Ameritas Life Insurance Corp., et al; Notice of Application, 65393-65396 [2013-25831]
Download as PDF
<![CDATA[
Federal Register / Vol. 78, No. 211 / Thursday, October 31, 2013 / Notices
The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on October 23,
2013, it filed with the Postal Regulatory
Commission a Request of the United
States Postal Service To Add Parcel
Return Service Contract 5 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2014–4, CP2014–4.
SUPPLEMENTARY INFORMATION:
Stanley F. Mires,
Attorney, Legal Policy & Legislative Advice.
[FR Doc. 2013–25807 Filed 10–30–13; 8:45 am]
BILLING CODE 7710–12–P
Product Change—Priority Mail Express
and Priority Mail Negotiated Service
Agreement
Postal ServiceTM.
ACTION: Notice.
AGENCY:
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Effective date: October 31, 2013.
FOR FURTHER INFORMATION CONTACT:
Elizabeth A. Reed, 202–268–3179.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on October 23,
2013, it filed with the Postal Regulatory
Commission a Request of the United
States Postal Service To Add Priority
Mail Express & Priority Mail Contract 15
to Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2014–3, CP2014–3.
Stanley F. Mires,
Attorney, Legal Policy & Legislative Advice.
[FR Doc. 2013–25810 Filed 10–30–13; 8:45 am]
BILLING CODE 7710–12–P
POSTAL SERVICE
Product Change—Priority Mail
Negotiated Service Agreement
Postal ServiceTM.
Notice.
AGENCY:
mstockstill on DSK4VPTVN1PROD with NOTICES
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 30764; File No. 812–14189]
SUMMARY:
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
SUMMARY:
19:21 Oct 30, 2013
Elizabeth A. Reed, 202–268–3179.
The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on October 23,
2013, it filed with the Postal Regulatory
Commission a Request of the United
States Postal Service To Add Priority
Mail Contract 66 to Competitive Product
List. Documents are available at
www.prc.gov, Docket Nos. MC2014–2,
CP2014–2.
SUPPLEMENTARY INFORMATION:
[FR Doc. 2013–25812 Filed 10–30–13; 8:45 am]
POSTAL SERVICE
VerDate Mar<15>2010
Effective date; October 31, 2013.
FOR FURTHER INFORMATION CONTACT:
Stanley F. Mires,
Attorney, Legal Policy & Legislative Advice.
BILLING CODE 7710–12–P
ACTION:
DATES:
Jkt 232001
Ameritas Life Insurance Corp., et al;
Notice of Application
October 25, 2013.
65393
Accounts to support certain variable
annuity contracts or variable life
insurance contracts (collectively, the
‘‘Contracts’’) issued by the Life
Insurance Companies (the
‘‘Substitution’’).
Filing Date: The application was
filed on July 31, 2013, and an amended
and restated application was filed on
October 25, 2013.
DATES:
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 November 14, 2013, and
should be accompanied by proof of
service on the Applicants, 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 may
request notification of a hearing by
writing to the Secretary of the
Commission.
HEARING OR NOTIFICATION OF HEARING:
The Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of application for an
order approving the substitution of
certain securities pursuant to Section
26(c) of the Investment Company Act of
1940, as amended (the ‘‘1940 Act’’).
ADDRESSES:
Ameritas Life Insurance
Corp., Ameritas Life Insurance Corp. of
New York, The Union Central Life
Insurance Company (each, a ‘‘Life
Insurance Company’’ and, collectively,
the ‘‘Life Insurance Companies’’), and
their respective separate accounts:
Ameritas Variable Separate Account
VA–2, Ameritas Variable Separate
Account V, Ameritas Variable Separate
Account VA, Ameritas Variable
Separate Account VL (the ‘‘Ameritas
Life Accounts’’); Ameritas Life of NY
Separate Account VA, Ameritas Life of
NY Separate Account VUL (the
‘‘Ameritas Life of NY Accounts’’); and
the Carillon Life Account (each an
‘‘Account’’ and together with the Life
Insurance Companies, the
‘‘Applicants’’).
SUMMARY OF APPLICATION: The
Applicants seek an order under Section
26(c) of the 1940 Act approving the
substitution of shares of the VIP Money
Market Portfolio, Initial Class (the
‘‘Replacement Portfolio’’) of the Variable
Insurance Products Fund V (‘‘VIPFV’’)
for shares of the Calvert VP Money
Market Portfolio (the ‘‘Current
Portfolio’’) of the Calvert Variable
Series, Inc. (‘‘CVSI’’) held by the
FOR FURTHER INFORMATION CONTACT:
AGENCY:
APPLICANTS:
PO 00000
Frm 00130
Fmt 4703
Sfmt 4703
Secretary, Securities and
Exchange Commission, 100 F Street NE.,
Washington, DC 20549–1090.
Applicants: Ameritas Life Insurance
Corp., Ameritas Variable Separate
Account VA–2, Ameritas Variable
Separate Account V, Ameritas Variable
Separate Account VA, and Ameritas
Variable Separate Account VL, 5900
‘‘O’’ Street, Lincoln, Nebraska 68510;
Ameritas Life Insurance Corp. of New
York, Ameritas Life of NY Separate
Account VA, Ameritas Life of NY
Separate Account VUL, 1350 Broadway,
Suite 2201, New York, New York 10018;
and The Union Central Life Insurance
Company and Carillon Life Account,
5900 ‘‘O’’ Street, Lincoln, Nebraska
68510.
