[Federal Register Volume 59, Number 21 (Tuesday, February 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-2196]
[[Page Unknown]]
[Federal Register: February 1, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-20036; 812-8746]
Kemper Blue Chip Fund, et al.; Application for Exemption
January 26, 1994.
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: Kemper Blue Chip Fund, Kemper Adjustable Rate U.S.
Government Fund, Kemper Diversified Income Fund, Kemper Environmental
Services Fund, Kemper Global Income Fund, Kemper Growth Fund, Kemper
High Yield Fund, Kemper Income and Capital Preservation Fund, Kemper
International Fund, Kemper Municipal Bond Fund, Kemper Retirement Fund,
Kemper Short-Term Global Income Fund, Kemper Small Capitalization
Equity Fund, Kemper State Tax-Free Income Series, Kemper Technology
Fund, Kemper Total Return Fund, Kemper U.S. Government Securities Fund,
Sterling Funds (the ``Funds''), Kemper Financial Services, Inc.
(``KFS''), the Funds' investment adviser and principal underwriter, and
any other open-end registered investment company, existing or
established in the future, for which KFS or any other person directly
or indirectly controlling, controlled by or under common control with
KFS serves or may serve as investment adviser or principal underwriter
with the same traditional front-end load sales charge structure for
which the imposition of the proposed contingent deferred sales charge
would be appropriate.\1\
\1\Certain Funds do not presently intend to rely on the
requested relief and have not signed the application, but in the
future they may rely on any order granted pursuant to the
application if they determine to impose a CDSC applicable to sales
of shares sold at net asset value in accordance with the
representations and conditions in the application.
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RELEVANT ACT SECTIONS: Exemption requested under section 6(c) of the
Act from the provisions of sections 2(a)(32), 2(a)(35), 22(c), and
22(d) of the Act and rule 22c-1 thereunder.
SUMMARY OF APPLICATION: Applicants seek an order that would amend a
prior order (the ``Prior Order'') that permits the imposition and,
under certain circumstances, waiver of a contingent deferred sales
charge (``CDSC'') on certain redemptions.\2\ Applicants seek to amend
the Prior Order to (a) include Sterling Funds as a named applicant and
(b) expand the definition of the group of investment companies that may
rely on the order.
\2\Kemper Blue Chip Fund, Investment Company Act Release Nos.
18801 (June 19, 1992) (notice) and 18849 (July 19, 1992) (order).
The order sought by this application will, if issued, supersede the
Prior Order.
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FILING DATE: The application was filed on December 29, 1993. In a
letter dated January 18, 1994, applicants' counsel has stated that an
amendment, the substance of which is incorporated herein, will be filed
during the notice period.
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 22,
1994, and should be accompanied by proof of service on applicants, in
the form of an affidavit or, for lawyers, a certificate of service.
Hearing requests should state 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 5th Street, NW., Washington, DC 20549.
Applicants, 120 South LaSalle Street, Chicago, Illinois 60603.
FOR FURTHER INFORMATION CONTACT: James M. Curtis, Senior Counsel, at
(202) 504-2406 or Barry D. Miller, Senior Special Counsel, 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 at the
SEC's Public Reference Branch.
Applicant's Representations
1. The Prior Order permits one or more applicants, excluding
Sterling Funds, and any other open-end registered investment company
established in the future, that may become a member of a ``group of
investment companies,'' as that phrase is defined by rule 11a-3 under
the Act, that is advised or distributed by KFS, to impose a CDSC in
certain situations. The present application, which adds Sterling Fund
as an applicant, seeks to amend the Prior Order by broadening the class
of investment companies to which the order would apply to include
applicants and any other open-end registered investment company or
series thereof, existing or established in the future, for which KFS or
any other person directly or indirectly controlling, controlled by or
under common control with KFS serves or may serve as investment adviser
or principal underwriter, notwithstanding the failure of one or more of
such investment companies or series to be a member of a ``group of
investment companies'' as that phrase is defined by rule 11a-3 of the
Act.
2. The Funds are open-end management investment companies organized
as Massachusetts business trusts pursuant to separate Declarations of
Trust. KFS provides investment advisory and other services to, and
serves as principal underwriter for, the Funds.
3. The Funds currently offer their shares for sale at net asset
value plus a front-end sales charge. The Funds have eliminated the
front-end sales charge on (a) purchases of $1,000,000 or more,
including purchases made pursuant to various combined purchases, letter
of intent, and cumulative discount features described in each Fund's
prospectus and, for certain Funds, (b) purchases by an employer-
sponsored employee benefit plan, provided that such plan has not less
than 1,000 eligible employees and is maintained on the subaccount
record keeping system made available through KFS (``NAV Purchase
Privilege'').
4. The Funds propose to impose a CDSC on the proceeds of certain
redemptions of shares purchased pursuant to the NAV Purchase Privilege.
Shares of the Funds are sold at net asset value under the NAV Purchase
Privilege only if another privilege to purchase the shares at net asset
value is unavailable. The CDSC will be imposed only in connection with
redemption of shares purchased under the NAV Purchase Privilege and
only in the event of a redemption transaction within a specified
period, currently 12 months (the ``CDSC Period''), following the share
purchase. The CDSC currently is 1.0 percent of the amount of shares
redeemed within one year of purchase. No CDSC would be imposed when the
investor redeems shares held for longer than the CDSC Period or redeems
reinvestment of income and capital gains dividends or appreciation on
shares.
5. Applicants currently intend to waive the CDSC in the event of
one or more of the following instances: (a) Redemption of shares of a
shareholder (including a registered joint owner) who has died; (b)
redemption of shares of a shareholder (including a registered joint
owner) who, after purchase of the shares being redeemed, becomes
totally disabled as evidenced by a determination by the Federal Social
Security Administration; (c) limited automatic redemptions as set forth
in the prospectus pursuant to a Fund's systematic withdrawal plan; and
(d) redemptions in connection with (i) distributions to participants or
beneficiaries of plans qualified under the Internal Revenue Code of
1986, as amended from time to time (``IRC''), section 401(a), custodial
accounts under IRC section 403(b)(7), individual retirement accounts
under IRC section 408(a), deferred compensation plans under IRC section
457 and other employee benefit plans (collectively, ``plans''), (ii)
participant-directed changes in investment choices in participant-
directed plans, and (iii) returns of excess contributions to these
plans.
6. KFS currently intends to credit a shareholder's account in full
(i.e., pay directly into the shareholder's account) for any CDSC paid
in connection with the redemption of any shares followed by a
reinvestment of the redemption proceeds in any of the Funds within
sixty days after such redemption.
Applicants' Condition
If the requested order is granted, applicants expressly consent to
the following condition: applicants will comply with the provisions of
proposed rule 6c-10 under the Act, Investment Company Act Rel. No.
16619 (November 2, 1988), (including any modifications that are
proposed prior to the adoption of such rule) until such rule is
adopted, and after such adoption will comply with such rule in the form
in which it is in effect from time to time.
For the Commission, by the Division of Investment Management,
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-2196 Filed 1-31-94; 8:45 am]
BILLING CODE 8010-01-M
