Nationwide Life Insurance Company, et al., 28967-29005 [E9-14288]
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28967
Day
Event
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[FR Doc. E9–14305 Filed 6–17–09; 8:45 am]
BILLING CODE 7590–01–P
NUCLEAR REGULATORY
COMMISSION
Advisory Committee on Reactor
Safeguards (ACRS); Meeting of the
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will hold a meeting on July 7, 2009,
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The entire meeting will be open to
public attendance. The agenda for the
subject meeting shall be as follows:
Dated: June 12, 2009.
Cayetano Santos,
Chief, Reactor Safety Branch A, Advisory
Committee on Reactor Safeguards.
[FR Doc. E9–14304 Filed 6–17–09; 8:45 am]
Tuesday, July 7, 2009—1:30 p.m.–5 p.m.
BILLING CODE 7590–01–P
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. IC–28767; File No. 812–
13495]
Nationwide Life Insurance Company, et
al.
June 12, 2009.
AGENCY: Securities and Exchange
Commission.
ACTION: Notice of application for an
order pursuant to Section 26(c) of the
Investment Company Act of 1940 (the
‘‘1940 Act’’) and an order of exemption
pursuant to Section 17(b) of the 1940
Act from Section 17(a) of the 1940 Act.
Applicants: Nationwide Life
Insurance Company (‘‘NWL’’),
PO 00000
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Nationwide Variable Account—II
(‘‘Account II’’), Nationwide Variable
Account—7 (‘‘Account 7’’), Nationwide
Variable Account—9 (‘‘Account 9’’),
Nationwide Variable Account—14
(‘‘Account 14’’), Nationwide Multi-Flex
Variable Account (‘‘Flex Account’’),
Nationwide VLI Separate Account—2
(‘‘Account 2’’), Nationwide VLI Separate
Account—4 (‘‘Account 4’’), Nationwide
VLI Separate Account—7 (‘‘VLI Account
7’’), Nationwide Life and Annuity
Insurance Company (‘‘NLAIC’’),
Nationwide VL Separate Account—G
(‘‘Account G’’), Nationwide Life
Insurance Company of America
(‘‘NLICA’’), Nationwide Provident VLI
Separate Account 1 (‘‘Account 1’’),
Nationwide Life and Annuity Company
of America (‘‘NLACA’’ and together
with NWL, NLAIC and NLICA,
‘‘Insurance Company Applicants’’),
Nationwide Provident VA Separate
Account A (‘‘Account A’’), and
Nationwide Provident VLI Separate
Account A (‘‘VLI Account A’’ and
together with Account II, Account 7,
Account 9, Account 14, Flex Account,
Account 2, VLI Account 7, Account G,
Account 1, and Account A, ‘‘Separate
Accounts’’ and, together with Insurance
Company Applicants, ‘‘Section 26
Applicants’’), and Nationwide Variable
Insurance Trust (‘‘NVIT’’ and together
with Section 26 Applicants, ‘‘Section 17
Applicants’’).
SUMMARY: Summary of Application:
Section 26 Applicants seek an order
pursuant to Section 26(c) of the 1940
Act, approving the substitutions of
certain securities (the ‘‘Substitutions’’)
issued by certain management
investment companies and held by
Separate Accounts to support certain
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Federal Register / Vol. 74, No. 116 / Thursday, June 18, 2009 / Notices
variable annuity contracts and variable
life insurance contracts (the
‘‘Contracts’’) issued by Insurance
Company Applicants. Section 17
Applicants seek an order pursuant to
Section 17(b) of the 1940 Act exempting
them from Section 17(a) of the 1940 Act
to the extent necessary to permit them
to effectuate the proposed Substitutions
by redeeming a portion of the securities
of one or more of the Existing Funds (as
defined herein) in-kind and using those
securities received to purchase shares of
the Replacement Funds (as defined
herein) (the ‘‘In-Kind Transactions’’).
DATES: Filing Date: The application was
originally filed on February 11, 2008
and amended on June 25, 2008, March
9, 2009 and June 12, 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 Secretary of
the Commission and serving Insurance
Company Applicants and NVIT with a
copy of the request, personally or by
mail. Hearing requests must be received
by the Commission by 5:30 p.m. on July
7, 2009, and should be accompanied by
proof of service on Insurance Company
Applicants and NVIT in the form of an
affidavit or, for lawyers, a certificate of
service. Hearing requests should state
the nature of the requester’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 Secretary
of the Commission.
ADDRESSES: Secretary, Securities and
Exchange Commission, 100 F Street,
NE., Washington, DC 20549–1090.
Insurance Company Applicants and
NVIT, c/o Jamie Ruff Casto, Managing
Counsel, Nationwide Insurance, One
Nationwide Plaza 1–34–201, Columbus,
Ohio 43215.
FOR FURTHER INFORMATION CONTACT:
Craig Ruckman, Attorney-Adviser, at
(202) 551–6753 or Harry Eisenstein,
Branch Chief, Office of Insurance
Products, Division of Investment
Management, at (202) 551–6795.
SUPPLEMENTARY INFORMATION: The
following is 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. NWL is a stock life insurance
company organized under the laws of
the State of Ohio. NLAIC is a stock life
insurance company organized under the
laws of the State of Ohio. NLICA is a
stock life insurance company organized
under the laws of the State of
Pennsylvania. NLACA is a stock life
insurance company organized under the
laws of the State of Pennsylvania.
2. Each of the following separate
accounts are registered as unit
investment trusts under the 1940 Act
and are used to fund certain variable
contracts issued by NWL: Account II
(File No. 811–3330); Account 7 (File No.
811–8666); Account 9 (File No. 811–
08241); Account 14 (File No. 811–
21205); Flex Account (File No. 811–
3338); Account 2 (File No. 811–5311);
Account 4 (File No. 811–8301); and, VLI
Account 7 (File No. 811–21610).
Each of the following separate
accounts are registered as unit
investment trusts under the 1940 Act
and are used to fund certain variable
contracts issued by NLACA: Account A
(File No. 811–6484); and, VLI Account
A (File No. 811–8722).
Account G is registered as a unit
investment trust under the 1940 Act
(File No. 811–21697) and is used to
fund certain variable contracts issued by
NLAIC.
Account 1 is registered as a unit
investment trust under the 1940 Act
(File No. 811–4460) and is used to fund
certain variable contracts issued by
NLICA.
3. For purposes of the 1940 Act, NWL
is the depositor and sponsor of Account
II, Account 7, Account 9, Account 14,
Flex Account, Account 2, Account 4,
and VLI Account 7; NLAIC is the
depositor and sponsor of Account G;
NLICA is the depositor and sponsor of
Account 1; and NLACA is the depositor
and sponsor of Account A and VLI
Account A as those terms have been
interpreted by the Commission with
respect to variable annuity and variable
life insurance separate accounts.
4. The Contracts can be issued as
individual or group contracts, with
participants of group contracts acquiring
certain ownership rights as described in
the group contract or the plan
documents. Contract owners and
participants in group contracts (each a
‘‘Contract Owner’’) may allocate some or
all of their Contract value to one or more
sub-accounts available as investment
Ref. No.
Existing funds
1 ................
AIM Variable Insurance Funds—AIM V.I. Basic Value Fund: Series I Shares.
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options under the Contract (each an
‘‘Investment Option’’). Each such
Investment Option corresponds to an
underlying mutual fund in which the
Separate Account invests. Additionally,
the Contract Owner may, if provided for
under the Contract, allocate some or all
Contract value to a fixed account and/
or guaranteed term option, both of
which are supported by the assets of the
depositor’s general account.
Each Contract permits the Contract
Owner to transfer Contract value from
one Investment Option to another
Investment Option available under the
Contract at any time, subject to certain
restrictions and charges described in the
prospectuses for the Contracts. To the
extent that the Contracts contain
restrictions or limitations on a Contract
Owner’s right to transfer, such
restrictions or limitations will not apply
in connection with the proposed
Substitutions.
5. Each Contract’s prospectus contains
provisions reserving Insurance
Company Applicants’ right to substitute
shares of one Investment Option for
shares of another Investment Option
already purchased or to be purchased in
the future if either of the following
occurs: (i) Shares of a current
Investment Option are no longer
available for investment by the Separate
Account; or (ii) in the judgment of
Insurance Company Applicants’
management, further investment in such
Investment Option is inappropriate in
view of the purposes of the Contract.
Each Insurance Company Applicant’s
management has determined that
further investment in the Existing Funds
is no longer appropriate in view of the
purposes of the Contracts.
6. Each Insurance Company
Applicant, on its own behalf and on
behalf of its Separate Accounts,
proposes to exercise its contractual right
to substitute a different Investment
Option for one of the current Investment
Options available under the Contracts.
In particular, Section 26 Applicants
request an order from the Commission
pursuant to Section 26(c) of the 1940
Act approving the proposed
Substitutions of shares of the following
Funds (as defined herein) of NVIT (the
‘‘Replacement Funds’’) for shares of the
corresponding underlying mutual funds
(the ‘‘Existing Funds’’), as shown in the
following Substitution table
(‘‘Substitution Table’’):
Replacement funds
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NVIT—NVIT Multi-Manager Large Cap Value Fund: Class I.
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Ref. No.
Existing funds
2 ................
AIM Variable Insurance Funds—AIM V.I. Basic Value Fund: Series II Shares.
AIM Variable Insurance Funds—AIM V.I. Large Cap Growth
Fund: Series I Shares.
American Century Variable Portfolios, Inc.—American Century
VP Capital Appreciation Fund: Class I.
American Century Variable Portfolios, Inc.—American Century
VP International Fund: Class I.
American Century Variable Portfolios, Inc.—American Century
VP International Fund: Class II.
American Century Variable Portfolios, Inc.—American Century
VP International Fund: Class III.
American Century Variable Portfolios, Inc.—American Century
VP International Fund: Class IV.
American Century Variable Portfolios, Inc.—American Century
VP Ultra Fund: Class I.
American Century Variable Portfolios, Inc.—American Century
VP Ultra Fund: Class II.
American Century Variable Portfolios, Inc.—American Century
VP Vista Fund: Class I.
American Century Variable Portfolios, Inc.—American Century
VP Vista Fund: Class II.
American Century Variable Portfolios, Inc.—American Century
VP Vista Fund: Class II.
Credit Suisse Trust—International Equity Flex I Portfolio (formerly, International Focus Portfolio).
Credit Suisse Trust—International Equity Flex I Portfolio (formerly, International Focus Portfolio).
Federated Insurance Series—Federated Quality Bond Fund II:
Primary Shares.
Federated Insurance Series—Federated Quality Bond Fund II:
Service Shares.
Franklin Templeton Variable Insurance Products Trust—
Templeton Developing Markets Securities Fund: Class 3.
Franklin Templeton Variable Insurance Products Trust—
Templeton Developing Markets Securities Fund: Class 3.
Janus Aspen Series—INTECH Risk-Managed Core Portfolio:
Service Shares.
Janus Aspen Series—INTECH Risk-Managed Core Portfolio:
Service Shares.
Neuberger Berman Advisers Management Trust—AMT Growth
Portfolio: I Class.
Neuberger Berman Advisers Management Trust—AMT Guardian Portfolio: I Class.
Neuberger Berman Advisers Management Trust—AMT International Portfolio: S Class.
Neuberger Berman Advisers Management Trust—AMT International Portfolio: S Class.
Neuberger Berman Advisers Management Trust—AMT Mid-Cap
Growth Portfolio: I Class.
Neuberger Berman Advisers Management Trust—AMT Mid-Cap
Growth Portfolio: S Class.
Neuberger Berman Advisers Management Trust—AMT Mid-Cap
Growth Portfolio: S Class.
Neuberger Berman Advisers Management Trust—AMT Partners
Portfolio: I Class.
Neuberger Berman Advisers Management Trust—AMT Regency Portfolio: S Class.
T. Rowe Price Equity Series, Inc.—T. Rowe Price Limited Term
Bond Portfolio: Class II.
The Universal Institutional Funds, Inc.—Mid Cap Growth Portfolio: Class I.
The Universal Institutional Funds, Inc.—U.S. Real Estate Portfolio: Class I.
The Universal Institutional Funds, Inc.—U.S. Real Estate Portfolio: Class II.
Van Eck Worldwide Insurance Trust—Worldwide Emerging Markets Fund: Initial Class.
Van Eck Worldwide Insurance Trust—Worldwide Emerging Markets Fund: Initial Class.
Van Eck Worldwide Insurance Trust—Worldwide Emerging Markets Fund: Class R1.
Wells Fargo Advantage Variable Trust—Wells Fargo Advantage
VT Discovery Fund.
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Replacement funds
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NVIT—NVIT Multi-Manager Large Cap Value Fund: Class II.
NVIT—NVIT Multi-Manager Large Cap Growth Fund: Class I.
NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
NVIT—NVIT
III.
NVIT—NVIT
VI.
NVIT—NVIT
III.
NVIT—NVIT
VI.
NVIT—NVIT
Multi-Manager International Growth Fund: Class
Multi-Manager International Growth Fund: Class
Multi-Manager International Growth Fund: Class
Multi-Manager International Growth Fund: Class
Multi-Manager Large Cap Growth Fund: Class I.
NVIT—NVIT Multi-Manager Large Cap Growth Fund: Class II.
NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class II.
NVIT—Gartmore NVIT International Equity Fund: Class I.
NVIT—Gartmore NVIT International Equity Fund: Class III.
NVIT—NVIT Core Bond Fund: Class I.
NVIT—NVIT Core Bond Fund: Class II.
NVIT—Gartmore NVIT Emerging Markets Fund: Class III.
NVIT—Gartmore NVIT Emerging Markets Fund: Class VI.
NVIT—NVIT Nationwide Fund: Class I.
NVIT—NVIT Nationwide Fund: Class II.
NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
NVIT—Neuberger Berman NVIT Multi Cap Opportunities Fund:
Class I.
NVIT—Gartmore NVIT International Equity Fund: Class III.
NVIT—Gartmore NVIT International Equity Fund: Class VI.
NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class II.
NVIT—Neuberger Berman NVIT Multi Cap Opportunities Fund:
Class I.
NVIT—NVIT Multi-Manager Mid Cap Value Fund: Class II.
NVIT—NVIT Short Term Bond Fund: Class II.
NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
NVIT—Van Kampen NVIT Real Estate Fund: Class I.
NVIT—Van Kampen NVIT Real Estate Fund: Class II.
NVIT—Gartmore NVIT Emerging Markets Fund: Class I.
NVIT—Gartmore NVIT Emerging Markets Fund: Class III.
NVIT—Gartmore NVIT Emerging Markets Fund: Class III.
NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
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Existing funds
39 ..............
Wells Fargo Advantage Variable Trust—Wells Fargo Advantage
VT Discovery Fund.
Wells Fargo Advantage Variable Trust—Wells Fargo Advantage
VT Opportunity Fund: Investor Class.
40 ..............
Replacement funds
NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class II.
NVIT—NVIT Multi-Manager Mid Cap Value Fund: Class II.
7. All of the Replacement Funds that
correspond to the Existing Funds are
available as Investment Options in the
Contracts.
8. Each Replacement Fund is a series
of NVIT, a Delaware statutory trust.
NVIT is registered as an open-end
management investment company
under the 1940 Act and its shares are
registered under the Securities Act of
1933, as amended, on Form N–1A (1933
Act File No. 02–73024). NVIT is a series
investment company and currently
offers 58 separate series (each a ‘‘Fund’’
and collectively, the ‘‘Funds’’). Shares
of NVIT are sold exclusively to
insurance company separate accounts to
fund benefits under variable annuity
contracts and variable life insurance
policies, and to employer pension and
profit-sharing plans.
9. Nationwide Fund Advisors
(‘‘NFA’’) is a registered investment
adviser (Reg. No. 801–56370) and is an
affiliate of Section 26 Applicants. NFA
currently serves as investment adviser
(‘‘Adviser’’) to each of the Funds,
including the Replacement Funds,
pursuant to investment management
agreements between NVIT, on behalf of
each Fund, and NFA (the ‘‘Management
Agreements’’). NFA employs a subadvised strategy whereby NFA serves as
a ‘‘manager of managers’’ and delegates
the fund management responsibilities
for each Fund to one or more third party
investment advisors (each a ‘‘SubAdviser’’) via investment advisory
agreements (‘‘Sub-Advisory
Agreements’’).
Pursuant to the Management
Agreements, NFA’s responsibilities
include general management of each
Fund, including full discretion to (i)
select a new sub-adviser or an
additional Sub-Adviser for each Fund;
(ii) terminate a Sub-Adviser for each
Fund; (iii) enter into, modify, and
terminate Sub-Advisory Agreements;
and (iv) allocate and reallocate a Fund’s
assets among the Adviser and one or
more Sub-Advisers. In addition, the
Adviser monitors and reports to NVIT’s
Board of Trustees on the performance of
each Sub-Adviser relative to such SubAdviser’s responsibilities of complying
with the investment objectives, policies,
and restrictions of any Fund under the
management of such Sub-Adviser.
10. NVIT received an exemptive order
from the Commission on April 28, 1998
(Investment Company Act Release No.
23133) (the ‘‘Manager of Managers
Order’’) that permits the Adviser,
subject to certain conditions, including
approval of the NVIT Board of Trustees,
and without the approval of
shareholders, to: (i) Select a new SubAdviser or additional Sub-Adviser for
each Fund; (ii) terminate any existing
Sub-Adviser and/or replace the SubAdviser; (iii) enter into new SubAdvisory Agreements 1 and/or
materially modify the terms of, or
terminate, any existing Sub-Advisory
Agreement; and (iv) allocate and
reallocate a Fund’s assets among the
Adviser and one or more Sub-Advisers.
If a new Sub-Adviser is retained for a
Fund, Contract Owners would receive
all information about the new Sub-
1 Relating to NVIT, the Adviser will not enter into
any Sub-Advisory Agreement with any Sub-Adviser
that is an ‘‘affiliated person,’’ as defined in Section
2(a)(3) of the 1940 Act, of NVIT or the Adviser,
other than by reason of serving as a Sub-Adviser to
a Fund, without such Sub-Advisory Agreement,
including the compensation to be paid thereunder,
being approved by the unit holders of any separate
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Adviser that would be included in a
proxy statement, including any change
in disclosure caused by the addition of
a new Sub-Adviser.
11. Section 26 Applicants represent
that, after the Substitution date, the
Replacement Funds will not change
sub-advisers, retain any new subadviser, or otherwise rely on the
Manager of Managers Order without
first obtaining shareholder approval of:
the new sub-adviser, the fund’s ability
add or to replace a sub-adviser in
reliance on the Manager of Managers
Order, or otherwise rely on the Manager
of Managers Order.
12. The Appendix includes a
comparison of the management fees, the
total operating expenses (before and
after any waivers and reimbursements)
expressed as an annual percentage of
average daily net assets, and the asset
levels of each Existing Fund and its
corresponding Replacement Fund. The
12b–1 fees listed in the fee tables
provided in the Appendix for each
Existing Fund and Replacement Fund
represents the maximum 12b–1 fee that
could be assessed by the particular
fund, except with regard to the Franklin
Templeton Variable Insurance Products
Trust—Templeton Developing Markets
Securities Fund: Class 3, which is
disclosed in a footnote.
13. Set forth below is a description of
the investment objectives, the advisers,
the principal investment strategies and
principal risk factors of each Existing
Fund and its corresponding
Replacement Fund.
BILLING CODE 8010–01–P
account for which that Fund serves as a funding
medium.
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14. As a result of the Substitutions,
the number of Investment Options
under each Contract will either not be
decreased, or, in those cases where the
number of Investment Options is being
reduced, continue to offer a significant
number of alternative Investment
Options. Specifically, the number of
Investment Options is currently
expected to range in number from 21 to
129 after the Substitutions versus 23 to
149 before the Substitutions.
15. Prospectus supplements for the
Contracts will be delivered to Contract
Owners at least thirty (30) days before
the Substitution date. The supplements
will: (i) Notify all Contract Owners of
the Insurance Company Applicants’
intent to implement the Substitutions,
and that an application has been filed in
order to obtain the necessary orders to
do so; (ii) advise Contract Owners that
from the date of the supplement until
the Substitution date, Contract Owners
are permitted to transfer Contract value
out of any Existing Fund sub-account to
any other sub-account(s) offered under
the Contract without the transfer being
treated as a transfer for purposes of
transfer limitations and short-term
trading fees that would otherwise be
applicable under the terms of the
Contract; (iii) instruct Contract Owners
how to submit transfer requests in light
of the proposed Substitutions; (iv)
advise Contract Owners that any
Contract value remaining in an Existing
Fund sub-account on the Substitution
date will be transferred to the
corresponding Replacement Fund subaccount, and that the Substitutions will
take place at relative net asset value; (v)
inform Contract Owners that for at least
thirty (30) days following the
Substitution date, the Insurance
Company Applicants will permit
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Contract Owners to make transfers of
Contract value out of each Replacement
Fund sub-account to any other subaccount(s) offered under the Contract
without the transfer being treated as a
transfer for purposes of transfer
limitations and short-term trading fees
that would otherwise be applicable
under the terms of the Contract; and (vi)
inform Contract Owners that the
respective Insurance Company
Applicant will not exercise any rights
reserved by it under the Contracts to
impose additional restrictions on
transfers out of a Replacement Fund for
at least thirty (30) days after the
Substitution date.2
16. The Insurance Company
Applicants will cause the appropriate
prospectus supplements containing this
disclosure and the prospectus and/or
supplement for the Replacement Funds
to be sent to all existing Contract
Owners. New purchasers of the
Contracts will be provided the
prospectus supplement, the Contract
prospectus, and the prospectus and/or
supplement for the Replacement Funds
in accordance with all applicable legal
requirements. Prospective purchasers of
the Contracts will be provided the
prospectus supplement and the Contract
prospectus.
17. In addition to the Contract
prospectus supplements distributed to
Contract Owners, within five (5)
business days after the Substitution
date, Contract Owners will be sent a
confirmation of the Substitutions in
accordance with Rule 10b–10 under the
Securities Exchange Act of 1934, as
2 One exception to this is that the Insurance
Companies may impose restrictions on transfers to
the extent necessary to prevent or limit disruptive
trading activity, as described in the prospectuses for
the Contracts and the underlying mutual funds.
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amended. The confirmation statement
will reiterate that the Insurance
Company Applicant will not exercise
any right reserved by it under the
Contracts to impose any restrictions or
fees on transfers from the Replacement
Funds until at least thirty (30) days after
the Substitution date.
