Forward Funds, et al.; Notice of Application, 10102-10104 [E9-4875]
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10102
Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Notices
DATES: Comments on this proposal
should be received within 30 calendar
days from the date of this publication.
ADDRESSES: Send or deliver comments
to—
James K. Freiert, Deputy Assistant
Director, Retirement Services Program,
Center for Retirement and Insurance
Services, U.S. Office of Personnel
Management, 1900 E Street, NW., Room
3305, Washington, DC 20415–3500 and
John W. Barkhamer, OPM Desk Officer,
Office of Information & Regulatory
Affairs, Office of Management and
Budget, New Executive Office Building,
725 17th Street, NW., Room 10235,
Washington, DC 20503.
For Information Regarding
Administrative Coordination Contact:
Cyrus S. Benson, Team Leader,
Publications Team, RIS Support
Services/Support Group, U.S. Office of
Personnel Management, 1900 E Street,
NW–Room 4H28, Washington, DC
20415, (202) 606–0623.
U.S. Office of Personnel Management.
Kathie Ann Whipple,
Acting Director.
[FR Doc. E9–4917 Filed 3–6–09; 8:45 am]
BILLING CODE 6325–38–P
SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of Investor
Education and Advocacy,
Washington, DC 20549.
dwashington3 on PROD1PC60 with NOTICES
Extension:
Rule 17Ac2–2, SEC File No. 270–298, OMB
Control No. 3235–0337.
Form TA–2, SEC File No. 270–298, OMB
Control No. 3235–0337.
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
• Rule 17Ac2–2 and Form TA–2
(OMB Control No. 3235–0337; SEC File
No. 270–298).
Rule 17Ac2–2 (17 CFR 240.17Ac2–2)
and Form TA–2 under the Securities
Exchange Act of 1934 (17 U.S.C. 78a et
seq.) require transfer agents to file an
annual report of their business activities
with the Commission. The amount of
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time needed to comply with the
requirements of Rule 17Ac2–2 and Form
TA–2 varies. From the total 598
registered transfer agents, approximately
30 registrants would be required to
complete only Questions 1 through 4
and the signature section of amended
Form TA–2, which the Commission
estimates would take each registrant
about 30 minutes, for a total burden of
15 hours (30 × .5 hours). Approximately
111 registrants would be required to
answer Questions 1 through 5, 10, and
11 and the signature section, which the
Commission estimates would take about
1 hour and 30 minutes, for a total of
166.5 hours (111 × 1.5 hours). The
remaining registrants, approximately
457, would be required to complete the
entire Form TA–2, which the
Commission estimates would take about
6 hours, for a total of 2,742 hours (457
× 6 hours). We estimate that the total
burden would be 2,923.5 hours (15
hours + 166.5 hours + 2,742 hours).
We estimate that the total cost of
reviewing and entering the information
reported on the Forms TA–2 for
respondents is $41.50 per hour. The
Commission estimates that the total cost
would be $121,325.25 annually ($41.50
× 2,923.5).
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 shall have practical utility;
(b) the accuracy of the agency’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information to be 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 in
writing within 60 days of this
publication.
Comments should be directed to
Charles Boucher, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Shirley
Martinson, 6432 General Green Way,
Alexandria, Virginia 22312 or send an email to: PRA_Mailbox@sec.gov.
Comments must be submitted to OMB
within 60 days of this notice.
Dated: February 26, 2009.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E9–4816 Filed 3–6–09; 8:45 am]
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SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
28640; 812–13543]
Forward Funds, et al.; Notice of
Application
March 3, 2009.
AGENCY: Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of application for an
order under section 17(d) of the
Investment Company Act of 1940
(‘‘Act’’) and rule 17d–1 under the Act.
SUMMARY: Applicants request an order to
permit certain registered open-end
investment companies in the same
group of investment companies to enter
into a special servicing agreement
(‘‘Special Servicing Agreement’’).
