Deutsche Bank Securities Inc., et al.; Notice of Application and Temporary Order, 28288-28290 [E9-13981]

Download as PDF pwalker on PROD1PC71 with NOTICES 28288 Federal Register / Vol. 74, No. 113 / Monday, June 15, 2009 / Notices All funds are required to conduct an annual review of the adequacy of their existing policies and procedures and the policies and procedures of each investment adviser, principal underwriter, administrator, and transfer agent of the fund, and the effectiveness of their implementation. In addition, each fund chief compliance officer is required to prepare an annual report that addresses the operation of the policies and procedures of the fund and the policies and procedures of each investment adviser, principal underwriter, administrator, and transfer agent of the fund, any material changes made to those policies and procedures since the date of the last report, any material changes to the policies and procedures recommended as a result of the annual review, and certain compliance matters that occurred since the date of the last report. The staff estimates that each fund spends 42 hours per year, on average, conducting the annual review and preparing the annual report to the board of directors. Thus, we estimate that the aggregate annual burden hours associated with the annual review and annual report requirement is 194,796 hours. Finally, the staff estimates that each fund spends 11 hours annually, on average, maintaining the records required by proposed Rule 38a–1. Thus, the aggregate annual burden hours associated with the recordkeeping requirement is 51,018 hours. In total, the staff estimates that the aggregate annual information collection burden of Rule 38a–1 is 254,214 hours. The estimate of burden hours is made solely for the purposes of the Paperwork Reduction Act. The estimate is not derived from a comprehensive or even a representative survey or study of the costs of Commission rules. Complying with this collection of information requirement is mandatory. Responses will not be kept confidential. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. 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 VerDate Nov<24>2008 16:47 Jun 12, 2009 Jkt 217001 techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Please direct your written comments to Charles Boucher, 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: June 9, 2009. Florence E. Harmon, Deputy Secretary. [FR Doc. E9–14007 Filed 6–12–09; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. IC–28763; File No. 812–13664] Deutsche Bank Securities Inc., et al.; Notice of Application and Temporary Order June 9, 2009. AGENCY: Securities and Exchange Commission (‘‘Commission’’). ACTION: Temporary order and notice of application for a permanent order under section 9(c) of the Investment Company Act of 1940 (‘‘Act’’). SUMMARY OF APPLICATION: Applicants have received a temporary order exempting them from section 9(a) of the Act, with respect to an injunction entered against Deutsche Bank Securities Inc. (‘‘DBSI’’) on June 9, 2009 by the United States District Court for the Southern District of New York (‘‘Injunction’’), until the Commission takes final action on an application for a permanent order. Applicants also have applied for a permanent order. APPLICANTS: DBSI, Deutsche Investment Management Americas, Inc. (‘‘DIMA’’), Deutsche Asset Management (Hong Kong) Limited (‘‘DeAM (HK)’’), Deutsche Asset Management International GmbH (‘‘DeAMI’’), Deutsche Asset Management (Japan) Limited (‘‘DeAMJ’’), Deutsche Investments Australia Limited (‘‘DIAL’’), RREEF America LLC (‘‘RREEF’’), RREEF Global Advisors Limited (‘‘RREEF (G)’’), and DWS Investments Distributors, Inc. (‘‘DIDI’’) (collectively, other than DBSI, the ‘‘Fund Servicing Applicants’’ and together with DBSI, the ‘‘Applicants’’).1 1 Applicants request that any relief granted pursuant to the application also apply to any other company of which DBSI is or may become an affiliated person (together with the Applicants, the ‘‘Covered Persons’’). PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 DATES: Filing Date: The application was filed on June 9, 2009. 