Rydex Series Funds, et al.; Notice of Application, 15468-15470 [2010-6874]

Download as PDF 15468 Federal Register / Vol. 75, No. 59 / Monday, March 29, 2010 / Notices cprice-sewell on DSK89S0YB1PROD with NOTICES nominee name, or otherwise, on behalf of a beneficial owner, the fund: (a) Will request that the financial intermediary, or its agent, forward the Notice to all beneficial owners of the fund’s stock held through such financial intermediary; (b) will provide, in a timely manner, to the financial intermediary, or its agent, enough copies of the Notice assembled in the form and at the place that the financial intermediary, or its agent, reasonably requests to facilitate the financial intermediary’s sending of the Notice to each beneficial owner of the fund’s common stock; and (c) upon the request of any financial intermediary, or its agent, that receives copies of the Notice, will pay the financial intermediary, or its agent, the reasonable expenses of sending the Notice to such beneficial owners. V. Additional Board Determinations for Funds Whose Stock Trades at a Premium If: A. A fund’s common stock has traded on the exchange that it primarily trades on at the time in question at an average premium to NAV equal to or greater than 10%, as determined on the basis of the average of the discount or premium to NAV of the fund’s common stock as of the close of each trading day over a 12-week rolling period (each such 12week rolling period ending on the last trading day of each week); and B. The fund’s annualized distribution rate for such 12-week rolling period, expressed as a percentage of NAV as of the ending date of such 12-week rolling period, is greater than the fund’s average annual total return in relation to the change in NAV over the 2-year period ending on the last day of such 12-week rolling period; then: 1. At the earlier of the next regularly scheduled meeting or within four months of the last day of such 12-week rolling period, the Board including a majority of the Independent Trustees: (a) Will request and evaluate, and the Adviser will furnish, such information as may be reasonably necessary to make an informed determination of whether the Plan should be continued or continued after amendment; (b) Will determine whether continuation, or continuation after amendment, of the Plan is consistent with the fund’s investment objective(s) and policies and in the best interests of the fund and its stockholders, after considering the information in condition V.B.1.a above; including, without limitation: (1) Whether the Plan is accomplishing its purpose(s); VerDate Nov<24>2008 09:18 Apr 05, 2010 Jkt 220001 (2) The reasonably foreseeable effects of the Plan on the fund’s long-term total return in relation to the market price and NAV of the fund’s common stock; and (3) The fund’s current distribution rate, as described in condition V.B above, compared to the fund’s average annual total return over the 2-year period, as described in condition V.B, or such longer period as the Board deems appropriate; and (c) Based upon that determination, will approve or disapprove the continuation, or continuation after amendment, of the Plan; and 2. The Board will record the information considered by it and the basis for its approval or disapproval of the continuation, or continuation after amendment, of the Plan in its meeting minutes, which must be made and preserved for a period of not less than six years from the date of such meeting, the first two years in an easily accessible place. VI. Public Offerings The fund will not make a public offering of the fund’s common stock other than: A. A rights offering below net asset value to holders of the fund’s common stock; B. An offering in connection with a dividend reinvestment plan, merger, consolidation, acquisition, spin-off or reorganization of the fund; or C. An offering other than an offering described in conditions VI.A and VI.B above, unless, with respect to such other offering: 1. The fund’s annualized distribution rate for the six months ending on the last day of the month ended immediately prior to the most recent distribution declaration date,5 expressed as a percentage of NAV per share as of such date, is no more than 1 percentage point greater than the fund’s average annual total return for the 5-year period ending on such date;6 and 2. The transmittal letter accompanying any registration statement filed with the Commission in connection with such offering discloses that the fund has received an order under section 19(b) to permit it to make periodic distributions of long-term capital gains with respect to its common stock as frequently as twelve times each year, and as frequently as distributions 5 If the fund has been in operation fewer than six months, the measured period will begin immediately following the fund’s first public offering. 6 If the fund has been in operation fewer than five years, the measured period will begin immediately following the fund’s first public offering. PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 are specified in accordance with the terms of any outstanding preferred stock that such fund may issue. VII. Amendments to Rule 19b–1 The requested relief will expire on the effective date of any amendment to rule 19b-1 that provides relief permitting certain closed-end investment companies to make periodic distributions of long-term capital gains with respect to their outstanding common stock as frequently as twelve times each year. For the Commission, by the Division of Investment Management, under delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–6779 Filed 3–26–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 29179; File No. 812–13685] Rydex Series Funds, et al.; Notice of Application March 23, 2010. