[Federal Register Volume 59, Number 18 (Thursday, January 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-1711]
[[Page Unknown]]
[Federal Register: January 27, 1994]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Rel. No. 20030; 812-8736]
The Alger Fund, et al.; Notice of Application
January 21, 1994.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of application for exemption under the Investment
Company Act of 1940 (``Act'').
-----------------------------------------------------------------------
APPLICANTS: The Alger Fund (the ``Fund''), any future series thereof,
and any registered investment company for which Fred Alger & Company,
Incorporated serves in the future as principal underwriter or for which
any person controlling, controlled by, or under common control with
Fred Alger & Company, Incorporated (within the meaning of section
2(a)(9) of the Act) may in the future serve as principal underwriter;
and Fred Alger & Company, Incorporated (the ``Distributor'').
RELEVANT ACT SECTIONS: Order requested under section 6(c) of the Act
amending previous orders that granted an exemption from sections
2(a)(32), 2(a)(35), 22(c) and 22(d) of the Act, and rule 22c-1
thereunder.
SUMMARY OF APPLICATION: The Fund previously received exemptive orders
that permit it to impose a contingent deferred sales charge (``CDSC'')
on certain redemptions of shares, and waive the CDSC in certain
instances. Applicants now seek to amend the prior orders to permit the
Fund to waive the CDSC in connection with redemptions effected by
registered investment advisers, banks and trust companies and other
financial institutions exercising discretionary authority with respect
to the money invested in Fund shares and on redemptions effected by
registered investment advisers for their own account.
FILING DATE: The application was filed on December 21, 1993 and amended
on January 21, 1994.
HEARING OR NOTIFICATION OF HEARING: An order granting the application
will be issued unless the SEC orders a hearing. Interested persons may
request a hearing by writing to the SEC's Secretary and serving
applicants with a copy of the request, personally or by mail. Hearing
requests should be received by the SEC by 5:30 p.m. on February 15,
1994, 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 writer's interest, the
reason for the request, and the issues contested. Persons who wish to
be notified of a hearing may request such notification by writing to
the SEC's Secretary.
ADDRESSES: Secretary, SEC, 450 Fifth Street NW., Washington, DC 20549.
Applicants, The Alger Fund, 75 Maiden Lane, New York, New York 10038;
Fred Alger & Company, Incorporated, 30 Montgomery Street, Jersey City,
New Jersey 07302.
FOR FURTHER INFORMATION CONTACT:
Marc Duffy, Staff Attorney, at (202) 272-2511, or C. David Messman,
Branch Chief, at (202) 272-3018 (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 for a fee from
the SEC's Public Reference Branch.
Applicants' Representations
1. The Fund is an open-end management investment company registered
under the Act. The Fund is a series company currently composed of seven
series: The Alger Money Market Portfolio, the Alger Income and Growth
Portfolio, the Alger Small Capitalization Portfolio, the Alger Growth
Portfolio, the Alger Balanced Portfolio, the Alger MidCap Growth
Portfolio, and the Alger Leveraged AllCap Portfolio (collectively, the
``Portfolios''). The Distributor is the distributor for the Fund.
2. In 1986, the Commission issued an order to the Fund to permit
the Fund to impose a CDSC on certain redemptions of shares of the
Portfolios and waive the CDSC in certain instances (the ``Prior
Order'').\1\ In 1987, the Prior Order was amended to include an
additional waiver category (together with the Prior Order, the ``Prior
Orders'').\2\ The present application seeks to expand the circumstances
under which the Fund may waive the CDSC. The order sought by this
application will, if issued, supersede the Prior Orders.
---------------------------------------------------------------------------
\1\Investment Company Act Release No. 15288 (Sept. 5, 1986)
(notice) and 15404 (Nov. 7, 1986) (order).
\2\Investment Company Act Release No. 16122 (Nov. 12, 1987)
(notice) and 16170 (Dec. 10, 1987) (order).