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 July 6, 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: DBSI, 60 Wall Street, New York, NY 10005; DIMA, 345 Park Avenue, New York, NY 10154; DeAM (HK), 48/F Cheung Kong Centre, 2 Queen’s Road Central, Hong Kong, China; DeAMI, Mainzer Landstrasse 178–190, Frankfurt am Main, 60327; DeAMJ, Sanno Park Tower, 2–11–1, Nagata-Cho, Chiyoda-Ku, Tokyo, 100– 6173; DIAL, Deutsche Bank Place, Level 16, CNR Hunter and Phillip Streets, Sydney, NSW 2000; RREEF, 875 N. Michigan Avenue, 41st Floor, Chicago, IL 60611; RREEF (G), Winchester House, 1 Great Winchester Street, London, United Kingdom EC2N 2DB; and DIDI, 222 South Riverside Plaza, Chicago, IL 60606. FOR FURTHER INFORMATION CONTACT: Steven I. Amchan, Senior Counsel, at (202) 551–6826, 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 temporary order and a summary of the application. The complete application may be obtained via the Commission’s Web site by searching for the file number, or an applicant using the Company name box, at https://www.sec.gov/search/ search.htm or by calling (202) 551– 8090. Applicants’ Representations 1. Deutsche Bank AG (‘‘DB’’) is a stock corporation organized under the laws of the Federal Republic of Germany. DBSI is an indirect wholly-owned subsidiary of DB, and an affiliated person of each Fund Servicing Applicant within the meaning of section 2(a)(3) of the Act (by E:\FR\FM\15JNN1.SGM 15JNN1 Federal Register / Vol. 74, No. 113 / Monday, June 15, 2009 / Notices virtue of being under common control with the Fund Servicing Applicants). DBSI provides securities brokerage and investment advisory services to private clients and institutions and correspondent clearing services to broker-dealers. DBSI also provides a variety of capital raising, market making, and brokerage services for its government, financial institution, and corporate clients, including fixed income and equity sales and trading, emerging markets activities, and equity market research and investment banking. 2. DIMA, DeAM (HK), DeAMI, DeAMJ, DIAL, RREEF, and RREEF (G) are registered as investment advisers under the Investment Advisers Act of 1940, as amended (‘‘Advisers Act’’) and provide investment advisory or subadvisory services to registered investment companies (‘‘Funds’’). DIDI is a broker-dealer registered under the Securities Exchange Act of 1934 (‘‘Exchange Act’’) and serves as principal underwriter to Funds. 3. On June 9, 2009, the United States District Court for the Southern District of New York entered a judgment against DBSI (‘‘Judgment’’) in a matter brought by the Commission.2 The Commission alleged in the complaint (‘‘Complaint’’) that DBSI violated section 15(c) of the Exchange Act by marketing auction rate securities as highly liquid investments comparable to cash or money market instruments and by selling auction rate securities to its customers without adequately disclosing the risks involved in purchasing such securities. Without admitting or denying the allegations in the Complaint, except as to jurisdiction, DBSI consented to the entry of the Judgment that included, among other things, the entry of the Injunction and other equitable relief including undertakings to take various remedial actions for the benefit of purchasers of certain auction rate securities. pwalker on PROD1PC71 with NOTICES Applicants’ Legal Analysis 1. Section 9(a)(2) of the Act, in relevant part, prohibits a person who has been enjoined from, among other things, engaging in or continuing any conduct or practice in connection with the purchase or sale of a security, or in connection with activities as an underwriter, broker or dealer, from acting, among other things, as an investment adviser or depositor of any registered investment company or a principal underwriter for any registered 2 Securities and Exchange Commission v. Deutsche Bank Securities Inc., Judgment on Consent Against Defendant Deutsche Bank Securities Inc., 09 Civ. 5174 (S.D.N.Y. June 9, 2009). VerDate Nov<24>2008 16:47 Jun 12, 2009 Jkt 217001 open-end investment company, registered unit investment trust or registered face-amount certificate company. Section 9(a)(3) of the Act makes the prohibition in section 9(a)(2) applicable to a company, any affiliated person of which has been disqualified under the provisions of section 9(a)(2). Section 2(a)(3) of the Act defines ‘‘affiliated person’’ to include, among others, any person directly or indirectly controlling, controlled by, or under common control with, the other person. Applicants state that DBSI is an affiliated person of each of the other Applicants within the meaning of section 2(a)(3) of the Act. Applicants state that the entry of the Injunction results in Applicants being subject to the disqualification provisions of section 9(a) of the Act. 2. Section 9(c) of the Act provides that the Commission shall grant an application for exemption from the disqualification provisions of section 9(a) if it is established that these provisions, as applied to the Applicants, are unduly or disproportionately severe or that the Applicants’ conduct has been such as not to make it against the public interest or the protection of investors to grant the exemption. Applicants have filed an application pursuant to section 9(c) seeking a temporary and permanent order exempting them and Covered Persons from the disqualification provisions of section 9(a) of the Act. 3. Applicants believe they meet the standard for exemption specified in section 9(c). Applicants state that the prohibitions of section 9(a) as applied to them would be unduly and disproportionately severe and that the conduct of the Applicants has been such as not to make it against the public interest or the protection of investors to grant the exemption from section 9(a). 