18. The proposed Substitutions will
take place at relative net asset value
determined on the Substitution date
pursuant to Section 22 of the 1940 Act
and Rule 22c–1 thereunder with no
change in the amount of any Contract
Owner’s Contract value, cash value,
death benefit, or dollar value of his or
her investment in the Separate
Accounts. Each Substitution will be
effected by redeeming shares of the
Existing Fund in cash and/or in-kind on
the Substitution date at their net asset
value and using the proceeds of those
redemptions to purchase shares of the
Replacement Fund at their net asset
value on the same date.3
19. Contract Owners will not incur
any fees or charges as a result of the
proposed Substitutions, nor will their
rights or insurance benefits or the
Insurance Company Applicants’
obligations under the Contracts be
altered in any way. All expenses
incurred in connection with the
proposed Substitutions, including any
brokerage, legal, accounting, and other
fees and expenses, will be paid by the
Insurance Company Applicants. In
addition, the proposed Substitutions
will not impose any tax liability on
Contract Owners. The proposed
3 For administrative convenience, the In-Kind
Transactions may be effected through a direct
transfer of securities and cash between the
custodian(s) for the Existing Fund and its
corresponding Replacement Fund, followed by the
distribution of shares of the Replacement Fund to
the applicable Separate Account(s).
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Substitutions will not cause the
Contract fees and charges currently
being paid by Contract Owners to be
greater after the proposed Substitution
than before the proposed Substitution.
No fees will be charged on transfers
made on the Substitution date because
each Substitution redemption and
purchase will not be treated as a transfer
for purposes of assessing transfer
charges or computing the number of
permissible transfers under the
Contracts.
20. For all Substitutions other than
Janus Aspen Series—INTECH RiskManaged Core Portfolio: Service Shares
to be replaced by NVIT—NVIT
Nationwide Fund: Class II (Ref. No. 21)
(the ‘‘Aspen Substitution’’), for a period
of two (2) years following the
Substitution date and for those
Contracts with assets allocated to the
Existing Fund on the date of the
Substitution, the issuing Insurance
Company, as applicable, will reimburse,
on the last business day of each fiscal
quarter, the sub-accounts investing in
the applicable Replacement Fund to the
extent that the Replacement Fund’s net
annual expenses for such period
exceeds, on an annualized basis, the net
annual expenses of the Existing Fund
for fiscal year 2008. In addition, the
Insurance Company Applicants will not
increase the Contract fees and charges
that would otherwise be assessed under
the terms of the Contracts for a period
of at least two (2) years following the
Substitution date.
21. For the Aspen Substitution, where
the sum of the management fee and
12b–1 fee of the Replacement Fund is
greater than (or could be greater than)
that of the Existing Fund, for those
Contracts with assets allocated to the
Existing Fund on the date of the
Substitution, the issuing Insurance
Company Applicant, as applicable, will
reimburse, on the last business day of
each fiscal quarter, the sub-accounts
investing in the applicable Replacement
Fund to the extent that the Replacement
Fund’s net annual expenses for such
period exceeds, on an annualized basis,
the net annual expenses of the Existing
Fund for fiscal year 2008. In addition,
for those same Contracts, the Insurance
Company Applicants will not increase
the Contract fees and charges that would
otherwise be assessed under the terms
of the Contracts for the duration of the
Contracts.
Section 26 Applicants’ Legal Analysis
1. Section 26 Applicants request that
the Commission issue an order pursuant
to Section 26(c) of the 1940 Act
approving the proposed Substitutions.
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2. Section 26 Applicants assert that
Section 26(c) of the 1940 Act makes it
unlawful for the depositor of a
registered unit investment trust that
invests in the securities of a single
issuer to substitute another security for
such security without Commission
approval. Section 26(c) further states
that the Commission shall issue an
order approving such a substitution ‘‘if
the evidence establishes that it is
consistent with the protection of
investors and the purposes fairly
intended by the policy and provisions of
this title.’’
3. Section 26 Applicants represent
that the Contracts have reserved the
right to substitute shares of another
underlying mutual fund for one of the
current underlying mutual funds offered
as an investment option under the
Contracts. The Contract prospectuses
disclose this right.
4. Section 26 Applicants represent
that each Replacement Fund and its
corresponding Existing Fund have
similar, and in some cases substantially
similar or identical, investment
objectives and strategies. In addition,
Section 26 Applicants maintain that
each proposed Substitution retains for
Contract Owners the investment
flexibility and expertise in asset
management, which are core investment
features of the Contracts and any impact
on the investment programs of affected
Contract Owners should be negligible.
Furthermore, Section 26 Applicants
assert that the ultimate effect of the
Substitutions would be to continue to
provide Contract Owners with a wide
array of investment options and
managers, while at the same time
increasing administrative efficiencies of
the Contracts. Additionally, Section 26
Applicants claim that information
pertaining to the underlying mutual
funds available under the Contracts will
be more consistent and thus easier for
Contract Owners to navigate and
understand.
5. Section 26 Applicants represent
that after the Substitution date, Contract
Owners with Contract value invested in
a Replacement Fund will have the same
or lower net operating expense ratio(s)
as before the Substitution. As indicated
previously, certain expense limits have
been put in place to ensure that Contract
Owners do not incur higher expenses as
a result of a Substitution for a period of
either two (2) years after the
Substitution, or for the lifetime of the
Contract.
6. Section 26 Applicants submit that
the proposed Substitutions are not of
the type that Section 26 was designed to
prevent, i.e., overreaching on the part of
the depositor by permanently impacting
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the investment allocations of the entire
trust. In the current situation, the
Contracts provide Contract Owners with
investment discretion to allocate and
reallocate their Contract value among
the available underlying mutual funds.
Section 26 Applicants claim this
flexibility provides Contract Owners
with the ability to reallocate their assets
at any time—either before the
Substitution date, or after the
Substitution date—if they do not wish
to invest in the Replacement Fund.
Thus, Section 26 Applicants assert that
the likelihood of being invested in an
undesired underlying mutual fund is
minimized, with the discretion
remaining with the Contract Owners,
and the Substitutions, therefore, will not
result in the type of costly forced
redemption that Section 26(c) was
designed to prevent.
7. Section 26 Applicants submit that
the proposed Substitutions are also
unlike the type of substitution that
Section 26(c) was designed to prevent in
that the Substitutions have no impact on
other aspects of the Contracts.
Specifically, Section 26 Applicants
maintain that the type of insurance
coverage offered by the Insurance
Company Applicants under the
applicable Contract, as well as
numerous other rights and privileges
associated with the Contract, are not
impacted by the proposed Substitution.
Section 26 Applicants note that Contract
Owners also may have considered the
Insurance Company Applicant’s size,
financial condition, and its reputation
for service in selecting their Contract.
Section 26 Applicants assert that these
factors will not change as a result of the
proposed Substitutions, nor will the
annuity, life, or tax benefits afforded
under the Contracts held by any of the
affected Contract Owners.
8. Section 26 Applicants submit that,
for all the reasons stated above, the
proposed Substitutions are consistent
with the protection of investors and the
purposes fairly intended by the policy
and provisions of the 1940 Act.
Section 17 Applicants’ Legal Analysis
1. Section 17 Applicants request that
the Commission issue an order pursuant
to Section 17(b) of the 1940 Act
exempting them from the provisions of
Section 17(a) of the 1940 Act to the
extent necessary to permit them to carry
out the In-Kind Transactions.
2. Section 17(a)(1) of the 1940 Act, in
relevant part, generally prohibits any
affiliated person of a registered
investment company (or any affiliated
person of such a person), acting as
principal, from knowingly selling any
security or other property to that
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company. Section 17(a)(2) of the 1940
Act generally prohibits the same
persons, acting as principals, from
knowingly purchasing any security or
other property from the registered
investment company. Section 2(a)(3) of
the 1940 Act defines the term ‘‘affiliated
person’’ of another person, in relevant
part, as:
(A) any person directly or indirectly
owning, controlling, or holding with power
to vote, 5 per centum or more of the
outstanding voting securities of such other
person; (B) any person 5 per centum or more
of whose outstanding voting securities are
directly or indirectly owned, controlled, or
held with power to vote, by such other
person; [or] (C) any person directly or
indirectly controlling, controlled by, or under
common control with, such other
person* * *
3. Section 2(a)(9) of the 1940 Act
states that any person who owns
beneficially, either directly or through
one or more controlled companies, more
than 25% of the voting securities of a
company shall be presumed to control
such company. Shares held by an
insurance company separate account are
legally owned by the insurance
company. Thus, the Insurance Company
Applicants collectively own
substantially all of the shares of NVIT.
Accordingly, NVIT and its respective
funds are arguably under the control of
the Insurance Company Applicants, as
per Section 2(a)(9) of the 1940 Act
(notwithstanding the fact that the
Contract Owners are the beneficial
owners of those Separate Account
shares). If NVIT is under the common
control of the Insurance Company
Applicants, then each of the Insurance
Company Applicants is an affiliated
person of NVIT and its respective
Funds. If NVIT and its respective Funds
are under the control of the Insurance
Company Applicants, then NVIT and its
respective affiliates are affiliated
persons of the Insurance Company
Applicants. Regardless of whether or
not the Insurance Company Applicants
can be considered to actually control
NVIT and its Funds, because the
Insurance Company Applicants and
their affiliates own of record more than
5% of the shares of each Fund and are
under common control with NFA, the
Insurance Company Applicants are
affiliated persons of NVIT and its
Funds. Likewise, NVIT and its
respective Funds are each an affiliated
person of the Insurance Company
Applicants.
4. Section 17 Applicants represent
that the proposed In-Kind Transactions
could be seen as the indirect purchase
of shares of certain Replacement Funds
with portfolio securities of certain
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Existing Funds and the indirect sale of
portfolio securities of certain Existing
Funds for shares of certain Replacement
Funds. Pursuant to this analysis, the
proposed In-Kind Transactions also
could be categorized as a purchase of
shares of certain Replacement Funds by
certain Existing Funds, acting as
principal, and a sale of portfolio
securities by certain Existing Funds,
acting as principal, to certain
Replacement Funds. In addition, the
proposed In-Kind Transactions could be
viewed as a purchase of securities from
certain Existing Funds, and a sale of
securities to certain Replacement Funds,
by the Insurance Company Applicants
(or their Separate Accounts), acting as
principal. If categorized in this manner,
the proposed In-Kind Transactions may
be deemed to contravene Section 17(a)
due to the affiliated status of these
participants.
5. Section 17(b) of the 1940 Act
provides that any person may apply to
the Commission for an exemption from
the provisions of Section 17(a), and the
Commission shall issue such exemptive
order, if evidence establishes that:
(1) The terms of the proposed transaction,
including the consideration to be paid or
received, are reasonable and fair and do not
involve overreaching on the part of any
person concerned;
(2) The proposed transaction is consistent
with the policy of each registered investment
company concerned, as recited in its
registration statement and reports filed under
[the 1940 Act]; and
(3) The proposed transaction is consistent
with the general purposes of [the 1940 Act].
6. The Section 17 Applicants submit
that the In-Kind Transactions meet the
conditions set forth in Section 17(b) of
the 1940 Act.
7. The Section 17 Applicants submit
that the terms of the In-Kind
Transactions, including the
consideration to be paid and received,
are reasonable, fair, and do not involve
overreaching because: (1) The Contract
Owners’ Contract values will not be
adversely impacted or diluted; (2) with
respect to those securities for which
market quotations are readily available,
the In-Kind Transactions will comply
with the conditions set forth in Rule
17a–7, other than the requirement
relating to cash consideration; and (3)
with respect to those securities for
which market quotations are not readily
available, the In-Kind Transactions will
be effected in accordance with the
relevant Existing Funds’ and the
relevant corresponding Replacement
Funds’ normal valuation procedures, as
described in the relevant fund’s
registration statement.
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28989
8. Section 17 Applicants represent
that Contract Owners’ Contract values
will not be adversely impacted or
diluted because the In-Kind
Transactions will be effected at the
respective net asset values of the
Existing Funds and the Replacement
Funds, as described in each fund’s
registration statement and as required
by Rule 22c–1 under the 1940 Act. The
In-Kind Transactions will not change
the dollar value of any Contract, the
accumulation unit value or annuity unit
value of any Contract, or the death
benefit payable under any Contract.
After the In-Kind Transactions, the
value of a Separate Account’s
investment in a Replacement Fund will
equal the value of its investments in the
corresponding Existing Fund (in
addition to any pre-existing investment
in the Replacement Fund) before the InKind Transactions.
9. The adopting release of Rule 17a–
7 states that the purpose of the rule is
to set forth ‘‘conditions as to the
availability of the exemption to those
situations where the Commission, upon
the basis of its experience, considers
that there is no likelihood of
overreaching of the investment
companies participating in the
transaction.’’ 4 Because the proposed InKind Transactions would comply in
substance with the conditions of the
rule and since the In-Kind Transactions
will be effected at the respective net
asset values of the relevant funds, as per
the registration statement for each fund
and as required by Rule 22c–1 under the
1940 Act, the Section 17 Applicants
submit that the terms of the In-Kind
Transactions do not present a situation
where the investment companies
participating in the transaction could
overreach and potentially harm
investors. Section 17 Applicants claim
that the purposes intended by
implementation of the rule are therefore
met by the terms of the In-Kind
Transactions.
10. Section 17 Applicants represent
that the proposed In-Kind Transactions
will be effected based upon the
independent current market price of the
portfolio securities as specified in Rule
17a–7(b). Section 17 Applicants claim
that the proposed In-Kind Transactions
will be consistent with the policy of
each registered investment company
and separate series thereof participating
in the In-Kind Transactions, as recited
in the relevant registered investment
company’s registration statement and
reports in accordance with Rule 17a–
4 1940 Act Rel. Nos. 4604 (May 20, 1966)
(proposing release) and 4697 (Sept. 8, 1966)
(adopting release).
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7(c). No brokerage commission, fee
(except for any customary transfer fees),
or other remuneration will be paid in
connection with the proposed In-Kind
Transactions as specified in Rule 17a–
7(d). NVIT’s board of directors has
adopted and implemented the fund
governance and oversight procedures as
required by Rule 17a–7(e) and (f).
Finally, a written record of the
procedures for the proposed In-Kind
Transactions will be maintained and
preserved in accordance with Rule 17a–
7(g).
11. Although the proposed In-Kind
Transactions will not comply with the
cash consideration requirement of Rule
17a–7(a), Section 17 Applicants assert
that the terms of the proposed In-Kind
Transactions will offer to each of the
relevant Existing Funds and each of the
relevant Replacement Funds the same
degree of protection from overreaching
that Rule 17a–7 generally provides in
connection with the purchase and sale
of securities under that Rule in the
ordinary course of business.
Specifically, Insurance Company
Applicants and their affiliates cannot
effect the proposed In-Kind
Transactions at a price that is
disadvantageous to any Replacement
Fund and the proposed In-Kind
Transactions will not occur absent an
exemptive order from the Commission.
12. Section 17 Applicants represent
that for those Existing Funds that will
redeem their shares in-kind as part of
the In-Kind Transactions, such
transactions will be consistent with the
investment policies of the Existing Fund
because: (1) The redemption in-kind
policy is stated in the relevant Existing
Fund’s current registration statement;
and (2) the shares will be redeemed at
their net asset value in conformity with
Rule 22c–1 under the 1940 Act.
Likewise, for the Replacement Funds
that will sell shares in exchange for
portfolio securities as part of the InKind Transactions, such transactions
will be consistent with the investment
policies of the Replacement Fund
because: (1) NVIT’s policy of selling
shares in exchange for investment
securities is stated in NVIT’s current
registration statement; (2) the shares
will be sold at their net asset value; and
(2) the investment securities will be of
the type and quality that a Replacement
Fund could have acquired with the
proceeds from the sale of its shares had
the shares been sold for cash. For each
of the proposed In-Kind Transactions,
the Adviser and relevant Sub-Adviser(s)
will analyze the portfolio securities
being offered to each relevant
Replacement Fund and will retain only
those securities that it would have
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acquired for each such Fund in a cash
transaction.
13. Section 17 Applicants represent
that all in-kind redemptions from an
Existing Fund of which any Section 17
Applicants is an affiliated person will
be effected in accordance with the
conditions set forth in the Commission’s
no-action letter issued to Signature
Financial Group, Inc. (available
December 28, 1999).
14. Section 17 Applicants assert that
the proposed In-Kind Transactions, as
described herein, are consistent with the
general purposes of the 1940 Act set
forth in Section 1 of the 1940 Act. In
particular, the proposed In-Kind
Transactions do not present any
conditions or abuses that the 1940 Act
was designed to prevent.
15. Section 17 Applicants request that
the Commission issue an order pursuant
to Section 17(b) of the 1940 Act to
permit them, to the extent necessary, to
carry out the proposed In-Kind
Transactions. Section 17 Applicants
submit that, for all the reasons stated
above: (1) The terms of the proposed InKind Transactions, including the
consideration to be paid and received,
are reasonable and fair to each of the
relevant Replacement Funds, each of the
relevant Existing Funds, and Contract
Owners, and that the proposed In-Kind
Transactions do not involve
overreaching on the part of any person
concerned; (2) the proposed In-Kind
Transactions are, or will be, consistent
with the policies of the relevant
Replacement Funds and the relevant
Existing Funds as stated in the relevant
investment company’s registration
statement and reports filed under the
1940 Act; and (3) the proposed In-Kind
Transactions are, or will be, consistent
with the general purposes of the 1940
Act.
Conclusion
Section 26 Applicants submit that for
the reasons summarized above the
proposed Substitutions meet the
standards of Section 26(c) of the 1940
Act and request that the Commission
issue an order of approval pursuant to
Section 26(c) of the 1940 Act. Section 17
Applicants submit that the proposed InKind Transactions meet the standards of
Section 17(b) of the 1940 Act and
request that the Commission issue an
order of exemption pursuant to Section
17(b) of the 1940 Act.
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For the Commission, by the Division of
Investment Management pursuant to
delegated authority.
Florence E. Harmon,
Deputy Secretary.
Appendix
1. AIM Variable Insurance Funds—
AIM V.I. Basic Value Fund Replaced by
the NVIT—NVIT Multi-Manager Large
Cap Value Fund (Substitution Table
Reference Nos. 1 & 2)
AIM Variable Insurance Funds—AIM
V.I. Basic Value Fund: Series I Shares
will be replaced by the NVIT—NVIT
Multi-Manager Large Cap Value Fund:
Class I shares. AIM Variable Insurance
Funds—AIM V.I. Basic Value Fund:
Series II Shares will be replaced by the
NVIT—NVIT Multi-Manager Large Cap
Value Fund: Class II shares.
The following chart compares the
management fees, the total operating
expenses (before and after any waivers
and reimbursements) expressed as an
annual percentage of average daily net
assets, and the asset levels of the AIM
Variable Insurance Funds—AIM V.I.
Basic Value Fund: Series I Shares, AIM
Variable Insurance Funds—AIM V.I.
Basic Value Fund: Series II Shares,
NVIT—NVIT Multi-Manager Large Cap
Value Fund: Class I, and NVIT—NVIT
Multi-Manager Large Cap Value Fund:
Class II.
5 Through April 30, 2010, the fund’s advisor has
contractually agreed to waive a portion of its
advisory fees to the extent necessary so that the
advisory fees payable by the fund do not exceed a
specified maximum annual advisory fee rate,
wherein the fee rate is based upon average net asset
levels as follows:
0.695% of the first $250 million,
0.67% of the next $250 million,
0.645% of the next $500 million,
0.62% of the next $1.5 billion,
0.595% of the next $2.5 billion,
0.57% of the next $2.5 billion,
0.545% of the next $2.5 billion,
0.52% of the excess over $10 billion.
6 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.15%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.02% and
1.27%, respectively.
7 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.77% until
May 1, 2010. This limit excludes certain Fund
expenses, including interest, taxes, brokerage
commissions, Rule 12b–1 fees, fees paid pursuant
to an Administrative Services Plan, short sale
dividend expenses, other expenditures which are
capitalized in accordance with generally accepted
accounting principles and other non-routine
expenses not incurred in the ordinary course of the
Fund’s business. NVIT is authorized to reimburse
the NFA for management fees previously waived or
reduced and/or for expenses previously paid by
E:\FR\FM\18JNN1.SGM
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Federal Register / Vol. 74, No. 116 / Thursday, June 18, 2009 / Notices
Existing fund
Replacement fund
AIM variable insurance funds—
AIM V.I. basic value fund
shares
NVIT–NVIT multi-manager
large cap value fund
Series I
5 0.68%
5 0.68%
0.00%
0.35%
1.03%
0.00%
1.03%
9 $170.3
Management Fees ...........................................................................................
12b–1 Fees ......................................................................................................
Other Expenses ...............................................................................................
Total Gross Expenses .....................................................................................
Waivers/Reimbursements ................................................................................
Total Net Expenses .........................................................................................
Fund/Class 8 Asset Level ($MMs) (5/20/09) ....................................................
2. AIM Variable Insurance Funds—
AIM V.I. Large Cap Growth Fund:
Series I Shares Replaced by the NVIT—
NVIT Multi-Manager Large Cap Growth
Fund: Class I (Substitution Table
Reference No. 3)
Class I
Series II
0.25%
0.35%
1.28%
0.00%
1.28%
10 $143.4
The following chart compares the
management fees, the total operating
expenses (before and after any waivers
and reimbursements) expressed as an
annual percentage of average daily net
assets, and the asset levels of the AIM
Class II
0.65%
0.00%
6 0.37%
1.02%
7 0.10%
0.92%
$0.2
0.65%
0.25%
6 0.37%
1.27%
7 0.10%
1.17%
$5.9
Variable Insurance Funds—AIM V.I.
Large Cap Growth Fund: Series I Shares
and the NVIT—NVIT Multi-Manager
Large Cap Growth Fund: Class I.
Existing fund
Replacement fund
AIM Variable Insurance Funds—AIM
V.I. Large Cap Growth Fund: Series
I Shares
NVIT—NVIT Multi-Manager Large
Cap Growth Fund: Class I
11 0.70%
Management Fees ...........................................................................
12b–1 Fees ......................................................................................
Other Expenses ...............................................................................
NFA, provided, however, that any reimbursements
must be paid at a date not more than three years
after the fiscal year in which NFA waived the fees
or reimbursed the expenses and the reimbursements
do not cause the Fund to exceed the expense
limitation in the agreement.
8 Represents assets held by the fund or listed
share class, as applicable.
9 Based on asset levels as of 3/31/09,
approximately 2% of AIM V.I. Basic Value Fund
Shares: Series I assets will be transferred to NVIT
Multi-Manager Large Cap Value Fund: Class I
pursuant to the Substitution. This transfer
represents approximately 1% of the Existing Fund’s
total assets.
10 Based on asset levels as of 3/31/09,
approximately 19% of AIM V.I. Basic Value Fund
Shares: Series II assets will be transferred to NVIT
Multi-Manager Large Cap Value Fund: Class II
pursuant to the Substitution. This transfer
represents approximately 9% of the Existing Fund’s
total assets.