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of an application under section 6(c) of the Investment Company Act of 1940 (‘‘Act’’) for an exemption from rule 12d1–2(a) under the Act. AGENCY: Summary of Application: Applicants request an order to permit funds of funds relying on rule 12d1–2 under the Act to invest in certain financial instruments. Applicants: Rydex Series Funds, Rydex Variable Trust (each, a ‘‘Trust’’ and together, the ‘‘Trusts’’), PADCO Advisors, Inc., PADCO Advisors II, Inc. (collectively, the ‘‘PADCO Advisers’’), and Rydex Distributors, Inc. (the ‘‘Distributor’’). Filing Dates: The application was filed on August 27, 2009, and amended on January 14, 2010 and March 22, 2010. Hearing or Notification of Hearing: An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission’s Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on April 19, 2010 and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state E:\FR\FM\29MRN1.SGM 29MRN1 cprice-sewell on DSK89S0YB1PROD with NOTICES Federal Register / Vol. 75, No. 59 / Monday, March 29, 2010 / Notices the nature of the writer’s interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission’s Secretary. ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090; Applicants: 9601 Blackwell Road, Suite 500, Rockville, Maryland 20850. FOR FURTHER INFORMATION CONTACT: Lewis Reich, Senior Counsel, at (202) 551–6919, or Jennifer L. Sawin, Branch Chief, at (202) 551–6821 (Division of Investment Management, Office of Investment Company Regulation). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained 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. Each Trust is organized as a Delaware statutory trust, and each is registered with the Commission as an open-end management investment company. Each of the PADCO Advisers is organized as a Maryland corporation and is a wholly owned subsidiary of Security Benefit Corporation. PADCO Advisors, Inc. currently serves as the investment adviser to the Rydex Series Funds and PADCO Advisors II, Inc. currently serves as the investment adviser to the Rydex Variable Trust. Each Adviser is or will be registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and the Distributor is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended (‘‘Exchange Act’’). 2. Applicants request the exemption on behalf of (i) Each Trust and all existing and future series of each Trust (‘‘Funds’’); (ii) any existing or future registered open-end management investment company or series thereof that is advised by the PADCO Advisers or any entity controlling, controlled by or under common control with the PADCO Advisers (collectively with the PADCO Advisers, the ‘‘Advisers’’) and that is in the same group of investment companies as defined in section 12(d)(1)(G) of the Act, as the Trusts (together with the Funds, the ‘‘Applicant Funds’’); and (iii) any entity controlling, controlled by or under common control with the Advisers or the Distributor that, now or in the future, acts as principal underwriter with respect to the transactions described herein. VerDate Nov<24>2008 09:18 Apr 05, 2010 Jkt 220001 Applicants request the exemption to the extent necessary to permit any Applicant Fund that may invest in other registered open-end investment companies including Applicant Funds (‘‘Underlying Funds’’) in reliance on section 12(d)(1)(G) of the Act (‘‘Fund of Funds’’) and that is also eligible to invest in securities (as defined in section 2(a)(36) of the Act) in reliance on rule 12d1–2 under the Act to also invest, to the extent consistent with its investment objective, policies, strategies and limitations, in financial instruments that may not be securities within the meaning of section 2(a)(36) of the Act (‘‘Other Investments’’).1 3. Consistent with its fiduciary obligations under the Act, each Applicant Fund’s board of trustees or directors will review the advisory fees charged by the Applicant Fund’s investment adviser to ensure that they are based on services provided that are in addition to, rather than duplicative of, services provided pursuant to the advisory agreement of any investment company in which the Applicant Funds may invest. Applicants’ Legal Analysis: 1. Section 12(d)(1)(A) of the Act provides that no registered investment company (‘‘acquiring company’’) may acquire securities of another investment company (‘‘acquired company’’) if such securities represent more than 3% of the acquired company’s outstanding voting stock or more than 5% of the acquiring company’s total assets, or if such securities, together with the securities of other investment companies, represent more than 10% of the acquiring company’s total assets. Section 12(d)(1)(B) of the Act provides that no registered open-end investment company may sell its securities to another investment company if the sale will cause the acquiring company to own more than 3% of the acquired company’s voting stock, or cause more than 10% of the acquired company’s voting stock to be owned by investment companies and companies controlled by them. 2. Section 12(d)(1)(G) of the Act provides that section 12(d)(1) will not apply to securities of an acquired company purchased by an acquiring company if: (i) The acquired company and acquiring company are part of the same group of investment companies; (ii) the acquiring company holds only securities of acquired companies that 1 Every existing entity that currently intends to rely on the requested order is named as an applicant. Any existing or future entity that relies on the order in the future will do so only in accordance with the terms and condition in the application. PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 15469 are part of the same group of investment companies, government securities, and short-term paper; (iii) the aggregate sales loads and distribution-related fees of the acquiring company and the acquired company are not excessive under rules adopted pursuant to section 22(b) or section 22(c) of the Act by a securities association registered under section 15A of the Exchange Act or by the Commission; and (iv) the acquired company has a policy that prohibits it from acquiring securities of registered open-end investment companies or registered unit investment trusts in reliance on section 12(d)(1)(F) or (G) of the Act. 3. Rule 12d1–2 under the Act permits a registered open-end investment company or a registered unit investment trust that relies on section 12(d)(1)(G) of the Act to acquire, in addition to securities issued by another registered investment company in the same group of investment companies, government securities, and short-term paper: (1) Securities issued by an investment company that is not in the same group of investment companies, when the acquisition is in reliance on section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (2) securities (other than securities issued by an investment company); and (3) securities issued by a money market fund, when the investment is in reliance on rule 12d1–1 under the Act. For the purposes of rule 12d1–2, ‘‘securities’’ means any security as defined in section 2(a)(36) of the Act. 4. Section 6(c) of the Act provides that the Commission may exempt any person, security, or transaction from any provision of the Act, or from any rule under the Act, if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policies and provisions of the Act. 5. Applicants state that the proposed arrangement would comply with the provisions of rule 12d1–2 under the Act, but for the fact that the Funds of Funds may invest a portion of their assets in Other Investments. Applicants request an order under section 6(c) of the Act for an exemption from rule 12d1–2(a) to allow the Funds of Funds to invest in Other Investments while investing in Underlying Funds. Applicants assert that permitting the Applicant Funds to invest in Other Investments as described in the application would not raise any of the concerns that the requirements of section 12(d)(1) were designed to address. Applicants’ Condition: E:\FR\FM\29MRN1.SGM 29MRN1 15470 Federal Register / Vol. 75, No. 59 / Monday, March 29, 2010 / Notices Applicants agree that the order granting the requested relief will be subject to the following condition: Applicants will comply with all provisions of rule 12d1–2 under the Act, except for paragraph (a)(2) to the extent that it restricts any Fund of Funds from investing in Other Investments as described in the application. For the Commission, by the Division of Investment Management, under delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–6874 Filed 3–26–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61747; File No. SR–FINRA– 2010–010] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Update a CrossReference Within FINRA Rule 0150 March 19, 2010. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that, on March 9, 2010, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II and III, which Items have been prepared by FINRA. FINRA has designated the proposed rule change as constituting a ‘‘non-controversial’’ rule change under paragraph (f)(6) of Rule 19b–4 under the Act,3 which renders the proposal effective upon receipt of this filing by the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. cprice-sewell on DSK89S0YB1PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FINRA is proposing to amend FINRA Rule 0150 (Application of Rules to Exempted Securities Except Municipal Securities) to update a cross-reference to reflect a change adopted in the consolidated FINRA rulebook. The text of the proposed rule change is available on FINRA’s Web site at https://www.finra.org, at the principal 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 2 17 VerDate Nov<24>2008 09:18 Apr 05, 2010 Jkt 220001 office of FINRA and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose FINRA is in the process of developing a new consolidated rulebook (‘‘Consolidated FINRA Rulebook’’).4 This process involves FINRA submitting to the Commission for approval a series of proposed rule changes over time to adopt rules in the Consolidated FINRA Rulebook. The phased adoption and implementation of those rules necessitates periodic amendments to update rule cross-references in the Consolidated FINRA Rulebook. The proposed rule change would update a rule cross-reference to reflect changes adopted in the Consolidated FINRA Rulebook. Specifically, the proposed rule change would update FINRA Rule 0150 to reflect the incorporation into the Consolidated FINRA Rulebook of FINRA Rule 5160 (Disclosure of Price and Concessions in Selling Agreements) and the deletion of NASD Rule 2770 (Disclosure of Price in Selling Agreements). FINRA Rule 5160 was approved by the Commission on January 25, 2010 5 and will become effective on April 19, 2010. FINRA has filed the proposed rule change for immediate effectiveness. The 4 The current FINRA rulebook consists of (1) FINRA Rules; (2) NASD Rules; and (3) rules incorporated from NYSE (‘‘Incorporated NYSE Rules’’) (together, the NASD Rules and Incorporated NYSE Rules are referred to as the ‘‘Transitional Rulebook’’). While the NASD Rules generally apply to all FINRA members, the Incorporated NYSE Rules apply only to those members of FINRA that are also members of the NYSE (‘‘Dual Members’’). The FINRA Rules apply to all FINRA members, unless such rules have a more limited application by their terms. For more information about the rulebook consolidation process, see Information Notice, March 12, 2008 (Rulebook Consolidation Process). 5 See Securities Exchange Act Release No. 61417 (January 25, 2010), 75 FR 5157 (February 1, 2010) (Order Approving File No. SR–FINRA–2009–086). PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 implementation date for the proposed rule change will be April 19, 2010, the date on which the previously approved rule change will also be implemented. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,6 which requires, among other things, that FINRA rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. FINRA believes the proposed rule change will provide greater clarity to members and the public regarding FINRA’s rules. B. Self-Regulatory Organization’s Statement on Burden on Competition FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 7 and Rule 19b– 4(f)(6) thereunder.8 At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, 6 15 U.S.C. 78o–3(b)(6). U.S.C. 78s(b)(3)(A). 8 17 CFR 240.19b–4(f)(6). Rule 19b–4(f)(6)(iii) requires that a self-regulatory organization submit to the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the filing of the proposed rule change, or such shorter time as designated by the Commission. The Commission notes that at least five days prior to the instant filing, FINRA provided the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change. 7 15 E:\FR\FM\29MRN1.SGM 29MRN1