Applicants: Forward Funds, on behalf of
its series, Accessor Aggressive Growth
Allocation Fund, Accessor Balanced
Allocation Fund, Accessor Growth
Fund, Accessor Growth Allocation
Fund, Accessor Growth And Income
Allocation Fund, Accessor High Yield
Bond Fund, Accessor Income Allocation
Fund, Accessor Income And Growth
Allocation Fund, Accessor Intermediate
Fixed-Income Fund, Accessor
International Equity Fund, Accessor
Mortgage Securities Fund, Accessor
Short-Intermediate Fixed-Income Fund,
Accessor Small To Mid Cap Fund,
Accessor Strategic Alternatives Fund,
Accessor U.S. Government Money Fund
and Accessor Value Fund, Forward
Management LLC (‘‘Forward
Management’’) and each existing or
future registered open-end management
investment company or series thereof
that is part of the same ‘‘group of
investment companies’’ as Forward
Funds (the ‘‘Trust’’) under Section
12(d)(1)(G)(ii) of the Act and is advised
by Forward Management or any entity
controlling, controlled by, or under
common control with Forward
Management. (such investment
companies or series thereof, together
with the Trust and its series, the
‘‘Funds’’).1
DATES: The application was filed on July
3, 2008, and amended on December 19,
2008. Applicants have agreed to file an
amendment during the notice period,
the substance of which is reflected in
this notice.
Hearing or Notification of Hearing: An
order granting the application will be
1 All entities that currently intend to rely on the
order have been named as applicants. Any other
entity that relies on the order in the future will
comply with the terms and conditions of the
application.
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Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Notices
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 March 27, 2009, 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, 433 California Street,
11th Floor, San Francisco, CA 94104.
FOR FURTHER INFORMATION CONTACT:
Bruce R. MacNeil, Senior Counsel, at
(202) 551–6817, or Julia Kim Gilmer,
Branch Chief, at (202) 551–6821
(Division of Investment Management,
Office of Investment Company
Regulation).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained for a fee at the
Commission’s Public Reference Room,
U.S. Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–1520 (telephone
(202) 551–5850).
dwashington3 on PROD1PC60 with NOTICES
Applicants’ Representations
1. The Trust is a Delaware statutory
trust registered under the Act as an
open-end management investment
company. The Trust currently offers 34
series, 6 of which are ‘‘Top-Tier
Funds’’ 2 and 10 of which are
‘‘Underlying Funds.’’ 3 The Top-Tier
Funds will invest substantially all of
their assets in the Underlying Funds.4
2 ‘‘Top-Tier Funds’’ refers to Accessor Aggressive
Growth Allocation Fund, Accessor Balanced
Allocation Fund, Accessor Growth Allocation
Fund, Accessor Growth and Income Allocation
Fund, Accessor Income Allocation Fund and
Accessor Income and Growth Allocation Fund and
any other Fund that invests substantially all of its
assets in the Underlying Funds (as defined below).
3 ‘‘Underlying Funds’’ refers to Accessor Growth
Fund, Accessor High Yield Bond Fund, Accessor
Intermediate Fixed-Income Fund, Accessor
International Equity Fund, Accessor Mortgage
Securities Fund, Accessor Short-Intermediate
Fixed-Income Fund, Accessor Small to Mid Cap
Fund, Accessor Strategic Alternatives Fund,
Accessor U.S. Government Money Fund and
Accessor Value Fund and any other Fund in which
a Top-Tier Fund may invest.
4 The Top-Tier Funds will not be Underlying
Funds and no Top-Tier Fund will invest in another
Top-Tier Fund.
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The Top-Tier Funds and the Underlying
Funds currently offer multiple classes of
shares in reliance on rule 18f–3 under
the Act. Forward Management, an
investment adviser registered under the
Investment Advisers Act of 1940, serves
as investment adviser to the Funds.