11 Through April 30, 2010, the fund’s advisor has
contractually agreed to waive a portion of its
advisory fees to the extent necessary so that the
advisory fees payable by the fund do not exceed a
specified maximum annual advisory fee rate,
wherein the fee rate is based upon average levels
as follows:
0.695% of the first $250 million,
0.67% of the next $250 million,
0.645% of the next $500 million,
0.62% of the next $1.5 billion,
0.595% of the next $2.5 billion,
0.57% of the next $2.5 billion,
0.545% of the next $2.5 billion,
0.52% of the excess over $10 billion.
12 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.15%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
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0.00%
0.40%
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.00%.
13 The fund’s advisor has contractually agreed to
waive advisory fees and/or reimburse expenses to
the extent necessary to limit Total Annual Fund
Operating Expenses (excluding certain items
discussed below) to 1.01% of average daily net
assets. In determining the advisor’s obligation to
waive advisory fees and/or reimburse expenses, the
following expenses are not taken into account, and
could cause the Total Annual Fund Operating
Expenses to exceed the number reflected above: (i)
Interest; (ii) taxes; (iii) dividend expense on short
sales; (iv) extraordinary items; (v) expenses related
to a merger or reorganization, as approved by the
fund’s Board of Trustees; and (vi) expenses that the
fund has incurred but did not actually pay because
of an expense offset arrangement. Currently, the
expense offset arrangements from which the fund
may benefit are in the form of credits that the fund
receives from banks where the fund or its transfer
agent has deposit accounts in which it holds
uninvested cash. These credits are used to pay
certain expenses incurred by the fund. This expense
limitation agreement is in effect through at least
April 30, 2010.
14 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.75% until
at least May 1, 2010. This limit excludes certain
Fund expenses, including any taxes, interest,
brokerage fees, Rule 12b–1 fees, short-sale dividend
expenses, administrative services fees, other
expenses which are capitalized in accordance with
generally accepted accounting principles and may
exclude other non-routine expenses not incurred in
the ordinary course of the Fund’s business. NVIT
is authorized to reimburse NFA for management
fees previously waived and/or for expenses
previously paid by NFA, provided however, that
any reimbursements must be paid at a date not
more than three years after the fiscal year in which
NFA waived the fees or reimbursed the expenses
and the reimbursements do not cause the Fund to
exceed the expense limitation in the agreement.
15 Represents assets held by the fund or listed
share class, as applicable.
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0.65%
0.00%
12 0.36%
16 Based on asset levels as of 3/31/09,
approximately 0.1% of the Existing Fund’s Series
I assets will be transferred to the Replacement Fund
pursuant to the Substitution. This transfer
represents approximately 0.3% of the Existing
Fund’s total assets.
17 The fund pays the advisor a single, unified
management fee for arranging all services necessary
for the fund to operate. The fee shown is based on
assets during the fund’s most recent fiscal year. The
fund has a stepped fee schedule, which is reflected
in the following table:
1.00% of first $500 million,
0.95% of the next $500 million, and
0.90% over $1 billion.
18 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.07%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.07%.
19 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.82% until
at least May 1, 2010. This limit excludes certain
Fund expenses, including any interest, taxes,
brokerage commissions, Rule 12b-1 fees, fees paid
pursuant to an Administrative Services Plan, shortsale dividend expenses, other expenditures which
are capitalized in accordance with generally
accepted accounting principles and other nonroutine expenses not incurred in the ordinary
course of the Fund’s business. NVIT is authorized
to reimburse NFA for management fees previously
waived or reduced and/or for expenses previously
paid by NFA, provided however, that any
reimbursements must be paid at a date not more
than three years after the fiscal year in which NFA
waived the fees or reimbursed the expenses and the
reimbursements do not cause the Fund to exceed
the expense limitation in the agreement.
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Federal Register / Vol. 74, No. 116 / Thursday, June 18, 2009 / Notices
Existing fund
Replacement fund
AIM Variable Insurance Funds—AIM
V.I. Large Cap Growth Fund: Series
I Shares
NVIT—NVIT Multi-Manager Large
Cap Growth Fund: Class I
Total Gross Expenses .....................................................................
Waivers/Reimbursements ................................................................
Total Net Expenses .........................................................................
Fund/Class 15 Asset Level ($MMs) (5/20/09) ...................................
3. American Century Variable
Portfolios, Inc.—American Century VP
Capital Appreciation Fund: Class I
Replaced by the NVIT—NVIT MultiManager Mid Cap Growth Fund: Class
I (Substitution Table Reference No. 4)
1.10%
1.01%
13 0.09%
14 0.11%
1.01%
0.90%
$0.6
16 $63.5
The following chart compares the
management fees, the total operating
expenses (before and after any waivers
and reimbursements) expressed as an
annual percentage of average daily net
assets, and the asset levels of the
American Century Variable Portfolios,
Inc.—American Century VP Capital
Appreciation Fund: Class I and the
NVIT—NVIT Multi-Manager Mid Cap
Growth Fund: Class I.
Existing fund
Replacement fund
American Century Variable Portfolios, Inc.—American Century VP
Capital Appreciation Fund: Class I
NVIT—NVIT Multi-Manager Mid Cap
Growth Fund: Class I
17 1.00%
Management Fees ...........................................................................
12b–1 Fees ......................................................................................
Other Expenses ...............................................................................
Total Gross Expenses .....................................................................
Waivers/Reimbursements ................................................................
Total Net Expenses .........................................................................
Fund/Class 20 Asset Level ($MMs) (9/30/08) ..................................
4. American Century Variable
Portfolios, Inc.—American Century VP
International Fund Replaced by the
NVIT—NVIT Multi-Manager
International Growth Fund
(Substitution Table Reference Nos. 5, 6,
7, & 8)
American Century Variable Portfolios,
Inc.—American Century VP
International Fund: Class I will be
replaced by NVIT—NVIT MultiManager International Growth Fund:
Class III. American Century Variable
Portfolios, Inc.—American Century VP
International Fund: Class II will be
replaced by NVIT—NVIT Multi-
0.75%
0.00%
18 0.22%
0.97%
19 0.08%
0.89%
$87.7
0.00%
0.01%
1.01%
0.00%
1.01%
21 $288.0
Manager International Growth Fund:
Class VI. American Century Variable
Portfolios, Inc.—American Century VP
International Fund: Class III will be
replaced by NVIT—NVIT MultiManager International Growth Fund:
Class III. American Century Variable
Portfolios, Inc.—American Century VP
International Fund: Class IV will be
replaced by NVIT—NVIT MultiManager International Growth Fund:
Class VI. The following chart compares
the management fees, the total operating
expenses (before and after any waivers
and reimbursements) expressed as an
annual percentage of average daily net
assets, and the asset levels of the
American Century Variable Portfolios,
Inc.—American Century VP
International Fund: Class I, American
Century Variable Portfolios, Inc.—
American Century VP International
Fund: Class II, American Century
Variable Portfolios, Inc.—American
Century VP International Fund: Class
III, American Century Variable
Portfolios, Inc.—American Century VP
International Fund: Class IV, NVIT—
NVIT Multi-Manager International
Growth Fund: Class III and NVIT—NVIT
Multi-Manager International Growth
Fund: Class VI.
Existing fund
Replacement fund
American Century Variable Portfolios, Inc.—American Century VP
International Fund
NVIT—NVIT Multi-Manager
International Growth Fund
Class I
Management Fees ...................................
12b–1 Fees ..............................................
Other Expenses .......................................
Total Gross Expenses .............................
Waivers/Reimbursements ........................
Total Net Expenses .................................
Fund/Class 26 Asset Level ($MMs) (4/30/
09) ........................................................
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21:58 Jun 17, 2009
Jkt 217001
Class II
Class III
Class IV
Class III
Class VI
22 1.36%
23 1.26%
22 1.36%
23 1.26%
0.00%
0.01%
1.37%
0.00%
1.37%
0.25%
0.01%
1.52%
0.00%
1.52%
0.00%
0.01%
1.37%
0.00%
1.37%
0.25%
0.01%
1.52%
0.00%
1.52%
0.85%
0.00%
24 0.30%
1.15%
25 0.04%
1.11%
0.85%
0.25%
24 0.30%
1.40%
25 0.04%
1.36%
27 $258.2
28 $105.1
29 $52.0
30 $9.8
$9.8
$90.6
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Federal Register / Vol. 74, No. 116 / Thursday, June 18, 2009 / Notices
5. American Century Variable
Portfolios, Inc.—American Century VP
Ultra Fund Replaced by NVIT—NVIT
Multi-Manager Large Cap Growth Fund
(Substitution Table Reference Nos. 9 &
10)
AmericanCentury Variable Portfolios,
Inc.—American Century VP Ultra Fund:
Class I will be replaced by NVIT—NVIT
Multi-Manager Large Cap Growth Fund:
Class I and American Century Variable
Portfolios, Inc.—American Century VP
Ultra Fund: Class II will be replaced by
NVIT—NVIT Multi-Manager Large Cap
Growth Fund: Class II. The following
chart compares the management fees,
the total operating expenses (before and
after any waivers and reimbursements)
expressed as an annual percentage of
average daily net assets, and the asset
levels of the American Century Variable
Portfolios, Inc.—American Century VP
Ultra Fund: Class I, American Century
Variable Portfolios, Inc.—American
Century VP Ultra Fund: Class II, NVIT—
NVIT Multi-Manager Large Cap Growth
Fund: Class I and NVIT—NVIT MultiManager Large Cap Growth Fund: Class
II.
Existing fund
Replacement fund
American Century Variable
Portfolios, Inc.—American Century VP Ultra Fund
NVIT—NVIT Multi-Manager
Large Cap Growth Fund
Class I
Management Fees ...........................................................................................
12b–1 Fees ......................................................................................................
Other Expenses ...............................................................................................
Total Gross Expenses .....................................................................................
Waivers/Reimbursements ................................................................................
Total Net Expenses .........................................................................................
Fund/Class 36 Asset Level ($MMs) (4/30/09) ..................................................
Class II
31 1.00%
32 0.90%
0.00%
0.01%
1.01%
0.00%
1.01%
37 $37.2
0.25%
0.01%
1.16%
0.00%
1.16%
38 $177.6
Class I
0.65%
0.00%
33 0.36%
1.01%
35 0.11%
0.90%
$0.6
Class II
0.65%
0.25%
34 0.36%
1.26%
35 0.11%
1.15%
$1.4
6. American Century Variable
Portfolios, Inc.—American Century VP
Vista Fund Replaced by NVIT—NVIT
Multi-Manager Mid Cap Growth Fund
(Substitution Table Reference Nos. 11,
12, & 13)
American Century Variable Portfolios,
Inc.—American Century VP Vista Fund:
20 Represents assets held by the fund or listed
share class, as applicable.
21 Based on asset levels as of 3/31/09,
approximately 27% of the Existing Fund’s Class I
assets will be transferred to the Replacement Fund
pursuant to the Substitution. This transfer
represents approximately 27% of the Existing
Fund’s total assets.
22 The fund pays the advisor a single, unified
management fee for arranging all services necessary
for the fund to operate. The fund has a stepped fee
schedule, which is as follows: 1.50% of first $250
million, 1.20% of the next $250 million, 1.10% of
the next $500 million, and 1.00% over $1 billion.
The fee shown has been restated based on strategy
assets for the period from the most recent fiscal year
end through March 31, 2009. As a result, the Total
Annual Fund Operating Expenses in this table
differ from those shown in the fund’s prospectus or
statement of additional information. The fee for the
fiscal year ended December 31, 2008 was 1.23%.
23 The fund pays the advisor a single, unified
management fee for arranging all services necessary
for the fund to operate. The fund has a stepped fee
schedule, which is as follows: 1.40% of first $250
million, 1.10% of the next $250 million, 1.00% of
the next $500 million, and 0.90% over $1 billion.
The fee shown has been restated based on strategy
assets for the period from the most recent fiscal year
end through March 31, 2009. As a result, the Total
Annual Fund Operating Expenses in this table
differ from those shown in the fund’s prospectus
and statement of additional information. The fee for
the fiscal year ended December 31, 2008 was
1.13%.
24 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.15%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.21% and
1.46%, respectively.
25 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.96% until
at least May 1, 2010. This limit excludes certain
Fund expenses, including any taxes, interest,
brokerage fees, Rule 12b–1 fees, short-sale dividend
expenses, administrative services fees, other
expenses which are capitalized in accordance with
generally accepted accounting principles and may
exclude other non-routine expenses not incurred in
the ordinary course of the Fund’s business. NVIT
is authorized to reimburse NFA for management
fees previously waived and/or for expenses
previously paid by NFA, provided however, that
any reimbursements must be paid at a date not
more than three years after the fiscal year in which
NFA waived the fees or reimbursed the expenses
and the reimbursements do not cause the Fund to
exceed the expense limitation in the agreement.
26 Represents assets held by the fund or listed
share class, as applicable.
27 Based on asset levels as of 3/31/09,
approximately 23% of the Existing Fund’s Class I
assets will be transferred to the Replacement Fund’s
Class III pursuant to the Substitution. This transfer
represents approximately 16% of the Existing
Fund’s total assets.
28 Based on asset levels as of 3/31/09,
approximately 2% of the Existing Fund’s Class II
assets will be transferred to the Replacement Fund’s
Class VI pursuant to the Substitution. This transfer
represents approximately 0.3% of the Existing
Fund’s total assets.
29 Based on asset levels as of 3/31/09,
approximately 87% of the Existing Fund’s Class III
assets will be transferred to the Replacement Fund’s
Class III pursuant to the Substitution. This transfer
represents approximately 12% of the Existing
Fund’s total assets.
30 Based on asset levels as of 3/31/09,
approximately 90% of the Existing Fund’s Class IV
assets will be transferred to the Replacement Fund
pursuant to the Substitution. This transfer
represents approximately 2% of the Existing Fund’s
total assets.
31 The fund pays the advisor a single, unified
management fee for arranging all services necessary
for the fund to operate. The fee shown is based on
assets during the fund’s most recent fiscal year. The
fund has s stepped fee schedule. As a result, the
fund’s unified management fee rate generally
decreases as strategy assets increase and increases
as strategy assets decrease.
32 The fund pays the advisor a single, unified
management fee for arranging all services necessary
for the fund to operate. The fee shown is based on
assets during the fund’s most recent fiscal year. The
fund has s stepped fee schedule, which is as
follows:
0.90% of first $500 million,
0.85% of next $500 million, and
0.80% over $1 billion.
33 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.15%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.00%.
34 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.15%, but which
Continued
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Federal Register / Vol. 74, No. 116 / Thursday, June 18, 2009 / Notices
Class I will be replaced by NVIT—NVIT
Multi-Manager Mid Cap Growth Fund:
Class I. American Century Variable
Portfolios, Inc.—American Century VP
Vista Fund: Class II will be replaced by
NVIT—NVIT Multi-Manager Mid Cap
Growth Fund: Class I or Class II,
depending on the contract involved in
the Substitution. The following chart
compares the management fees, the total
operating expenses (before and after any
waivers and reimbursements) expressed
as an annual percentage of average daily
net assets, and the asset levels of
American Century Variable Portfolios,
Inc.—American Century VP Vista Fund:
Class I, American Century Variable
Portfolios, Inc.—American Century VP
Vista Fund: Class II, NVIT—NVIT MultiManager Mid Cap Growth Fund: Class I
and NVIT—NVIT Multi-Manager Mid
Cap Growth Fund: Class II.
Existing fund
Replacement fund
American Century Variable
Portfolios, Inc.—American
Century VP Vista Fund
NVIT—NVIT Multi-Manager
Mid Cap Growth Fund
Class I
Management Fees ...........................................................................................
12b–1 Fees ......................................................................................................
Other Expenses ...............................................................................................
Total Gross Expenses .....................................................................................
Waivers/Reimbursements ................................................................................
Total Net Expenses .........................................................................................
Fund/Class 41 Asset Level ($MMs) (4/30/09) ..................................................
7. Credit Suisse Trust—International
Equity Flex I Portfolio (Formerly,
International Focus Portfolio) Replaced
by NVIT—Gartmore NVIT
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.25%.
35 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.75% until
at least May 1, 2010. This limit excludes certain
Fund expenses, including any taxes, interest,
brokerage fees, Rule 12b–1 fees, short-sale dividend
expenses, administrative services fees, other
expenses which are capitalized in accordance with
generally accepted accounting principles and may
exclude other non-routine expenses not incurred in
the ordinary course of the Fund’s business. NVIT
is authorized to reimburse NFA for management
fees previously waived and/or for expenses
previously paid by NFA, provided however, that
any reimbursements must be paid at a date not
more than three years after the fiscal year in which
NFA waived the fees or reimbursed the expenses
and the reimbursements do not cause the Fund to
exceed the expense limitation in the agreement.
36 Represents assets held by the fund or listed
share class, as applicable.
37 Based on asset levels as of 3/31/09,
approximately 22% of the Existing Fund’s Class I
assets will be transferred to the Replacement Fund’s
Class I pursuant to the Substitution. This transfer
represents approximately 4% of the Existing Fund’s
total assets.
38 Based on asset levels as of 3/31/09,
approximately 4% of the Existing Fund’s Class II
assets will be transferred to the Replacement Fund’s
Class II pursuant to the Substitution. This transfer
represents approximately 4% of the Existing Fund’s
total assets.
39 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.07%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
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21:58 Jun 17, 2009
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1.00%
0.00%
0.01%
1.01%
0.00%
1.01%
42 $37.7
International Equity Fund (Substitution
Table Reference Nos. 14 & 15)
Credit Suisse Trust—International
Equity Flex I Portfolio (formerly,
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.07% and
1.32%, respectively.
40 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.82% for
all share classes until at least May 1, 2010. This
limit excludes certain Fund expenses, including
any interest, taxes, brokerage commissions, Rule
12b–1 fees, fees paid pursuant to an Administrative
Services Plan, short-sale dividend expenses, other
expenditures which are capitalized in accordance
with generally accepted accounting principles and
other non-routine expenses not incurred in the
ordinary course of the Fund’s business. NVIT is
authorized to reimburse NFA for management fees
previously waived or reduced and/or for expenses
previously paid by NFA, provided however, that
any reimbursements must be paid at a date not
more than three years after the fiscal year in which
NFA waived the fees or reimbursed the expenses
and the reimbursements do not cause the Fund to
exceed the expense limitation in the agreement.
41 Represents assets held by the fund or listed
share class, as applicable.
42 Based on asset levels as of 3/31/09,
approximately 29% of the Existing Fund’s Class I
assets will be transferred to the Replacement Fund’s
Class I pursuant to the Substitution. This transfer
represents approximately 22% of the Existing
Fund’s total assets.
43 Based on asset levels as of 3/31/09,
approximately 2% of the Existing Fund’s Class II
assets will be transferred to the Replacement Fund’s
Class I pursuant to the Substitution. This transfer
represents approximately 0.5% of the Existing
Fund’s total assets. Based on asset levels as of 3/
31/09, approximately 94% of the Existing Fund’s
Class II assets will be transferred to the
Replacement Fund’s Class II pursuant to the
Substitution. This transfer represents approximately
22% of the Existing Fund’s total assets.
44 Management fees have been restated to reflect
the elimination of a performance-based
management fee and implementation of an assetbased management fee equal to the lowest possible
management fee under the previous performance-
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Class II
0.90%
0.25%
0.01%
1.16%
0.00%
1.16%
43 $11.7
Class I
0.75%
0.00%
39 0.22%
0.97%
40 0.08%
0.89%
$87.7
Class II
0.75%
0.25%
39 0.22%
1.22%
40 0.08%
1.14%
$134.2
International Focus Portfolio) will be
replaced by NVIT—Gartmore NVIT
International Equity Fund: Class I or
based fee structure, as approved by the Board of
Trustees on January 16, 2009. Under no
circumstances, during a six-month transition period
will the management fee under the new fee
structure exceed what the Adviser would have
received under the old structure assuming
maximum penalty for underperformance.
45 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.15%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses would be 1.21%.
46 NVIT and NFA have entered into a written
contract limiting operating expenses to 1.05% for
all share classes until at least May 1, 2010. This
limit excludes certain Fund expenses, including
interest, taxes, brokerage commissions, Rule 12b–1
fees, fees paid pursuant to an Administrative
Services Plan, short-sale dividend expenses, other
expenditures which are capitalized in accordance
with generally accepted accounting principles and
other non-routine expenses not incurred in the
ordinary course of the Fund’s business. NVIT is
authorized to reimburse NFA for management fees
previously waived or reduced and/or for expenses
previously paid by NFA provided, however, that
any reimbursements must be paid at a date not
more than three years after the fiscal year in which
NFA waived the fees or reimbursed the expenses
and the reimbursements do not cause the Fund to
exceed the expense limitation in the agreement.
Currently, all share classes are operating below the
expense limit.
47 Represents assets held by the fund or listed
share class, as applicable.
48 Based on asset levels as of 3/31/09,
approximately 0.5% of the Existing Fund’s assets
will be transferred to the Replacement Fund’s Class
I pursuant to the Substitution. This transfer
represents approximately 0.5% of the Existing
Fund’s total assets. Based on asset levels as of 3/
31/09, approximately 47% of the Existing Fund’s
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Class III, depending on the contract
involved in the Substitution. The
following chart compares the
management fees, the total operating
expenses (before and after any waivers
and reimbursements) expressed as an
annual percentage of average daily net
assets, and the asset levels of Credit
Suisse Trust—International Equity Flex
I Portfolio, NVIT—Gartmore NVIT
International Equity Fund: Class I and
NVIT—Gartmore NVIT International
Equity Fund: Class III.
Existing fund
Replacement fund
Credit Suisse Trust—
International Equity Flex I Portfolio
NVIT—Gartmore NVIT
International Equity Fund
Management Fees .............................................................................................
12b–1 Fees ........................................................................................................
Other Expenses .................................................................................................
Total Gross Expenses .......................................................................................
Waivers/Reimbursements ..................................................................................
Total Net Expenses ...........................................................................................
Fund/Class 47 Asset Level ($MMs) (5/20/09) ....................................................
8. Federated Insurance Series—
Federated Quality Bond Fund II
Replaced by NVIT—NVIT Core Bond
Fund (Substitution Table Reference
Nos. 16 & 17)
1.00%
0.00%
1.14%
2.14%
0.00%
2.14%
48 $44.5
NVIT—NVIT Core Bond Fund: Class I.
Federated Insurance Series—Federated
Quality Bond Fund II: Service Shares
will be replaced by NVIT—NVIT Core
Bond Fund: Class II. The following chart
compares the management fees, the total
operating expenses (before and after any
waivers and reimbursements) expressed
as an annual percentage of average daily
Federated Insurance Series—
Federated Quality Bond Fund II:
Primary Shares will be replaced by
Class I
44 0.80%
0.00%
45 0.31%
1.11%
46 0.00%
1.11%
$8.1
Class III
44 0.80%
0.00%
45 0.31%
1.11%
46 0.00%
1.11%
$35.4
net assets, and the asset levels of
Federate Insurance Series—Federated
Quality Bond Fund II: Primary Shares,
Federate Insurance Series—Federated
Quality Bond Fund II: Service Shares,
NVIT—NVIT Core Bond Fund: Class I
and NVIT—NVIT Core Bond Fund:
Class II.
