[Federal Register Volume 62, Number 147 (Thursday, July 31, 1997)]
[Notices]
[Pages 41108-41116]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20048]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-22763; File No. 812-10398]
CUNA Mutual Life Insurance Company, et al.
July 24, 1997.
AGENCY: Securities and Exchange Commission (the ``SEC'' or
``Commission'').
ACTION: Notice of Application for Exemptions under the Investment
Company Act of 1940 (the ``1940 Act'').
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APPLICANTS: CUNA Mutual Life Insurance Company (``CUNA Mutual Life''),
CUNA Mutual Life Variable Account (``Account''), Ultra Series Fund
(``Fund''), CIMCO, Inc. (``CIMCO''), CUNA Mutual Life Insurance Company
Pension Plan for Agents, CUNA Mutual Life Insurance Company Pension
Plan for Home Office Employees, CUNA Mutual Life Insurance Company
401(k)/Thrift Plan for Agents, CUNA Mutual Life Insurance Company
401(k)/Thrift Plan for Home Office Employees, CUNA Mutual Pension Plan,
CUNA Mutual Savings Plan and CUNA Mutual Thrift Plan. (The seven plans
shall be referred to collectively as the ``Plans.'' CUNA Mutual Life,
the Account, the Fund, CIMCO and the Plans shall be referred to
collectively as the ``Applicants.'')
RELEVANT 1940 ACT SECTIONS: Order requested under section 6(c) of the
1940 Act for exemptions form sections 9(a), 13(a) and 15(b) of the 1940
Act, and Rule 6e-3(T) thereunder; and an order requested under section
17(b) of the 1940 Act for exemptions from section 17(a) of the 1940
Act.
SUMMARY OF APPLICATION: CUNA Mutual Life, the Account and the Fund seek
an order exempting them and certain other separate accounts established
in the future by CUNA Mutual Life, or any life insurance company
affiliate of CUNA Mutual Life (``future affiliated accounts'') and
other separate accounts established in the future by any other life
insurance company (``future unaffiliated accounts,''and together with
the future affiliated accounts, the ``future accounts''), from the
provisions of sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act,
and Rule 6e-3(T) thereunder, to the extent necessary to permit the
Account and the future accounts to hold shares of the Fund at the same
time that the Fund offers its shares to such future accounts, the Plans
or other qualified pension or retirement plans (the ``unaffiliated
plans''). In addition, the Plans and CIMCO seek an order exempting them
from Section 17(a) of the 1940 Act to the extent necessary to permit
the Plans to purchase certain classes of shares of the Fund with
investment securities of the Plans.
FILING DATE: The application was filed on October 15, 1996, and amended
and restated on May 9, 1997 and July 23, 1997.
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 on this application by writing to the
Secretary of the SEC 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 August 18, 1997, and 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 interest, the reason for the request and the issues contested.
Persons may request notification of the date of a hearing by writing to
the Secretary of the SEC.
ADDRESSES: Secretary, SEC, 450 Fifth Street, NW., Washington, DC 20549.
Applicants, Linda L. Lilledahl, Esq., Associate General Counsel, CUNA
Mutual Group, 5910 Mineral Point Road, Madison, WI 53701-0391.
FOR FURTHER INFORMATION CONTACT: Megan Dunphy, Attorney, or Mark
Amorosi, Branch Chief, Office of Insurance Products, Division of
Investment Management, at (202) 942-0670.
SUPPLEMENTARY INFORMATION: Following is a summary of the application;
the complete application is available for a fee from the Public
Reference Branch of the SEC.
Applications' Representations
1. CUNA Mutual Life, former Century Life of America, is principally
engaged in the offering of life insurance contracts and is the
depositor and sponsor of the Account. On July 1, 1990, CUNA Mutual Life
entered into a permanent affiliation with CUNA Mutual Insurance Society
(``CUNA Mutual''). All of the directors of CUNA Mutual Life are also
directors of CUNA Mutual and many of the senor executive officers of
CUNA Mutual Life hold similar positions with CUNA Mutual. However, both
companies remain separate corporate entities and their respective
owners retain their voting rights.
2. The Account, a separate account registered under the 1940 Act as
a unit investment trust, was established on August 16, 1993 to serve as
a funding vehicle to support variable life insurance contracts issued
by CUNA Mutual Life. The Account is divided into subaccounts and
invests in shares of open-end management investment companies with one
or more investment portfolios or series, including the Fund.
3. The future accounts also would need to rely on the exemptions
requested in the application. Any such future accounts would be
registered under the 1940 Act as unit investment trusts.
[[Page 41109]]
4. CUNA Mutual, a mutual life insurance company, is principally
engaged in the offering of insurance products and related services.