2. Forward Management and the Trust
propose to enter into a Special Servicing
Agreement that would allow an
Underlying Fund to bear the expenses of
a Top-Tier Fund (other than investment
management fees, rule 12b–1 fees and
class-specific administrative service
fees). Under the Special Servicing
Agreement, each Underlying Fund will
bear expenses of a Top-Tier Fund in
proportion to the estimated benefits to
the Underlying Fund arising from the
investment in the Underlying Fund by
the Top-Tier Fund (‘‘Underlying Fund
Benefits’’).
3. Applicants state that the
Underlying Fund Benefits are expected
to result primarily from the incremental
increase in assets resulting from
investment in the Underlying Funds by
the Top-Tier Funds and the large asset
size of each shareholder account that
represents an investment by a Top-Tier
Fund relative to other shareholder
accounts. A shareholder account that
represents a Top-Tier Fund will
experience fewer shareholder
transactions and greater predictability of
transaction activity than other
shareholder accounts. As a result, the
shareholder servicing costs to any
Underlying Fund for servicing one
account registered to a Top-Tier Fund
will be significantly less than the cost to
that same Underlying Fund of servicing
the same pool of assets contributed by
a large group of shareholders owning
relatively small accounts in one or more
Underlying Funds.
4. No Fund will enter into a Special
Servicing Agreement unless the Special
Servicing Agreement: (a) Precisely
describes the services provided to the
Top-Tier Funds and the amount of
expenses for services charged to the
Top-Tier Fund that may be paid by an
Underlying Fund (‘‘Underlying Fund
Payments’’); (b) provides that no
affiliated person of the Top-Tier Funds,
or affiliated person of such person, will
receive, directly or indirectly, any
portion of the Underlying Fund
Payments, except for bona fide transfer
agent services approved by the board of
trustees (‘‘Board’’) of the Underlying
Fund, including a majority of trustees
who are not ‘‘interested persons’’
(within the meaning of section 2(a)(19)
of the Act) (‘‘Independent Trustees’’); (c)
provides that the Underlying Fund
Payments may not exceed the amount of
actual expenses incurred by the Top-
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10103
Tier Funds; (d) provides that, in
instances where transfer agent expenses
are calculated based on a fixed fee per
account, no Underlying Fund will
reimburse transfer agent expenses of a
Top-Tier Fund, including subaccounting expenses and other out-ofpocket expenses, at a rate in excess of
the average per account transfer agent
expenses of the Underlying Fund,
including sub-accounting expenses and
other out-of-pocket expenses, expressed
as a basis point charge (for purposes of
calculating the Underlying Fund’s
average per account transfer agent
expense, the Top-Tier Fund’s
investment in the Underlying Fund will
be excluded); and (e) has been approved
by the Fund’s Board, including a
majority of the Independent Trustees, as
being in the best interests of the Fund
and its shareholders and not involving
overreaching on the part of any person
concerned.
Applicants’ Legal Analysis
1. Section 17(d) of the Act and rule
17d–1 under the Act provide that an
affiliated person of, or a principal
underwriter for, a registered investment
company, or an affiliate of such person
or principal underwriter, acting as
principal, shall not participate in, or
effect any transaction in connection
with, any joint enterprise or other joint
arrangement in which the registered
investment company is a participant
unless the Commission has issued an
order approving the arrangement.
Forward Management, as investment
adviser, is an affiliated person of each
of the Underlying Funds and Top-Tier
Funds, which in turn could be deemed
to be under common control of Forward
Management and therefore affiliated
persons of each other. The Top-Tier
Funds and the Underlying Funds also
may be affiliated persons by virtue of a
Top-Tier Fund’s ownership of more
than 5% of the outstanding voting
securities of an Underlying Fund.
Consequently, the Special Servicing
Agreement could be deemed to be a
joint transaction among the Top-Tier
Funds, the Underlying Funds and
Forward Management.