Existing fund
Replacement fund
Federated Insurance Series—
Federated Quality Bond Fund II
NVIT—NVIT Core
Bond Fund
Primary
Management Fees ...........................................................................................
12b–1 Fees ......................................................................................................
Other Expenses ...............................................................................................
Total Gross Expenses .....................................................................................
Waivers/Reimbursements ................................................................................
Total Net Expenses .........................................................................................
Fund/Class 55 Asset Level ($MMs) (5/19/09) ..................................................
Service
49 0.60%
49 0.60%
50 0.25%
0.25%
51 0.39%
1.24%
0.00%
1.24%
57 $62.7
51 0.39%
1.24%
53 0.00%
1.24%
56 $218.5
9. Franklin Templeton Variable
Insurance Products Trust—Templeton
Developing Markets Securities Fund
Replaced by NVIT—Gartmore NVIT
Emerging Markets Fund (Substitution
Table Reference Nos. 18 & 19)
Franklin Templeton Variable
Insurance Products Trust—Templeton
shareholder services. The shareholder services
provider did not charge, and therefore the Fund’s
Primary Shares did not accrue, its fee. This
reduction can be terminated at any time. Total other
expenses paid by the Fund’s Primary Shares (after
the reduction) were 0.14% for the fiscal year ended
December 31, 2008.
52 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.15%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 0.80% and
1.05% respectively.
0.40%
0.00%
52 0.37%
0.77%
54 0.07%
0.70%
$4.8
Class II
0.40%
0.25%
52 0.37%
1.02%
54 0.07%
0.95%
$7.1
Developing Markets Securities Fund:
assets will be transferred to the Replacement Fund’s
Class III pursuant to the Substitution. This transfer
represents approximately 47% of the Existing
Fund’s total assets.
49 The Adviser voluntarily waived a portion of the
management fee. The Adviser can terminate this
voluntary waiver at any time. The management fee
paid by the Fund (after the voluntary waiver) was
0.56% for the fiscal year ended December 31, 2008.
50 The Fund’s Primary Shares did not pay or
accrue the distribution (12b–1) fee during the fiscal
year ended December 31, 2008. The Fund’s Primary
Shares have no present intention of paying or
accruing the distribution (12b–1) fee during the
fiscal year ending December 31, 2009.
51 Includes an administrative services fee which
is used to compensate insurance companies for
Class I
53 Although not contractually obligated to do so,
the Adviser waived and the distributor and
shareholder services provider elected not to charge
0.56% in expenses, resulting in Total Net Expenses
(after waiver reductions) of 0.70%.
54 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.55% for
all share classes until May 1, 2010. This limit
excludes certain Fund expenses, including interest,
taxes, brokerage commissions, Rule 12b–1 fees, fees
paid pursuant to an Administrative Services Plan,
short sale dividend expenses, other expenditures
which are capitalized in accordance with generally
accepted accounting principles and other nonroutine expenses not incurred in the ordinary
course of the Fund’s business. NVIT is authorized
to reimburse NFA for management fees previously
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Class 3 will be replaced by NVIT—
Gartmore NVIT Emerging Markets Fund:
Class III or NVIT—Gartmore NVIT
Emerging Markets Fund: Class VI,
depending on the contract involved in
the Substitution. The following chart
compares the management fees, the total
operating expenses (before and after any
waivers and reimbursements) expressed
as an annual percentage of average daily
net assets, and the asset levels of
Franklin Templeton Variable Insurance
Products Trust—Templeton Developing
Markets Securities Fund: Class 3,
NVIT—Gartmore NVIT Emerging
Markets Fund: Class III and NVIT—
Gartmore NVIT Emerging Markets Fund:
Class VI.
Existing fund
Replacement fund
Franklin Templeton Variable
Insurance Products Trust—
Templeton Developing Markets
Securities Fund
NVIT—Gartmore NVIT Emerging Markets Fund
Class III
Class VI
Class 3
1.25%
58 0.95%
59 0.25%
Management Fees .............................................................................................
12b–1 Fees ........................................................................................................
Other Expenses .................................................................................................
Total Gross Expenses .......................................................................................
Waivers/Reimbursements ..................................................................................
Total Net Expenses ...........................................................................................
Fund/Class63 Asset Level ($MMs) (5/20/09) .....................................................
0.00%
60 0.29%
1.24%
62 0.00%
1.24%
$101.6
0.29%
1.79%
61 0.01%
1.78%
64 $42.3
58 0.95%
0.25%
60 0.28%
1.48%
62 0.00%
1.48%
$44.8
10. Janus Aspen Series—INTECH RiskManaged Core Portfolio Replaced by
NVIT—NVIT Nationwide Fund
(Substitution Table Reference Nos. 20 &
21)
Janus Aspen Series—INTECH RiskManaged Core Portfolio: Service Shares
will be replaced by NVIT—NVIT
Nationwide Fund: Class I or Class II,
depending on the contract involved in
the Substitution. The following chart
compares the management fees, the total
operating expenses (before and after any
waivers and reimbursements) expressed
as an annual percentage of average daily
net assets, and the asset levels of Janus
Aspen Series—INTECH Risk-Managed
Core Portfolio: Service Shares, NVIT—
NVIT Nationwide Fund: Class I and
NVIT—NVIT Nationwide Fund: Class II.
waived or reduced and/or for expenses previously
paid by NFA, provided, however, that any
reimbursements must be paid at a date not more
than three years after the fiscal year in which NFA
waived the fees or reimbursed the expenses and the
reimbursements do not cause the Fund to exceed
the expense limitation in the agreement.
55 Represents assets held by the fund or listed
share class, as applicable.
56 Based on asset levels as of 3/31/09,
approximately 84% of the Existing Fund’s Primary
Share assets will be transferred to the Replacement
Fund’s Class I pursuant to the Substitution. This
transfer represents approximately 65% of the
Existing Fund’s total assets.
57 Based on asset levels as of 3/31/09,
approximately 97% of the Existing Fund’s Service
Share assets will be transferred to the Replacement
Fund’s Class II pursuant to the Substitution. This
transfer represents approximately 21.5% of the
Existing Fund’s total assets.
58 Management fees have been restated to reflect
the elimination of a performance-based
management fee and implementation of an assetbased management fee equal to the lowest possible
management fee under the previous performancebased fee structure, as approved by the Board of
Trustees on September 18, 2008. Under no
circumstances, during a six-month transition period
will the management fee under the new fee
structure exceed what the Adviser would have
received under the old structure assuming
maximum penalty for underperformance.
59 While the maximum amount payable under the
Fund’s Class 3 rule 12b–1 plan is 0.35% per year
of the Fund’s average daily net assets, the Fund’s
board of trustees has set the current rate at 0.25%
per year through April 30, 2010.
60 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.16% and 0.15%,
respectively, but which are permitted to be as high
as 0.25%. The full 0.25% in administrative services
fees is not reflected in ‘‘Other Expenses’’ at this
time because, until at least May 1, 2010, the Fund
does not intend to pay insurance companies a
higher amount. If the full amount of administrative
services fees were charged, total operating expenses
would be 1.33% and 1.58%, respectively.
61 The investment manager has agreed in advance
to reduce its fee from assets invested by the Fund
in a Franklin Templeton money market fund (the
Sweep Money Fund which is the ‘‘acquired fund’’
in this case) to the extent of the Fund’s fees and
expenses of the acquired fund. This reduction is
required by the Trust’s board of trustees and an
exemptive order by the Securities and Exchange
Commission; this arrangement will continue as long
as the exemptive order is relied upon.
62 NVIT and NFA have entered into a written
contract limiting operating expenses to 1.20% for
all share classes until at least May 1, 2010. This
limit excludes certain Fund expenses, including
interest, taxes, brokerage commissions, Rule 12b–1
fees, fees paid pursuant to an Administrative
Services Plan, short sale dividend expenses, other
expenditures which are capitalized in accordance
with generally accepted accounting principles and
other non-routine expenses not incurred in the
ordinary course of the Fund’s business. NVIT is
authorized to reimburse NFA for management fees
previously waived or reduced and/or for expenses
previously paid by NFA provided, however, that
any reimbursements must be paid at a date not
more than three years after the fiscal year in which
NFA waived the fees or reimbursed the expenses
and the reimbursements do not cause the Fund to
exceed the expense limitation in the agreement.
Currently, all share classes are operating below the
expense limit.
63 Represents assets held by the fund or listed
share class, as applicable.
64 Based on asset levels as of 3/31/09,
approximately 30% of the Existing Fund’s Class 3
assets will be transferred to the NVIT—Gartmore
NVIT Emerging Markets Fund: Class III and
approximately 36% of the Existing Fund’s Class 3
assets will be transferred to NVIT—Gartmore NVIT
Emerging Markets Fund: Class VI pursuant to the
Substitution. These transfers represent
approximately 5% of the Existing Fund’s total
assets.
65 The ‘‘Management Fee’’ is the investment
advisory fee rate paid by each Portfolio to Janus
Capital as of the end of the fiscal year. This fee may
go up or down monthly based on the Portfolio’s
performance relative to its benchmark index over
the performance measurement period. This fee rate,
prior to any performance adjustment, is 0.50% and
may go up or down by a variable of up to 0.15%
(assuming constant assets) on a monthly basis. Any
such adjustment to this fee rate commenced January
2007, and may increase or decrease the
Management Fee. The Portfolio has entered into an
agreement with Janus Capital to limit certain
expenses. Because a fee waiver will have a positive
effect upon the Portfolio’s performance, a fee waiver
that is in place during the period when the
performance adjustment applies may affect the
performance adjustment in a way that is favorable
to Janus Capital. It is possible that the cumulative
dollar amount of additional compensation
ultimately payable to Janus Capital may, under
some circumstances, exceed the cumulative dollar
amount of management fees waived by Janus
Capital.
66 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.15%, but which
are permitted to be as high as 0.25%. The full
amounts of administrative services fees are not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amounts of administrative services fees were
charged, total operating expenses would be 0.94%
and 1.19%, respectively.
67 Janus Capital has contractually agreed to waive
certain Portfolios’ total operating expenses
(excluding the distribution and shareholder
servicing fee, the administrative services fee
applicable to certain Portfolios, brokerage
commissions, interest, dividends, taxes, and
extraordinary expenses including, but not limited
to, acquired fund fees and expenses) to until at least
May 1, 2010.
68 Represents assets held by the fund or listed
share class, as applicable.
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Existing fund
Replacement fund
Janus Aspen Series—INTECH RiskManaged Core Portfolio
NVIT—NVIT Nationwide Fund
Class I
Service Shares
0.40%65
0.25%
1.06%
1.71%
67 0.26%
1.45%
69 $20.5
Management Fees ...................................................................................
12b–1 Fees ..............................................................................................
Other Expenses .......................................................................................
Total Gross Expenses .............................................................................
Waivers/Reimbursements ........................................................................
Total Net Expenses .................................................................................
Fund/Class 68 Asset Level ($MMs) (5/30/09) ..........................................
11. Neuberger Berman Advisers
Management Trust—AMT Growth
Portfolio Replaced by NVIT—NVIT
Multi-Manager Mid Cap Growth Fund
(Substitution Table Reference No. 22)
Neuberger Berman Advisers
Management Trust—AMT Growth
Portfolio: I Class will be replaced by
NVIT—NVIT Multi-Manager Mid Cap
Growth Fund: Class I. The following
chart compares the management fees,
the total operating expenses (before and
after any waivers and reimbursements)
expressed as an annual percentage of
0.58%
0.00%
66 0.26%
0.84%
0.00%
0.84%
$629.2
Class II
0.58%
0.25%
66 0.26%
1.09%
0.00%
1.09%
$316.6
average daily net assets, and the asset
levels of Neuberger Berman Advisers
Management Trust—AMT Growth
Portfolio: I Class and NVIT—NVIT
Multi-Manager Mid Cap Growth Fund:
Class I.
Existing fund
Replacement fund
Neuberger Berman Advisers Management
Trust—AMT Growth
Portfolio: I Class
NVIT—NVIT Multi-Manager Mid Cap Growth
Fund: Class I
0.85%
0.00%
0.19%
1.04%
71 0.00%
1.04%
74 $78.5
0.75%
0.00%
70 0.22%
0.97%
72 0.08%
0.89%
$87.7
Management Fees ...................................................................................................................
12b–1 Fees ..............................................................................................................................
Other Expenses .......................................................................................................................
Total Gross Expenses .............................................................................................................
Waivers/Reimbursements ........................................................................................................
Total Net Expenses .................................................................................................................
Fund/Class 73 Asset Level ($MMs) (5/20/09) ..........................................................................
12. Neuberger Berman Advisers
Management Trust—AMT Guardian
Portfolio Replaced by NVIT—
Neuberger Berman NVIT Multi Cap
Opportunities Fund (Substitution Table
Reference No. 23)
Neuberger Berman Advisers
Management Trust—AMT Guardian
Portfolio: I Class will be replaced by
NVIT—Neuberger Berman NVIT Multi
Cap Opportunities Fund: Class I. The
following chart compares the
management fees, the total operating
expenses (before and after any waivers
and reimbursements) expressed as an
annual percentage of average daily net
assets, and the asset levels of Neuberger
Berman Advisers Management Trust—
AMT Guardian Portfolio: I Class and
NVIT—Neuberger Berman NVIT Multi
Cap Opportunities Fund: Class I.
69 Based on asset levels as of 3/31/09,
approximately 2% of the Existing Fund’s Service
Shares assets will be transferred to the NVIT—NVIT
Nationwide Fund: Class I and approximately 22%
of the Existing Fund’s Service Shares assets will be
transferred to the NVIT—NVIT Nationwide Fund:
Class II pursuant to the Substitution. These
transfers represent approximately 24% of the
Existing Fund’s total assets.
70 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.07%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.07%.
71 Neuberger Berman Management LLC (‘‘NBM’’)
has contractually undertaken to limit the Fund’s
expenses through December 31, 2012 by
reimbursing the Fund for its total operating
expenses (excluding the compensation of NBM,
taxes, interest, extraordinary expenses, brokerage
commissions and transaction costs) that exceed, in
the aggregate, 1.00% per annum of the Fund’s
average daily net asset value. Because of the
exclusion, the Fund’s net expenses may exceed the
contractual expense limitation. The Fund has
contractually undertaken to reimburse NBM for the
excess expenses paid by NBM, provided the
reimbursements do not cause total operating
expenses (exclusive of the compensation of NBM,
taxes, interest, brokerage commissions, transaction
costs and extraordinary expenses) to exceed an
annual rate of 1.00%, and the reimbursements are
made within three years after the year in which
NBM incurred the expense. The figures in the table
are based on last year’s expenses.
72 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.82% for
all share classes until at least May 1, 2010. This
limit excludes certain Fund expenses, including
any interest, taxes, brokerage commissions, Rule
12b–1 fees, fees paid pursuant to an Administrative
Services Plan, short-sale dividend expenses, other
expenditures which are capitalized in accordance
with generally accepted accounting principles and
other non-routine expenses not incurred in the
ordinary course of the Fund’s business. NVIT is
authorized to reimburse NFA for management fees
previously waived or reduced and/or for expenses
previously paid by NFA, provided however, that
any reimbursements must be paid at a date not
more than three years after the fiscal year in which
NFA waived the fees or reimbursed the expenses
and the reimbursements do not cause the Fund to
exceed the expense limitation in the agreement.
73 Represents assets held by the fund or listed
share class, as applicable.
74 Based on asset levels as of 3/31/09,
approximately 88% of the Existing Fund’s I Class
assets will be transferred to the Replacement Fund’s
Class I pursuant to the Substitution. This transfer
represents approximately 88% of the Existing
Fund’s total assets.
75 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.15%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.00%.
76 Neuberger Berman Management LLC (‘‘NBM’’)
has contractually undertaken to limit the expenses
of I Class shares through December 31, 2012 by
Continued
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Existing fund
Replacement fund
Neuberger Berman Advisers Management
Trust—AMT Guardian
Portfolio: I Class
NVIT—Neuberger Berman NVIT Multi Cap Opportunities Fund: Class I
0.85%
0.00%
0.16%
1.01%
0.00% 76
1.01%
$62.4 79
0.60%
0.00%
1.50%75
2.10%
1.20% 77
0.90%
$2.9
Management Fees ...................................................................................................................
12b–1 Fees ..............................................................................................................................
Other Expenses .......................................................................................................................
Total Gross Expenses .............................................................................................................
Waivers/Reimbursements ........................................................................................................
Total Net Expenses .................................................................................................................
Fund/Class 78 Asset Level ($MMs) (5/20/09) ..........................................................................
13. Neuberger Berman Advisers
Management Trust—AMT International
Portfolio Replaced by NVIT—Gartmore
NVIT International Equity Fund
(Substitution Table Reference Nos. 24 &
25)
Neuberger Berman Advisers
Management Trust—AMT International
Portfolio: S Class will be replaced by
NVIT—Gartmore NVIT International
Equity Fund: Class III or Class VI,
depending on the contract involved in
the Substitution. The following chart
compares the management fees, the total
operating expenses (before and after any
waivers and reimbursements) expressed
as an annual percentage of average daily
net assets, and the asset levels of
Neuberger Berman Advisers
Management Trust—AMT International
Portfolio: S Class, NVIT—Gartmore
NVIT International Equity Fund: Class
III and NVIT—Gartmore NVIT
International Equity Fund: Class VI.
Existing fund
Replacement fund
Neuberger Berman Advisers Management Trust—AMT International
Portfolio
NVIT—Gartmore NVIT
International Equity
Fund
S Class
Management Fees ...................................................................................
12b–1 Fees ..............................................................................................
Other Expenses .......................................................................................
Total Gross Expenses .............................................................................
Waivers/Reimbursements ........................................................................
Total Net Expenses .................................................................................
Fund/Class 84 Asset Level ($MMs) (5/20/09) ..........................................
14. Neuberger Berman Advisers
Management Trust—AMT Mid-Cap
Growth Portfolio Replaced by NVIT—
NVIT Multi-Manager Mid Cap Growth
Fund (Substitution Table Reference
Nos. 26, 27, & 28)
Class III
1.15%
0.25%
0.21%
1.61%
82 0.00%
1.61%
85 $284.0
80 0.80%
0.00%
81 0.31%
1.11%
83 0.00%
1.11%
$35.5
Class VI
80 0.80%
0.25%
81 0.31%
1.36%
83 0.00%
1.36%
$5.0
Neuberger Berman Advisers
Management Trust—AMT Mid-Cap
Growth Portfolio: I Class will be
replaced by NVIT—NVIT Multi-
Manager Mid Cap Growth Fund: Class I.
Neuberger Berman Advisers
Management Trust—AMT Mid-Cap
Growth Portfolio: S Class will be
replaced by NVIT—NVIT MultiManager Mid Cap Growth Fund: Class I
or Class II, depending on the contract
involved in the Substitution. The
following chart compares the
management fees, the total operating
expenses (before and after any waivers
and reimbursements) expressed as an
annual percentage of average daily net
assets, and the asset levels of Neuberger
Berman Advisers Management Trust—
AMT Mid-Cap Growth Portfolio: I Class,
Neuberger Berman Advisers
Management Trust—AMT Mid-Cap
Growth Portfolio: S Class, NVIT—NVIT
Multi-Manager Mid Cap Growth Fund:
Class I and NVIT—NVIT Multi-Manager
Mid Cap Growth Fund: Class II.
reimbursing the Fund for its total operating
expenses, excluding compensation to NBM, taxes,
interest, extraordinary expenses, transaction costs
and brokerage commissions, that exceed, in the
aggregate, 1.00% per annum of the Class’s average
daily net asset value. Because of the exclusion, the
Fund’s net expenses may exceed the contractual
expense limitation. The Fund has in turn
contractually undertaken to repay NBM from I Class
assets for the excess operating expenses borne by
NBM, so long as the Class’s annual operating
expenses during that period (exclusive of
compensation to NBM, taxes, interest, extraordinary
expenses and brokerage commissions) does not
exceed 1.00% per year of the Class’s average daily
net assets, and further provided that the
reimbursements are made within three years after
the year in which NBM incurred the expense. The
figures in the table are based on last year’s
expenses.
77 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.75% for
all share classes until May 1, 2010. This limit
excludes certain Fund expenses, including interest,
taxes, brokerage commissions, Rule 12b–1 fees, fees
paid pursuant to an Administrative Services Plan,
short sale dividend expenses, other expenditures
which are capitalized in accordance with generally
accepted accounting principles and other nonroutine expenses not incurred in the ordinary
course of the Fund’s business. NVIT is authorized
to reimburse NFA for management fees previously
waived or reduced and/or for expenses previously
paid by NFA, provided, however, that any
reimbursements must be paid at a date not more
than three years after the fiscal year in which NFA
waived the fees or reimbursed the expenses and the
reimbursements do not cause the Fund to exceed
the expense limitation in the agreement.
78 Represents assets held by the fund or listed
share class, as applicable.
79 Based on asset levels as of 3/31/09,
approximately 70% of the Existing Fund’s I Class
assets will be transferred to the Replacement Fund’s
Class I pursuant to the Substitution. This transfer
represents approximately 35% of the Existing
Fund’s total assets.
80 Management fees have been restated to reflect
the elimination of a performance-based
management fee and implementation of an assetbased management fee equal to the lowest possible
management fee under the previous performancebased fee structure, as approved by the Board of
Trustees on January 16, 2009. Under no
circumstances, during a six-month transition period
will the management fee under the new fee
structure exceed what the Adviser would have
received under the old structure assuming
maximum penalty for underperformance.
81 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.15%, but which
are permitted to be as high as 0.25%. The full
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Federal Register / Vol. 74, No. 116 / Thursday, June 18, 2009 / Notices
Existing fund
Replacement fund
Neuberger Berman Advisers
Management Trust—AMT MidCap Growth Portfolio
NVIT—NVIT Multi-Manager
Mid Cap
Growth Fund
I Class
Management Fees ...........................................................................................
12b–1 Fees ......................................................................................................
Other Expenses ...............................................................................................
Total Gross Expenses .....................................................................................
Waivers/Reimbursements ................................................................................
Total Net Expenses .........................................................................................
Fund/Class 90 Asset Level ($MMs) (5/20/09) ..................................................
15. Neuberger Berman Advisers
Management Trust—AMT Partners
Portfolio Replaced by NVIT—
Neuberger Berman NVIT Multi Cap
Opportunities Fund (Substitution Table
Reference No. 29)
0.83%
0.00%
0.09%
0.92%
87 0.00%
0.92%
91 $331.0
S Class
0.83%
0.25%
0.10%
1.18%
88 0.00%
1.18%
92 $37.3
Class I
0.75%
0.00%
86 0.22%
0.97%
89 0.08%
0.89%
$87.7
Class II
0.75%
0.25%
86 0.22%
1.22%
89 0.08%
1.14%
$134.2
assets, and the asset levels of Neuberger
Berman Advisers Management Trust—
AMT Partners Portfolio: I Class and
NVIT—Neuberger Berman NVIT Multi
Cap Opportunities Fund: Class I.
