[Federal Register Volume 62, Number 12 (Friday, January 17, 1997)]
[Notices]
[Pages 2697-2701]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-1160]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-22459; File No. 812-10294]
SoGen Variable Funds, Inc., et al. January 10, 1997
AGENCY: The Securities and Exchange Commission (the ``Commission'').
ACTION: Notice of Application for an Exemption pursuant to the
Investment Company Act of 1940 (``1940 Act'').
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APPLICANTS: SoGen Variable Funds, Inc. (the ``Company''), Societe
Generale Asset Management Corp. (the ``Adviser'') and certain life
insurance companies and their separate accounts investing now or in the
future in the Company.
RELEVANT 1940 ACT SECTIONS: Order requested pursuant to section 6(c)
for exemptions from sections 9(a), 13(a), 15(a), and 15(b) thereof and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder.
SUMMARY OF THE APPLICATION: Applicants seek an order to permit shares
of the Company to be sold to and held by separate accounts funding
variable annuity and variable life insurance contracts issued by both
affiliated and unaffiliated life insurance companies (``Participating
Insurance Companies'') or qualified pension and retirement plans
outside the separate account context (``Plans'').
FILING DATES: The application was filed on August 12, 1996.
HEARING OR NOTIFICATION OF HEARING: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Secretary of the
Commission and serving Applicants with a copy of the request,
personally or by mail. Hearing requests must be received by the
Commission by 5:30 p.m. on February 4, 1997, and must be accompanied by
proof of service on Applicants in the form of an affidavit or, for
lawyers, a certificate of service. Hearing requests should state the
nature of the requestor'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, 450 Fifth
Street, NW., Washington, DC 20549. Applicants, c/o Philip J. Bafundo,
Societe Generale Asset Management Corp., 1221 Avenue of the Americas,
New York, New York 10020.
FOR FURTHER INFORMATION CONTACT: Veena K. Jain, Attorney, or Kevin M.
Kirchoff, Branch Chief, Office of Insurance Products (Division of
Investment Management), at (202) 942-0670.
SUPPLEMENTARY INFORMATION: The following is a summary of the
application; the complete application is available for a fee from the
Public Reference Branch of the Commission.
Applicants' Representations
1. The Company, incorporated in Maryland, is registered under the
1940 Act as an open-end management investment company. The Company
currently consists of one series, the SoGen Overseas Variable Fund (the
``Fund,'' together with future series of the Company, the ``Funds'').
Additional series may be established.
2. The Adviser, an indirect, majority-owned subsidiary of Societe
Generale, is registered pursuant to the 1940 Act as an investment
adviser and is the investment adviser to the Company.
3. Shares of the Funds will be offered initially to the Continental
Assurance Company and Valley Forge Life Insurance Company, and
eventually to Participating Insurance Companies and Plans, to serve as
investment vehicles for insurance contracts, which may include variable
annuity contracts, variable life insurance contracts and variable group
life insurance contracts (collectively, ``Contracts'').
4. Each Participating Insurance Company will have the legal
obligation of satisfying all requirements applicable to it under the
Federal securities laws in connection with any Contract issued by such
Company.
5. The Advisory will not act as investment adviser to any of the
Plans that will purchase shares of the Company. There will be no pass-
through voting to the participants in such Plans.
Applicants' Legal Analysis
1. Section 6(c) authorizes the Commission to grant exemptions from
the provisions of the 1940 Act, and rules thereunder, if and to the
extent that an exemption is necessary or appropriate in the public
interest and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the 1940 Act.
2. Applicants request that the Commission issue an order under
Section 6(c) of the 1940 Act exempting them from sections 9(a), 13(a),
15(a), and 15(b) thereof and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder to the extent necessary to permit ``mixed'' and ``shared''
funding, as defined below.
3. In connection with the funding of scheduled premium variable
life insurance contracts issued through a separate account registered
under the 1940 Act as a unit investment trust (``UIT''), Rule 6e-
2(b)(15) provides partial exemptions from sections 9(a), 13(a), 15(a)
and 15(b) of the 1940 Act. The exemptions granted by Rule 6e-2(b)(15)
are available, however, only where the management investment company
underlying the UIT offers its shares ``exclusively to variable life
insurance separate accounts of the life insurer, or of any affiliated
life insurance company.''