2. Rule 17d–1 under the Act provides
that, in passing upon a joint
arrangement under the rule, the
Commission will consider whether
participation of the investment
company in the joint enterprise or joint
arrangement on the basis proposed is
consistent with the provisions, policies,
and purposes of the Act and the extent
to which the participation is on a basis
different from or less advantageous than
that of other participants.
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Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Notices
dwashington3 on PROD1PC60 with NOTICES
3. Applicants request an order under
section 17(d) and rule 17d–1 to permit
the proposed expense sharing
arrangements. Applicants state that
participation by the Top-Tier Funds, the
Underlying Funds and Forward
Management in the proposed expense
sharing arrangements is consistent with
the provisions, policies and purposes of
the Act, and that the terms of the
Special Servicing Agreement and the
conditions set forth below will ensure
that no participant will participate on a
basis less advantageous than that of
other participants.
Applicants’ Conditions
Applicants agree that any order
granting the requested relief will be
subject to the following conditions:
1. No Fund will enter into a Special
Servicing Agreement unless the Special
Servicing Agreement: (a) Precisely
describes the services provided to the
Top-Tier Funds and the Underlying
Fund Payments; (b) provides that no
affiliated person of the Top-Tier Funds,
or affiliated person of such person, will
receive, directly or indirectly, any
portion of the Underlying Fund
Payments, except for bona fide transfer
agent services approved by the Board of
the Underlying Fund, including a
majority of the Independent Trustees;
(c) provides that the Underlying Fund
Payments may not exceed the amount of
actual expenses incurred by the TopTier Funds; (d) provides that, in
instances where transfer agent expenses
are calculated based on a fixed fee per
account, no Underlying Fund will
reimburse transfer agent expenses of a
Top-Tier Fund, including subaccounting expenses and other out-ofpocket expenses, at a rate in excess of
the average per account transfer agent
expenses of the Underlying Fund,
including sub-accounting expenses and
other out-of-pocket expenses, expressed
as a basis point charge (for purposes of
calculating the Underlying Fund’s
average per account transfer agent
expense, the Top-Tier Fund’s
investment in the Underlying Fund will
be excluded); and (e) has been approved
by the Fund’s Board, including a
majority of the Independent Trustees, as
being in the best interests of the Fund
and its shareholders and not involving
overreaching on the part of any person
concerned.
2. In approving a Special Servicing
Agreement, the Board of an Underlying
Fund will consider, without limitation:
(a) The reasons for the Underlying
Fund’s entering into the Special
Servicing Agreement; (b) information
quantifying the Underlying Fund
Benefits; (c) the extent to which
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15:28 Mar 06, 2009
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investors in the Top-Tier Fund could
have purchased shares of the
Underlying Fund; (d) the extent to
which an investment in the Top-Tier
Fund represents or would represent a
consolidation of accounts in the
Underlying Funds, through exchanges
or otherwise, or a reduction in the rate
of increase in the number of accounts in
the Underlying Funds; (e) the extent to
which the expense ratio of the
Underlying Fund was reduced following
investment in the Underlying Fund by
the Top-Tier Fund and the reasonably
foreseeable effects of the investment by
the Top-Tier Fund on the Underlying
Fund’s expense ratio; (f) the reasonably
foreseeable effects of participation in the
Special Servicing Agreement on the
Underlying Fund’s expense ratio; and
(g) any conflicts of interest that Forward
Management, any affiliated person of
Forward Management, or any other
affiliated person of the Underlying Fund
may have relating to the Underlying
Fund’s participation in the Special
Servicing Agreement.