Neuberger Berman Advisers
Management Trust—AMT Partners
Portfolio: I Class will be replaced by
NVIT—Neuberger Berman NVIT Multi
Cap Opportunities Fund: Class I. The
following chart compares the
management fees, the total operating
expenses (before and after any waivers
and reimbursements) expressed as an
annual percentage of average daily net
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses would be 1.21%
and 1.46%, respectively.
82 Neuberger Berman Management Inc. (NBMI)
has undertaken through December 31, 2012 to
reimburse certain operating expenses, including the
compensation of NBMI and excluding taxes,
interest, extraordinary expenses, brokerage
commissions and transaction costs, that exceed, in
the aggregate, 2.00% of the average daily net asset
value of the Fund. The expense limitation
agreement is contractual and any excess expenses
can be repaid to NBMI within three years of the
year incurred, provided such recoupment would
not cause the fund to exceed its contractual expense
limitation. Moreover, NBMI has voluntarily
committed to reimburse certain expenses, as stated
above, for an additional 0.50% of the average daily
net asset value of fund to maintain the Fund’s net
operating expense ratio at 1.50%. NBMI may, at its
sole discretion, terminate this voluntary additional
reimbursement commitment without notice. The
figures in the table are based on last year’s
expenses.
83 NVIT and NFA have entered into a written
contract limiting operating expenses to 1.05% f
until at least May 1, 2010. This limit excludes
certain Fund expenses, including interest, taxes,
brokerage commissions, Rule 12b–1 fees, fees paid
pursuant to an Administrative Services Plan, short
sale dividend expenses, other expenditures which
are capitalized in accordance with generally
accepted accounting principles and other nonroutine expenses not incurred in the ordinary
course of the Fund’s business. NVIT is authorized
to reimburse NFA for management fees previously
waived or reduced and/or for expenses previously
paid by NFA provided, however, that any
reimbursements must be paid at a date not more
than three years after the fiscal year in which NFA
waived the fees or reimbursed the expenses and the
reimbursements do not cause the Fund to exceed
the expense limitation in the agreement. Currently,
all share classes are operating below the expense
limit.
84 Represents assets held by the fund or listed
share class, as applicable.
85 Based on asset levels as of 3/31/09,
approximately 1% of the Existing Fund’s S Class
assets will be transferred to the NVIT—Gartmore
NVIT International Equity Fund: Class III and
approximately 3% of the Existing Fund’s S Class
assets will be transferred to the NVIT—Gartmore
NVIT International Equity Fund: Class VI pursuant
to the Substitution. These transfers represent
approximately 4% of the Existing Fund’s total
assets.
86 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.07%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.07% and
1.32%, respectively.
87 Neuberger Berman Management LLC (‘‘NBM’’)
has contractually undertaken to limit the expenses
of I Class shares through December 31, 2012 by
reimbursing the Fund for its total operating
expenses, excluding compensation to NBM, taxes,
interest, extraordinary expenses, transaction costs
and brokerage commissions, that exceed, in the
aggregate, 1.00% per annum of the Class’s average
daily net asset value. Because of the exclusion, the
Fund’s net expenses may exceed the contractual
expense limitation. The Fund has in turn
contractually undertaken to repay NBM from I Class
assets for the excess operating expenses borne by
NBM, so long as the Class’s annual operating
expenses during that period (exclusive of the
compensation to NBM, taxes, interest, extraordinary
expenses and brokerage commissions) does not
exceed 1.00% per year of the Class’s average daily
net assets, and further provided that the
reimbursements are made within three years after
the year in which NBM incurred the expense. The
figures in the table are based on last year’s
expenses.
88 Neuberger Berman Management Inc. (NBMI)
has contractually undertaken to limit the expenses
of S Class shares through December 31, 2012 by
reimbursing the Fund for its total operating
expenses, including compensation to NBMI, but
excluding taxes, interest, extraordinary expenses,
transaction costs and brokerage commissions, that
exceed, in the aggregate, 1.25% per annum of the
Class’s average daily net asset value. The Fund has
in turn contractually undertaken to repay NBMI
from S Class assets for the excess operating
expenses borne by NBMI, so long as the Class’s
annual operating expenses during that period
(exclusive of taxes, interest, extraordinary expenses
and brokerage commissions) does not exceed 1.25%
per year of the Class’s average daily net assets, and
further provided that the reimbursements are made
within three years after the year in which NBMI
incurred the expense. The figures in the table are
based on last year’s expenses.
89 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.82% until
at least May 1, 2010. This limit excludes certain
Fund expenses, including any interest, taxes,
brokerage commissions, Rule 12b–1 fees, fees paid
pursuant to an Administrative Services Plan, shortsale dividend expenses, other expenditures which
are capitalized in accordance with generally
accepted accounting principles and other nonroutine expenses not incurred in the ordinary
course of the Fund’s business. NVIT is authorized
to reimburse NFA for management fees previously
waived or reduced and/or for expenses previously
paid by NFA, provided however, that any
reimbursements must be paid at a date not more
than three years after the fiscal year in which NFA
waived the fees or reimbursed the expenses and the
reimbursements do not cause the Fund to exceed
the expense limitation in the agreement.
90 Represents assets held by the fund or listed
share class, as applicable.
91 Based on asset levels as of 3/31/09,
approximately 22% of the Existing Fund’s I Class
assets will be transferred to NVIT—NVIT MultiManager Mid Cap Growth Fund: Class I pursuant
to the Substitution. This transfer represents
approximately 20% of the Existing Fund’s total
assets.
92 Based on asset levels as of 3/31/09,
approximately 0.8% of the Existing Fund’s S Class
assets will be transferred to NVIT—NVIT MultiManager Mid Cap Growth Fund: Class I,
representing approximately 0.1% of the Existing
Fund’s total assets, and approximately 11% of the
Existing Fund’s S Class assets will be transferred to
NVIT—NVIT Multi-Manager Mid Cap Growth
Fund: Class II pursuant to the Substitution,
representing approximately 1% of the Existing
Fund’s total assets.
93 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.15%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
Continued
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Federal Register / Vol. 74, No. 116 / Thursday, June 18, 2009 / Notices
Existing fund
Replacement fund
Neuberger Berman Advisers Management
Trust—AMT Partners
Portfolio: I Class
NVIT—Neuberger Berman NVIT Multi Cap Opportunities Fund: Class I
0.84%
0.00%
0.11%
0.95%
94 0.00%
0.95%
97 $236.1
0.60%
0.00%
93 1.50%
2.10%
95 1.20%
0.90%
$2.9
Management Fees ...................................................................................................................
12b–1 Fees ..............................................................................................................................
Other Expenses .......................................................................................................................
Total Gross Expenses .............................................................................................................
Waivers/Reimbursements ........................................................................................................
Total Net Expenses .................................................................................................................
Fund/Class 96 Asset Level ($MMs) (5/20/09) ..........................................................................
Neuberger Berman Advisers
Management Trust—AMT Regency
Portfolio: S Class will be replaced by
NVIT—NVIT Multi-Manager Mid Cap
Value Fund: Class II. The following
chart compares the management fees,
the total operating expenses (before and
after any waivers and reimbursements)
16. Neuberger Berman Advisers
Management Trust—AMT Regency
Portfolio Replaced by NVIT—NVIT
Multi-Manager Mid Cap Value Fund
(Substitution Table Reference No. 30)
expressed as an annual percentage of
average daily net assets, and the asset
levels of Neuberger Berman Advisers
Management Trust—AMT Regency
Portfolio: S Class and NVIT—NVIT
Multi-Manager Mid Cap Value Fund:
Class II.
Existing fund
Replacement fund
Neuberger Berman Advisers Management
Trust—AMT Regency
Portfolio: S Class
NVIT—NVIT Multi-Manager Mid Cap Value
Fund: Class II
0.85%
0.25%
0.13%
1.23%
99 0.00%
1.23%
102 $149.7
0.75%
0.25%
98 0.13%
1.13%
100 0.06%
1.07%
$124.9
Management Fees ...................................................................................................................
12b–1 Fees ..............................................................................................................................
Other Expenses .......................................................................................................................
Total Gross Expenses .............................................................................................................
Waivers/Reimbursements ........................................................................................................
Total Net Expenses .................................................................................................................
Fund/Class 101 Asset Level ($MMs) (5/20/09) .........................................................................
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.00%.
94 Neuberger Berman Management LLC (‘‘NBM’’)
has contractually undertaken to limit the Fund’s
expenses through December 31, 2012 by
reimbursing the Fund for its total operating
expenses (excluding the compensation of NBM,
taxes, interest, extraordinary expenses, brokerage
commissions and transaction costs) that exceed, in
the aggregate, 1.00% per annum of the Fund’s
average daily net asset value. Because of the
exclusion, the Fund’s net expenses may exceed the
contractual expense limitation. The Fund has
contractually undertaken to reimburse NBM for the
excess expenses paid by NBM, provided the
reimbursements do not cause total operating
expenses (exclusive of the compensation of NBM,
taxes, interest, brokerage commissions, transaction
costs and extraordinary expenses) to exceed an
annual rate of 1.00%, and the reimbursements are
made within three years after the year in which
NBM incurred the expense. The figures in the table
are based on last year’s expenses.
95 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.75% until
May 1, 2010. This limit excludes certain Fund
expenses, including interest, taxes, brokerage
commissions, Rule 12b–1 fees, fees paid pursuant
to an Administrative Services Plan, short sale
dividend expenses, other expenditures which are
capitalized in accordance with generally accepted
accounting principles and other non-routine
expenses not incurred in the ordinary course of the
Fund’s business. NVIT is authorized to reimburse
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NFA for management fees previously waived or
reduced and/or for expenses previously paid by
NFA, provided, however, that any reimbursements
must be paid at a date not more than three years
after the fiscal year in which NFA waived the fees
or reimbursed the expenses and the reimbursements
do not cause the Fund to exceed the expense
limitation in the agreement.
96 Represents assets held by the fund or listed
share class, as applicable.
97 Based on asset levels as of 3/31/09,
approximately 50% of the Existing Fund’s assets
will be transferred to the Replacement Fund
pursuant to the Substitution.
98 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.01%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.31%.
99 Neuberger Berman Management LLC (‘‘NBM’’)
has contractually agreed to reimburse certain
expenses of the Fund through 12/31/2019, so that
the total annual operating expenses are limited to
1.25% of the Fund’s average daily net asset value.
This arrangement does not cover interest, taxes,
brokerage commissions, and extraordinary
expenses; consequently, net expenses may exceed
the contractual expense limitation. The Fund has
agreed to repay NBM for expenses reimbursed to
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the Fund provided that repayment does not cause
the Fund’s annual operating expenses to exceed its
expense limitation. Any such repayment must be
made within three years after the year in which
NBM incurred the expense. The figures in the table
are based on last year’s expenses.
100 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.81% until
at least May 1, 2010. This limit excludes certain
Fund expenses, including interest, taxes, brokerage
commissions, Rule 12b–1 fees, short-sale dividend
expenses, fees paid pursuant to an Administrative
Services Plan, other expenditures which are
capitalized in accordance with generally accepted
accounting principles and other non-routine
expenses not incurred in the ordinary course of the
Fund’s business. NVIT is authorized to reimburse
NFA for management fees previously waived or
reduced and/or for expenses previously paid by
NFA, provided, however, that any reimbursements
must be paid at a date not more than three years
after the fiscal year in which NFA waived the fees
or reimbursed the expenses and the reimbursements
do not cause the Fund to exceed the expense
limitation in the agreement.
101 Represents assets held by the fund or listed
share class, as applicable.
102 Based on asset levels as of 3/31/09,
approximately 7% of the Existing Fund’s S Class
assets will be transferred to the Replacement Fund
pursuant to the Substitution. This transfer
represents approximately 7% of the Existing Fund’s
total assets.
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Federal Register / Vol. 74, No. 116 / Thursday, June 18, 2009 / Notices
17. T. Rowe Price Equity Series, Inc.—
T. Rowe Price Limited Term Bond
Portfolio Replaced by NVIT—NVIT
Short Term Bond Fund (Substitution
Table Reference No. 31)
T. Rowe Price Equity Series, Inc.—T.
Rowe Price Limited Term Bond
Portfolio: Class II will be replaced by
NVIT—NVIT Short Term Bond Fund:
Class II. The following chart compares
the management fees, the total operating
expenses (before and after any waivers
29001
and reimbursements) expressed as an
annual percentage of average daily net
assets, and the asset levels of T. Rowe
Price Equity Series, Inc.—T. Rowe Price
Limited Term Bond Portfolio: Class II
and NVIT—NVIT Short Term Bond
Fund: Class II.
Existing fund
Replacement fund
T. Rowe Price Equity
Series, Inc.—T. Rowe
Price Limited Term Bond
Portfolio: Class II
NVIT—NVIT Short Term
Bond Fund: Class II
0.70%
0.25%
0.00%
0.95%
0.00%
0.95%
106 $73.5
0.35%
0.25%
103 0.32%
0.92%
104 0.02%
0.90%
$34.6
Management Fees ...................................................................................................................
12b–1 Fees ..............................................................................................................................
Other Expenses .......................................................................................................................
Total Gross Expenses .............................................................................................................
Waivers/Reimbursements ........................................................................................................
Total Net Expenses .................................................................................................................
Fund/Class 105 Asset Level ($MMs) (4/30/09) .........................................................................
18. The Universal Institutional Funds,
Inc.—Mid Cap Growth Portfolio
Replaced by NVIT—NVIT MultiManager Mid Cap Growth Fund
(Substitution Table Reference No. 32)
The Universal Institutional Funds,
Inc.—Mid Cap Growth Portfolio: Class I
will be replaced by NVIT—NVIT MultiManager Mid Cap Growth Fund: Class I.
The following chart compares the
management fees, the total operating
expenses (before and after any waivers
and reimbursements) expressed as an
annual percentage of average daily net
assets, and the asset levels of The
Universal Institutional Funds, Inc.—
Mid Cap Growth Portfolio: Class I and
NVIT—NVIT Multi-Manager Mid Cap
Growth Fund: Class I.
Existing fund
Replacement fund
The Universal Institutional Funds, Inc.—Mid
Cap Growth Portfolio:
Class I
NVIT—NVIT Multi-Manager Mid Cap Growth
Fund: Class I
107 0.75%
Management Fees ...................................................................................................................
12b–1 Fees ..............................................................................................................................
103 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.15%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.00%.
104 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.50% for
all share classes until May 1, 2010. This limit
excludes certain Fund expenses, including interest,
taxes, brokerage commissions, Rule 12b–1 fees, fees
paid pursuant to an Administrative Services Plan,
short sale dividend expenses, other expenditures
which are capitalized in accordance with generally
accepted accounting principles and other nonroutine expenses not incurred in the ordinary
course of the Fund’s business. NVIT is authorized
to reimburse NFA for management fees previously
waived or reduced and/or for expenses previously
paid by NFA, provided, however, that any
reimbursements must be paid at a date not more
than three years after the fiscal year in which NFA
waived the fees or reimbursed the expenses and the
reimbursements do not cause the Fund to exceed
the expense limitation in the agreement.
105 Represents assets held by the fund or listed
share class, as applicable.
106 Based on asset levels as of 3/31/09,
approximately 96% of the Existing Fund’s Class II
assets will be transferred to the Replacement Fund
pursuant to the Substitution. This comprised
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approximately 31% of the Existing Fund’s total
assets.
107 The Adviser is entitled to receive an advisory
fee at an annual percentage of the Portfolio’s
average daily net assets as set forth in the table
below:
First $500 million—0.75%
From $500 million to $1 billion—0.70%
More than $1 billion—0.65%
108 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.07%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.07%.
109 The Adviser has voluntarily agreed to reduce
its advisory fee and/or reimburse the Portfolio so
that Total Annual Portfolio Operating Expenses,
excluding certain investment related expenses
described below, will not exceed 1.05%. In
determining the actual amount of voluntary
advisory fee waivers and/or expense
reimbursements for the Portfolio, if any, certain
investment related expenses, such as foreign
country tax expense and interest expense on
amounts borrowed, are excluded from Total Annual
Portfolio Operating Expenses. If these expenses
were included, the Total Annual Portfolio
Operating Expenses after voluntary fee waivers and/
or expense reimbursements could exceed the
expense ratio shown. For the fiscal year ended
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0.00%
0.75%
0.00%
December 31, 2008, after giving effect to the
Adviser’s voluntary advisory fee waivers and/or
expense reimbursements, the Total Annual
Portfolio Operating Expenses incurred by investors
were 1.05%. Fee waivers and/or expense
reimbursements are voluntary and the Adviser
reserves the right to terminate any waivers and/or
reimbursements at any time and without notice.
110 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.82% until
at least May 1, 2010. This limit excludes certain
Fund expenses, including any interest, taxes,
brokerage commissions, Rule 12b–1 fees, fees paid
pursuant to an Administrative Services Plan, shortsale dividend expenses, other expenditures which
are capitalized in accordance with generally
accepted accounting principles and other nonroutine expenses not incurred in the ordinary
course of the Fund’s business. NVIT is authorized
to reimburse NFA for management fees previously
waived or reduced and/or for expenses previously
paid by the NFA, provided however, that any
reimbursements must be paid at a date not more
than three years after the fiscal year in which NFA
waived the fees or reimbursed the expenses and the
reimbursements do not cause the Fund to exceed
the expense limitation in the agreement.
111 Represents assets held by the fund or listed
share class, as applicable.
112 Based on asset levels as of 3/31/09,
approximately 22% of the Existing Fund’s Class I
assets will be transferred to the Replacement Fund
pursuant to the Substitution. This comprises
approximately 7% of the Existing Fund’s total
assets.
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Federal Register / Vol. 74, No. 116 / Thursday, June 18, 2009 / Notices
Existing fund
Replacement fund
The Universal Institutional Funds, Inc.—Mid
Cap Growth Portfolio:
Class I
NVIT—NVIT Multi-Manager Mid Cap Growth
Fund: Class I
Other Expenses .......................................................................................................................
Total Gross Expenses .............................................................................................................
Waivers/Reimbursements ........................................................................................................
Total Net Expenses .................................................................................................................
Fund/Class 111 Asset Level ($MMs) (5/20/09) .........................................................................
19. The Universal Institutional Funds,
Inc.—U.S. Real Estate Portfolio
Replaced by NVIT—Van Kampen NVIT
Real Estate Fund (Substitution Table
Reference Nos. 33 & 34)
The Universal Institutional Funds,
Inc.—U.S. Real Estate Portfolio: Class I
will be replaced by NVIT—Van Kampen
NVIT Real Estate Fund: Class I. The
Universal Institutional Funds, Inc.—
U.S. Real Estate Portfolio: Class II will
be replaced by NVIT—Van Kampen
NVIT Real Estate Fund: Class II. The
following chart compares the
management fees, the total operating
expenses (before and after any waivers
and reimbursements) expressed as an
108 0.22%
0.31%
1.06%
109 0.00%
1.06%
112 $56.4
0.97%
110 0.08%
0.89%
$87.7
annual percentage of average daily net
assets, and the asset levels of The
Universal Institutional Funds, Inc.—
U.S. Real Estate Portfolio: Class I, The
Universal Institutional Funds, Inc.—
U.S. Real Estate Portfolio: Class II,
NVIT—Van Kampen NVIT Real Estate
Fund: Class I and NVIT—Van Kampen
NVIT Real Estate Fund: Class II.
Existing fund
Replacement fund
The Universal Institutional
Funds, Inc.—U.S. Real Estate
Portfolio
NVIT—Van Kampen NVIT
Real Estate Fund
Class I
Management Fees ...........................................................................................
12b–1 Fees ......................................................................................................
Other Expenses ...............................................................................................
Total Gross Expenses .....................................................................................
Waivers/Reimbursements ................................................................................
Total Net Expenses .........................................................................................
Fund/Class 116 Asset Level ($MMs) (5/20/09) .................................................
Class II
113 0.77%
113 0.77%
0.00%
0.30%
1.07%
0.00%
1.07%
117 $340.9
0.35%
0.30%
1.42%
0.00%
1.42%
118 $219.3
Class I
0.70%
0.00%
114 0.74%
1.44%
115 0.44%
1.00%
$3.8
Class II
0.70%
0.25%
114 0.74%
1.69%
115 0.44%
1.25%
$2.8
20. Van Eck Worldwide Insurance
Trust—Worldwide Emerging Markets
Fund Replaced by NVIT—Gartmore
NVIT Emerging Markets Fund
(Substitution Table Reference Nos. 35,
36, & 37)
Van Eck Worldwide Insurance
Trust—Worldwide Emerging Markets
Fund: Initial Class will be replaced by
NVIT—Gartmore NVIT Emerging
Markets Fund: Class I or Class III,
depending on the contract involved in
the Substitution. Van Eck Worldwide
Insurance Trust—Worldwide Emerging
Markets Fund: Class R1 will be replaced
by NVIT—Gartmore NVIT Emerging
Markets Fund: Class III. The following
chart compares the management fees,
the total operating expenses (before and
after any waivers and reimbursements)
expressed as an annual percentage of
average daily net assets, and the asset
levels of Van Eck Worldwide Insurance
Trust—Worldwide Emerging Markets
Fund: Initial Class, Van Eck Worldwide
Insurance Trust—Worldwide Emerging
Markets Fund: Class R1, NVIT—
Gartmore NVIT Emerging Markets Fund:
Class I and NVIT—Gartmore NVIT
Emerging Markets Fund: Class III.
113 The Adviser is entitled to receive an advisory
fee at an annual percentage of the Portfolio’s
average daily net assets as set forth as follows: First
$500 million 0.80%; from $500 million to $1 billion
0.75%; more than $1 billion 0.70%.
114 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.15%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses would be 1.10%
and 1.35%, respectively.
115 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.85% until
May 1, 2010. This limit excludes certain Fund
expenses, including interest, taxes, brokerage
commissions, Rule 12b–1 fees, fees paid pursuant
to an Administrative Services Plan, short sale
dividend expenses, other expenditures which are
capitalized in accordance with generally accepted
accounting principles and other non-routine
expenses not incurred in the ordinary course of the
Fund’s business. NVIT is authorized to reimburse
NFA for management fees previously waived or
reduced and/or for expenses previously paid by
NFA, provided, however, that any reimbursements
must be paid at a date not more than three years
after the fiscal year in which NFA waived the fees
or reimbursed the expenses and the reimbursements
do not cause the Fund to exceed the expense
limitation in the agreement.
116 Represents assets held by the fund or listed
share class.
