Rydex Series Funds, et al.; Notice of Application, 15468-15470 [2010-6874]
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15468
Federal Register / Vol. 75, No. 59 / Monday, March 29, 2010 / Notices
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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);
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(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.
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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
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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.
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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.
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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:
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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
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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).
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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
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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]
-----------------------------------------------------------------------
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\
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\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