Michelle Roberts, Senior Counsel, or
Joyce M. Pickholz, Branch Chief,
Insured Investments Office, Division of
Investment Management at (202) 551–
6795.
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.
SUPPLEMENTARY INFORMATION:
E:\FR\FM\31OCN1.SGM
31OCN1
65394
Federal Register / Vol. 78, No. 211 / Thursday, October 31, 2013 / Notices
Applicants’ Representations
1. The Life Insurance Companies, on
their own behalf and on behalf of their
respective separate accounts, propose to
substitute shares of the Replacement
Portfolio for shares of the Current
Portfolio held by the Accounts to fund
the Contracts.
2. Ameritas Life Insurance Corp. is the
depositor and sponsor of the Ameritas
Life Accounts. Ameritas Life Insurance
Corp. of New York is the depositor and
sponsor of the Ameritas Life of NY
Accounts. The Union Central Life
Insurance Company is the depositor and
sponsor of the Carillon Life Account.
3. Each Account is a ‘‘separate
account’’ as defined by Rule 0–1(e)
under the 1940 Act, and is registered
with the Commission as a unit
investment trust. Security interests
under the Contracts have been
registered under the Securities Act of
1933, as amended (the ‘‘1933 Act’’). The
application sets forth the registration
statement file numbers for the Contracts
and the Separate Accounts.
4. Each Account is divided into
subaccounts, each of which invests
exclusively in shares of a corresponding
investment portfolio (a ‘‘Portfolio’’) of a
series-type management investment
company, including CVSI.
5. Pursuant to the Contracts, the Life
Insurance Companies reserve the right
to substitute shares of one Portfolio for
shares of another. The prospectuses for
the Contracts also disclose that the Life
Insurance Companies reserve this right.
6. CVSI is an open-end management
investment company (File No. 811–
03591) that currently consists of six
investment portfolios, including the
Current Portfolio, and issues a separate
series of shares in connection with each.
CVSI has registered such shares under
the 1933 Act (File No. 002–80154).
7. Calvert Investment Management,
Inc. (‘‘CIM’’) serves as the investment
adviser to each CVSI Portfolio. CIM is
an indirect wholly-owned subsidiary of
AMHC.
8. The VIPFV is an open-end
management investment company (File
No. 811–05361) that currently consists
of 32 investment portfolios, one of
which, the Replacement Portfolio, is the
subject of the proposed Substitution.
VIPFV issues a separate series of shares
in connection with each Portfolio and
has registered such shares under the
1933 Act (File No. 033–17704).
9. Fidelity Management & Research
Company (‘‘FMR’’) serves as the
manager of each Portfolio of VIPFV.
FMR receives an investment
management fee from each Portfolio.
Fidelity Investments Money
Management, Inc. (‘‘FIMM’’) and other
affiliates of FMR serve as sub-advisers
for the Replacement Portfolio. FIMM
has the day-to-day responsibility of
choosing investments for the
Replacement Portfolio. In addition,
other affiliates of FMR serve as subadvisers for the Replacement Portfolio
and may provide investment research
and advice for the Replacement
Portfolio. None of VIPFV, FMR, FIMM,
or other affiliates of FMR are affiliated
persons (or affiliated persons of
affiliated person) of any of the
Applicants. Likewise, none of the
Applicants are affiliated persons (or
affiliated persons of affiliated persons)
of VIPFV, FMR, FIMM or other affiliates
of FMR.
10. The Applicants state that
Replacement Portfolio’s and Current
Portfolio’s respective investment
objectives, strategies and risks are
substantially the same. A comparison of
the investment objectives, strategies and
risks of the Replacement Portfolio and
the Current Portfolio is included in the
application.
11. The following table compares the
fees and expenses of the Current
Portfolio and the Replacement Portfolio
as of the year ended December 31, 2012:
Current portfolio
Calvert Variable Series, Inc., Calvert
VP Money Market Portfolio
Management Fee ....................................................................
Distribution and Service (12b–1) Fee .....................................
Other Expenses ......................................................................
Total Operating Expenses ......................................................
Fee Waivers and Expense Reimbursements .........................
Net Operating Expenses .........................................................
Replacement portfolio
Variable Insurance Products Fund V,
VIP Money Market Portfolio, Initial
Class
0.25% .....................................................
None ......................................................
0.14% .....................................................
0.39% .....................................................
None 1 ....................................................
0.39% 2 ..................................................
0.17%.
None.
0.09%.
0.26%.
None.
0.26%.
mstockstill on DSK4VPTVN1PROD with NOTICES
1 The Investment Advisor, CIM, has contractually agreed to limit direct net annual portfolio operating expenses through April 30, 2014 to
0.40%. Under the terms of the contractual expense limitation, operating expenses do not include interest expense, brokerage commissions, taxes
and extraordinary expenses. Only the Board of Directors of CVSI may terminate a Portfolio’s expense cap before the contractual period expires.
2 The Advisor further voluntarily reimbursed expenses of $88,900 or 0.11%, for Net Operating Expenses of 0.28% to maintain a positive yield
during the year ended December 31, 2012.