3. Prior to approving a Special
Servicing Agreement on behalf of an
Underlying Fund, the Board of the
Underlying Fund, including a majority
of the Independent Trustees, will
determine that: (a) The Underlying
Fund Payments under the Special
Servicing Agreement are expenses that
the Underlying Fund would have
incurred if the shareholders of the TopTier Fund had instead purchased shares
of the Underlying Fund through the
same broker-dealer or other financial
intermediary; (b) the amount of the
Underlying Fund Payments is less than
the amount of Underlying Fund
Benefits; and (c) by entering into the
Special Servicing Agreement, the
Underlying Fund is not engaging,
directly or indirectly, in financing any
activity which is primarily intended to
result in the sale of shares issued by the
Underlying Fund.
4. In approving a Special Servicing
Agreement, the Board of a Fund will
request and evaluate, and Forward
Management will furnish, such
information as may reasonably be
necessary to evaluate the terms of the
Special Servicing Agreement and the
factors set forth in condition 2 above,
and make the determinations set forth in
conditions 1 and 3 above.
5. Approval by the Fund’s Board,
including a majority of the Independent
Trustees, in accordance with conditions
1 through 4 above, will be required at
least annually after the Fund’s entering
into a Special Servicing Agreement and
prior to any material amendment to a
Special Servicing Agreement.
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6. To the extent Underlying Fund
Payments are treated, in whole or in
part, as a class expense of an Underlying
Fund, or are used to pay a class-based
expense of a Top-Tier Fund, conditions
1 through 5 above must be met with
respect to each class of a Fund as well
as the Fund as a whole.
7. Each Fund will maintain and
preserve the Board’s findings and
determinations set forth in conditions 1
and 3 above, and the information and
considerations on which they were
based, for the duration of the Special
Servicing Agreement, and for a period
not less than six years thereafter, the
first two years in an easily accessible
place.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–4875 Filed 3–6–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59486; File No. SR–NYSE–
2009–16]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Amend
NYSE Rule 17 To Address Issues
Related to Vendor Liability and To
Make Amendments and Conforming
Changes to NYSE Rule 18
March 2, 2009.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on February
17, 2009, New York Stock Exchange
LLC (‘‘NYSE’’ or ‘‘Exchange’’) 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 the self-regulatory
organization. The Exchange filed the
proposed rule change pursuant to
Section 19(b)(3)(A) 4 of the Act and Rule
19b–4(f)(6) thereunder,5 which renders
the proposal effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 15 U.S.C. 78s(b)(3)(A).
5 17 CFR 240.19b–4(f)(6).
2 15
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]]>Agencies
[Federal Register Volume 74, Number 44 (Monday, March 9, 2009)]
[Notices]
[Pages 10102-10104]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-4875]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 28640; 812-13543]
Forward Funds, et al.; Notice of Application
March 3, 2009.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of application for an order under section 17(d) of the
Investment Company Act of 1940 (``Act'') and rule 17d-1 under the Act.
-----------------------------------------------------------------------
SUMMARY: Applicants request an order to permit certain registered open-
end investment companies in the same group of investment companies to
enter into a special servicing agreement (``Special Servicing
Agreement'').
Applicants: Forward Funds, on behalf of its series, Accessor Aggressive
Growth Allocation Fund, Accessor Balanced Allocation Fund, Accessor
Growth Fund, Accessor Growth Allocation Fund, Accessor Growth And
Income Allocation Fund, Accessor High Yield Bond Fund, Accessor Income
Allocation Fund, Accessor Income And Growth Allocation Fund, Accessor
Intermediate Fixed-Income Fund, Accessor International Equity Fund,
Accessor Mortgage Securities Fund, Accessor Short-Intermediate Fixed-
Income Fund, Accessor Small To Mid Cap Fund, Accessor Strategic
Alternatives Fund, Accessor U.S. Government Money Fund and Accessor
Value Fund, Forward Management LLC (``Forward Management'') and each
existing or future registered open-end management investment company or
series thereof that is part of the same ``group of investment
companies'' as Forward Funds (the ``Trust'') under Section
12(d)(1)(G)(ii) of the Act and is advised by Forward Management or any
entity controlling, controlled by, or under common control with Forward
Management. (such investment companies or series thereof, together with
the Trust and its series, the ``Funds'').\1\
---------------------------------------------------------------------------
\1\ All entities that currently intend to rely on the order have
been named as applicants. Any other entity that relies on the order
in the future will comply with the terms and conditions of the
application.