[[Page 2698]]
4. The relief granted by Rule 6e-2(b)(15), thus, is not available
with respect to a variable life insurance separate account that owns
shares of an underlying fund that also offers its shares to a variable
annuity or a flexible premium variable life insurance separate account
of the same company or of any other affiliated insurance company. The
use of a common management investment company as the underlying
investment medium for both variable annuity and variable life insurance
separate accounts of the same insurance company or of any affiliated
life insurance company is referred to as ``Mixed Funding.'' The relief
granted by Rule 6e-2(b)(15) is also not available with respect to a
variable life insurance separate account that owns shares of an
underlying fund that also offers its shares to separate accounts
funding Contracts of one or more unaffiliated life insurance companies.
The use of a common management investment company as the underlying
investment medium for variable annuity and/or variable life insurance
separate accounts of unaffiliated insurance companies is referred to as
``Shared Funding.'' Rule 6e-2(b)(15), therefore, precludes Mixed and
Shared Funding.
5. In connection with flexible premium variable life insurance
contracts issued through a UIT, Rule 6e-3(T)(b)(15) provides partial
exemptions from sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act.
The exemptions granted to a separate account by Rule 6e-3(T)(b)(15) are
available only where the UIT's underlying fund offers its shares
``exclusively to separate accounts of the life insurer, or of any
affiliated life insurance company, offering either scheduled contracts
or flexible contracts, or both; or which also offer their shares to
variable annuity separate accounts of the life insurer or of an
affiliated life insurance company.'' Rule 6e-3(T)(b)(15) thus permits
Mixed Funding but does not permit Shared Funding.
6. Applicants state that because the relief under Rule 6e-2(b)(15)
and Rule 6e-3(T)(b)(15) is available only where shares are offered
exclusively to separate accounts, additional exemptive relief is also
necessary if shares of the Funds are to be also sold to Plans.
Applicant assert that the relief granted by paragraphs (b)(15) of Rules
6e-2 and 6e-3(T) should not be affected by the proposed sale of the
Funds to Plans.
7. Applicants submit that Mixed and Shared Funding should benefit
Contract owners by: (a) Eliminating a significant portion of the costs
of establishing and administering separate funds; (b) allowing for a
greater amount of assets available for investment by the Company,
thereby promoting economies of scale, permitting greater safety though
greater diversification, and/or making the addition of Funds more
feasible; and (c) encouraging more insurance companies to offer
Contracts, resulting in increased competition with respect to both
Contract design and pricing, which can be expected to result in more
product variation and lower charges. Each Fund of the Company will be
managed to attempt to achieve the Fund's investment objectives and not
to favor or disfavor any participating insurer or type of insurance
product.
8. Applicants state that Section 817(h) of the Internal Revenue
Code, as amended, (``Code'') imposes certain diversification
requirements on the underlying assets of Contracts. The Code provides
that such Contracts shall not be treated as annuity contracts or life
insurance contracts for any period (and any subsequent period) for
which the investments are not, in accordance with regulations
prescribed by the Treasury Department, adequately diversified. On March
2, 1989, the Treasury Department issued regulations which established
diversification requirements for the investment portfolios underlying
Contracts. Treas. Reg. 1.817-5 (1989). The regulations provide that, to
meet the diversification requirements, all of the beneficial interests
in the investment company must be held by the segregated asset accounts
of one or more insurance companies. The regulations do, however,
contain certain exceptions to this requirement, one of which allows
shares in an investment company to be held by Plans without adversely
effecting the ability of shares in the same investment company to also
be held by the separate accounts of insurance companies in connection
with their Contracts. Treas. Reg. 1.817-5(f)(3)(iii).
9. Applicants state that the promulgation of Rules 6e-2 and 6e-3(T)
under the 1940 Act preceded the issuance of these Treasury regulations
and that the sale of shares of the same investment company to both
separate accounts and Plans could not have been envisioned at the time
of the adoption of Rules 6e-2(b)(15) and 6e-3(T)(b)(15), given the
then-current tax law.