12. The Applicants state that the
proposed Substitution is in response to
a decision by the Board of Directors for
CVSI, at a meeting held on June 5, 2013,
to approve the dissolution of the
Current Portfolio on or about November
15, 2013 (the ‘‘Liquidation Date’’). The
board’s decision to liquidate the Current
Portfolio requires the Life Insurance
Companies to transfer accumulated
Contract value invested in the Current
Portfolio to an alternative investment
option available under the Contracts on
or before the Liquidation Date.
Currently, the only money market
portfolio investment option offered
under the Contracts is the Current
VerDate Mar<15>2010
19:21 Oct 30, 2013
Jkt 232001
Portfolio. Accordingly, the proposed
Substitution is necessary in order to
provide the Contract owners with
continued access to a money market
portfolio investment option.
Consequently, the Life Insurance
Companies have determined to replace
the Current Portfolio with the
Replacement Portfolio via the
Substitution.
13. The Life Insurance Companies
submit that the Replacement Portfolio is
an appropriate alternative for Contract
owners for several reasons. First, its
investment objectives, strategies and
risks are substantially the same as those
of the Current Portfolio. Second, it is
PO 00000
Frm 00131
Fmt 4703
Sfmt 4703
substantially larger than the Current
Portfolio, has had lower overall expense
levels than the Portfolio in recent years,
and has had higher yields in recent
years than the Current Portfolio. Third,
the Contracts and other variable annuity
and variable life insurance contracts
issued by the Life Insurance Companies
currently offer one or more VIPFV
portfolios (other than the Replacement
Portfolio).
14. The Applicants believe that
Contract owners would benefit from the
significantly larger size of the
Replacement Portfolio and the
somewhat higher yields of the
Replacement Portfolio, as contrasted
E:\FR\FM\31OCN1.SGM
31OCN1
Federal Register / Vol. 78, No. 211 / Thursday, October 31, 2013 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
with the size and recent yields of the
Current Portfolio. The yield for the
Current Portfolio for the seven days
ending December 31, 2012 was 0.01%.
The net asset value of the Current
Portfolio was $85,913,000 as of
December 31, 2012. The yield for the
Replacement Portfolio Initial Class
shares for the seven days ending
December 31, 2012 was 0.08%. The net
asset value of the Replacement Portfolio
supporting Initial Class shares was
$889,797,000 as of December 31, 2012.
15. The Applicants believe that
Contract owners will benefit from the
reduction in overall expenses of the
Replacement Portfolio as compared to
the Current Portfolio. Specifically, the
management fee, other expenses, and
total operating expenses are less than
those of the Current Portfolio. Both
Portfolios have no charge for Rule 12b–
1 distribution and services fees. The
total annual operating expense of the
Replacement Portfolio is less than that
of the Current Portfolio. Given this
decrease, the Applicants believe that the
Substitution would benefit Contract
owners by reducing the overall level of
Portfolio expenses.
Legal Analysis and Conditions
1. The Applicants request that the
Commission issue an order pursuant to
Section 26(c) of the 1940 Act approving
the proposed Substitution. Section 26(c)
of the 1940 Act requires the depositor of
a registered unit investment trust
holding securities of a single issuer to
obtain Commission approval before
substituting the securities held by the
trust.
2. Applicants submit that the
proposed Substitution is not the type of
substitution that Section 26(c) was
designed to prevent. Section 26(c) was
intended to provide for Commission
scrutiny of a proposed Substitution
which could, in effect, force
shareholders dissatisfied with the
substitute security to redeem their
shares, thereby possibly incurring a loss
of the sales load deducted from initial
premium, an additional sales load upon
reinvestment of the proceeds of
redemption, or both, as well as possibly
suffering adverse tax consequences
upon redemption. Consequently, the
section was designed to forestall the
ability of a depositor to present holders
of interest in a unit investment trust
with situations in which a holder’s only
choice would be to continue an
investment in an unsuitable underlying
security, or to elect a costly and, in
effect, forced redemption.
3. Applicants submit that the
proposed substitution will provide
Contract owners with substantially the
VerDate Mar<15>2010
19:21 Oct 30, 2013
Jkt 232001
same investment vehicle and would not
raise any of the aforementioned
concerns that Congress intended to
address when the 1940 Act was
amended to include Section 26(c).
4. Applicants represent that
redemptions and purchases will occur
simultaneously so that contract values
will remain fully invested at all times.
All redemptions of shares of the Current
Portfolio and purchases of shares of the
Replacement Portfolio will be effected
in accordance with Section 22(c) of the
Act and Rule 22c–1 thereunder. The
Substitution will take place at relative
net asset value as of the effective date
of the Substitution (‘‘Effective Date’’)
with no change in the amount of any
Contract owner’s contract value or death
benefit or in the dollar value of his or
her investments in the money market
subaccount of the applicable Account.
5. Contract values attributable to
investments in the Current Portfolio will
be transferred to the Replacement
Portfolio without charge (including
sales charges or surrender charges) and
without counting toward the number of
transfers that may be permitted without
charge. Contract owners will not incur
any additional fees or charges as a result
of the Substitution, nor will their rights
or the Life Insurance Companies’
respective obligations under the
Contracts be altered in any way and the
Substitution will not change Contract
owners’ insurance benefits under the
Contracts. All expenses incurred in
connection with the Substitution,
including legal, accounting,
transactional, and other fees and
expenses, including brokerage
commissions, will be paid by the Life
Insurance Companies. In addition, the
Substitution will not impose any tax
liability on Contract owners.