DATES: The application was filed on July 3, 2008, and amended on
December 19, 2008. Applicants have agreed to file an amendment during
---------------------------------------------------------------------------
the notice period, the substance of which is reflected in this notice.
Hearing or Notification of Hearing: An order granting the application
will be
[[Page 10103]]
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 March 27,
2009, 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, 433 California
Street, 11th Floor, San Francisco, CA 94104.
FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at
(202) 551-6817, or Julia Kim Gilmer, Branch Chief, at (202) 551-6821
(Division of Investment Management, Office of Investment Company
Regulation).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee at the
Commission's Public Reference Room, U.S. Securities and Exchange
Commission, 100 F Street, NE., Washington, DC 20549-1520 (telephone
(202) 551-5850).
Applicants' Representations
1. The Trust is a Delaware statutory trust registered under the Act
as an open-end management investment company. The Trust currently
offers 34 series, 6 of which are ``Top-Tier Funds'' \2\ and 10 of which
are ``Underlying Funds.'' \3\ The Top-Tier Funds will invest
substantially all of their assets in the Underlying Funds.\4\ The Top-
Tier Funds and the Underlying Funds currently offer multiple classes of
shares in reliance on rule 18f-3 under the Act. Forward Management, an
investment adviser registered under the Investment Advisers Act of
1940, serves as investment adviser to the Funds.
---------------------------------------------------------------------------
\2\ ``Top-Tier Funds'' refers to Accessor Aggressive Growth
Allocation Fund, Accessor Balanced Allocation Fund, Accessor Growth
Allocation Fund, Accessor Growth and Income Allocation Fund,
Accessor Income Allocation Fund and Accessor Income and Growth
Allocation Fund and any other Fund that invests substantially all of
its assets in the Underlying Funds (as defined below).
\3\ ``Underlying Funds'' refers to Accessor Growth Fund,
Accessor High Yield Bond Fund, Accessor Intermediate Fixed-Income
Fund, Accessor International Equity Fund, Accessor Mortgage
Securities Fund, Accessor Short-Intermediate Fixed-Income Fund,
Accessor Small to Mid Cap Fund, Accessor Strategic Alternatives
Fund, Accessor U.S. Government Money Fund and Accessor Value Fund
and any other Fund in which a Top-Tier Fund may invest.
\4\ The Top-Tier Funds will not be Underlying Funds and no Top-
Tier Fund will invest in another Top-Tier Fund.
---------------------------------------------------------------------------
2. Forward Management and the Trust propose to enter into a Special
Servicing Agreement that would allow an Underlying Fund to bear the
expenses of a Top-Tier Fund (other than investment management fees,
rule 12b-1 fees and class-specific administrative service fees). Under
the Special Servicing Agreement, each Underlying Fund will bear
expenses of a Top-Tier Fund in proportion to the estimated benefits to
the Underlying Fund arising from the investment in the Underlying Fund
by the Top-Tier Fund (``Underlying Fund Benefits'').
3. Applicants state that the Underlying Fund Benefits are expected
to result primarily from the incremental increase in assets resulting
from investment in the Underlying Funds by the Top-Tier Funds and the
large asset size of each shareholder account that represents an
investment by a Top-Tier Fund relative to other shareholder accounts. A
shareholder account that represents a Top-Tier Fund will experience
fewer shareholder transactions and greater predictability of
transaction activity than other shareholder accounts. As a result, the
shareholder servicing costs to any Underlying Fund for servicing one
account registered to a Top-Tier Fund will be significantly less than
the cost to that same Underlying Fund of servicing the same pool of
assets contributed by a large group of shareholders owning relatively
small accounts in one or more Underlying Funds.
