majority of the trustees who are not interested persons of such Trust within the meaning of Section 2(a)(19) of the Act, (the ‘‘Boards’’), and the investment adviser (the ‘‘Adviser’’), such sales would be inconsistent with the Funds’ investment objectives of preservation of capital and harmful to non-redeeming shareholders. 4. In response to these developments, on October 8, 2008, the Boards, taking into account the recommendations of the Adviser, determined to liquidate the Funds. 5. On October 8, 2008, the Boards also determined that it would be in the best interest of each Fund’s shareholders to suspend the right of redemption and postpone the date of payment or satisfaction upon redemption for more than seven days to allow Applicants the ability to liquidate the portfolio securities of the Funds in an orderly manner and allow the additional securities held by each Fund to mature. In addition, the Boards determined to request an order under Section 22(e)(3) of the Act. Applicants’ Legal Analysis 1. Section 22(e)(1) of the Act generally provides that a registered investment VerDate Aug<31>2005 15:31 Oct 30, 2008 Jkt 217001 company may not suspend the right of redemption or postpone the date of payment or satisfaction upon redemption of any redeemable security in accordance with its terms for more than seven days after the tender of such security to the company or its designated agent except for any period during which the New York Stock Exchange (‘‘NYSE’’) is closed other than customary week-end and holiday closings, or during which trading on the NYSE is restricted. 2. Section 22(e)(2) of the Act provides that the seven-day redemption period does not apply for any period during which an emergency exists, as determined by Commission rules and regulations, as a result of which the disposal by a registered investment company of portfolio securities is not reasonably practicable or it is not reasonably practicable for the registered investment company fairly to determine the value of its net assets. 3. Section 22(e)(3) of the Act provides that redemptions may be suspended by a registered investment company for such other periods as the Commission may by order permit for the protection of security holders of the registered investment company. 4. Applicants submit that granting the requested relief is for the protection of each Fund’s shareholders, as provided in Section 22(e)(3) of the Act. Applicants assert that, in requesting an order by the Commission, the Boards’ goal is to ensure that each of the Funds’ shareholders will be treated appropriately in view of the otherwise detrimental effect on each Fund of the recent unprecedented illiquidity of the markets and extraordinary levels of redemptions that the Funds have experienced. Current market conditions continue to be extraordinary, and the requested relief is intended to cause an orderly liquidation of each of the Funds’ portfolio securities and ensure that all of their respective shareholders are protected in the process. 5. Applicants further submit that the relief is appropriate because: (1) The Boards: (a) Taking into account the recommendations of the Adviser, determined on October 8, 2008 to liquidate the Funds, (b) determined, on October 8, 2008, that a suspension of redemption is in the best interest of each Fund’s shareholders, (c) determined, on October 8, 2008, that a postponement of payment for shares which have been submitted for redemption for which payment has not been made is in the best interest of each Fund’s shareholders, and (d) promptly will create plans for the orderly liquidation of each Fund’s assets and for PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 the appropriate payments to each Fund’s shareholders, including those whose redemption orders have been received but not yet paid, which plans will be subject to Commission supervision and which plans will include a planned schedule of possible payments to Fund shareholders that is based on the maturities of the portfolio securities held by each Fund; (2) each Fund has previously suspended sales as of September 18, 2008; (3) each Fund will make and keep appropriate records surrounding these events; and (4) each Fund continuously will provide timely and appropriate information, including initial and ongoing disclosure about the plan and its implementation, to its shareholders, via Web site or otherwise. Commission Finding Based on the representations in the application, including those relating to the current extraordinary market conditions and the Boards’ October 8, 2008 determinations, the Commission permits the temporary suspension of the right of redemption and postponement of payment for shares which have been submitted for redemption for which payment has not been made by the Funds for the protection of the Funds’ security holders. Under the circumstances described in the application, which require immediate action to protect the Funds’ security holders, the Commission concludes that it is not practicable to give notice or an opportunity to request a hearing before issuing the order. In addition, under the circumstances described in the application, the Commission concludes that the order should be effective as of the date of the actions of the Boards. It is ordered, pursuant to Section 22(e)(3) of the Act, that the requested relief from Section 22(e) of the Act is granted with respect to each Fund until that Fund has liquidated, or until the Commission rescinds the order granted herein. This order shall be in effect as of October 8, 2008. By the Commission. Florence E. Harmon, Acting Secretary. [FR Doc. E8–25862 Filed 10–30–08; 8:45 am] BILLING CODE 8011–01–P E:\FR\FM\31OCN1.SGM 31OCN1

Agencies

[Federal Register Volume 73, Number 212 (Friday, October 31, 2008)]
[Notices]
[Pages 64993-64994]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-25862]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-28466; 812-13585]


Reserve Municipal Money-Market Trust, et al.; Notice of 
Application and Temporary Order

October 24, 2008.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application and a temporary order under Section 
22(e)(3) of the Investment Company Act of 1940 (the ``Act'').