6. The Applicants also represent that
the Substitution will not cause the
Contract fees and charges currently paid
by existing Contract owners to be greater
after the Substitution than before the
Substitution. The Life Insurance
Companies will not exercise any right
they may have under the Contracts to
impose restrictions on transfers under
the Contracts for the period beginning
on the date of the Pre-Substitution
Notice (defined below) through at least
thirty (30) days following the Effective
Date.
7. Existing Contract owners will be
notified of the proposed Substitution by
means of a prospectus or prospectus
supplement for each of the Contracts
(‘‘Pre-Substitution Notice’’) at least
thirty (30) days before the Effective
Date. New purchasers of the Contracts
will be provided the Pre-Substitution
Notice, the Contract prospectus, and the
PO 00000
Frm 00132
Fmt 4703
Sfmt 4703
65395
prospectus for the Replacement
Portfolio in accordance with all
applicable legal requirements.
8. The Pre-Substitution Notice will: (i)
State that the Applicants filed the
application seeking approval of the
Substitution; (ii) set forth the
anticipated Effective Date; (iii) explain
that the Contract values attributable to
investments in the Current Portfolio
would be attributable to the
Replacement Portfolio as of the Effective
Date; (iv) state that, from the date of the
Pre-Substitution Notice until the
Effective Date, Contract Owners are
permitted to transfer Contract value out
of any Current Portfolio 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 fees that would
otherwise be applicable under the terms
of the Contract; (v) advise Contract
owners that any contract value
remaining in the Current Portfolio subaccount on the Effective Date will be
transferred to a sub-account investing in
the Replacement Portfolio, and that the
Substitution will take place at relative
net asset value; (vi) inform Contract
owners that for at least thirty (30) days
following the Effective Date, the
applicable Life Insurance Company will
permit Contract owners to make
transfers of contract value out of the
sub-account investing in the
Replacement Portfolio to any other
available sub-accounts offered under
their Contracts without the transfer
being counted as a transfer for purposes
of transfer limitations and fees, if any,
that would otherwise be applicable
under the terms of the Contracts; and
(vii) inform Contract owners that, except
as described in the market timing
limitations section of the relevant
prospectus, the applicable Life
Insurance Company will not exercise
any rights reserved by it under the
Contracts to impose additional
restrictions on transfers out of the subaccount investing in the Replacement
Portfolio for at least thirty (30) days after
the Effective Date.
9. All Contract owners will have
received a copy of the most recent
prospectus for the Replacement
Portfolio prior to the Substitution. In
addition, within five (5) days following
the Substitution, Contract owners
affected by the Substitution will be
notified in writing that the Substitution
was carried out. This notice will restate
the relevant information set forth in the
Pre-Substitution Notice, and will also
explain that the contract values
attributable to investments in the
Current Portfolio were transferred to the
Replacement Portfolio without charge
E:\FR\FM\31OCN1.SGM
31OCN1
65396
Federal Register / Vol. 78, No. 211 / Thursday, October 31, 2013 / Notices
(including sales charges or surrender
charges) and without counting toward
the number of transfers that may be
permitted without charge.
10. The Applicants represent that the
Life Insurance Companies will not
receive, for three (3) years after the
Effective Date, any direct or indirect
benefits from the Replacement Portfolio,
its advisor or underwriter (or their
affiliates), in connection with assets
attributable to the Contracts affected by
the Substitution, at a higher rate than
the Life Insurance Companies had
received from the Current Portfolio, its
advisor or underwriter (or their
affiliates), including without limitation
12b–1 fees, revenue sharing or other
arrangements. The Applicants further
represent that the Substitution and the
selection of the Replacement Portfolio
were not motivated by any financial
consideration paid or to be paid to a Life
Insurance Company or its affiliates by
the Replacement Portfolio, its advisor or
underwriter, or their affiliates.
11. Applicants submit that the
replacement of the Current Portfolio
with the Replacement Portfolio is
consistent with the protection of
Contract owners and the purposes fairly
intended by the policy and provisions of
the 1940 Act and, thus, meets the
standards necessary to support an order
pursuant to Section 26(c) of the 1940
Act. In addition, the Applicants submit
that the proposed Substitution meets the
standards that the Commission and its
staff have applied to Substitutions that
have been approved in the past.
Conclusion
For the reasons and upon the facts set
forth above in the application, the
Applicants believe that the requested
order meets the standards set forth in
Section 26(c) of the 1940 Act and
should therefore be granted.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–25831 Filed 10–30–13; 8:45 am]
mstockstill on DSK4VPTVN1PROD with NOTICES
BILLING CODE 8011–01–P
VerDate Mar<15>2010
19:21 Oct 30, 2013
Jkt 232001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70756; File No. SR–BX–
2013–016]
Self-Regulatory Organizations;
NASDAQ OMX BX Inc.; Order
Disapproving Proposed Rule Change
To Adopt a Directed Order Process
October 25, 2013.
I. Introduction
On February 21, 2013, NASDAQ OMX
BX Inc. (‘‘Exchange’’ or ‘‘BX’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’),1 and
Rule 19b–4 thereunder,2 a proposed rule
change to establish a directed order
process for the trading of listed options.
The proposed rule change was
published for comment in the Federal
Register on March 11, 2013.3 The
Commission received a comment letter
on the proposal,4 BX’s response to the
comment letter,5 and a follow up
comment letter from the same
commenter.6 On April 17, 2013, BX
filed Amendment No. 1 to the proposed
rule change.7 On April 22, 2013, BX
extended to June 6, 2013 the time period
within which the Commission must
approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to disapprove the proposed
U.S.C. 78a.