4. Applicants state that the alleged conduct giving rise to the Injunction did not involve any of the Applicants acting in the capacity of investment adviser, subadviser or depositor to any Fund or in the capacity of principal underwriter for any open-end Fund, UIT, or registered face-amount certificate company. Applicants also state that none of the current or former directors, officers, or employees of the Fund Servicing Applicants had any responsibility for, or had any involvement in, the conduct alleged in the Complaint. Applicants further state that the personnel at DBSI who were involved in the violations alleged in the Complaint have had no and will not have any future involvement in providing investment advisory, subadvisory, depository or underwriting services to Funds. PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 28289 5. Applicants state that their inability to continue to provide investment advisory, subadvisory and underwriting services to Funds would result in potential hardship for the Funds and their shareholders. Applicants state that they will, as soon as reasonably practicable, distribute written materials, including an offer to meet in person to discuss the materials, to the boards of directors (‘‘Boards’’) of the Funds for which the Applicants serve as investment adviser, investment subadviser or principal underwriter, including the directors who are not ‘‘interested persons,’’ as defined in section 2(a)(19) of the Act, of such Funds, and their independent legal counsel as defined in rule 0–1(a)(6) under the Act, relating to the circumstances that led to the Injunction, any impact on the Funds, and the application. Applicants state they will provide the Boards of the Funds with all information concerning the Injunction and the application that is necessary for the Funds to fulfill their disclosure and other obligations under the Federal securities laws. 6. Applicants also state that, if the Fund Servicing Applicants were barred from providing services to the Funds, the effect on their businesses and employees would be severe. Applicants state that they have committed substantial resources to establish an expertise in providing advisory and principal underwriting services to Funds. Applicants further state that prohibiting the Fund Servicing Applicants from providing such services would not only adversely affect their businesses, but would also adversely affect over 500 employees who are involved in those activities. 7. Applicants previously have received exemptions under section 9(c) as the result of conduct that triggered section 9(a) as described in greater detail in the application. Applicants’ Condition Applicants agree that any order granting the requested relief will be subject to the following condition: Any temporary exemption granted pursuant to the application shall be without prejudice to, and shall not limit the Commission’s rights in any manner with respect to, any Commission investigation of, or administrative proceedings involving or against, Covered Persons, including, without limitation, the consideration by the Commission of a permanent exemption from section 9(a) of the Act requested pursuant to the application or the revocation or removal of any temporary E:\FR\FM\15JNN1.SGM 15JNN1 28290 Federal Register / Vol. 74, No. 113 / Monday, June 15, 2009 / Notices exemptions granted under the Act in connection with the application. Temporary Order The Commission has considered the matter and finds that Applicants have made the necessary showing to justify granting a temporary exemption. Accordingly, It is hereby ordered, pursuant to section 9(c) of the Act, that Applicants and any other Covered Persons are granted a temporary exemption from the provisions of section 9(a), solely with respect to the Injunction, subject to the condition in the application, from June 9, 2009, until the Commission takes final action on their application for a permanent order. By the Commission. Florence E. Harmon, Deputy Secretary. [FR Doc. E9–13981 Filed 6–12–09; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. IC–28762; File No. 812–13663] RBC Capital Markets Corporation, et al.; Notice of Application and Temporary Order June 9, 2009. pwalker on PROD1PC71 with NOTICES AGENCY: Securities and Exchange Commission (‘‘Commission’’). ACTION: Temporary order and notice of application for a permanent order under section 9(c) of the Investment Company Act of 1940 (‘‘Act’’). SUMMARY OF APPLICATION: Applicants have received a temporary order exempting them from section 