4. No Fund will enter into a Special Servicing Agreement unless the
Special Servicing Agreement: (a) Precisely describes the services
provided to the Top-Tier Funds and the amount of expenses for services
charged to the Top-Tier Fund that may be paid by an Underlying Fund
(``Underlying Fund Payments''); (b) provides that no affiliated person
of the Top-Tier Funds, or affiliated person of such person, will
receive, directly or indirectly, any portion of the Underlying Fund
Payments, except for bona fide transfer agent services approved by the
board of trustees (``Board'') of the Underlying Fund, including a
majority of trustees who are not ``interested persons'' (within the
meaning of section 2(a)(19) of the Act) (``Independent Trustees''); (c)
provides that the Underlying Fund Payments may not exceed the amount of
actual expenses incurred by the Top-Tier Funds; (d) provides that, in
instances where transfer agent expenses are calculated based on a fixed
fee per account, no Underlying Fund will reimburse transfer agent
expenses of a Top-Tier Fund, including sub-accounting expenses and
other out-of-pocket expenses, at a rate in excess of the average per
account transfer agent expenses of the Underlying Fund, including sub-
accounting expenses and other out-of-pocket expenses, expressed as a
basis point charge (for purposes of calculating the Underlying Fund's
average per account transfer agent expense, the Top-Tier Fund's
investment in the Underlying Fund will be excluded); and (e) has been
approved by the Fund's Board, including a majority of the Independent
Trustees, as being in the best interests of the Fund and its
shareholders and not involving overreaching on the part of any person
concerned.
Applicants' Legal Analysis
1. Section 17(d) of the Act and rule 17d-1 under the Act provide
that an affiliated person of, or a principal underwriter for, a
registered investment company, or an affiliate of such person or
principal underwriter, acting as principal, shall not participate in,
or effect any transaction in connection with, any joint enterprise or
other joint arrangement in which the registered investment company is a
participant unless the Commission has issued an order approving the
arrangement. Forward Management, as investment adviser, is an
affiliated person of each of the Underlying Funds and Top-Tier Funds,
which in turn could be deemed to be under common control of Forward
Management and therefore affiliated persons of each other. The Top-Tier
Funds and the Underlying Funds also may be affiliated persons by virtue
of a Top-Tier Fund's ownership of more than 5% of the outstanding
voting securities of an Underlying Fund. Consequently, the Special
Servicing Agreement could be deemed to be a joint transaction among the
Top-Tier Funds, the Underlying Funds and Forward Management.
2. Rule 17d-1 under the Act provides that, in passing upon a joint
arrangement under the rule, the Commission will consider whether
participation of the investment company in the joint enterprise or
joint arrangement on the basis proposed is consistent with the
provisions, policies, and purposes of the Act and the extent to which
the participation is on a basis different from or less advantageous
than that of other participants.
[[Page 10104]]
3. Applicants request an order under section 17(d) and rule 17d-1
to permit the proposed expense sharing arrangements. Applicants state
that participation by the Top-Tier Funds, the Underlying Funds and
Forward Management in the proposed expense sharing arrangements is
consistent with the provisions, policies and purposes of the Act, and
that the terms of the Special Servicing Agreement and the conditions
set forth below will ensure that no participant will participate on a
basis less advantageous than that of other participants.