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 69040
(March 5, 2013), 78 FR 15385 (‘‘Notice’’).
4 See Letter, dated April 2, 2013, to Elizabeth M.
Murphy, Secretary, Commission, from Janet
McGuiness, Executive Vice President, Secretary and
General Counsel, NYSE Euronext (‘‘NYSE Euronext
Letter 1’’). For a summary of this letter, see
Securities Exchange Act Release No. 69684 (June 3,
2013), 78 FR 34683 (June 10, 2013) (‘‘Order
Instituting Proceedings’’).
5 See Letter, dated April 17, 2013, to Elizabeth M.
Murphy, Secretary, Commission, from Edith
Hallahan, Principal Associate General Counsel, BX
(‘‘BX Letter 1’’). For a summary of this letter, see
Order Instituting Proceedings, supra note 4, 78 FR
at 34685.
6 See Letter, dated May 10, 2013, to Elizabeth M.
Murphy, Secretary, Commission, from Janet
McGuiness, Executive Vice President, Secretary and
General Counsel, NYSE Euronext (‘‘NYSE Euronext
Letter 2’’). For a summary of this letter, see Order
Instituting Proceedings, supra note 4, 78 FR at
34685.
7 Amendment No. 1, which the Commission
believes is technical in nature and not subject to
notice and comment, clarifies that, when a Directed
Order (as defined below) is submitted in an options
class that is subject to the price/time priority on BX,
the Directed Market Maker’s Directed Allocation (as
defined below) would be capped at 40%, unless the
Directed Market Maker’s size at the first position in
time priority at that price exceeds 40%, in which
case the Directed Market Maker would have priority
for that size.
rule change. On June 3, 2013, the
Commission instituted proceedings to
determine whether to approve or
disapprove the proposed rule change.8
The Commission received a letter from
BX responding to the Order Instituting
Proceedings,9 another comment letter
from the same commenter—NYSE
Euronext—who had commented
previously on the proposed rule
change,10 and a follow up letter from BX
in response to NYSE Euronext’s
comment letter.11 This order
disapproves the proposed rule change.
II. Description of the Proposal
BX proposes to establish a directed
order process that would permit
members of BX (‘‘BX Participants’’) to
direct orders in listed options (‘‘Directed
Orders’’) to a particular market maker
on BX (‘‘Directed Market Maker’’).12 As
detailed below, a Directed Market Maker
would be eligible to receive an allocated
percentage of the Directed Order (40%)
at all price levels at which the Directed
Market Maker has a quote or order (a
‘‘Directed Allocation’’).13 To receive a
Directed Allocation, the Directed Market
Maker would be required to have quotes
or orders at the National Best Bid or
National Best Offer (‘‘NBBO’’) at the
time of the execution of the Directed
Order; the Directed Market Maker
would not be required to be quoting at
the NBBO at the time the Directed Order
is received.14 If a Directed Order is not
executed upon receipt, it would be
1 15
2 17
PO 00000
Frm 00133
Fmt 4703
Sfmt 4703
8 See
Order Instituting Proceedings, supra note 4.
Letter, dated July 1, 2013, to Elizabeth M.
Murphy, Secretary, Commission, from Edith
Hallahan, Principal Associate General Counsel, BX
(‘‘BX Letter 2’’).
10 See Letter, dated July 15, 2013, to Elizabeth M.
Murphy, Secretary, Commission, from Janet
McGuiness, Executive Vice President, Secretary and
General Counsel, NYSE Euronext (‘‘NYSE Euronext
Letter 3’’).
11 See Letter, dated August 28, 2013, to Elizabeth
M. Murphy, Secretary, Commission, from Edith
Hallahan, Principal Associate General Counsel, BX
(‘‘BX Letter 3’’).
12 Specifically, BX proposes to add BX Chapter
VI, Section 1(e)(1) to Chapter VI to define a Directed
Order as ‘‘an order to buy or sell which has been
directed (pursuant to BX’s instructions on how to
direct an order) to a particular Market Maker
(‘‘Directed Market Maker’’) after the opening.’’ BX
also proposes to amend BX Chapter VI, Section
6(a)(2) to include Directed Order to the list of orders
handled within the BX System.
13 Proposed BX Chapter VI, Section 10(3)(iv)(C).
14 For example, as shown in Example 4 in the
Notice, if BX was not at the National Best Offer
(‘‘NBO’’) and the Directed Market Maker was
quoting one tick away from the NBO at the time a
Directed Order was received, once the NBO was
exhausted and BX became the new NBO, the
Directed Order could be executed at this new NBO
and the Directed Market Maker would receive its
Directed Allocation, even though the Directed
Market Maker was not at the NBO at when the order
was received.
9 See
E:\FR\FM\31OCN1.SGM
31OCN1
]]>Agencies
[Federal Register Volume 78, Number 211 (Thursday, October 31, 2013)]
[Notices]
[Pages 65393-65396]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-25831]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 30764; File No. 812-14189]
Ameritas Life Insurance Corp., et al; Notice of Application
October 25, 2013.
AGENCY: The Securities and Exchange Commission (``Commission'').
ACTION: Notice of application for an order approving the substitution
of certain securities pursuant to Section 26(c) of the Investment
Company Act of 1940, as amended (the ``1940 Act'').