9(a) of the Act, with respect to an injunction entered against RBC Capital Markets Corporation (‘‘RBC’’) on June 9, 2009 by the United States District Court for the Southern District of New York (‘‘Injunction’’), until the Commission takes final action on an application for a permanent order. Applicants also have applied for a permanent order. APPLICANTS: RBC, Voyageur Asset Management Inc. (‘‘Voyageur’’), Tamarack Distributors Inc. (‘‘Tamarack’’), and Sky Investment Counsel Inc. (‘‘Sky’’) (collectively, other than RBC, the ‘‘Fund Servicing Applicants’’ and together with RBC, the ‘‘Applicants’’).1 1 Applicants request that any relief granted pursuant to the application also apply to any other company of which RBC is or may become an affiliated person (together with the Applicants, the ‘‘Covered Persons’’). VerDate Nov<24>2008 16:47 Jun 12, 2009 Jkt 217001 FILING DATE: The application was filed on June 3, 2009. 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 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 July 6, 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: RBC, One Liberty Plaza, 165 Broadway, New York, NY 10006; Voyageur and Tamarack, 100 South Fifth Street, Suite 2300, Minneapolis, MN 55402; and Sky, 1 Adelaide Street East, Suite 2310, Toronto, ON, Canada M5C 2V9. FOR FURTHER INFORMATION CONTACT: Jaea F. Hahn, Senior Counsel, at (202) 551– 6870, 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 temporary order and a summary of the application. The complete application may be obtained via the Commission’s Web site by searching for the file number, or an applicant using the Company name box, at https://www.sec.gov/search/ search.htm or by calling (202) 551– 8090. Applicants’ Representations 1. RBC is a full service investment banking firm engaged in securities underwriting, sales and trading, investment banking, financial advisory services and investment research services. RBC is registered with the Commission as a broker-dealer under the Securities Exchange Act of 1934, as amended (‘‘Exchange Act’’) and as an investment adviser under the Investment Advisers Act of 1940, as amended (‘‘Advisers Act’’). RBC is an indirect, wholly owned subsidiary of Royal Bank of Canada (‘‘Royal Bank’’), a Canada-based global financial services firm. PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 2. Voyaguer and Sky are registered as investment advisers under the Advisers Act and provide investment advisory or subadvisory services to registered investment companies (‘‘Funds’’). Voyageur is an indirect, wholly owned subsidiary of Royal Bank. Royal Bank indirectly owns a controlling interest in Sky. Tamarack is a broker-dealer registered under the Exchange Act and serves as principal underwriter to openend Funds. None of the Applicants serve as depositor to any Fund. 3. On June 9, 2009, the United States District Court for the Southern District of New York entered a judgment against RBC (‘‘Judgment’’) in a matter brought by the Commission.2 The Commission alleged in the complaint (‘‘Complaint’’) that RBC violated section 15(c) of the Exchange Act by misrepresenting to many of its customers that auction rate securities were safe, highly liquid investments that were substitutes for cash or money market funds. The Complaint further alleges that on February 11, 2008, RBC determined not to place bids in most of its auctions, as it had historically done, resulting in failed auctions. Without admitting or denying the allegations in the Complaint, except as to jurisdiction, RBC consented to the entry of the Injunction and other equitable relief including undertakings to take various remedial actions for the benefit of purchasers of certain auction rate securities. Applicants’ Legal Analysis 1. Section 9(a)(2) of the Act, in relevant part, prohibits a person who has been enjoined from, among other things, engaging in or continuing any conduct or practice in connection with the purchase or sale of a security, or in connection with activities as an underwriter, broker or dealer, from acting, among other things, as an investment adviser or depositor of any registered investment company or a principal underwriter for any registered open-end investment company, registered unit investment trust or registered face-amount certificate company. Section 9(a)(3) of the Act makes the prohibition in section 9(a)(2) applicable to a company, any affiliated person of which has been disqualified under the provisions of section 9(a)(2). Section 2(a)(3) of the Act defines ‘‘affiliated person’’ to include, among others, any person directly or indirectly controlling, controlled by, or under 2 Securities and Exchange Commission v. RBC Capital Markets Corporation, Judgment as to Defendant RBC Capital Markets Corporation, 09– cv–5172 (S.D.N.Y., June 9, 2009). E:\FR\FM\15JNN1.SGM 15JNN1