---------------------------------------------------------------------------
3. No CDSC is imposed upon the redemption of shares of a Portfolio
to the extent that the net asset value of the shares redeemed does not
exceed (a) the current net asset value of shares purchased more than
six years prior to the redemption, plus (b) the current net asset value
of shares purchased through reinvestment of dividends or capital gains
distributions, plus (c) increases in the net asset value of the shares
above purchase payments made with respect to a Portfolio during the
preceding six years. The amount of the CDSC depends on the number of
years that the shareholder has held the shares from which an amount is
being redeemed. The Fund assesses no CDSC on exchanges of shares among
Portfolios.
4. In accordance with the terms of the Prior Orders, the Fund
waives the CDSC on the following redemptions: (a) Any partial or total
redemption of shares of a shareholder who dies or becomes disabled, so
long as the redemption is requested within one year of death or initial
determination of disability; (b) any partial or complete redemption in
connection with certain distributions from Individual Retirement
Accounts (``IRAs'') or other qualified retirement plans; (c)
redemptions effected pursuant to the Fund's automatic cash withdrawal
plan of amounts up to 2% of the value of a shareholder's shares in a
Portfolio at the time the withdrawal plan commences; (d) redemptions
effected by (i) employees of Alger Associates, Inc. and its
subsidiaries, (ii) IRAs, Keogh plans and employee benefit plans for
those employees, and trusts of which those individuals are
beneficiaries, as long as orders for the Fund's shares on behalf of
those individuals and trusts are placed by the employees; (e)
redemptions effected by (i) accounts managed by investment advisory
subsidiaries of Alger Associates, Inc. that are registered under the
Investment Advisers Act of 1940, (ii) employees, participants and
beneficiaries of those accounts, (iii) IRAs, Keogh plans and employee
benefit plans for those employees, participants and beneficiaries and
(iv) spouses and minor children of those employees, participants and
beneficiaries as long as orders for the Fund's shares are placed by the
employees, participants and beneficiaries; (f) redemptions effected by
directors or trustees or any investment company for which Alger
Associates, Inc. or any of its subsidiaries serves as investment
adviser or distributor; (g) redemptions effected by an investment
company registered under the Act in connection with the combination of
the investment company with the Fund by merger, acquisition of assets
or by any other transaction; (h) redemptions effected pursuant to the
Fund's right to liquidate involuntarily a shareholder's account in any
Portfolio with a current value of less than $250; and (i) redemptions
of shares of the Portfolios held through defined contribution plans
with respect to which Fred Alger Management, Inc. or an affiliate
thereof provides certain non-fiduciary services.
5. The Fund also offers a one-time only reinvestment privilege
under which a shareholder who redeems shares subject to the CDSC and
reinvests the proceeds of the redemption within 30 days after the
redemption will receive a credit against the amount of the CDSC paid.
The percentage of the CDSC credited to the shareholder is the same as
the percentage of the redemption proceeds that are reinvested. The
Distributor will pay any credit from its own assets.
6. In the present application, applicants also propose to waive the
CDSC on redemptions effected by registered investment advisers, banks
and trust companies and other financial institutions exercising
discretionary authority with respect to the money invested in Fund
shares and on redemptions effected by registered investment advisers
for their own account.
Applicants' Legal Analysis
1. The requested 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 Act.
Applicants believe that the additional waiver is appropriate because
shares of a Portfolio with respect to which the CDSC would be waived
are purchased with little or no selling effort or expense. In addition,
the waiver will encourage sales of the Fund's shares which will be
beneficial to all the Fund's shareholders.
2. Waiving the CDSC is consistent with the policies underlying
section 22(d) of the Act, which prohibits an investment company
registered under the Act from selling its redeemable securities other
than at a current public offering price described in the company's
prospectus. The waiver will not result in the occurrence of any of the
abuses to which section 22(d) is directed and will not harm the Fund or
its shareholders or unfairly discriminate among shareholders or
purchasers.
Applicants' Condition
Applicants will comply with the provisions of proposed rule 6c-10
under the Act, Investment Company Act Release No. 16619 (November 2,
1988), as such rule is currently proposed and as it may be reproposed,
adopted or amended.
For the SEC, by the Division of Investment Management, under
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-1711 Filed 1-26-94; 8:45 am]
BILLING CODE 8010-11-M