-----------------------------------------------------------------------
Applicants: Ameritas Life Insurance Corp., Ameritas Life Insurance
Corp. of New York, The Union Central Life Insurance Company (each, a
``Life Insurance Company'' and, collectively, the ``Life Insurance
Companies''), and their respective separate accounts: Ameritas Variable
Separate Account VA-2, Ameritas Variable Separate Account V, Ameritas
Variable Separate Account VA, Ameritas Variable Separate Account VL
(the ``Ameritas Life Accounts''); Ameritas Life of NY Separate Account
VA, Ameritas Life of NY Separate Account VUL (the ``Ameritas Life of NY
Accounts''); and the Carillon Life Account (each an ``Account'' and
together with the Life Insurance Companies, the ``Applicants'').
Summary of Application: The Applicants seek an order under Section
26(c) of the 1940 Act approving the substitution of shares of the VIP
Money Market Portfolio, Initial Class (the ``Replacement Portfolio'')
of the Variable Insurance Products Fund V (``VIPFV'') for shares of the
Calvert VP Money Market Portfolio (the ``Current Portfolio'') of the
Calvert Variable Series, Inc. (``CVSI'') held by the Accounts to
support certain variable annuity contracts or variable life insurance
contracts (collectively, the ``Contracts'') issued by the Life
Insurance Companies (the ``Substitution'').
DATES: Filing Date: The application was filed on July 31, 2013, and an
amended and restated application was filed on October 25, 2013.
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 November 14, 2013, and should be accompanied by proof of
service on the Applicants, 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 may request notification of a hearing by writing to
the Secretary of the Commission.
ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street
NE., Washington, DC 20549-1090. Applicants: Ameritas Life Insurance
Corp., Ameritas Variable Separate Account VA-2, Ameritas Variable
Separate Account V, Ameritas Variable Separate Account VA, and Ameritas
Variable Separate Account VL, 5900 ``O'' Street, Lincoln, Nebraska
68510; Ameritas Life Insurance Corp. of New York, Ameritas Life of NY
Separate Account VA, Ameritas Life of NY Separate Account VUL, 1350
Broadway, Suite 2201, New York, New York 10018; and The Union Central
Life Insurance Company and Carillon Life Account, 5900 ``O'' Street,
Lincoln, Nebraska 68510.
FOR FURTHER INFORMATION CONTACT: Michelle Roberts, Senior Counsel, or
Joyce M. Pickholz, Branch Chief, Insured Investments Office, 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.
[[Page 65394]]
Applicants' Representations
1. The Life Insurance Companies, on their own behalf and on behalf
of their respective separate accounts, propose to substitute shares of
the Replacement Portfolio for shares of the Current Portfolio held by
the Accounts to fund the Contracts.
2. Ameritas Life Insurance Corp. is the depositor and sponsor of
the Ameritas Life Accounts. Ameritas Life Insurance Corp. of New York
is the depositor and sponsor of the Ameritas Life of NY Accounts. The
Union Central Life Insurance Company is the depositor and sponsor of
the Carillon Life Account.
3. Each Account is a ``separate account'' as defined by Rule 0-1(e)
under the 1940 Act, and is registered with the Commission as a unit
investment trust. Security interests under the Contracts have been
registered under the Securities Act of 1933, as amended (the ``1933
Act''). The application sets forth the registration statement file
numbers for the Contracts and the Separate Accounts.
4. Each Account is divided into subaccounts, each of which invests
exclusively in shares of a corresponding investment portfolio (a
``Portfolio'') of a series-type management investment company,
including CVSI.
5. Pursuant to the Contracts, the Life Insurance Companies reserve
the right to substitute shares of one Portfolio for shares of another.
The prospectuses for the Contracts also disclose that the Life
Insurance Companies reserve this right.
6. CVSI is an open-end management investment company (File No. 811-
03591) that currently consists of six investment portfolios, including
the Current Portfolio, and issues a separate series of shares in
connection with each. CVSI has registered such shares under the 1933
Act (File No. 002-80154).
7. Calvert Investment Management, Inc. (``CIM'') serves as the
investment adviser to each CVSI Portfolio. CIM is an indirect wholly-
owned subsidiary of AMHC.
8. The VIPFV is an open-end management investment company (File No.
811-05361) that currently consists of 32 investment portfolios, one of
which, the Replacement Portfolio, is the subject of the proposed
Substitution. VIPFV issues a separate series of shares in connection
with each Portfolio and has registered such shares under the 1933 Act
(File No. 033-17704).
9. Fidelity Management & Research Company (``FMR'') serves as the
manager of each Portfolio of VIPFV. FMR receives an investment
management fee from each Portfolio. Fidelity Investments Money
Management, Inc. (``FIMM'') and other affiliates of FMR serve as sub-
advisers for the Replacement Portfolio. FIMM has the day-to-day
responsibility of choosing investments for the Replacement Portfolio.
In addition, other affiliates of FMR serve as sub-advisers for the
Replacement Portfolio and may provide investment research and advice
for the Replacement Portfolio. None of VIPFV, FMR, FIMM, or other
affiliates of FMR are affiliated persons (or affiliated persons of
affiliated person) of any of the Applicants. Likewise, none of the
Applicants are affiliated persons (or affiliated persons of affiliated
persons) of VIPFV, FMR, FIMM or other affiliates of FMR.