Agencies

[Federal Register Volume 74, Number 113 (Monday, June 15, 2009)]
[Notices]
[Pages 28288-28290]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-13981]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-28763; File No. 812-13664]


Deutsche Bank Securities Inc., et al.; Notice of Application and 
Temporary Order

June 9, 2009.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Temporary order and notice of application for a permanent order 
under section 9(c) of the Investment Company Act of 1940 (``Act'').

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Summary of Application: Applicants have received a temporary order 
exempting them from section 9(a) of the Act, with respect to an 
injunction entered against Deutsche Bank Securities Inc. (``DBSI'') on 
June 9, 2009 by the United States District Court for the Southern 
District of New York (``Injunction''), until the Commission takes final 
action on an application for a permanent order. Applicants also have 
applied for a permanent order.

Applicants: DBSI, Deutsche Investment Management Americas, Inc. 
(``DIMA''), Deutsche Asset Management (Hong Kong) Limited (``DeAM 
(HK)''), Deutsche Asset Management International GmbH (``DeAMI''), 
Deutsche Asset Management (Japan) Limited (``DeAMJ''), Deutsche 
Investments Australia Limited (``DIAL''), RREEF America LLC 
(``RREEF''), RREEF Global Advisors Limited (``RREEF (G)''), and DWS 
Investments Distributors, Inc. (``DIDI'') (collectively, other than 
DBSI, the ``Fund Servicing Applicants'' and together with DBSI, the 
``Applicants'').\1\
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    \1\ Applicants request that any relief granted pursuant to the 
application also apply to any other company of which DBSI is or may 
become an affiliated person (together with the Applicants, the 
``Covered Persons'').

---------------------------------------------------------------------------
DATES: Filing Date: The application was filed on June 9, 2009.

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 July 6, 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: DBSI, 60 Wall 
Street, New York, NY 10005; DIMA, 345 Park Avenue, New York, NY 10154; 
DeAM (HK), 48/F Cheung Kong Centre, 2 Queen's Road Central, Hong Kong, 
China; DeAMI, Mainzer Landstrasse 178-190, Frankfurt am Main, 60327; 
DeAMJ, Sanno Park Tower, 2-11-1, Nagata-Cho, Chiyoda-Ku, Tokyo, 100-
6173; DIAL, Deutsche Bank Place, Level 16, CNR Hunter and Phillip 
Streets, Sydney, NSW 2000; RREEF, 875 N. Michigan Avenue, 41st Floor, 
Chicago, IL 60611; RREEF (G), Winchester House, 1 Great Winchester 
Street, London, United Kingdom EC2N 2DB; and DIDI, 222 South Riverside 
Plaza, Chicago, IL 60606.

FOR FURTHER INFORMATION CONTACT: Steven I. Amchan, Senior Counsel, at 
(202) 551-6826, 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 temporary order and a 
summary of the application. The complete application may be obtained 
via the Commission's Web site by searching for the file number, or an 
applicant using the Company name box, at https://www.sec.gov/search/search.htm or by calling (202) 551-8090.

Applicants' Representations

    1. Deutsche Bank AG (``DB'') is a stock corporation organized under 
the laws of the Federal Republic of Germany. DBSI is an indirect 
wholly-owned subsidiary of DB, and an affiliated person of each Fund 
Servicing Applicant within the meaning of section 2(a)(3) of the Act 
(by

[[Page 28289]]

virtue of being under common control with the Fund Servicing 
Applicants). DBSI provides securities brokerage and investment advisory 
services to private clients and institutions and correspondent clearing 
services to broker-dealers. DBSI also provides a variety of capital 
raising, market making, and brokerage services for its government, 
financial institution, and corporate clients, including fixed income 
and equity sales and trading, emerging markets activities, and equity 
market research and investment banking.
    2. DIMA, DeAM (HK), DeAMI, DeAMJ, DIAL, RREEF, and RREEF (G) are 
registered as investment advisers under the Investment Advisers Act of 
1940, as amended (``Advisers Act'') and provide investment advisory or 
subadvisory services to registered investment companies (``Funds''). 
DIDI is a broker-dealer registered under the Securities Exchange Act of 
1934 (``Exchange Act'') and serves as principal underwriter to Funds.
    3. On June 9, 2009, the United States District Court for the 
Southern District of New York entered a judgment against DBSI 
(``Judgment'') in a matter brought by the Commission.\2\ The Commission 
alleged in the complaint (``Complaint'') that DBSI violated section 
15(c) of the Exchange Act by marketing auction rate securities as 
highly liquid investments comparable to cash or money market 
instruments and by selling auction rate securities to its customers 
without adequately disclosing the risks involved in purchasing such 
securities. Without admitting or denying the allegations in the 
Complaint, except as to jurisdiction, DBSI consented to the entry of 
the Judgment that included, among other things, the entry of the 
Injunction and other equitable relief including undertakings to take 
various remedial actions for the benefit of purchasers of certain 
auction rate securities.
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    \2\ Securities and Exchange Commission v. Deutsche Bank 
Securities Inc., Judgment on Consent Against Defendant Deutsche Bank 
Securities Inc., 09 Civ. 5174 (S.D.N.Y. June 9, 2009).
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Applicants' Legal Analysis

