[Federal Register Volume 61, Number 251 (Monday, December 30, 1996)]
[Notices]
[Pages 68803-68804]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-33057]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC--22414; 812--10448]
PIMCO Advisors Funds, et al.; Notice of Application
December 20, 1996.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of Application for Exemption under the Investment
Company Act of 1940 (the ``Act'').
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APPLICANTS: PIMCO Advisors Funds (``PAF''), Cash Accumulation Trust
(``CAT''), PIMCO Funds, and PIMCO Funds: Equity Advisors Series
(``PFEAS'') (collectively, the ``Funds''), PIMCO Advisors L.P.
(``PALP'').
RELEVANT ACT SECTIONS: Order requested under section 6(c) of the Act
for an exemption from sections 13(a)(2), 13(a)(3), 17(a)(1), 18(f)(1),
22(f) and 22(g) of the Act and rule 2a-7 thereunder and pursuant to
section 17(d) of the Act and rule 17d-1 thereunder.
SUMMARY OF APPLICATION: Applicants request an order to amend a prior
order (the ``Order'') \1\ that permitted certain entities to enter into
deferred fee arrangements with certain of their trustees. The requested
order would extend the relief granted in the Order to PALP, PIMCO,
Funds, PFEAS and other open-end investment companies in the same
``group of investment companies'' as the Funds, as that term is defined
under Rule 11a-3 under the Act, or any other registered open-end
investment company for which PALP, or any entity controlling,
controlled by, or under common control with PALP, serves as investment
adviser.\2\
\1\ Thompson Fund Group, Investment Company Release Nos. 18894
(Aug. 14, 1992) (notice) and 18939 (Sept. 9, 1992) (order).
\2\ All currently existing investment companies that currently
intend to rely on the amended order are named as applicants herein.
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FILING DATE: The application was filed on November 27, 1996 and amended
on December 19, 1996.
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
[[Page 68804]]
received by the SEC by 5:30 p.m. on January 14, 1997, 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 notification by writing to the SEC's Secretary.
ADDRESSES: Secretary, SEC, 450 Fifth Street, N.W., Washington, D.C.
20549. Applicants, c/o Newton B. Schott, Jr., PIMCO Advisors L.P. 2187
Atlantic Street, Stamford, CT 06902.
FOR FURTHER INFORMATION CONTACT: Suzanne Krudys, Senior Attorney, at
(202) 942-0641, or Mercer E. Bullard, Branch Chief, at (202) 942-0564
(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' Representation
1. PAF, CAT, PIMCO Funds and PFEAS are registered as open-end
management series investment companies and organized as Massachusetts
business trust currently consisting of 16, 1, 19 and 14 separate
investment portfolios, respectively.
2. PALP is organized as a Delaware limited partnership and is
registered as an investment adviser under the Investment Advisers Act
of 1940 (the ``Advisers Act''). PALP serves as investment adviser to
PAF, CAT and PFEAS. The general partner of PALP is Pimco Partners G.P.,
a general partnership between an indirect wholly owned subsidiary of
Pacific Mutual Life Insurance Company and PIMCO Partners, LLC, a
limited liability company controlled by the managing directors of
Pacific Investment Management Company (``PIMCO''). PIMCO, an affiliate
and subsidiary partnership of PALP, is registered as an investment
adviser under the Advisers Act and serves as investment adviser to
PIMCO Funds.
3. On September 9, 1992, the SEC issued the Order pursuant to
section 6(c) exempting Thomson Fund Group (``TFG'') (predecessor of
PAF), CAT, and Thomson Advisory Group L.P. (``TAG'') (predecessor of
PALP) and any registered investment companies for which TAG
subsequently serves as adviser from the provisions sections 13(a)(2),
17(a)(1), 18(f)(1), 22(f) and 22(g) and rule 2a-7 and, with respect to
the Thomson U.S. Government Fund only (predecessor of PAF U.S.
Government Fund), from Section 13(a)(3), and under section 17(d) and
rule 17d-1 to permit TFG and CAT to offer deferred compensation
arrangements to their trustees who are not ``interested persons''
within the meaning of section 2(a)(19) of the Act.
4. In November 1994, the investment advisory businesses of TAG and
its affiliates were consolidated with the investment advisory
businesses of Pacific Financial Asset Management Corporation
(``PFAMCo''), then a wholly owned subsidiary of Pacific Mutual, which
included the investment advisory businesses of PIMCO (the
``Consolidation''). The Consolidation involved the transfer of the
investment advisory operations of PFAMCo and its subsidiaries to TAG in
return for units of limited partnership interest of TAG and the
substitution of PIMCO Partners G.P. for the former general partner of
TAG. TAG as a legal entity survived the Consolidation and was
subsequently renamed PIMCO Advisors L.P. (``PALP'').
5. In order to ensure that PALP, PIMCO Funds, PFEAS and all funds
advised by PALP, of any entity controlling, controlled by, or under
common control with PALP may rely on the Order, applicants request that
the Order be amended to make the relief available not only to
investment companies advised by PALP, but also to any open-end
investment company in the same ``group of investment companies'' as the
Funds, within the meaning of Rule 11a-3 under the Act and any other
open-end investment company for which PALP, or any entity controlling,
controlled by, or under common control with PALP, serves as investment
adviser. The immediate effect of the amendment would be to render the
relief granted in the Order available to PIMCO Funds, should its
trustees elect to participate in the deferred compensation plan.
Applicants Legal Analysis
1. Section 6(c) of the Act provides that the SEC may exempt a
person, transaction or class of transactions from any provision of the
Act or any rule thereunder, if and to the extent that the 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.
2. Section 17(d) of the Act and rule 17d-1 thereunder prohibit an
affiliated person of an investment company, acting as principal, from
participating in or effecting any transaction in connection with any
joint enterprises or joint arrangement in which the investment company
participates. Rule 17d-1 permits the SEC to approve a proposed joint
transaction. In determining whether to approve a transaction, the SEC
is to consider whether the proposed transaction is consistent with the
provisions, policies, and purposes of the Act, and the extent to which
the participation of the investment companies is on a basis different
from or less advantageous than that of the other participants.
3. Applicants confirm the arguments made in the original
application under the Order and confirm that the terms of applicants'
request for an amended order are consistent with the provisions,
policies and purposes of the Act, that the requested exemption are
necessary or appropriate in the public interest and consistent with the
protection of investors, and that each Fund's participation in the
proposed arrangements is on a basis no different from or less
advantageous than that of any other participant.
Applicants' Conditions
Applicants agree that any order granting the requested relief will
be subject to the following conditions:
1. With respect to the requested relief from rule 2a-7, any money
market series of a Fund that values its assets using the amortized cost
method or the penny rounding method will buy and hold the Underlying
Securities that determine the performance of Deferred Fee Accounts to
achieve an exact match between such series' liability to pay deferred
fees and the assets that offset that liability.\3\
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\3\ The terms Underlying Securities and Deferred Fee Arrangement
have the same meaning as under the Order.
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2. If a fund purchases Underlying Securities issued by an
affiliated Fund, the Fund will vote such shares in proportion to the
votes of all other shareholders of such affiliated Fund.
3. Any Fund that enters into a deferred fee arrangement will comply
with all of the terms of the Order.
For the Commission, by the Division of Investment Management,
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-33057 Filed 12-27-96; 8:45 am]
BILLING CODE 8010-01-M