10. The Applicants state that Replacement Portfolio's and Current
Portfolio's respective investment objectives, strategies and risks are
substantially the same. A comparison of the investment objectives,
strategies and risks of the Replacement Portfolio and the Current
Portfolio is included in the application.
11. The following table compares the fees and expenses of the
Current Portfolio and the Replacement Portfolio as of the year ended
December 31, 2012:
------------------------------------------------------------------------
Current portfolio Replacement
-------------------- portfolio
-------------------
Calvert Variable Variable Insurance
Series, Inc., Products Fund V,
Calvert VP Money VIP Money Market
Market Portfolio Portfolio, Initial
Class
------------------------------------------------------------------------
Management Fee.................. 0.25%............. 0.17%.
Distribution and Service (12b-1) None.............. None.
Fee.
Other Expenses.................. 0.14%............. 0.09%.
Total Operating Expenses........ 0.39%............. 0.26%.
Fee Waivers and Expense None \1\.......... None.
Reimbursements.
Net Operating Expenses.......... 0.39% \2\......... 0.26%.
------------------------------------------------------------------------
\1\ The Investment Advisor, CIM, has contractually agreed to limit
direct net annual portfolio operating expenses through April 30, 2014
to 0.40%. Under the terms of the contractual expense limitation,
operating expenses do not include interest expense, brokerage
commissions, taxes and extraordinary expenses. Only the Board of
Directors of CVSI may terminate a Portfolio's expense cap before the
contractual period expires.
\2\ The Advisor further voluntarily reimbursed expenses of $88,900 or
0.11%, for Net Operating Expenses of 0.28% to maintain a positive
yield during the year ended December 31, 2012.
12. The Applicants state that the proposed Substitution is in
response to a decision by the Board of Directors for CVSI, at a meeting
held on June 5, 2013, to approve the dissolution of the Current
Portfolio on or about November 15, 2013 (the ``Liquidation Date''). The
board's decision to liquidate the Current Portfolio requires the Life
Insurance Companies to transfer accumulated Contract value invested in
the Current Portfolio to an alternative investment option available
under the Contracts on or before the Liquidation Date. Currently, the
only money market portfolio investment option offered under the
Contracts is the Current Portfolio. Accordingly, the proposed
Substitution is necessary in order to provide the Contract owners with
continued access to a money market portfolio investment option.
Consequently, the Life Insurance Companies have determined to replace
the Current Portfolio with the Replacement Portfolio via the
Substitution.
13. The Life Insurance Companies submit that the Replacement
Portfolio is an appropriate alternative for Contract owners for several
reasons. First, its investment objectives, strategies and risks are
substantially the same as those of the Current Portfolio. Second, it is
substantially larger than the Current Portfolio, has had lower overall
expense levels than the Portfolio in recent years, and has had higher
yields in recent years than the Current Portfolio. Third, the Contracts
and other variable annuity and variable life insurance contracts issued
by the Life Insurance Companies currently offer one or more VIPFV
portfolios (other than the Replacement Portfolio).
14. The Applicants believe that Contract owners would benefit from
the significantly larger size of the Replacement Portfolio and the
somewhat higher yields of the Replacement Portfolio, as contrasted
[[Page 65395]]
with the size and recent yields of the Current Portfolio. The yield for
the Current Portfolio for the seven days ending December 31, 2012 was
0.01%. The net asset value of the Current Portfolio was $85,913,000 as
of December 31, 2012. The yield for the Replacement Portfolio Initial
Class shares for the seven days ending December 31, 2012 was 0.08%. The
net asset value of the Replacement Portfolio supporting Initial Class
shares was $889,797,000 as of December 31, 2012.
15. The Applicants believe that Contract owners will benefit from
the reduction in overall expenses of the Replacement Portfolio as
compared to the Current Portfolio. Specifically, the management fee,
other expenses, and total operating expenses are less than those of the
Current Portfolio. Both Portfolios have no charge for Rule 12b-1
distribution and services fees. The total annual operating expense of
the Replacement Portfolio is less than that of the Current Portfolio.
Given this decrease, the Applicants believe that the Substitution would
benefit Contract owners by reducing the overall level of Portfolio
expenses.
Legal Analysis and Conditions
1. The Applicants request that the Commission issue an order
pursuant to Section 26(c) of the 1940 Act approving the proposed
Substitution. Section 26(c) of the 1940 Act requires the depositor of a
registered unit investment trust holding securities of a single issuer
to obtain Commission approval before substituting the securities held
by the trust.
2. Applicants submit that the proposed Substitution is not the type
of substitution that Section 26(c) was designed to prevent. Section
26(c) was intended to provide for Commission scrutiny of a proposed
Substitution which could, in effect, force shareholders dissatisfied
with the substitute security to redeem their shares, thereby possibly
incurring a loss of the sales load deducted from initial premium, an
additional sales load upon reinvestment of the proceeds of redemption,
or both, as well as possibly suffering adverse tax consequences upon
redemption. Consequently, the section was designed to forestall the
ability of a depositor to present holders of interest in a unit
investment trust with situations in which a holder's only choice would
be to continue an investment in an unsuitable underlying security, or
to elect a costly and, in effect, forced redemption.
3. Applicants submit that the proposed substitution will provide
Contract owners with substantially the same investment vehicle and
would not raise any of the aforementioned concerns that Congress
intended to address when the 1940 Act was amended to include Section
26(c).