117 Based on asset levels as of 3/31/09,
approximately 35% of the Existing Fund’s Class I
assets will be transferred to NVIT—Van Kampen
NVIT Real Estate Fund: Class I pursuant to the
Substitution. This comprises approximately 21% of
the Existing Fund’s total assets.
118 Based on asset levels as of 3/31/09,
approximately 13% of the Existing Fund’s Class II
assets will be transferred to NVIT—Van Kampen
NVIT Real Estate Fund: Class II pursuant to the
Substitution. This comprises approximately 5% of
the Existing Fund’s total assets.
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Existing fund
Replacement fund
Van Eck Worldwide Insurance
Trust—Worldwide Emerging
Markets Fund
NVIT—Gartmore NVIT Emerging Markets Fund
Initial Class
Management Fees ...........................................................................................
12b–1 Fees ......................................................................................................
Other Expenses ...............................................................................................
Total Gross Expenses .....................................................................................
Waivers/Reimbursements ................................................................................
Total Net Expenses .........................................................................................
Fund/Class124 Asset Level ($MMs) (5/20/09) .................................................
1.00%
0.00%
0.29%
1.29%
122 0.00%
1.29%
125 $118.3
Class R1
1.00%
0.00%
0.29%
1.29%
122 0.00%
1.29%
126 $37.1
Class I
119 0.95%
0.00%
120 0.28%
1.23%
123 0.00%
1.23%
$36.0
Class III
119 0.95%
0.00%
121 0.29%
1.24%
123 0.00%
1.24%
$101.6
21. Wells Fargo Advantage Variable
Trust—Wells Fargo Advantage VT
Discovery Fund Replaced by NVIT—
NVIT Multi-Manager Mid Cap Growth
Fund (Substitution Table Reference
Nos. 38 & 39)
Wells Fargo Advantage Variable
Trust—Wells Fargo Advantage VT
Discovery Fund will be replaced by
NVIT—NVIT Multi-Manager Mid Cap
Growth Fund: Class I or Class II,
depending on the contract involved in
the Substitution. The following chart
compares the management fees, the total
operating expenses (before and after any
waivers and reimbursements) expressed
as an annual percentage of average daily
net assets, and the asset levels of Wells
Fargo Advantage Variable Trust—Wells
Fargo Advantage VT Discovery Fund,
NVIT—NVIT Multi-Manager Mid Cap
Growth Fund: Class I and NVIT—NVIT
Multi-Manager Mid Cap Growth Fund:
Class II.
119 Management fees have been restated to reflect
the elimination of a performance-based
management fee and implementation of an assetbased management fee equal to the lowest possible
management fee under the previous performancebased fee structure, as approved by the Board of
Trustees on September 18, 2008. Under no
circumstances, during a six-month transition period
will the management fee under the new fee
structure exceed what the Adviser would have
received under the old structure assuming
maximum penalty for underperformance.
120 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.15%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses would be 1.33%.
121 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.16%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses would be 1.33%.
122 For the period May 1, 2009 through April 30,
2010, the Adviser contractually agreed to waive fees
and reimburse certain operating expenses
(excluding interest, dividends paid on securities
sold short, trading expenses, taxes and
extraordinary expenses) to the extent Total Annual
Fund Operating Expenses exceed 1.50% of average
daily net assets.
123 NVIT and NFA have entered into a written
contract limiting operating expenses to 1.20% for
all share classes until at least May 1, 2010. This
limit excludes certain Fund expenses, including
interest, taxes, brokerage commissions, Rule 12b–1
fees, fees paid pursuant to an Administrative
Services Plan, short sale dividend expenses, other
expenditures which are capitalized in accordance
with generally accepted accounting principles and
other non-routine expenses not incurred in the
ordinary course of the Fund’s business. NVIT is
authorized to reimburse NFA for management fees
previously waived or reduced and/or for expenses
previously paid by NFA provided, however, that
any reimbursements must be paid at a date not
more than three years after the fiscal year in which
NFA waived the fees or reimbursed the expenses
and the reimbursements do not cause the Fund to
exceed the expense limitation in the agreement.
Currently, all share classes are operating below the
expense limit.
124 Represents assets held by the fund or listed
share class, as applicable.
125 Based on asset levels as of 3/31/09,
approximately 0.3% of the Existing Fund’s Initial
Class assets will be transferred to NVIT—Gartmore
NVIT Emerging Markets Fund: Class I, representing
approximately 0.3% of the Existing Fund’s total
assets, and approximately 25% of the Existing
Fund’s assets will be transferred to NVIT—
Gartmore NVIT Emerging Markets Fund: Class III,
representing approximately 25% of the Existing
Fund’s total assets, pursuant to the Substitution.
126 Based on asset levels as of 3/31/09,
approximately 42% of the Existing Fund’s Class R1
assets will be transferred to NVIT—Gartmore NVIT
Emerging Markets Fund: Class III pursuant to the
Substitution. This comprises approximately 10% of
the Existing Fund’s total assets.
127 The following advisory fee schedule is
charged to the Fund as a percentage of the Fund’s
average daily net assets: 0.75% for the first $500
million; 0.70% for the next $500 million; 0.65% for
the next $2 billion; 0.625% for the next $2 billion;
and 0.60% for assets over $5 billion.
128 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.07%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.07% and
1.32%, respectively.
129 The adviser has committed through April 30,
2010 to waive fees and/or reimburse expenses to the
extent necessary to maintain the Fund’s net
operating expenses, excluding brokerage
commissions, interest, taxes, extraordinary
expenses and the expenses of any money market
fund or other fund held by the Fund, do not exceed
the net operating expense ratio of 1.15%.The
committed net operating expense ratio may be
increased only with approval of the Board of
Trustees.
130 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.82% for
all share classes until at least May 1, 2010. This
limit excludes certain Fund expenses, including
any interest, taxes, brokerage commissions, Rule
12b–1 fees, fees paid pursuant to an Administrative
Services Plan, short-sale dividend expenses, other
expenditures which are capitalized in accordance
with generally accepted accounting principles and
other non-routine expenses not incurred in the
ordinary course of the Fund’s business. NVIT is
authorized to reimburse NFA for management fees
previously waived or reduced and/or for expenses
previously paid by NFA, provided however, that
any reimbursements must be paid at a date not
more than three years after the fiscal year in which
NFA waived the fees or reimbursed the expenses
and the reimbursements do not cause the Fund to
exceed the expense limitation in the agreement.
131 Represents assets held by the fund or listed
share class, as applicable.
132 Based on asset levels as of 3/31/09,
approximately 29% of the Existing Fund’s assets
will be transferred to NVIT—NVIT Multi-Manager
Mid Cap Growth Fund: Class I and approximately
0.02% of the Existing Fund’s assets will be
transferred to NVIT—NVIT Multi-Manager Mid Cap
Growth Fund: Class II pursuant to the Substitution.
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Existing fund
Replacement fund
Wells Fargo Advantage Variable
Trust—Wells Fargo Advantage VT
Discovery Fund
NVIT—NVIT Multi-Manager
Mid Cap Growth Fund
127 0.76%
Management Fees ...................................................................................
12b–1 Fees ..............................................................................................
Other Expenses .......................................................................................
Total Gross Expenses .............................................................................
Waivers/Reimbursements ........................................................................
Total Net Expenses .................................................................................
Fund/Class131 Asset Level ($MMs) (5/20/09) .........................................
22. Wells Fargo Advantage Variable
Trust—Wells Fargo Advantage VT
Opportunity Fund Replaced by NVIT—
NVIT Multi-Manager Mid Cap Value
Fund (Substitution Table Reference No.
40)
Class I
0.25%
0.27%
1.28%
129 0.12%
1.16%
132 $112.7
Wells Fargo Advantage Variable
Trust—Wells Fargo Advantage VT
Opportunity Fund: Investor Class will
be replaced by NVIT—NVIT MultiManager Mid Cap Value Fund: Class II.
The following chart compares the
management fees, the total operating
expenses (before and after any waivers
0.75%
0.00%
128 0.22%
0.97%
130 0.08%
0.89%
$87.7
Class II
0.75%
0.25%
128 0.22%
1.22%
130 0.08%
1.14%
$134.2
and reimbursements) expressed as an
annual percentage of average daily net
assets, and the asset levels of Wells
Fargo Advantage Variable Trust—Wells
Fargo Advantage VT Opportunity Fund:
Investor Class and NVIT—NVIT MultiManager Mid Cap Value Fund: Class II.
Existing fund
Replacement fund
Wells Fargo Advantage
Variable Trust—Wells
Fargo Advantage VT
Opportunity Fund: Investor Class
NVIT—NVIT Multi-Manager Mid Cap Value
Fund: Class II
133 0.76%
Management Fees ...................................................................................................................
12b–1 Fees ..............................................................................................................................
Other Expenses .......................................................................................................................
Total Gross Expenses .............................................................................................................
Waivers/Reimbursements ........................................................................................................
Total Net Expenses .................................................................................................................
Fund/Class 137 Asset Level ($MMs) (5/20/09) .........................................................................
133 The following advisory fee schedule is
charged to the Fund as a percentage of the Fund’s
average daily net assets:
0.75% for the first $500 million;
0.70% for the next $500 million;
0.65% for the next $2 billion;
0.625% for the next $2 billion; and
0.60% for assets over $5 billion.
134 ‘‘Other Expenses’’ include administrative
services fees which currently are 0.01%, but which
are permitted to be as high as 0.25%. The full
0.25% in administrative services fees is not
reflected in ‘‘Other Expenses’’ at this time because,
until at least May 1, 2010, the Fund does not intend
to pay insurance companies a higher amount. If the
full amount of administrative services fees were
charged, total operating expenses (after fee waivers/
expense reimbursements) would be 1.31%.
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135 The adviser has committed through April 30,
2010, to waive fees and/or reimburse expenses to
the extent necessary to ensure that the Fund’s net
operating expenses, excluding brokerage
commissions, interest, taxes, extraordinary
expenses and the expenses of any money market
fund or other fund held by the Fund, do not exceed
the net operating expense ratio of 1.07%.The
committed net operating expense ratio may be
increased only with approval of the Board of
Trustees.
136 NVIT and NFA have entered into a written
contract limiting operating expenses to 0.81% for
all share classes until at least May 1, 2010. This
limit excludes certain Fund expenses, including
interest, taxes, brokerage commissions, Rule 12b-1
fees, short-sale dividend expenses, fees paid
pursuant to an Administrative Services Plan, other
expenditures which are capitalized in accordance
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0.25%
0.22%
1.23%
135 0.14%
1.09%
138 $404.3
0.75%
0.25%
134 0.13%
1.13%
136 0.06%
1.07%
$124.9
with generally accepted accounting principles and
other non-routine expenses not incurred in the
ordinary course of the Fund’s business. NVIT is
authorized to reimburse NFA for management fees
previously waived or reduced and/or for expenses
previously paid by NFA, provided, however, that
any reimbursements must be paid at a date not
more than three years after the fiscal year in which
NFA waived the fees or reimbursed the expenses
and the reimbursements do not cause the Fund to
exceed the expense limitation in the agreement.
137 Represents assets held by the fund or listed
share class, as applicable.
138 Based on asset levels as of 3/31/09,
approximately 53% of the Existing Fund’s assets
will be transferred to the Replacement Fund
pursuant to the Substitution.
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Federal Register / Vol. 74, No. 116 / Thursday, June 18, 2009 / Notices
[FR Doc. E9–14288 Filed 6–17–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60108; File No. PCAOB–
2008–05]
Public Company Accounting Oversight
Board; Notice of Filing of Proposed
Rules on Succeeding to the
Registration Status of a Predecessor
Firm
June 12, 2009.
Pursuant to Section 107(b) of the
Sarbanes-Oxley Act of 2002 (the ‘‘Act’’),
notice is hereby given that on August 4,
2008, the Public Company Accounting
Oversight Board (the ‘‘Board’’ or the
‘‘PCAOB’’) filed with the Securities and
Exchange Commission (the
‘‘Commission’’ or ‘‘SEC’’) the proposed
rules described in Items I and II below,
which items have been prepared by the
Board. The Commission is publishing
this notice to solicit comments on the
proposed rules from interested persons.
I. Board’s Statement of the Terms of
Substance of the Proposed Rules
On July 29, 2008, the Board adopted
rules and a form related to succeeding
to the registration status of a
predecessor firm. New PCAOB Rules
2108–2109 and the instructions to a new
form, Form 4, are set out below.
Section 2. Registration and Reporting
Part 1—Registration of Public
Accounting Firms
*
*
*
*
*
2108. Succeeding to the Registration
Status of a Predecessor
(a) In the event that a registered
public accounting firm changes its form
of organization or changes the
jurisdiction under the law of which it is
organized, in circumstances that do not
involve an acquisition or combination
as described in paragraph (b) of this
Rule, the entity in its new form shall
succeed to the registration status of the
predecessor if the new entity is a public
accounting firm and files a Form 4 in
accordance with Rule 2109.
(b) In the event that a registered
public accounting firm is acquired by an
entity that is not a registered public
accounting firm, or combines with any
other entity or entities to form a new
legal entity—
(1) If the acquiring entity or the new
entity is a public accounting firm that
files a Form 4 in accordance with Rule
2109, and the answer provided to each
subpart of Item 3.2.e of that Form 4 is
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21:58 Jun 17, 2009
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‘‘no,’’ that entity shall succeed to the
registration status of the registered firm;
(2) If the acquiring entity or the new
entity is a public accounting firm that
files a Form 4 in accordance with Rule
2109, and the answer provided to any
subpart of Item 3.2.e of that Form 4 is
other than ‘‘no,’’ that entity shall not
succeed to the registration status of the
registered firm; provided, however, that
if that entity represents on Form 4 that
it has filed, or that it intends to file
within 45 days of the effective date of
the acquisition or combination, an
application for registration on Form 1,
then—
(i) Subject to the qualifications in
subparagraphs (ii), (iii), and (iv), that
entity shall temporarily succeed to the
registration status of the registered firm
for a transitional period, but that
registration will cease to be effective on
the earlier of the date that the entity’s
application on Form 1 is approved or
the date that is 91 days after the
effective date of the acquisition or
combination as reported on Form 4;
(ii) Subject to the qualifications in
subparagraphs (iii) and (iv), if the
acquisition or combination took effect
before the effective date of this rule, that
entity shall temporarily succeed to the
registration status of the registered firm
for a transitional period, but that
registration will cease to be effective on
the earlier of the date that the entity’s
application on Form 1 is approved or
the date that is 91 days after the
effective date of this rule;
(iii) if the Board requests additional
information from the entity pursuant to
Rule 2106(c) with less than 60 days
remaining in the original transitional
period, the entity’s temporary
succession to registration status shall
continue to the date that is 60 days after
the date of the Board’s request; and
(iv) If, after the original transition
period has been extended pursuant to
subparagraph (iii), the Board makes any
further requests for additional
information from the entity pursuant to
Rule 2106(c), the Board may in its
discretion extend the temporary
succession to registration status for such
finite period as the Board shall specify.
(c) Subject to paragraph (d) of this
rule, a public accounting firm that
results from events described in
paragraphs (a) or (b) of this rule shall
not, in the absence of compliance with
the provisions of Rule 2109, succeed to
the registration status of a predecessor
registered public accounting firm.
(d) Notwithstanding paragraph (c) of
this rule, if a public accounting firm’s
failure to comply with the provisions of
Rule 2109 is solely a failure concerning
the timeliness of the submission, the
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29005
firm may request leave to file Form 4
out of time by indicating and supporting
that request in accordance with the
instructions to the form. The Board will
evaluate any such request in light of the
relevant facts and circumstances and the
public interest and may, in its
discretion, grant or deny the request. If
the Board grants leave to file the form
out of time, the Form 4 shall be deemed
filed and the provisions of paragraphs
(a) and (b) shall apply as if the Form 4
had been timely filed. A Form 4 that has
been submitted out of time may be
withdrawn by the firm at any time
before the Board has approved or
disapproved the request for leave to file
out of time.
2109. Procedure for Succeeding to the
Registration Status of a Predecessor
(a) A public accounting firm seeking
to succeed to the registration status of a
predecessor registered public
accounting firm pursuant to the
provisions of Rule 2108 must do so by
filing a Form 4—
(1) No later than the 14th day after the
change or business combination takes
effect, if the change or business
combination takes effect on or after
[insert effective date of this rule]; or
(2) No later than [insert date 14 days
after effective date of this rule], if the
change or business combination took
effect before [insert effective date of this
rule].
(b) A public accounting firm filing a
Form 4 must do so by filing the Form
4 in accordance with the instructions to
that form. Unless directed otherwise by
the Board, a public accounting firm
filing a Form 4 must file the Form 4 and
exhibits thereto electronically with the
Board through the Board’s Web-based
system.
(c) A Form 4 shall be deemed to be
filed on the date that the public
accounting firm submits a Form 4 in
accordance with Rule 2109(b) that
includes the signed certification
required in Part V of Form 4, provided,
however, that any report so submitted
after the applicable deadline as
prescribed in paragraph (a) of this rule,
shall not be deemed filed unless and
until the Board, pursuant to Rule
2108(d), grants leave to file the Form 4
out of time.
(d) The provisions of Rule 2204
concerning signatures, shall apply to
each signature required by Form 4 as if
it were a signature to a report on Form
3. Rule 2205 concerning amendments,
and Rule 2207 concerning assertions of
conflicts with non-U.S. laws, shall
apply to any submission on Form 4 as
if the submission were a report on Form.
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]]>Agencies
[Federal Register Volume 74, Number 116 (Thursday, June 18, 2009)]
[Notices]
[Pages 28967-29005]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-14288]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-28767; File No. 812-13495]
Nationwide Life Insurance Company, et al.
June 12, 2009.
AGENCY: Securities and Exchange Commission.
ACTION: Notice of application for an order pursuant to Section 26(c) of
the Investment Company Act of 1940 (the ``1940 Act'') and an order of
exemption pursuant to Section 17(b) of the 1940 Act from Section 17(a)
of the 1940 Act.
-----------------------------------------------------------------------
Applicants: Nationwide Life Insurance Company (``NWL''), Nationwide
Variable Account--II (``Account II''), Nationwide Variable Account--7
(``Account 7''), Nationwide Variable Account--9 (``Account 9''),
Nationwide Variable Account--14 (``Account 14''), Nationwide Multi-Flex
Variable Account (``Flex Account''), Nationwide VLI Separate Account--2
(``Account 2''), Nationwide VLI Separate Account--4 (``Account 4''),
Nationwide VLI Separate Account--7 (``VLI Account 7''), Nationwide Life
and Annuity Insurance Company (``NLAIC''), Nationwide VL Separate
Account--G (``Account G''), Nationwide Life Insurance Company of
America (``NLICA''), Nationwide Provident VLI Separate Account 1
(``Account 1''), Nationwide Life and Annuity Company of America
(``NLACA'' and together with NWL, NLAIC and NLICA, ``Insurance Company
Applicants''), Nationwide Provident VA Separate Account A (``Account
A''), and Nationwide Provident VLI Separate Account A (``VLI Account
A'' and together with Account II, Account 7, Account 9, Account 14,
Flex Account, Account 2, VLI Account 7, Account G, Account 1, and
Account A, ``Separate Accounts'' and, together with Insurance Company
Applicants, ``Section 26 Applicants''), and Nationwide Variable
Insurance Trust (``NVIT'' and together with Section 26 Applicants,
``Section 17 Applicants'').
SUMMARY: Summary of Application: Section 26 Applicants seek an order
pursuant to Section 26(c) of the 1940 Act, approving the substitutions
of certain securities (the ``Substitutions'') issued by certain
management investment companies and held by Separate Accounts to
support certain
[[Page 28968]]
variable annuity contracts and variable life insurance contracts (the
``Contracts'') issued by Insurance Company Applicants. Section 17
Applicants seek an order pursuant to Section 17(b) of the 1940 Act
exempting them from Section 17(a) of the 1940 Act to the extent
necessary to permit them to effectuate the proposed Substitutions by
redeeming a portion of the securities of one or more of the Existing
Funds (as defined herein) in-kind and using those securities received
to purchase shares of the Replacement Funds (as defined herein) (the
``In-Kind Transactions'').
DATES: Filing Date: The application was originally filed on February
11, 2008 and amended on June 25, 2008, March 9, 2009 and June 12, 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 Secretary of
the Commission and serving Insurance Company Applicants and NVIT with a
copy of the request, personally or by mail. Hearing requests must be
received by the Commission by 5:30 p.m. on July 7, 2009, and should be
accompanied by proof of service on Insurance Company Applicants and
NVIT in the form of an affidavit or, for lawyers, a certificate of
service. Hearing requests should state the nature of the requester'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 Secretary of the Commission.
ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street,
NE., Washington, DC 20549-1090. Insurance Company Applicants and NVIT,
c/o Jamie Ruff Casto, Managing Counsel, Nationwide Insurance, One
Nationwide Plaza 1-34-201, Columbus, Ohio 43215.
FOR FURTHER INFORMATION CONTACT: Craig Ruckman, Attorney-Adviser, at
(202) 551-6753 or Harry Eisenstein, Branch Chief, Office of Insurance
Products, Division of Investment Management, at (202) 551-6795.
SUPPLEMENTARY INFORMATION: The following is 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. NWL is a stock life insurance company organized under the laws
of the State of Ohio. NLAIC is a stock life insurance company organized
under the laws of the State of Ohio. NLICA is a stock life insurance
company organized under the laws of the State of Pennsylvania. NLACA is
a stock life insurance company organized under the laws of the State of
Pennsylvania.
2. Each of the following separate accounts are registered as unit
investment trusts under the 1940 Act and are used to fund certain
variable contracts issued by NWL: Account II (File No. 811-3330);
Account 7 (File No. 811-8666); Account 9 (File No. 811-08241); Account
14 (File No. 811-21205); Flex Account (File No. 811-3338); Account 2
(File No. 811-5311); Account 4 (File No. 811-8301); and, VLI Account 7
(File No. 811-21610).
Each of the following separate accounts are registered as unit
investment trusts under the 1940 Act and are used to fund certain
variable contracts issued by NLACA: Account A (File No. 811-6484); and,
VLI Account A (File No. 811-8722).
Account G is registered as a unit investment trust under the 1940
Act (File No. 811-21697) and is used to fund certain variable contracts
issued by NLAIC.
Account 1 is registered as a unit investment trust under the 1940
Act (File No. 811-4460) and is used to fund certain variable contracts
issued by NLICA.
3. For purposes of the 1940 Act, NWL is the depositor and sponsor
of Account II, Account 7, Account 9, Account 14, Flex Account, Account
2, Account 4, and VLI Account 7; NLAIC is the depositor and sponsor of
Account G; NLICA is the depositor and sponsor of Account 1; and NLACA
is the depositor and sponsor of Account A and VLI Account A as those
terms have been interpreted by the Commission with respect to variable
annuity and variable life insurance separate accounts.