Agencies

[Federal Register Volume 75, Number 59 (Monday, March 29, 2010)]
[Notices]
[Pages 15468-15470]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-6874]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29179; File No. 812-13685]


Rydex Series Funds, et al.; Notice of Application

March 23, 2010.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (``Act'') for an exemption from rule 12d1-2(a) 
under the Act.

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

    Summary of Application: Applicants request an order to permit funds 
of funds relying on rule 12d1-2 under the Act to invest in certain 
financial instruments.
    Applicants: Rydex Series Funds, Rydex Variable Trust (each, a 
``Trust'' and together, the ``Trusts''), PADCO Advisors, Inc., PADCO 
Advisors II, Inc. (collectively, the ``PADCO Advisers''), and Rydex 
Distributors, Inc. (the ``Distributor'').
    Filing Dates: The application was filed on August 27, 2009, and 
amended on January 14, 2010 and March 22, 2010.
    Hearing or Notification of Hearing: An order granting the 
application will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary and serving applicants with a copy of the request, personally 
or by mail. Hearing requests should be received by the Commission by 
5:30 p.m. on April 19, 2010 and should be accompanied by proof of 
service on applicants, in the form of an affidavit or, for lawyers, a 
certificate of service. Hearing requests should state

[[Page 15469]]

the nature of the writer's interest, the reason for the request, and 
the issues contested. Persons who wish to be notified of a hearing may 
request notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street, 
NE., Washington, DC 20549-1090; Applicants: 9601 Blackwell Road, Suite 
500, Rockville, Maryland 20850.

FOR FURTHER INFORMATION CONTACT: Lewis Reich, Senior Counsel, at (202) 
551-6919, or Jennifer L. Sawin, Branch Chief, at (202) 551-6821 
(Division of Investment Management, Office of Investment Company 
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained 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. Each Trust is organized as a Delaware statutory trust, and each 
is registered with the Commission as an open-end management investment 
company. Each of the PADCO Advisers is organized as a Maryland 
corporation and is a wholly owned subsidiary of Security Benefit 
Corporation. PADCO Advisors, Inc. currently serves as the investment 
adviser to the Rydex Series Funds and PADCO Advisors II, Inc. currently 
serves as the investment adviser to the Rydex Variable Trust. Each 
Adviser is or will be registered as an investment adviser under the 
Investment Advisers Act of 1940, as amended, and the Distributor is 
registered as a broker-dealer under the Securities Exchange Act of 
1934, as amended (``Exchange Act'').
    2. Applicants request the exemption on behalf of (i) Each Trust and 
all existing and future series of each Trust (``Funds''); (ii) any 
existing or future registered open-end management investment company or 
series thereof that is advised by the PADCO Advisers or any entity 
controlling, controlled by or under common control with the PADCO 
Advisers (collectively with the PADCO Advisers, the ``Advisers'') and 
that is in the same group of investment companies as defined in section 
12(d)(1)(G) of the Act, as the Trusts (together with the Funds, the 
``Applicant Funds''); and (iii) any entity controlling, controlled by 
or under common control with the Advisers or the Distributor that, now 
or in the future, acts as principal underwriter with respect to the 
transactions described herein. Applicants request the exemption to the 
extent necessary to permit any Applicant Fund that may invest in other 
registered open-end investment companies including Applicant Funds 
(``Underlying Funds'') in reliance on section 12(d)(1)(G) of the Act 
(``Fund of Funds'') and that is also eligible to invest in securities 
(as defined in section 2(a)(36) of the Act) in reliance on rule 12d1-2 
under the Act to also invest, to the extent consistent with its 
investment objective, policies, strategies and limitations, in 
financial instruments that may not be securities within the meaning of 
section 2(a)(36) of the Act (``Other Investments'').\1\
---------------------------------------------------------------------------