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

    Summary of Application: Applicants request a temporary order to 
permit certain of their series to suspend the right of redemption of 
their outstanding redeemable securities and to postpone payment for 
shares which have been submitted for redemption for which payment has 
not been made.
    Applicants: Reserve Municipal Money-Market Trust on behalf of two 
of its series, Arizona Municipal Money-Market Fund and Minnesota 
Municipal Money-Market Fund; Reserve Municipal Money-Market Trust II, 
on behalf of nine of its series, Interstate Tax-Exempt Fund, California 
Municipal Money-Market Fund, Connecticut Municipal Money-Market Fund, 
Florida Municipal Money-Market Fund, Michigan Municipal Money-Market 
Fund, New Jersey Municipal Money-Market Fund, Ohio Municipal Money-
Market Fund, Pennsylvania Municipal Money-Market Fund and Virginia 
Municipal Money-Market Fund; Reserve New York Municipal Money-Market 
Trust on behalf of its single series, New York Municipal Money-Market 
Fund; and Reserve Short-Term Investment Trust on behalf of one of its 
series, Reserve Yield Plus Fund (Reserve Municipal Money-Market Trust, 
Reserve Municipal Money-Market Trust II, Reserve New York Municipal 
Money-Market Trust, and Reserve Short-Term Investment Trust, 
collectively, the ``Applicants'' or the ``Trusts,'' and each such 
series of Reserve Municipal Money-Market Trust, Reserve Municipal 
Money-Market Trust II and Reserve New York Municipal Money-Market 
Trust, a ``Money Market Fund'').
    Filing Date: The application was filed on October 14, 2008 and 
amended on October 24, 2008.
    Hearing or Notification of 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 November 
17, 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, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-1090. Applicants, 1250 Broadway, New 
York, NY 10001-3701.

FOR FURTHER INFORMATION CONTACT: Brian P. Murphy, Senior Counsel, at 
(202) 551-6825 (Division of Investment Management, Office of Chief 
Counsel).

SUPPLEMENTARY INFORMATION: The complete application may be obtained for 
a fee at the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549-1520 (tel. 202-551-5850).

Applicants' Representations

    1. Each of the Money Market Funds and the Reserve Yield Plus Fund 
(collectively, the ``Funds'') is an open-end management investment 
company registered with the Commission under the Act. Each Money Market 
Fund is a money market fund that operates in a manner consistent with 
Rule 2a-7 under the Act and that seeks a high level of short-term 
interest income exempt from certain taxes as is consistent with the 
preservation of capital and liquidity. The Reserve Yield Plus Fund 
seeks as high a level of current income as is consistent with the 
preservation of capital and liquidity.
    2. The Funds have been subject to a heavy level of redemption 
requests. For example, from September 12, 2008 to October 8, 2008, the 
total net assets of some of the Funds have declined as follows: (1) The 
Interstate Tax-Exempt Fund's total net assets declined from $1.78 
billion to $154.6 million; (2) the Michigan Municipal Money-Market

[[Page 64994]]

Fund's total net assets declined from $29.1 million to $5.3 million; 
(3) the New Jersey Municipal Money-Market Fund's total net assets 
declined from $72.2 million to $20.9 million; (4) the Ohio Municipal 
Money-Market Fund's total net assets declined from $30.9 million to 
$5.6 million; (5) the Pennsylvania Municipal Money-Market Fund's total 
net assets declined from $74.4 million to $2.6 million; and (6) the New 
York Municipal Money-Market Fund's total net assets declined from 
$180.7 million to $91.8 million. The decline of each Fund's total net 
assets was largely caused by heavy redemption requests and not 
declining values associated with portfolio holdings. There has been no 
abatement of the redemptions, and there is no reasonable basis for 
believing that redemptions will abate.
    3. The Funds' have made efforts to raise cash to satisfy 
redemptions from the Funds through the sale of certain short-term 
portfolio securities or maturation of other portfolio securities. The 
Funds are or soon will be limited in the amount of portfolio securities 
that can be sold at or above amortized cost or that will mature in 
seven days or less. The Funds' other portfolio securities can only be 
sold at below amortized cost (possibly at fire-sale prices) due to the 
extreme illiquidity and limited bids in the markets. In the view of the 
boards of trustees of each Trust, including a majority of the trustees 
who are not interested persons of such Trust within the meaning of 
Section 2(a)(19) of the Act, (the ``Boards''), and the investment 
adviser (the ``Adviser''), such sales would be inconsistent with the 
Funds' investment objectives of preservation of capital and harmful to 
non-redeeming shareholders.
    4. In response to these developments, on October 8, 2008, the 
Boards, taking into account the recommendations of the Adviser, 
determined to liquidate the Funds.
    5. On October 8, 2008, the Boards also determined that it would be 
in the best interest of each Fund's shareholders to suspend the right 
of redemption and postpone the date of payment or satisfaction upon 
redemption for more than seven days to allow Applicants the ability to 
liquidate the portfolio securities of the Funds in an orderly manner 
and allow the additional securities held by each Fund to mature. In 
addition, the Boards determined to request an order under Section 
22(e)(3) of the Act.