Disqualification
10. Section 9(a) of the 1940 Act provides that it is unlawful for
any company to serve as an investment adviser to or principal
underwriter for any registered open-end investment company if an
affiliated person of that company is subject to a disqualification
enumerated in section 9(a) (1) or (2). Rules 6e-2(b)(15) and 6e-
3(T)(b)(15) provide exemptions from section 9(a) under certain
circumstances. The relief provided by Rules 6e-2(b)(15)(i) and 6e-
3(T)(b)(15)(i) permits a person disqualified under section 9(a) to
serve as an officer, director or employee of the life insurer, or any
of its affiliates, so long as that person does not participate directly
in the management or administration of the underlying fund. The relief
provided by Rules 6e-2(b)(15)(ii) and 63-3(T)(b)(15)(ii) permits the
life insurer to serve as the underlying fund's investment adviser or
principal underwriter, provided that none of the insurer's personnel
who are ineligible pursuant to Section 9(a) participates in the
management or administration of the fund.
11. Applicants state that the partial relief from section 9(a) of
the 1940 Act found in Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder,
in effect, limits the amount of monitoring necessary to ensure
compliance with Section 9 to that which is appropriate in light of the
policy and purposes of section 9. Applicants assert that those rules
reflect a recognition that it is not necessary for the protection of
investors or the purposes fairly intended by the policy or provisions
of the 1940 Act to apply the provisions of section 9(a) to the many
individuals in an insurance company complex, most of whom typically
will have no involvement in matters pertaining to investment companies
in that organization. It is also unnecessary to apply section 9 (a) to
the many individuals in various unaffiliated insurance companies (or
affiliated companies of Participating Insurance Companies) that may
utilize the Company as the funding medium for Contracts. Therefore,
Applicants assert, applying the restrictions of section 9(a) serves no
regulatory purpose. Applicants also state that the relief requested
should not be affected by the proposed sale of shares of the Funds to
the Plans because the Plans are not investment companies and are not,
therefore, to section 9(a).
Pass-Through Voting
12. Rules 6e-2(b)(15)(iii) and 6e-3(T)(b)(15)(iii) under the 1940
Act assume the existence of a pass-through voting requirement with
respect to management investment company shares held by a separate
account.
13. Rule 6e-2(b)(15)(iii) and 6e-3(T)(b)(15)(iii) under the 1940
Act provide exemptions from the pass-through voting requirement in
certain limited circumstances. Rules 6e-2(b)(15)(iii)(A) and 6e-
3(T)(b)(15)(iii)(A) provide that the insurance company may disregard
the voting instructions of
[[Page 2699]]
its Contract owners with respect to the investments of an underlying
fund, when required to do so by an insurance regulatory authority.
Rules 6e-2(b)(15)(iii)(B) and 6e-3(T)(b)(15)(iii)(B) also provide that
the insurance company may disregard voting instructions of its Contract
owners if the Contract owners initiate any change in the investment
company's investment policies, principal underwriter, or any investment
adviser, provided that disregarding such voting instructions is
reasonable and subject to the other provisions of paragraphs
(b)(15)(ii) and (b)(7)(ii) (B) and (C) of each rule.
14. Applicants state that shares of the Funds sold to Plans will be
held by the trustees of such Plans as required by section 403(a) of the
Employee Retirement Income Security Act (``ERISA''). Section 403(a)
also provides that the trustees must have exclusive authority and
discretion to manage and control the Plan with two exceptions: (a) when
the Plan expressly provides that the trustees are subject to the
direction of a named fiduciary who is not a trustee, in which case the
trustees are subject to proper directions made in accordance with the
terms of the Plan and not contrary to ERISA; and (b) when the authority
to manage, acquire or dispose of assets of the Plan is delegated to one
or more investment managers pursuant to section 402(c)(3) of ERISA.
Unless one of the two exceptions stated in section 403(a) applies, Plan
trustees have the exclusive authority and responsibility for voting
proxies. Where a named fiduciary appoints an investment manager, the
investment manager has the responsibility to vote the shares held
unless the right to vote such shares is reserved to the trustees or to
the named fiduciary. In any event, there is no pass-through voting to
the participants in such Plans. Accordingly, Applicants note that,
unlike the case with insurance company separate accounts, the issue of
the resolution of material irreconcilable conflicts with respect to
voting is not present with Plans because the Plans are not entitled to
pass-through voting privileges.