4. The Contracts can be issued as individual or group contracts,
with participants of group contracts acquiring certain ownership rights
as described in the group contract or the plan documents. Contract
owners and participants in group contracts (each a ``Contract Owner'')
may allocate some or all of their Contract value to one or more sub-
accounts available as investment options under the Contract (each an
``Investment Option''). Each such Investment Option corresponds to an
underlying mutual fund in which the Separate Account invests.
Additionally, the Contract Owner may, if provided for under the
Contract, allocate some or all Contract value to a fixed account and/or
guaranteed term option, both of which are supported by the assets of
the depositor's general account.
Each Contract permits the Contract Owner to transfer Contract value
from one Investment Option to another Investment Option available under
the Contract at any time, subject to certain restrictions and charges
described in the prospectuses for the Contracts. To the extent that the
Contracts contain restrictions or limitations on a Contract Owner's
right to transfer, such restrictions or limitations will not apply in
connection with the proposed Substitutions.
5. Each Contract's prospectus contains provisions reserving
Insurance Company Applicants' right to substitute shares of one
Investment Option for shares of another Investment Option already
purchased or to be purchased in the future if either of the following
occurs: (i) Shares of a current Investment Option are no longer
available for investment by the Separate Account; or (ii) in the
judgment of Insurance Company Applicants' management, further
investment in such Investment Option is inappropriate in view of the
purposes of the Contract. Each Insurance Company Applicant's management
has determined that further investment in the Existing Funds is no
longer appropriate in view of the purposes of the Contracts.
6. Each Insurance Company Applicant, on its own behalf and on
behalf of its Separate Accounts, proposes to exercise its contractual
right to substitute a different Investment Option for one of the
current Investment Options available under the Contracts. In
particular, Section 26 Applicants request an order from the Commission
pursuant to Section 26(c) of the 1940 Act approving the proposed
Substitutions of shares of the following Funds (as defined herein) of
NVIT (the ``Replacement Funds'') for shares of the corresponding
underlying mutual funds (the ``Existing Funds''), as shown in the
following Substitution table (``Substitution Table''):
------------------------------------------------------------------------
Ref. No. Existing funds Replacement funds
------------------------------------------------------------------------
1................. AIM Variable Insurance NVIT--NVIT Multi-Manager
Funds--AIM V.I. Basic Large Cap Value Fund:
Value Fund: Series I Class I.
Shares.
[[Page 28969]]
2................. AIM Variable Insurance NVIT--NVIT Multi-Manager
Funds--AIM V.I. Basic Large Cap Value Fund:
Value Fund: Series II Class II.
Shares.
3................. AIM Variable Insurance NVIT--NVIT Multi-Manager
Funds--AIM V.I. Large Large Cap Growth Fund:
Cap Growth Fund: Series Class I.
I Shares.
4................. American Century Variable NVIT--NVIT Multi-Manager
Portfolios, Inc.-- Mid Cap Growth Fund:
American Century VP Class I.
Capital Appreciation
Fund: Class I.
5................. American Century Variable NVIT--NVIT Multi-Manager
Portfolios, Inc.-- International Growth
American Century VP Fund: Class III.
International Fund:
Class I.
6................. American Century Variable NVIT--NVIT Multi-Manager
Portfolios, Inc.-- International Growth
American Century VP Fund: Class VI.
International Fund:
Class II.
7................. American Century Variable NVIT--NVIT Multi-Manager
Portfolios, Inc.-- International Growth
American Century VP Fund: Class III.
International Fund:
Class III.
8................. American Century Variable NVIT--NVIT Multi-Manager
Portfolios, Inc.-- International Growth
American Century VP Fund: Class VI.
International Fund:
Class IV.
9................. American Century Variable NVIT--NVIT Multi-Manager
Portfolios, Inc.-- Large Cap Growth Fund:
American Century VP Class I.
Ultra Fund: Class I.
10................ American Century Variable NVIT--NVIT Multi-Manager
Portfolios, Inc.-- Large Cap Growth Fund:
American Century VP Class II.
Ultra Fund: Class II.
11................ American Century Variable NVIT--NVIT Multi-Manager
Portfolios, Inc.-- Mid Cap Growth Fund:
American Century VP Class I.
Vista Fund: Class I.
12................ American Century Variable NVIT--NVIT Multi-Manager
Portfolios, Inc.-- Mid Cap Growth Fund:
American Century VP Class I.
Vista Fund: Class II.
13................ American Century Variable NVIT--NVIT Multi-Manager
Portfolios, Inc.-- Mid Cap Growth Fund:
American Century VP Class II.
Vista Fund: Class II.
14................ Credit Suisse Trust-- NVIT--Gartmore NVIT
International Equity International Equity
Flex I Portfolio Fund: Class I.
(formerly, International
Focus Portfolio).
15................ Credit Suisse Trust-- NVIT--Gartmore NVIT
International Equity International Equity
Flex I Portfolio Fund: Class III.
(formerly, International
Focus Portfolio).
16................ Federated Insurance NVIT--NVIT Core Bond
Series--Federated Fund: Class I.
Quality Bond Fund II:
Primary Shares.
17................ Federated Insurance NVIT--NVIT Core Bond
Series--Federated Fund: Class II.
Quality Bond Fund II:
Service Shares.
18................ Franklin Templeton NVIT--Gartmore NVIT
Variable Insurance Emerging Markets Fund:
Products Trust-- Class III.
Templeton Developing
Markets Securities Fund:
Class 3.
19................ Franklin Templeton NVIT--Gartmore NVIT
Variable Insurance Emerging Markets Fund:
Products Trust-- Class VI.
Templeton Developing
Markets Securities Fund:
Class 3.
20................ Janus Aspen Series-- NVIT--NVIT Nationwide
INTECH Risk-Managed Core Fund: Class I.
Portfolio: Service
Shares.
21................ Janus Aspen Series-- NVIT--NVIT Nationwide
INTECH Risk-Managed Core Fund: Class II.
Portfolio: Service
Shares.
22................ Neuberger Berman Advisers NVIT--NVIT Multi-Manager
Management Trust--AMT Mid Cap Growth Fund:
Growth Portfolio: I Class I.
Class.
23................ Neuberger Berman Advisers NVIT--Neuberger Berman
Management Trust--AMT NVIT Multi Cap
Guardian Portfolio: I Opportunities Fund:
Class. Class I.
24................ Neuberger Berman Advisers NVIT--Gartmore NVIT
Management Trust--AMT International Equity
International Portfolio: Fund: Class III.
S Class.
25................ Neuberger Berman Advisers NVIT--Gartmore NVIT
Management Trust--AMT International Equity
International Portfolio: Fund: Class VI.
S Class.
26................ Neuberger Berman Advisers NVIT--NVIT Multi-Manager
Management Trust--AMT Mid Cap Growth Fund:
Mid-Cap Growth Class I.
Portfolio: I Class.
27................ Neuberger Berman Advisers NVIT--NVIT Multi-Manager
Management Trust--AMT Mid Cap Growth Fund:
Mid-Cap Growth Class I.
Portfolio: S Class.
28................ Neuberger Berman Advisers NVIT--NVIT Multi-Manager
Management Trust--AMT Mid Cap Growth Fund:
Mid-Cap Growth Class II.
Portfolio: S Class.
29................ Neuberger Berman Advisers NVIT--Neuberger Berman
Management Trust--AMT NVIT Multi Cap
Partners Portfolio: I Opportunities Fund:
Class. Class I.
30................ Neuberger Berman Advisers NVIT--NVIT Multi-Manager
Management Trust--AMT Mid Cap Value Fund:
Regency Portfolio: S Class II.
Class.
31................ T. Rowe Price Equity NVIT--NVIT Short Term
Series, Inc.--T. Rowe Bond Fund: Class II.
Price Limited Term Bond
Portfolio: Class II.
32................ The Universal NVIT--NVIT Multi-Manager
Institutional Funds, Mid Cap Growth Fund:
Inc.--Mid Cap Growth Class I.
Portfolio: Class I.
33................ The Universal NVIT--Van Kampen NVIT
Institutional Funds, Real Estate Fund: Class
Inc.--U.S. Real Estate I.
Portfolio: Class I.
34................ The Universal NVIT--Van Kampen NVIT
Institutional Funds, Real Estate Fund: Class
Inc.--U.S. Real Estate II.
Portfolio: Class II.
35................ Van Eck Worldwide NVIT--Gartmore NVIT
Insurance Trust-- Emerging Markets Fund:
Worldwide Emerging Class I.
Markets Fund: Initial
Class.
36................ Van Eck Worldwide NVIT--Gartmore NVIT
Insurance Trust-- Emerging Markets Fund:
Worldwide Emerging Class III.
Markets Fund: Initial
Class.
37................ Van Eck Worldwide NVIT--Gartmore NVIT
Insurance Trust-- Emerging Markets Fund:
Worldwide Emerging Class III.
Markets Fund: Class R1.
38................ Wells Fargo Advantage NVIT--NVIT Multi-Manager
Variable Trust--Wells Mid Cap Growth Fund:
Fargo Advantage VT Class I.
Discovery Fund.
[[Page 28970]]
39................ Wells Fargo Advantage NVIT--NVIT Multi-Manager
Variable Trust--Wells Mid Cap Growth Fund:
Fargo Advantage VT Class II.
Discovery Fund.
40................ Wells Fargo Advantage NVIT--NVIT Multi-Manager
Variable Trust--Wells Mid Cap Value Fund:
Fargo Advantage VT Class II.
Opportunity Fund:
Investor Class.
------------------------------------------------------------------------
7. All of the Replacement Funds that correspond to the Existing
Funds are available as Investment Options in the Contracts.
8. Each Replacement Fund is a series of NVIT, a Delaware statutory
trust. NVIT is registered as an open-end management investment company
under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended, on Form N-1A (1933 Act File No. 02-73024).
NVIT is a series investment company and currently offers 58 separate
series (each a ``Fund'' and collectively, the ``Funds''). Shares of
NVIT are sold exclusively to insurance company separate accounts to
fund benefits under variable annuity contracts and variable life
insurance policies, and to employer pension and profit-sharing plans.
9. Nationwide Fund Advisors (``NFA'') is a registered investment
adviser (Reg. No. 801-56370) and is an affiliate of Section 26
Applicants. NFA currently serves as investment adviser (``Adviser'') to
each of the Funds, including the Replacement Funds, pursuant to
investment management agreements between NVIT, on behalf of each Fund,
and NFA (the ``Management Agreements''). NFA employs a sub-advised
strategy whereby NFA serves as a ``manager of managers'' and delegates
the fund management responsibilities for each Fund to one or more third
party investment advisors (each a ``Sub-Adviser'') via investment
advisory agreements (``Sub-Advisory Agreements'').
Pursuant to the Management Agreements, NFA's responsibilities
include general management of each Fund, including full discretion to
(i) select a new sub-adviser or an additional Sub-Adviser for each
Fund; (ii) terminate a Sub-Adviser for each Fund; (iii) enter into,
modify, and terminate Sub-Advisory Agreements; and (iv) allocate and
reallocate a Fund's assets among the Adviser and one or more Sub-
Advisers. In addition, the Adviser monitors and reports to NVIT's Board
of Trustees on the performance of each Sub-Adviser relative to such
Sub-Adviser's responsibilities of complying with the investment
objectives, policies, and restrictions of any Fund under the management
of such Sub-Adviser.
10. NVIT received an exemptive order from the Commission on April
28, 1998 (Investment Company Act Release No. 23133) (the ``Manager of
Managers Order'') that permits the Adviser, subject to certain
conditions, including approval of the NVIT Board of Trustees, and
without the approval of shareholders, to: (i) Select a new Sub-Adviser
or additional Sub-Adviser for each Fund; (ii) terminate any existing
Sub-Adviser and/or replace the Sub-Adviser; (iii) enter into new Sub-
Advisory Agreements \1\ and/or materially modify the terms of, or
terminate, any existing Sub-Advisory Agreement; and (iv) allocate and
reallocate a Fund's assets among the Adviser and one or more Sub-
Advisers.
---------------------------------------------------------------------------
\1\ Relating to NVIT, the Adviser will not enter into any Sub-
Advisory Agreement with any Sub-Adviser that is an ``affiliated
person,'' as defined in Section 2(a)(3) of the 1940 Act, of NVIT or
the Adviser, other than by reason of serving as a Sub-Adviser to a
Fund, without such Sub-Advisory Agreement, including the
compensation to be paid thereunder, being approved by the unit
holders of any separate account for which that Fund serves as a
funding medium.
---------------------------------------------------------------------------
If a new Sub-Adviser is retained for a Fund, Contract Owners would
receive all information about the new Sub-Adviser that would be
included in a proxy statement, including any change in disclosure
caused by the addition of a new Sub-Adviser.
11. Section 26 Applicants represent that, after the Substitution
date, the Replacement Funds will not change sub-advisers, retain any
new sub-adviser, or otherwise rely on the Manager of Managers Order
without first obtaining shareholder approval of: the new sub-adviser,
the fund's ability add or to replace a sub-adviser in reliance on the
Manager of Managers Order, or otherwise rely on the Manager of Managers
Order.
12. The Appendix includes a comparison of the management fees, the
total operating expenses (before and after any waivers and
reimbursements) expressed as an annual percentage of average daily net
assets, and the asset levels of each Existing Fund and its
corresponding Replacement Fund. The 12b-1 fees listed in the fee tables
provided in the Appendix for each Existing Fund and Replacement Fund
represents the maximum 12b-1 fee that could be assessed by the
particular fund, except with regard to the Franklin Templeton Variable
Insurance Products Trust--Templeton Developing Markets Securities Fund:
Class 3, which is disclosed in a footnote.
13. Set forth below is a description of the investment objectives,
the advisers, the principal investment strategies and principal risk
factors of each Existing Fund and its corresponding Replacement Fund.
BILLING CODE 8010-01-P
[[Page 28971]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.001
[[Page 28972]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.002
[[Page 28973]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.003
[[Page 28974]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.004
[[Page 28975]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.005
[[Page 28976]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.006
[[Page 28977]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.007
[[Page 28978]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.008
[[Page 28979]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.009
[[Page 28980]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.010
[[Page 28981]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.011
[[Page 28982]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.012
[[Page 28983]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.013
[[Page 28984]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.014
[[Page 28985]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.015
[[Page 28986]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.016
[[Page 28987]]
[GRAPHIC] [TIFF OMITTED] TN18JN09.021
BILLING CODE 8010-01-C
14. As a result of the Substitutions, the number of Investment
Options under each Contract will either not be decreased, or, in those
cases where the number of Investment Options is being reduced, continue
to offer a significant number of alternative Investment Options.
Specifically, the number of Investment Options is currently expected to
range in number from 21 to 129 after the Substitutions versus 23 to 149
before the Substitutions.
15. Prospectus supplements for the Contracts will be delivered to
Contract Owners at least thirty (30) days before the Substitution date.
The supplements will: (i) Notify all Contract Owners of the Insurance
Company Applicants' intent to implement the Substitutions, and that an
application has been filed in order to obtain the necessary orders to
do so; (ii) advise Contract Owners that from the date of the supplement
until the Substitution date, Contract Owners are permitted to transfer
Contract value out of any Existing Fund sub-account to any other sub-
account(s) offered under the Contract without the transfer being
treated as a transfer for purposes of transfer limitations and short-
term trading fees that would otherwise be applicable under the terms of
the Contract; (iii) instruct Contract Owners how to submit transfer
requests in light of the proposed Substitutions; (iv) advise Contract
Owners that any Contract value remaining in an Existing Fund sub-
account on the Substitution date will be transferred to the
corresponding Replacement Fund sub-account, and that the Substitutions
will take place at relative net asset value; (v) inform Contract Owners
that for at least thirty (30) days following the Substitution date, the
Insurance Company Applicants will permit Contract Owners to make
transfers of Contract value out of each Replacement Fund sub-account to
any other sub-account(s) offered under the Contract without the
transfer being treated as a transfer for purposes of transfer
limitations and short-term trading fees that would otherwise be
applicable under the terms of the Contract; and (vi) inform Contract
Owners that the respective Insurance Company Applicant will not
exercise any rights reserved by it under the Contracts to impose
additional restrictions on transfers out of a Replacement Fund for at
least thirty (30) days after the Substitution date.\2\
---------------------------------------------------------------------------
\2\ One exception to this is that the Insurance Companies may
impose restrictions on transfers to the extent necessary to prevent
or limit disruptive trading activity, as described in the
prospectuses for the Contracts and the underlying mutual funds.
---------------------------------------------------------------------------
16. The Insurance Company Applicants will cause the appropriate
prospectus supplements containing this disclosure and the prospectus
and/or supplement for the Replacement Funds to be sent to all existing
Contract Owners. New purchasers of the Contracts will be provided the
prospectus supplement, the Contract prospectus, and the prospectus and/
or supplement for the Replacement Funds in accordance with all
applicable legal requirements. Prospective purchasers of the Contracts
will be provided the prospectus supplement and the Contract prospectus.
17. In addition to the Contract prospectus supplements distributed
to Contract Owners, within five (5) business days after the
Substitution date, Contract Owners will be sent a confirmation of the
Substitutions in accordance with Rule 10b-10 under the Securities
Exchange Act of 1934, as amended. The confirmation statement will
reiterate that the Insurance Company Applicant will not exercise any
right reserved by it under the Contracts to impose any restrictions or
fees on transfers from the Replacement Funds until at least thirty (30)
days after the Substitution date.
18. The proposed Substitutions will take place at relative net
asset value determined on the Substitution date pursuant to Section 22
of the 1940 Act and Rule 22c-1 thereunder with no change in the amount
of any Contract Owner's Contract value, cash value, death benefit, or
dollar value of his or her investment in the Separate Accounts. Each
Substitution will be effected by redeeming shares of the Existing Fund
in cash and/or in-kind on the Substitution date at their net asset
value and using the proceeds of those redemptions to purchase shares of
the Replacement Fund at their net asset value on the same date.\3\
---------------------------------------------------------------------------
\3\ For administrative convenience, the In-Kind Transactions may
be effected through a direct transfer of securities and cash between
the custodian(s) for the Existing Fund and its corresponding
Replacement Fund, followed by the distribution of shares of the
Replacement Fund to the applicable Separate Account(s).
---------------------------------------------------------------------------
19. Contract Owners will not incur any fees or charges as a result
of the proposed Substitutions, nor will their rights or insurance
benefits or the Insurance Company Applicants' obligations under the
Contracts be altered in any way. All expenses incurred in connection
with the proposed Substitutions, including any brokerage, legal,
accounting, and other fees and expenses, will be paid by the Insurance
Company Applicants. In addition, the proposed Substitutions will not
impose any tax liability on Contract Owners. The proposed
[[Page 28988]]
Substitutions will not cause the Contract fees and charges currently
being paid by Contract Owners to be greater after the proposed
Substitution than before the proposed Substitution. No fees will be
charged on transfers made on the Substitution date because each
Substitution redemption and purchase will not be treated as a transfer
for purposes of assessing transfer charges or computing the number of
permissible transfers under the Contracts.
20. For all Substitutions other than Janus Aspen Series--INTECH
Risk-Managed Core Portfolio: Service Shares to be replaced by NVIT--
NVIT Nationwide Fund: Class II (Ref. No. 21) (the ``Aspen
Substitution''), for a period of two (2) years following the
Substitution date and for those Contracts with assets allocated to the
Existing Fund on the date of the Substitution, the issuing Insurance
Company, as applicable, will reimburse, on the last business day of
each fiscal quarter, the sub-accounts investing in the applicable
Replacement Fund to the extent that the Replacement Fund's net annual
expenses for such period exceeds, on an annualized basis, the net
annual expenses of the Existing Fund for fiscal year 2008. In addition,
the Insurance Company Applicants will not increase the Contract fees
and charges that would otherwise be assessed under the terms of the
Contracts for a period of at least two (2) years following the
Substitution date.
21. For the Aspen Substitution, where the sum of the management fee
and 12b-1 fee of the Replacement Fund is greater than (or could be
greater than) that of the Existing Fund, for those Contracts with
assets allocated to the Existing Fund on the date of the Substitution,
the issuing Insurance Company Applicant, as applicable, will reimburse,
on the last business day of each fiscal quarter, the sub-accounts
investing in the applicable Replacement Fund to the extent that the
Replacement Fund's net annual expenses for such period exceeds, on an
annualized basis, the net annual expenses of the Existing Fund for
fiscal year 2008. In addition, for those same Contracts, the Insurance
Company Applicants will not increase the Contract fees and charges that
would otherwise be assessed under the terms of the Contracts for the
duration of the Contracts.
Section 26 Applicants' Legal Analysis
1. Section 26 Applicants request that the Commission issue an order
pursuant to Section 26(c) of the 1940 Act approving the proposed
Substitutions.
2. Section 26 Applicants assert that Section 26(c) of the 1940 Act
makes it unlawful for the depositor of a registered unit investment
trust that invests in the securities of a single issuer to substitute
another security for such security without Commission approval. Section
26(c) further states that the Commission shall issue an order approving
such a substitution ``if the evidence establishes that it is consistent
with the protection of investors and the purposes fairly intended by
the policy and provisions of this title.''
3. Section 26 Applicants represent that the Contracts have reserved
the right to substitute shares of another underlying mutual fund for
one of the current underlying mutual funds offered as an investment
option under the Contracts. The Contract prospectuses disclose this
right.
4. Section 26 Applicants represent that each Replacement Fund and
its corresponding Existing Fund have similar, and in some cases
substantially similar or identical, investment objectives and
strategies. In addition, Section 26 Applicants maintain that each
proposed Substitution retains for Contract Owners the investment
flexibility and expertise in asset management, which are core
investment features of the Contracts and any impact on the investment
programs of affected Contract Owners should be negligible.
Furthermore, Section 26 Applicants assert that the ultimate effect
of the Substitutions would be to continue to provide Contract Owners
with a wide array of investment options and managers, while at the same
time increasing administrative efficiencies of the Contracts.
Additionally, Section 26 Applicants claim that information pertaining
to the underlying mutual funds available under the Contracts will be
more consistent and thus easier for Contract Owners to navigate and
understand.
5. Section 26 Applicants represent that after the Substitution
date, Contract Owners with Contract value invested in a Replacement
Fund will have the same or lower net operating expense ratio(s) as
before the Substitution. As indicated previously, certain expense
limits have been put in place to ensure that Contract Owners do not
incur higher expenses as a result of a Substitution for a period of
either two (2) years after the Substitution, or for the lifetime of the
Contract.
6. Section 26 Applicants submit that the proposed Substitutions are
not of the type that Section 26 was designed to prevent, i.e.,
overreaching on the part of the depositor by permanently impacting the
investment allocations of the entire trust. In the current situation,
the Contracts provide Contract Owners with investment discretion to
allocate and reallocate their Contract value among the available
underlying mutual funds. Section 26 Applicants claim this flexibility
provides Contract Owners with the ability to reallocate their assets at
any time--either before the Substitution date, or after the
Substitution date--if they do not wish to invest in the Replacement
Fund. Thus, Section 26 Applicants assert that the likelihood of being
invested in an undesired underlying mutual fund is minimized, with the
discretion remaining with the Contract Owners, and the Substitutions,
therefore, will not result in the type of costly forced redemption that
Section 26(c) was designed to prevent.