    1. Section 9(a)(2) of the Act, in relevant part, prohibits a person 
who has been enjoined from, among other things, engaging in or 
continuing any conduct or practice in connection with the purchase or 
sale of a security, or in connection with activities as an underwriter, 
broker or dealer, from acting, among other things, as an investment 
adviser or depositor of any registered investment company or a 
principal underwriter for any registered open-end investment company, 
registered unit investment trust or registered face-amount certificate 
company. Section 9(a)(3) of the Act makes the prohibition in section 
9(a)(2) applicable to a company, any affiliated person of which has 
been disqualified under the provisions of section 9(a)(2). Section 
2(a)(3) of the Act defines ``affiliated person'' to include, among 
others, any person directly or indirectly controlling, controlled by, 
or under common control with, the other person. Applicants state that 
DBSI is an affiliated person of each of the other Applicants within the 
meaning of section 2(a)(3) of the Act. Applicants state that the entry 
of the Injunction results in Applicants being subject to the 
disqualification provisions of section 9(a) of the Act.
    2. Section 9(c) of the Act provides that the Commission shall grant 
an application for exemption from the disqualification provisions of 
section 9(a) if it is established that these provisions, as applied to 
the Applicants, are unduly or disproportionately severe or that the 
Applicants' conduct has been such as not to make it against the public 
interest or the protection of investors to grant the exemption. 
Applicants have filed an application pursuant to section 9(c) seeking a 
temporary and permanent order exempting them and Covered Persons from 
the disqualification provisions of section 9(a) of the Act.
    3. Applicants believe they meet the standard for exemption 
specified in section 9(c). Applicants state that the prohibitions of 
section 9(a) as applied to them would be unduly and disproportionately 
severe and that the conduct of the Applicants has been such as not to 
make it against the public interest or the protection of investors to 
grant the exemption from section 9(a).
    4. Applicants state that the alleged conduct giving rise to the 
Injunction did not involve any of the Applicants acting in the capacity 
of investment adviser, subadviser or depositor to any Fund or in the 
capacity of principal underwriter for any open-end Fund, UIT, or 
registered face-amount certificate company. Applicants also state that 
none of the current or former directors, officers, or employees of the 
Fund Servicing Applicants had any responsibility for, or had any 
involvement in, the conduct alleged in the Complaint. Applicants 
further state that the personnel at DBSI who were involved in the 
violations alleged in the Complaint have had no and will not have any 
future involvement in providing investment advisory, subadvisory, 
depository or underwriting services to Funds.
    5. Applicants state that their inability to continue to provide 
investment advisory, subadvisory and underwriting services to Funds 
would result in potential hardship for the Funds and their 
shareholders. Applicants state that they will, as soon as reasonably 
practicable, distribute written materials, including an offer to meet 
in person to discuss the materials, to the boards of directors 
(``Boards'') of the Funds for which the Applicants serve as investment 
adviser, investment subadviser or principal underwriter, including the 
directors who are not ``interested persons,'' as defined in section 
2(a)(19) of the Act, of such Funds, and their independent legal counsel 
as defined in rule 0-1(a)(6) under the Act, relating to the 
circumstances that led to the Injunction, any impact on the Funds, and 
the application. Applicants state they will provide the Boards of the 
Funds with all information concerning the Injunction and the 
application that is necessary for the Funds to fulfill their disclosure 
and other obligations under the Federal securities laws.
    6. Applicants also state that, if the Fund Servicing Applicants 
were barred from providing services to the Funds, the effect on their 
businesses and employees would be severe. Applicants state that they 
have committed substantial resources to establish an expertise in 
providing advisory and principal underwriting services to Funds. 
Applicants further state that prohibiting the Fund Servicing Applicants 
from providing such services would not only adversely affect their 
businesses, but would also adversely affect over 500 employees who are 
involved in those activities.
    7. Applicants previously have received exemptions under section 
9(c) as the result of conduct that triggered section 9(a) as described 
in greater detail in the application.

Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    Any temporary exemption granted pursuant to the application shall 
be without prejudice to, and shall not limit the Commission's rights in 
any manner with respect to, any Commission investigation of, or 
administrative proceedings involving or against, Covered Persons, 
including, without limitation, the consideration by the Commission of a 
permanent exemption from section 9(a) of the Act requested pursuant to 
the application or the revocation or removal of any temporary

[[Page 28290]]

exemptions granted under the Act in connection with the application.

Temporary Order

    The Commission has considered the matter and finds that Applicants 
have made the necessary showing to justify granting a temporary 
exemption.
    Accordingly,
    It is hereby ordered, pursuant to section 9(c) of the Act, that 
Applicants and any other Covered Persons are granted a temporary 
exemption from the provisions of section 9(a), solely with respect to 
the Injunction, subject to the condition in the application, from June 
9, 2009, until the Commission takes final action on their application 
for a permanent order.

    By the Commission.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-13981 Filed 6-12-09; 8:45 am]
BILLING CODE 8010-01-P
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