Conflicts of Interest
15. Applicants assert that Shared Funding does not present any
issues that do not already exist where a single insurance company is
licensed to do business in several states. Applicants note that where
Participating Insurance Companies are domiciled in different states, it
is possible that the state insurance regulatory body in a state in
which one Participating Insurance Company is domiciled could require
action that is inconsistent with the requirements of insurance
regulators in one or more other states in which other Participating
Insurance Companies are domiciled. Applicants submit that this
possibility is no different and no greater than exists where a single
insurer and its affiliates offer their insurance products in several
states.
16. Applicants further submit that affiliation does not reduce the
potential for differences among state regulatory requirements. In any
event, the conditions (adapted from the conditions included in Rule 6e-
3(T)(b)(15) discussed below) are designed to safeguard against any
adverse effects that these differences may produce. If a particular
state insurance regulator's decision conflicts with the decisions of a
majority of other state regulators, the affected insurer may be
required to withdraw its separate account's investment in the relevant
Funds. The requirement will be provided for in agreements that will be
entered into by Participating Insurance Companies with respect to their
participating in the Company.
17. Applicants also argue that affiliation does not eliminate the
potential, if any exists, for divergent judgments as to the
advisability or legality of a change in investment policies, principal
underwriter, or investment adviser initiated by Contract owners.
Potential disagreement is limited by the requirement that the
Participating Insurance Company's disregard of voting instructions be
both reasonable and based on specific good faith determinations.
However, if a Participating Insurance Company's decision to disregard
Contract owner instructions represents a minority position or would
preclude a majority vote approving a particular change, such
Participating Insurance Company may be required, at the election of the
relevant Fund, to withdraw its investment in that Fund. No charge or
penalty will be imposed as a result of such withdrawal. The requirement
will be provided for in agreements that will be entered into by
Participating Insurance Companies with respect to their participating
in the Company.
18. Applicants submit that there is no reason why the investment
policies of a fund with Mixed Funding would or should be materially
different from what those policies would or should be if such
investment company or series thereof funded only variable annuity or
variable life insurance contracts, whether flexible premium or
scheduled premium policies. Moreover, Applicants represent that the
Funds will not be managed to favor or disfavor any particular insurance
company or type of Contract.
19. Applicants note that Section 817(h) of the Code imposes certain
diversification standards on the underlying assets of Contracts held in
the portfolios of management investment companies. Treasury regulation
1.817-5(f)(3)(iii), which established diversification requirements for
such portfolios, specifically permits ``qualified pension or retirement
plans'' and separate accounts to share the same underlying investment
company. Therefore, Applicants have concluded that neither the Code,
nor the Treasury regulations, nor the revenue rulings thereunder,
present any inherent conflicts of interest if Plans, variable annuity
separate accounts and variable life insurance separate accounts all
invest in the same management investment company.
20. Applicants note that while there are differences in the manner
in which distributions are taxed for Contracts and Plans, these tax
consequences do not raise any conflicts of interest. When distributions
are to be made, and the separate account or the Plan cannot net
purchase payments to make the distributions, the separate account or
the Plan will redeem shares of the Company at their net asset value.
The Plan will then make distributions in accordance with the terms of
the Plan. A Participating Insurance Company will make distributions in
accordance with the terms of the Contract.
21. With respect to voting rights, Applicants state that it is
possible to provide an equitable means of giving such voting rights to
Contract owners and to Plans. Applicants represent that the transfer
agent for the Company will inform each Participating Insurance Company
of its share ownership as well as inform the trustees of Plans of their
holdings. A Participating Insurance Company will then solicit voting
instructions in accordance with Rules 6e-2 and 6e-3(T).
22. Applicants argue that the ability of the Funds to sell their
respective shares directly to Plans does not create a ``senior
security,'' as such term is defined under section 18(g) of the 1940
Act, with respect to any Contract owner as opposed to a participant
under a Plan. Regardless of the rights and benefits of Plan
participants and Contract owners under their respective Plans and
Contracts, the Plans and separate accounts have rights only with
respect to their shares of the Funds. Such shares may be redeemed only
at net asset value. No shareholder of the Company has any preference
over any other shareholder with respect to
[[Page 2700]]
distribution of assets or payment of dividends.