Applicants' Conditions
Applicants agree that any order granting the requested relief will
be subject to the following conditions:
1. No Fund will enter into a Special Servicing Agreement unless the
Special Servicing Agreement: (a) Precisely describes the services
provided to the Top-Tier Funds and the Underlying Fund Payments; (b)
provides that no affiliated person of the Top-Tier Funds, or affiliated
person of such person, will receive, directly or indirectly, any
portion of the Underlying Fund Payments, except for bona fide transfer
agent services approved by the Board of the Underlying Fund, including
a majority of the Independent Trustees; (c) provides that the
Underlying Fund Payments may not exceed the amount of actual expenses
incurred by the Top-Tier Funds; (d) provides that, in instances where
transfer agent expenses are calculated based on a fixed fee per
account, no Underlying Fund will reimburse transfer agent expenses of a
Top-Tier Fund, including sub-accounting expenses and other out-of-
pocket expenses, at a rate in excess of the average per account
transfer agent expenses of the Underlying Fund, including sub-
accounting expenses and other out-of-pocket expenses, expressed as a
basis point charge (for purposes of calculating the Underlying Fund's
average per account transfer agent expense, the Top-Tier Fund's
investment in the Underlying Fund will be excluded); and (e) has been
approved by the Fund's Board, including a majority of the Independent
Trustees, as being in the best interests of the Fund and its
shareholders and not involving overreaching on the part of any person
concerned.
2. In approving a Special Servicing Agreement, the Board of an
Underlying Fund will consider, without limitation: (a) The reasons for
the Underlying Fund's entering into the Special Servicing Agreement;
(b) information quantifying the Underlying Fund Benefits; (c) the
extent to which investors in the Top-Tier Fund could have purchased
shares of the Underlying Fund; (d) the extent to which an investment in
the Top-Tier Fund represents or would represent a consolidation of
accounts in the Underlying Funds, through exchanges or otherwise, or a
reduction in the rate of increase in the number of accounts in the
Underlying Funds; (e) the extent to which the expense ratio of the
Underlying Fund was reduced following investment in the Underlying Fund
by the Top-Tier Fund and the reasonably foreseeable effects of the
investment by the Top-Tier Fund on the Underlying Fund's expense ratio;
(f) the reasonably foreseeable effects of participation in the Special
Servicing Agreement on the Underlying Fund's expense ratio; and (g) any
conflicts of interest that Forward Management, any affiliated person of
Forward Management, or any other affiliated person of the Underlying
Fund may have relating to the Underlying Fund's participation in the
Special Servicing Agreement.
3. Prior to approving a Special Servicing Agreement on behalf of an
Underlying Fund, the Board of the Underlying Fund, including a majority
of the Independent Trustees, will determine that: (a) The Underlying
Fund Payments under the Special Servicing Agreement are expenses that
the Underlying Fund would have incurred if the shareholders of the Top-
Tier Fund had instead purchased shares of the Underlying Fund through
the same broker-dealer or other financial intermediary; (b) the amount
of the Underlying Fund Payments is less than the amount of Underlying
Fund Benefits; and (c) by entering into the Special Servicing
Agreement, the Underlying Fund is not engaging, directly or indirectly,
in financing any activity which is primarily intended to result in the
sale of shares issued by the Underlying Fund.
4. In approving a Special Servicing Agreement, the Board of a Fund
will request and evaluate, and Forward Management will furnish, such
information as may reasonably be necessary to evaluate the terms of the
Special Servicing Agreement and the factors set forth in condition 2
above, and make the determinations set forth in conditions 1 and 3
above.
5. Approval by the Fund's Board, including a majority of the
Independent Trustees, in accordance with conditions 1 through 4 above,
will be required at least annually after the Fund's entering into a
Special Servicing Agreement and prior to any material amendment to a
Special Servicing Agreement.
6. To the extent Underlying Fund Payments are treated, in whole or
in part, as a class expense of an Underlying Fund, or are used to pay a
class-based expense of a Top-Tier Fund, conditions 1 through 5 above
must be met with respect to each class of a Fund as well as the Fund as
a whole.
7. Each Fund will maintain and preserve the Board's findings and
determinations set forth in conditions 1 and 3 above, and the
information and considerations on which they were based, for the
duration of the Special Servicing Agreement, and for a period not less
than six years thereafter, the first two years in an easily accessible
place.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-4875 Filed 3-6-09; 8:45 am]
BILLING CODE 8011-01-P