4. Applicants represent that redemptions and purchases will occur
simultaneously so that contract values will remain fully invested at
all times. All redemptions of shares of the Current Portfolio and
purchases of shares of the Replacement Portfolio will be effected in
accordance with Section 22(c) of the Act and Rule 22c-1 thereunder. The
Substitution will take place at relative net asset value as of the
effective date of the Substitution (``Effective Date'') with no change
in the amount of any Contract owner's contract value or death benefit
or in the dollar value of his or her investments in the money market
subaccount of the applicable Account.
5. Contract values attributable to investments in the Current
Portfolio will be transferred to the Replacement Portfolio without
charge (including sales charges or surrender charges) and without
counting toward the number of transfers that may be permitted without
charge. Contract owners will not incur any additional fees or charges
as a result of the Substitution, nor will their rights or the Life
Insurance Companies' respective obligations under the Contracts be
altered in any way and the Substitution will not change Contract
owners' insurance benefits under the Contracts. All expenses incurred
in connection with the Substitution, including legal, accounting,
transactional, and other fees and expenses, including brokerage
commissions, will be paid by the Life Insurance Companies. In addition,
the Substitution will not impose any tax liability on Contract owners.
6. The Applicants also represent that the Substitution will not
cause the Contract fees and charges currently paid by existing Contract
owners to be greater after the Substitution than before the
Substitution. The Life Insurance Companies will not exercise any right
they may have under the Contracts to impose restrictions on transfers
under the Contracts for the period beginning on the date of the Pre-
Substitution Notice (defined below) through at least thirty (30) days
following the Effective Date.
7. Existing Contract owners will be notified of the proposed
Substitution by means of a prospectus or prospectus supplement for each
of the Contracts (``Pre-Substitution Notice'') at least thirty (30)
days before the Effective Date. New purchasers of the Contracts will be
provided the Pre-Substitution Notice, the Contract prospectus, and the
prospectus for the Replacement Portfolio in accordance with all
applicable legal requirements.
8. The Pre-Substitution Notice will: (i) State that the Applicants
filed the application seeking approval of the Substitution; (ii) set
forth the anticipated Effective Date; (iii) explain that the Contract
values attributable to investments in the Current Portfolio would be
attributable to the Replacement Portfolio as of the Effective Date;
(iv) state that, from the date of the Pre-Substitution Notice until the
Effective Date, Contract Owners are permitted to transfer Contract
value out of any Current Portfolio 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 fees
that would otherwise be applicable under the terms of the Contract; (v)
advise Contract owners that any contract value remaining in the Current
Portfolio sub-account on the Effective Date will be transferred to a
sub-account investing in the Replacement Portfolio, and that the
Substitution will take place at relative net asset value; (vi) inform
Contract owners that for at least thirty (30) days following the
Effective Date, the applicable Life Insurance Company will permit
Contract owners to make transfers of contract value out of the sub-
account investing in the Replacement Portfolio to any other available
sub-accounts offered under their Contracts without the transfer being
counted as a transfer for purposes of transfer limitations and fees, if
any, that would otherwise be applicable under the terms of the
Contracts; and (vii) inform Contract owners that, except as described
in the market timing limitations section of the relevant prospectus,
the applicable Life Insurance Company will not exercise any rights
reserved by it under the Contracts to impose additional restrictions on
transfers out of the sub-account investing in the Replacement Portfolio
for at least thirty (30) days after the Effective Date.
9. All Contract owners will have received a copy of the most recent
prospectus for the Replacement Portfolio prior to the Substitution. In
addition, within five (5) days following the Substitution, Contract
owners affected by the Substitution will be notified in writing that
the Substitution was carried out. This notice will restate the relevant
information set forth in the Pre-Substitution Notice, and will also
explain that the contract values attributable to investments in the
Current Portfolio were transferred to the Replacement Portfolio without
charge
[[Page 65396]]
(including sales charges or surrender charges) and without counting
toward the number of transfers that may be permitted without charge.
10. The Applicants represent that the Life Insurance Companies will
not receive, for three (3) years after the Effective Date, any direct
or indirect benefits from the Replacement Portfolio, its advisor or
underwriter (or their affiliates), in connection with assets
attributable to the Contracts affected by the Substitution, at a higher
rate than the Life Insurance Companies had received from the Current
Portfolio, its advisor or underwriter (or their affiliates), including
without limitation 12b-1 fees, revenue sharing or other arrangements.
The Applicants further represent that the Substitution and the
selection of the Replacement Portfolio were not motivated by any
financial consideration paid or to be paid to a Life Insurance Company
or its affiliates by the Replacement Portfolio, its advisor or
underwriter, or their affiliates.
11. Applicants submit that the replacement of the Current Portfolio
with the Replacement Portfolio is consistent with the protection of
Contract owners and the purposes fairly intended by the policy and
provisions of the 1940 Act and, thus, meets the standards necessary to
support an order pursuant to Section 26(c) of the 1940 Act. In
addition, the Applicants submit that the proposed Substitution meets
the standards that the Commission and its staff have applied to
Substitutions that have been approved in the past.
Conclusion
For the reasons and upon the facts set forth above in the
application, the Applicants believe that the requested order meets the
standards set forth in Section 26(c) of the 1940 Act and should
therefore be granted.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-25831 Filed 10-30-13; 8:45 am]
BILLING CODE 8011-01-P