23. Applicants state that there are no conflicts of interest
between Contract owners and Plan participants with respect to the state
insurance commissioners' veto powers over investment objectives. The
state insurance commissioners have been given the veto power to prevent
insurance companies indiscriminately redeeming their separate accounts
out of one Fund and investing those assets in another Fund. Generally,
to accomplish such redemptions and transfers, complex and time
consuming transactions must be undertaken. Conversely, trustees of
Plans can make the decision quickly and implement redemption of shares
from the Company and reinvest the monies in another funding vehicle
without the same regulatory impediments or, as is the case with most
Plans, even hold cash pending a suitable investment. Based on the
foregoing, Applicants represent that even should there arise issues
where the interests of Contract owners and the interests of the Plans
and Plan participants conflict, the issues can be almost immediately
resolved in that trustees of the Plans can, independently, redeem
shares out of the Company.
Applicants' Conditions
Applicants have consented to the following conditions:
1. A majority of the Board of Directors (``Board'') of the Company
shall consist of persons who are not ``interested persons'' of the
Funds, as defined by section 2(a)(19) of the 1940 Act and rules
thereunder, and as modified by any applicable orders of the Commission,
except that, if this condition is not met by reason of death,
disqualification, or bona fide resignation of any director, then the
operation of this condition shall be suspended: (a) For a period of 45
days, if the vacancy or vacancies may be filled by the Board; (b) for a
period of 60 days, if a vote of shareholders is required to fill the
vacancy or vacancies; or (c) for such longer period as the Commission
may prescribe by order upon application.
2. The Board will monitor the Company for the existence of any
material irreconcilable conflict between and among the interests of
Contract owners of all separate accounts investing in the Company. A
material irreconcilable conflict may arise for a variety of reasons,
including: (a) An action by any state insurance regulatory authority;
(b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretive letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of the Company are managed; (e) a
difference in voting instructions given by owners of variable annuity
and variable life insurance contracts; or (f) a decision by an insurer
to disregard voting instructions of Contract owners.
3. Participating Insurance Companies and the Adviser, and any Plan
that executes a participation agreement upon becoming an owner of 10
percent or more of the issued and outstanding shares of the Company
(collectively, ``Participating Parties'') will report any potential or
existing conflicts of which it becomes aware to the Board.
participating Parties will be responsible for assisting the Board in
carrying out its responsibilities under these conditions by providing
the Board with all information reasonably necessary for it to consider
any issues raised. This responsibility includes, but is not limited to,
an obligation by a Participating Insurance Company to inform the Board
whenever contract owner voting instructions are disregarded. The
responsibility to report such information and conflicts and to assist
the Board will be a contractual obligation of all Participating Parties
investing in the Company under their agreements governing participation
in the Company, and such agreements shall provide that these
responsibilities will be carried out with a view only to the interests
of the Contract owners and, if applicable, Plan participants.
4. If it is determined by a majority of the Board, or by a majority
of its disinterested directors, that a material irreconcilable conflict
exists, the relevant Participating parties shall, at their expense and
to the extent reasonably practicable (as determined by a majority of
disinterested directors), take whatever steps are necessary to remedy
or eliminate the material irreconcilable conflict, including: (a)
Withdrawing the assets allocable to some or all of the separate
accounts from the Company or any Fund therein and reinvesting such
assets in a different investment medium, which may include another
Fund, if any, of the Company or submitting the question of whether such
segregation should be implemented to a vote of all affected Contract
owners and, as appropriate, segregating the assets of any appropriate
group (i.e., variable annuity or variable life insurance contract
owners of one or more Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected Contract owners
the option of making such a change; (b) withdrawing the assets
allocable to some or all of the Plans from the Company and reinvesting
those assets in a different investment medium; and (c) establishing a
new registered management investment company or managed separate
account. If a material irreconcilable conflict arises because a
Participating Insurance Company's decision to disregard Contract owner
voting instructions and that decision represents a minority position or
would preclude a majority vote, the insurer may be required, at the
Company's election, to withdraw its separate account's investment in
the Company, and no charge or penalty will be imposed as a result of
such withdrawal. The responsibility of taking remedial action in the
event of a Board determination of the existence of a material
irreconcilable conflict and bearing the cost of such remedial action,
shall be a contractual obligation of all Participating Parties under
their agreements governing participation in the Company, and these
responsibilities will be carried out with a view only to the interests
of the Contract owners and, as applicable, Plan participants. For
purposes of this Condition Four, a majority of the disinterested
members of the Board will determine whether or not any proposed action
adequately remedies any material irreconcilable conflict, but in no
event will the Company or the Adviser or any Plan be required to
establish a new funding medium for any Contract. No Participating
Insurance Company shall be required by this Condition Four to establish
a new funding medium for any Contract if an offer to do so has been
declined by a vote of a majority of Contract owners materially
adversely affected by the material irreconcilable conflict.