    \1\ Every existing entity that currently intends to rely on the 
requested order is named as an applicant. Any existing or future 
entity that relies on the order in the future will do so only in 
accordance with the terms and condition in the application.
---------------------------------------------------------------------------

    3. Consistent with its fiduciary obligations under the Act, each 
Applicant Fund's board of trustees or directors will review the 
advisory fees charged by the Applicant Fund's investment adviser to 
ensure that they are based on services provided that are in addition 
to, rather than duplicative of, services provided pursuant to the 
advisory agreement of any investment company in which the Applicant 
Funds may invest.
    Applicants' Legal Analysis:
    1. Section 12(d)(1)(A) of the Act provides that no registered 
investment company (``acquiring company'') may acquire securities of 
another investment company (``acquired company'') if such securities 
represent more than 3% of the acquired company's outstanding voting 
stock or more than 5% of the acquiring company's total assets, or if 
such securities, together with the securities of other investment 
companies, represent more than 10% of the acquiring company's total 
assets. Section 12(d)(1)(B) of the Act provides that no registered 
open-end investment company may sell its securities to another 
investment company if the sale will cause the acquiring company to own 
more than 3% of the acquired company's voting stock, or cause more than 
10% of the acquired company's voting stock to be owned by investment 
companies and companies controlled by them.
    2. Section 12(d)(1)(G) of the Act provides that section 12(d)(1) 
will not apply to securities of an acquired company purchased by an 
acquiring company if: (i) The acquired company and acquiring company 
are part of the same group of investment companies; (ii) the acquiring 
company holds only securities of acquired companies that are part of 
the same group of investment companies, government securities, and 
short-term paper; (iii) the aggregate sales loads and distribution-
related fees of the acquiring company and the acquired company are not 
excessive under rules adopted pursuant to section 22(b) or section 
22(c) of the Act by a securities association registered under section 
15A of the Exchange Act or by the Commission; and (iv) the acquired 
company has a policy that prohibits it from acquiring securities of 
registered open-end investment companies or registered unit investment 
trusts in reliance on section 12(d)(1)(F) or (G) of the Act.
    3. Rule 12d1-2 under the Act permits a registered open-end 
investment company or a registered unit investment trust that relies on 
section 12(d)(1)(G) of the Act to acquire, in addition to securities 
issued by another registered investment company in the same group of 
investment companies, government securities, and short-term paper: (1) 
Securities issued by an investment company that is not in the same 
group of investment companies, when the acquisition is in reliance on 
section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (2) securities (other 
than securities issued by an investment company); and (3) securities 
issued by a money market fund, when the investment is in reliance on 
rule 12d1-1 under the Act. For the purposes of rule 12d1-2, 
``securities'' means any security as defined in section 2(a)(36) of the 
Act.
    4. Section 6(c) of the Act provides that the Commission may exempt 
any person, security, or transaction from any provision of the Act, or 
from any rule under the Act, if such exemption is necessary or 
appropriate in the public interest and consistent with the protection 
of investors and the purposes fairly intended by the policies and 
provisions of the Act.
    5. Applicants state that the proposed arrangement would comply with 
the provisions of rule 12d1-2 under the Act, but for the fact that the 
Funds of Funds may invest a portion of their assets in Other 
Investments. Applicants request an order under section 6(c) of the Act 
for an exemption from rule 12d1-2(a) to allow the Funds of Funds to 
invest in Other Investments while investing in Underlying Funds. 
Applicants assert that permitting the Applicant Funds to invest in 
Other Investments as described in the application would not raise any 
of the concerns that the requirements of section 12(d)(1) were designed 
to address.
    Applicants' Condition:

[[Page 15470]]

    Applicants agree that the order granting the requested relief will 
be subject to the following condition:
    Applicants will comply with all provisions of rule 12d1-2 under the 
Act, except for paragraph (a)(2) to the extent that it restricts any 
Fund of Funds from investing in Other Investments as described in the 
application.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-6874 Filed 3-26-10; 8:45 am]
BILLING CODE 8011-01-P
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