Applicants' Legal Analysis

    1. Section 22(e)(1) of the Act generally provides that a registered 
investment company may not suspend the right of redemption or postpone 
the date of payment or satisfaction upon redemption of any redeemable 
security in accordance with its terms for more than seven days after 
the tender of such security to the company or its designated agent 
except for any period during which the New York Stock Exchange 
(``NYSE'') is closed other than customary week-end and holiday 
closings, or during which trading on the NYSE is restricted.
    2. Section 22(e)(2) of the Act provides that the seven-day 
redemption period does not apply for any period during which an 
emergency exists, as determined by Commission rules and regulations, as 
a result of which the disposal by a registered investment company of 
portfolio securities is not reasonably practicable or it is not 
reasonably practicable for the registered investment company fairly to 
determine the value of its net assets.
    3. Section 22(e)(3) of the Act provides that redemptions may be 
suspended by a registered investment company for such other periods as 
the Commission may by order permit for the protection of security 
holders of the registered investment company.
    4. Applicants submit that granting the requested relief is for the 
protection of each Fund's shareholders, as provided in Section 22(e)(3) 
of the Act. Applicants assert that, in requesting an order by the 
Commission, the Boards' goal is to ensure that each of the Funds' 
shareholders will be treated appropriately in view of the otherwise 
detrimental effect on each Fund of the recent unprecedented illiquidity 
of the markets and extraordinary levels of redemptions that the Funds 
have experienced. Current market conditions continue to be 
extraordinary, and the requested relief is intended to cause an orderly 
liquidation of each of the Funds' portfolio securities and ensure that 
all of their respective shareholders are protected in the process.
    5. Applicants further submit that the relief is appropriate 
because: (1) The Boards: (a) Taking into account the recommendations of 
the Adviser, determined on October 8, 2008 to liquidate the Funds, (b) 
determined, on October 8, 2008, that a suspension of redemption is in 
the best interest of each Fund's shareholders, (c) determined, on 
October 8, 2008, that a postponement of payment for shares which have 
been submitted for redemption for which payment has not been made is in 
the best interest of each Fund's shareholders, and (d) promptly will 
create plans for the orderly liquidation of each Fund's assets and for 
the appropriate payments to each Fund's shareholders, including those 
whose redemption orders have been received but not yet paid, which 
plans will be subject to Commission supervision and which plans will 
include a planned schedule of possible payments to Fund shareholders 
that is based on the maturities of the portfolio securities held by 
each Fund; (2) each Fund has previously suspended sales as of September 
18, 2008; (3) each Fund will make and keep appropriate records 
surrounding these events; and (4) each Fund continuously will provide 
timely and appropriate information, including initial and ongoing 
disclosure about the plan and its implementation, to its shareholders, 
via Web site or otherwise.

Commission Finding

    Based on the representations in the application, including those 
relating to the current extraordinary market conditions and the Boards' 
October 8, 2008 determinations, the Commission permits the temporary 
suspension of the right of redemption and postponement of payment for 
shares which have been submitted for redemption for which payment has 
not been made by the Funds for the protection of the Funds' security 
holders. Under the circumstances described in the application, which 
require immediate action to protect the Funds' security holders, the 
Commission concludes that it is not practicable to give notice or an 
opportunity to request a hearing before issuing the order. In addition, 
under the circumstances described in the application, the Commission 
concludes that the order should be effective as of the date of the 
actions of the Boards.
    It is ordered, pursuant to Section 22(e)(3) of the Act, that the 
requested relief from Section 22(e) of the Act is granted with respect 
to each Fund until that Fund has liquidated, or until the Commission 
rescinds the order granted herein. This order shall be in effect as of 
October 8, 2008.

    By the Commission.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-25862 Filed 10-30-08; 8:45 am]
BILLING CODE 8011-01-P