7. Section 26 Applicants submit that the proposed Substitutions are
also unlike the type of substitution that Section 26(c) was designed to
prevent in that the Substitutions have no impact on other aspects of
the Contracts. Specifically, Section 26 Applicants maintain that the
type of insurance coverage offered by the Insurance Company Applicants
under the applicable Contract, as well as numerous other rights and
privileges associated with the Contract, are not impacted by the
proposed Substitution. Section 26 Applicants note that Contract Owners
also may have considered the Insurance Company Applicant's size,
financial condition, and its reputation for service in selecting their
Contract. Section 26 Applicants assert that these factors will not
change as a result of the proposed Substitutions, nor will the annuity,
life, or tax benefits afforded under the Contracts held by any of the
affected Contract Owners.
8. Section 26 Applicants submit that, for all the reasons stated
above, the proposed Substitutions are consistent with the protection of
investors and the purposes fairly intended by the policy and provisions
of the 1940 Act.
Section 17 Applicants' Legal Analysis
1. Section 17 Applicants request that the Commission issue an order
pursuant to Section 17(b) of the 1940 Act exempting them from the
provisions of Section 17(a) of the 1940 Act to the extent necessary to
permit them to carry out the In-Kind Transactions.
2. Section 17(a)(1) of the 1940 Act, in relevant part, generally
prohibits any affiliated person of a registered investment company (or
any affiliated person of such a person), acting as principal, from
knowingly selling any security or other property to that
[[Page 28989]]
company. Section 17(a)(2) of the 1940 Act generally prohibits the same
persons, acting as principals, from knowingly purchasing any security
or other property from the registered investment company. Section
2(a)(3) of the 1940 Act defines the term ``affiliated person'' of
another person, in relevant part, as:
(A) any person directly or indirectly owning, controlling, or
holding with power to vote, 5 per centum or more of the outstanding
voting securities of such other person; (B) any person 5 per centum
or more of whose outstanding voting securities are directly or
indirectly owned, controlled, or held with power to vote, by such
other person; [or] (C) any person directly or indirectly
controlling, controlled by, or under common control with, such other
person* * *
3. Section 2(a)(9) of the 1940 Act states that any person who owns
beneficially, either directly or through one or more controlled
companies, more than 25% of the voting securities of a company shall be
presumed to control such company. Shares held by an insurance company
separate account are legally owned by the insurance company. Thus, the
Insurance Company Applicants collectively own substantially all of the
shares of NVIT. Accordingly, NVIT and its respective funds are arguably
under the control of the Insurance Company Applicants, as per Section
2(a)(9) of the 1940 Act (notwithstanding the fact that the Contract
Owners are the beneficial owners of those Separate Account shares). If
NVIT is under the common control of the Insurance Company Applicants,
then each of the Insurance Company Applicants is an affiliated person
of NVIT and its respective Funds. If NVIT and its respective Funds are
under the control of the Insurance Company Applicants, then NVIT and
its respective affiliates are affiliated persons of the Insurance
Company Applicants. Regardless of whether or not the Insurance Company
Applicants can be considered to actually control NVIT and its Funds,
because the Insurance Company Applicants and their affiliates own of
record more than 5% of the shares of each Fund and are under common
control with NFA, the Insurance Company Applicants are affiliated
persons of NVIT and its Funds. Likewise, NVIT and its respective Funds
are each an affiliated person of the Insurance Company Applicants.
4. Section 17 Applicants represent that the proposed In-Kind
Transactions could be seen as the indirect purchase of shares of
certain Replacement Funds with portfolio securities of certain Existing
Funds and the indirect sale of portfolio securities of certain Existing
Funds for shares of certain Replacement Funds. Pursuant to this
analysis, the proposed In-Kind Transactions also could be categorized
as a purchase of shares of certain Replacement Funds by certain
Existing Funds, acting as principal, and a sale of portfolio securities
by certain Existing Funds, acting as principal, to certain Replacement
Funds. In addition, the proposed In-Kind Transactions could be viewed
as a purchase of securities from certain Existing Funds, and a sale of
securities to certain Replacement Funds, by the Insurance Company
Applicants (or their Separate Accounts), acting as principal. If
categorized in this manner, the proposed In-Kind Transactions may be
deemed to contravene Section 17(a) due to the affiliated status of
these participants.
5. Section 17(b) of the 1940 Act provides that any person may apply
to the Commission for an exemption from the provisions of Section
17(a), and the Commission shall issue such exemptive order, if evidence
establishes that:
(1) The terms of the proposed transaction, including the
consideration to be paid or received, are reasonable and fair and do
not involve overreaching on the part of any person concerned;
(2) The proposed transaction is consistent with the policy of
each registered investment company concerned, as recited in its
registration statement and reports filed under [the 1940 Act]; and
(3) The proposed transaction is consistent with the general
purposes of [the 1940 Act].
6. The Section 17 Applicants submit that the In-Kind Transactions
meet the conditions set forth in Section 17(b) of the 1940 Act.
7. The Section 17 Applicants submit that the terms of the In-Kind
Transactions, including the consideration to be paid and received, are
reasonable, fair, and do not involve overreaching because: (1) The
Contract Owners' Contract values will not be adversely impacted or
diluted; (2) with respect to those securities for which market
quotations are readily available, the In-Kind Transactions will comply
with the conditions set forth in Rule 17a-7, other than the requirement
relating to cash consideration; and (3) with respect to those
securities for which market quotations are not readily available, the
In-Kind Transactions will be effected in accordance with the relevant
Existing Funds' and the relevant corresponding Replacement Funds'
normal valuation procedures, as described in the relevant fund's
registration statement.
8. Section 17 Applicants represent that Contract Owners' Contract
values will not be adversely impacted or diluted because the In-Kind
Transactions will be effected at the respective net asset values of the
Existing Funds and the Replacement Funds, as described in each fund's
registration statement and as required by Rule 22c-1 under the 1940
Act. The In-Kind Transactions will not change the dollar value of any
Contract, the accumulation unit value or annuity unit value of any
Contract, or the death benefit payable under any Contract. After the
In-Kind Transactions, the value of a Separate Account's investment in a
Replacement Fund will equal the value of its investments in the
corresponding Existing Fund (in addition to any pre-existing investment
in the Replacement Fund) before the In-Kind Transactions.
9. The adopting release of Rule 17a-7 states that the purpose of
the rule is to set forth ``conditions as to the availability of the
exemption to those situations where the Commission, upon the basis of
its experience, considers that there is no likelihood of overreaching
of the investment companies participating in the transaction.'' \4\
Because the proposed In-Kind Transactions would comply in substance
with the conditions of the rule and since the In-Kind Transactions will
be effected at the respective net asset values of the relevant funds,
as per the registration statement for each fund and as required by Rule
22c-1 under the 1940 Act, the Section 17 Applicants submit that the
terms of the In-Kind Transactions do not present a situation where the
investment companies participating in the transaction could overreach
and potentially harm investors. Section 17 Applicants claim that the
purposes intended by implementation of the rule are therefore met by
the terms of the In-Kind Transactions.
---------------------------------------------------------------------------
\4\ 1940 Act Rel. Nos. 4604 (May 20, 1966) (proposing release)
and 4697 (Sept. 8, 1966) (adopting release).
---------------------------------------------------------------------------
10. Section 17 Applicants represent that the proposed In-Kind
Transactions will be effected based upon the independent current market
price of the portfolio securities as specified in Rule 17a-7(b).
Section 17 Applicants claim that the proposed In-Kind Transactions will
be consistent with the policy of each registered investment company and
separate series thereof participating in the In-Kind Transactions, as
recited in the relevant registered investment company's registration
statement and reports in accordance with Rule 17a-
[[Page 28990]]
7(c). No brokerage commission, fee (except for any customary transfer
fees), or other remuneration will be paid in connection with the
proposed In-Kind Transactions as specified in Rule 17a-7(d). NVIT's
board of directors has adopted and implemented the fund governance and
oversight procedures as required by Rule 17a-7(e) and (f). Finally, a
written record of the procedures for the proposed In-Kind Transactions
will be maintained and preserved in accordance with Rule 17a-7(g).
11. Although the proposed In-Kind Transactions will not comply with
the cash consideration requirement of Rule 17a-7(a), Section 17
Applicants assert that the terms of the proposed In-Kind Transactions
will offer to each of the relevant Existing Funds and each of the
relevant Replacement Funds the same degree of protection from
overreaching that Rule 17a-7 generally provides in connection with the
purchase and sale of securities under that Rule in the ordinary course
of business. Specifically, Insurance Company Applicants and their
affiliates cannot effect the proposed In-Kind Transactions at a price
that is disadvantageous to any Replacement Fund and the proposed In-
Kind Transactions will not occur absent an exemptive order from the
Commission.
12. Section 17 Applicants represent that for those Existing Funds
that will redeem their shares in-kind as part of the In-Kind
Transactions, such transactions will be consistent with the investment
policies of the Existing Fund because: (1) The redemption in-kind
policy is stated in the relevant Existing Fund's current registration
statement; and (2) the shares will be redeemed at their net asset value
in conformity with Rule 22c-1 under the 1940 Act. Likewise, for the
Replacement Funds that will sell shares in exchange for portfolio
securities as part of the In-Kind Transactions, such transactions will
be consistent with the investment policies of the Replacement Fund
because: (1) NVIT's policy of selling shares in exchange for investment
securities is stated in NVIT's current registration statement; (2) the
shares will be sold at their net asset value; and (2) the investment
securities will be of the type and quality that a Replacement Fund
could have acquired with the proceeds from the sale of its shares had
the shares been sold for cash. For each of the proposed In-Kind
Transactions, the Adviser and relevant Sub-Adviser(s) will analyze the
portfolio securities being offered to each relevant Replacement Fund
and will retain only those securities that it would have acquired for
each such Fund in a cash transaction.
13. Section 17 Applicants represent that all in-kind redemptions
from an Existing Fund of which any Section 17 Applicants is an
affiliated person will be effected in accordance with the conditions
set forth in the Commission's no-action letter issued to Signature
Financial Group, Inc. (available December 28, 1999).
14. Section 17 Applicants assert that the proposed In-Kind
Transactions, as described herein, are consistent with the general
purposes of the 1940 Act set forth in Section 1 of the 1940 Act. In
particular, the proposed In-Kind Transactions do not present any
conditions or abuses that the 1940 Act was designed to prevent.
15. Section 17 Applicants request that the Commission issue an
order pursuant to Section 17(b) of the 1940 Act to permit them, to the
extent necessary, to carry out the proposed In-Kind Transactions.
Section 17 Applicants submit that, for all the reasons stated above:
(1) The terms of the proposed In-Kind Transactions, including the
consideration to be paid and received, are reasonable and fair to each
of the relevant Replacement Funds, each of the relevant Existing Funds,
and Contract Owners, and that the proposed In-Kind Transactions do not
involve overreaching on the part of any person concerned; (2) the
proposed In-Kind Transactions are, or will be, consistent with the
policies of the relevant Replacement Funds and the relevant Existing
Funds as stated in the relevant investment company's registration
statement and reports filed under the 1940 Act; and (3) the proposed
In-Kind Transactions are, or will be, consistent with the general
purposes of the 1940 Act.
Conclusion
Section 26 Applicants submit that for the reasons summarized above
the proposed Substitutions meet the standards of Section 26(c) of the
1940 Act and request that the Commission issue an order of approval
pursuant to Section 26(c) of the 1940 Act. Section 17 Applicants submit
that the proposed In-Kind Transactions meet the standards of Section
17(b) of the 1940 Act and request that the Commission issue an order of
exemption pursuant to Section 17(b) of the 1940 Act.
For the Commission, by the Division of Investment Management
pursuant to delegated authority.
Florence E. Harmon,
Deputy Secretary.
Appendix
1. AIM Variable Insurance Funds--AIM V.I. Basic Value Fund Replaced by
the NVIT--NVIT Multi-Manager Large Cap Value Fund (Substitution Table
Reference Nos. 1 & 2)
AIM Variable Insurance Funds--AIM V.I. Basic Value Fund: Series I
Shares will be replaced by the NVIT--NVIT Multi-Manager Large Cap Value
Fund: Class I shares. AIM Variable Insurance Funds--AIM V.I. Basic
Value Fund: Series II Shares will be replaced by the NVIT--NVIT Multi-
Manager Large Cap Value Fund: Class II shares.
The following chart compares the management fees, the total
operating expenses (before and after any waivers and reimbursements)
expressed as an annual percentage of average daily net assets, and the
asset levels of the AIM Variable Insurance Funds--AIM V.I. Basic Value
Fund: Series I Shares, AIM Variable Insurance Funds--AIM V.I. Basic
Value Fund: Series II Shares, NVIT--NVIT Multi-Manager Large Cap Value
Fund: Class I, and NVIT--NVIT Multi-Manager Large Cap Value Fund: Class
II.
---------------------------------------------------------------------------
\5\ Through April 30, 2010, the fund's advisor has contractually
agreed to waive a portion of its advisory fees to the extent
necessary so that the advisory fees payable by the fund do not
exceed a specified maximum annual advisory fee rate, wherein the fee
rate is based upon average net asset levels as follows:
0.695% of the first $250 million,
0.67% of the next $250 million,
0.645% of the next $500 million,
0.62% of the next $1.5 billion,
0.595% of the next $2.5 billion,
0.57% of the next $2.5 billion,
0.545% of the next $2.5 billion,
0.52% of the excess over $10 billion.
\6\ ``Other Expenses'' include administrative services fees
which currently are 0.15%, but which are permitted to be as high as
0.25%. The full 0.25% in administrative services fees is not
reflected in ``Other Expenses'' at this time because, until at least
May 1, 2010, the Fund does not intend to pay insurance companies a
higher amount. If the full amount of administrative services fees
were charged, total operating expenses (after fee waivers/expense
reimbursements) would be 1.02% and 1.27%, respectively.
\7\ NVIT and NFA have entered into a written contract limiting
operating expenses to 0.77% until May 1, 2010. This limit excludes
certain Fund expenses, including interest, taxes, brokerage
commissions, Rule 12b-1 fees, fees paid pursuant to an
Administrative Services Plan, short sale dividend expenses, other
expenditures which are capitalized in accordance with generally
accepted accounting principles and other non-routine expenses not
incurred in the ordinary course of the Fund's business. NVIT is
authorized to reimburse the NFA for management fees previously
waived or reduced and/or for expenses previously paid by NFA,
provided, however, that any reimbursements must be paid at a date
not more than three years after the fiscal year in which NFA waived
the fees or reimbursed the expenses and the reimbursements do not
cause the Fund to exceed the expense limitation in the agreement.
\8\ Represents assets held by the fund or listed share class, as
applicable.
\9\ Based on asset levels as of 3/31/09, approximately 2% of AIM
V.I. Basic Value Fund Shares: Series I assets will be transferred to
NVIT Multi-Manager Large Cap Value Fund: Class I pursuant to the
Substitution. This transfer represents approximately 1% of the
Existing Fund's total assets.
\10\ Based on asset levels as of 3/31/09, approximately 19% of
AIM V.I. Basic Value Fund Shares: Series II assets will be
transferred to NVIT Multi-Manager Large Cap Value Fund: Class II
pursuant to the Substitution. This transfer represents approximately
9% of the Existing Fund's total assets.
[[Page 28991]]
----------------------------------------------------------------------------------------------------------------
Existing fund Replacement fund
---------------------------------------------------------------
AIM variable insurance funds-- NVIT-NVIT multi-manager large
AIM V.I. basic value fund cap value fund
shares -------------------------------
--------------------------------
Series I Series II Class I Class II
----------------------------------------------------------------------------------------------------------------
Management Fees................................. \5\ 0.68% \5\ 0.68% 0.65% 0.65%
12b-1 Fees...................................... 0.00% 0.25% 0.00% 0.25%
Other Expenses.................................. 0.35% 0.35% \6\ 0.37% \6\ 0.37%
Total Gross Expenses............................ 1.03% 1.28% 1.02% 1.27%
Waivers/Reimbursements.......................... 0.00% 0.00% \7\ 0.10% \7\ 0.10%
Total Net Expenses.............................. 1.03% 1.28% 0.92% 1.17%
Fund/Class \8\ Asset Level ($MMs) (5/20/09)..... \9\ $170.3 \10\ $143.4 $0.2 $5.9
----------------------------------------------------------------------------------------------------------------
2. AIM Variable Insurance Funds--AIM V.I. Large Cap Growth Fund: Series
I Shares Replaced by the NVIT--NVIT Multi-Manager Large Cap Growth
Fund: Class I (Substitution Table Reference No. 3)
The following chart compares the management fees, the total
operating expenses (before and after any waivers and reimbursements)
expressed as an annual percentage of average daily net assets, and the
asset levels of the AIM Variable Insurance Funds--AIM V.I. Large Cap
Growth Fund: Series I Shares and the NVIT--NVIT Multi-Manager Large Cap
Growth Fund: Class I.
---------------------------------------------------------------------------
\11\ Through April 30, 2010, the fund's advisor has
contractually agreed to waive a portion of its advisory fees to the
extent necessary so that the advisory fees payable by the fund do
not exceed a specified maximum annual advisory fee rate, wherein the
fee rate is based upon average levels as follows:
0.695% of the first $250 million,
0.67% of the next $250 million,
0.645% of the next $500 million,
0.62% of the next $1.5 billion,
0.595% of the next $2.5 billion,
0.57% of the next $2.5 billion,
0.545% of the next $2.5 billion,
0.52% of the excess over $10 billion.
\12\ ``Other Expenses'' include administrative services fees
which currently are 0.15%, but which are permitted to be as high as
0.25%. The full 0.25% in administrative services fees is not
reflected in ``Other Expenses'' at this time because, until at least
May 1, 2010, the Fund does not intend to pay insurance companies a
higher amount. If the full amount of administrative services fees
were charged, total operating expenses (after fee waivers/expense
reimbursements) would be 1.00%.
\13\ The fund's advisor has contractually agreed to waive
advisory fees and/or reimburse expenses to the extent necessary to
limit Total Annual Fund Operating Expenses (excluding certain items
discussed below) to 1.01% of average daily net assets. In
determining the advisor's obligation to waive advisory fees and/or
reimburse expenses, the following expenses are not taken into
account, and could cause the Total Annual Fund Operating Expenses to
exceed the number reflected above: (i) Interest; (ii) taxes; (iii)
dividend expense on short sales; (iv) extraordinary items; (v)
expenses related to a merger or reorganization, as approved by the
fund's Board of Trustees; and (vi) expenses that the fund has
incurred but did not actually pay because of an expense offset
arrangement. Currently, the expense offset arrangements from which
the fund may benefit are in the form of credits that the fund
receives from banks where the fund or its transfer agent has deposit
accounts in which it holds uninvested cash. These credits are used
to pay certain expenses incurred by the fund. This expense
limitation agreement is in effect through at least April 30, 2010.
\14\ NVIT and NFA have entered into a written contract limiting
operating expenses to 0.75% until at least May 1, 2010. This limit
excludes certain Fund expenses, including any taxes, interest,
brokerage fees, Rule 12b-1 fees, short-sale dividend expenses,
administrative services fees, other expenses which are capitalized
in accordance with generally accepted accounting principles and may
exclude other non-routine expenses not incurred in the ordinary
course of the Fund's business. NVIT is authorized to reimburse NFA
for management fees previously waived and/or for expenses previously
paid by NFA, provided however, that any reimbursements must be paid
at a date not more than three years after the fiscal year in which
NFA waived the fees or reimbursed the expenses and the
reimbursements do not cause the Fund to exceed the expense
limitation in the agreement.
\15\ Represents assets held by the fund or listed share class,
as applicable.
\16\ Based on asset levels as of 3/31/09, approximately 0.1% of
the Existing Fund's Series I assets will be transferred to the
Replacement Fund pursuant to the Substitution. This transfer
represents approximately 0.3% of the Existing Fund's total assets.
\17\ The fund pays the advisor a single, unified management fee
for arranging all services necessary for the fund to operate. The
fee shown is based on assets during the fund's most recent fiscal
year. The fund has a stepped fee schedule, which is reflected in the
following table:
1.00% of first $500 million,
0.95% of the next $500 million, and
0.90% over $1 billion.
\18\ ``Other Expenses'' include administrative services fees
which currently are 0.07%, but which are permitted to be as high as
0.25%. The full 0.25% in administrative services fees is not
reflected in ``Other Expenses'' at this time because, until at least
May 1, 2010, the Fund does not intend to pay insurance companies a
higher amount. If the full amount of administrative services fees
were charged, total operating expenses (after fee waivers/expense
reimbursements) would be 1.07%.
\19\ NVIT and NFA have entered into a written contract limiting
operating expenses to 0.82% until at least May 1, 2010. This limit
excludes certain Fund expenses, including any interest, taxes,
brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an
Administrative Services Plan, short-sale dividend expenses, other
expenditures which are capitalized in accordance with generally
accepted accounting principles and other non-routine expenses not
incurred in the ordinary course of the Fund's business. NVIT is
authorized to reimburse NFA for management fees previously waived or
reduced and/or for expenses previously paid by NFA, provided
however, that any reimbursements must be paid at a date not more
than three years after the fiscal year in which NFA waived the fees
or reimbursed the expenses and the reimbursements do not cause the
Fund to exceed the expense limitation in the agreement.
----------------------------------------------------------------------------------------------------------------
Existing fund Replacement fund
-----------------------------------------------------------------------
AIM Variable Insurance Funds--AIM
V.I. Large Cap Growth Fund: Series NVIT--NVIT Multi-Manager Large Cap
I Shares Growth Fund: Class I
----------------------------------------------------------------------------------------------------------------
Management Fees......................... \11\ 0.70% 0.65%
12b-1 Fees.............................. 0.00% 0.00%
Other Expenses.......................... 0.40% \12\ 0.36%
[[Page 28992]]
Total Gross Expenses.................... 1.10% 1.01%
Waivers/Reimbursements.................. \13\ 0.09% \14\ 0.11%
Total Net Expenses...................... 1.01% 0.90%
Fund/Class \15\ Asset Level ($MMs) (5/20/ \16\ $63.5 $0.6
09)....................................
----------------------------------------------------------------------------------------------------------------
3. American Century Variable Portfolios, Inc.--American Century VP
Capital Appreciation Fund: Class I Replaced by the NVIT--NVIT Multi-
Manager Mid Cap Growth Fund: Class I (Substitution Table Reference No.
4)
The following chart compares the management fees, the total
operating expenses (before and after any waivers and reimbursements)
expressed as an annual percentage of average