5. All Participating Parties will be promptly informed in writing
of the Board's determination that a material irreconcilable conflict
exists and its implications.
6. Participating Insurance Companies will provide pass-through
voting privileges to all Contract owners so long as the Commission
continues to interpret the 1940 Act as requiring pass-through voting
privileges for Contract owners. Accordingly, the Participating
Insurance Companies will vote shares of a Fund held in their separate
accounts in a manner consistent with voting instructions timely
received from Contract owners. Participating Insurance Companies will
be responsible for assuring that each of
[[Page 2701]]
their separate accounts calculates voting privileges in a manner
consistent with all other Participating Insurance Companies. The
obligation to calculate voting privileges in a manner consistent with
all other separate accounts investing in the Company will be a
contractual obligation of all participating Insurance Companies under
the agreements governing participation in the Company. Each
Participating Insurance Company will vote shares for which it has not
received voting instructions as well as shares it owns in the same
proportion as it votes shares for which it has received instructions.
7. All reports of potential or existing conflicts of interest
received by a Board, and all Board action with regard to determining
the existence of a conflict, notifying Participating Parties of a
conflict, and determining whether any proposed action adequately
remedies a conflict, will be properly recorded in the minutes of the
appropriate Board or other appropriate records, and such minutes or
other records shall be made available to the Commission upon request.
8. The Company will notify all Participating Insurance Companies
that separate account prospectus disclosure regarding potential risks
of Mixed and Shared Funding may be appropriate. The Company shall
disclose in its prospectus that: (a) Its shares are offered to Plans
and to separate accounts that fund all types of Contracts offered by
various insurance companies; (b) material irreconcilable differences
may arise; and (c) the Board will monitor events in order to identify
any material conflicts of interest and determine what action, if any,
should be taken.
9. The Company will comply with all provisions of the 1940 Act
requiring voting by shareholders (which for these purposes, shall be
the persons having a voting interest in the shares of the Company) and
in particular, the Company will either provide for annual meetings
(except insofar as the Commission may interpret section 16 of the 1940
Act not to require such meetings) or, if annual meetings are not held,
comply with section 16(c) of the 1940 Act (although the Company is one
of the trusts described in section 16(c) of the 1940 Act), as well as
with section 16(a) and, if and when applicable, section 16(b) of the
1940 Act. Further, the Fund will act in accordance with the
Commission's interpretation of the requirements of section 16(a) with
respect to periodic elections of directors (or trustees) and with
whatever rules the Commission may promulgate with respect thereto.
10. If an to the extent Rule 6e-2 or Rule 6e-3(T) is am emended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of
the 1940 Act or the rules thereunder with respect to Mixed and Shared
Funding on terms and conditions materially different from any
exemptions granted in the order requested by Applicants, then the
Company and/or the Participating Parties, as appropriate, shall take
such steps as may be necessary to comply with Rule 6e-2 or Rule 6e-
3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules
are applicable.
11. No less than annually, the Participating Parties shall submit
to the Board such reports, materials, or data as the Board may
reasonable request so that it may carry out fully the obligations
imposed upon them by the conditions stated in the application. Such
reports, materials, and data shall be submitted more frequently if
deemed appropriate by the Board. The obligations of Participating
Parties to provide these reports, materials, and data to the Board
shall be a contractual obligation of all Participating Parties under
the agreements governing their participation in the Company.
12. In the event that a Plan shareholder should ever become an
owner of 10 percent or more of the assets of the Company, that Plan
shareholder will execute a fund participating agreement with the
Company. A Plan shareholder will execute an application containing an
acknowledgement of this condition at the time of the initial purchase
of shares of the Company.
Conclusion
For the reasons summarized above, Applicants assert that the
requested exemptions are appropriate in the public interest and
consistent with the protection of investors and the purposes fairly
intended by the policy and provisions of the 1940 Act.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-1160 Filed 1-16-97; 8:45 am]
BILLING CODE 8010-01-M