5. CIMCO is engaged primarily in the business of providing
investment management and advice to insurance company pension plans,
investment companies and other organizations. CIMCO is registered under
the Investment Advisers Act of 1940, is the investment adviser to the
Fund, and manages certain assets of the Plans. CUNA Mutual Life and
CUNA Mutual Investment Corporation each own a one-half interest in
CIMCO. CUNA Mutual Investment Corporation is a wholly-owned subsidiary
of CUNA Mutual.
6. The board of directors of CUNA Mutual Life established CUNA
Mutual Life Insurance Company Pension Plan For Agents, CUNA Mutual Life
Insurance Company Pension Plan For Home Office Employees, CUNA Mutual
Life Insurance Company 401(k)/Thrift Plan for Agents, and CUNA Mutual
Life Insurance Company 401(k)/Thrift Plan for Home Office Employees
(the ``CUNA Life Mutual Plans''). Participation in a CUNA Mutual Life
Plan is open to eligible employees of CUNA Mutual Life and its
subsidiaries or other companies under common control with CUNA Mutual
Life and which has adopted a CUNA Mutual life Plan. CUNA Mutual Life
Insurance Company 401(k)/Thrift Plan for Agents and CUNA Mutual Life
Insurance Company 401(k)/Thrift Plan for Home Office Employees (the
``CUNA Mutual Life Defined Contribution Plans'') are voluntary defined
contribution plans. CUNA Mutual Life Insurance Company Pension Plan For
Agents and CUNA Mutual Life Insurance Company Pension Plan for Home
Office Employees are defined benefit plans.
7. The board of directors of CUNA Mutual established CUNA Mutual
Pension Plan, CUNA Mutual Savings Plan and CUNA Mutual Thrift Plan
(``CUNA Mutual Plans''). Participation in a CUNA Mutual Plan is open to
eligible employees of CUNA Mutual and its subsidiaries or other
companies under common control with CUNA Mutual and which adopted a
CUNA Mutual Plan. The CUNA Mutual Pension Plan is a defined benefit
plan. The CUNA Mutual Savings Plan and CUNA Mutual Thrift Plan (the
``CUNA Mutual Defined Contribution Plans'') are voluntary defined
contribution plans.
8. All of the Plans are intended to qualify under sections 401(a)
and 501(a) of the Internal Revenue Code of 1986, as amended (the
``Code''). The CUNA Mutual Life Defined Contribution Plans and CUNA
Mutual Defined Contribution Plans include cash or deferred arrangements
intended to qualify under section 401(k) of the Code. The Plans also
are subject to, and have been designed to comply with, the provisions
of the Employee Retirement Income Security Act of 1977 (``ERISA'').
9. Each of the Plans is funded by a trust with an institutional
trustee or by an annuity contract issued by CUNA Mutual Life or CUNA
Mutual. CUNA Mutual Life and CUNA Mutual retain the right to establish
different funding arrangements or to appoint other trustees. Each of
the Plans is managed and administered by a plan committee and other
fiduciaries appointed by CUNA Mutual Life or CUNA Mutual, as applicable
(hereinafter, ``plan committees'').
10. The unaffiliated plans will be pension or retirement plans
intended to qualify under Section 401(a) and 501(a) of the Code and
will be subject to, and will be designed to comply with, the applicable
provisions of ERISA. The unaffiliated plans will not be affiliated
persons of the Applicants or affiliated persons of such persons. The
trustees and the other fiduciaries of the unaffiliated plans also will
not be affiliated persons of the Applicants or affiliated persons of
such persons.
11. The CUNA Mutual Thrift Plan offers participants seven
investment options including, among others, the following: a growth and
income investment portfolio, a capital appreciation investment
portfolio, a bond investment portfolio a balanced investment portfolio,
and a money market investment portfolio. The CUNA Mutual Savings Plan
offers participants three investment options: a growth and income
investment portfolio, a bond investment portfolio, and a money market
investment portfolio. The CUNA Mutual Life Defined Contribution Plans
offer participants three investment options: a capital appreciation
investment portfolio, a growth and income investment portfolio and a
money market investment portfolio. Assets of the other Plans are not
held as part of separate Plan investment portfolios.
12. The Fund, an open-end management investment company organized
as a Massachusetts business trust on September 16, 1983, is a series
company that consists of six investment portfolios: Capital
Appreciation Stock Fund, Growth and Income Stock Fund, Balanced Fund,
Bond Fund, Money Market Fund and Treasury 2000 Fund.
13. The investment objective of the Capital Appreciation Stock Fund
is long-term capital growth. The investment objective of the Growth and
Income Stock Fund is long-term capital growth, with income as a
secondary consideration. The investment objective of the Balanced Fund
is to achieve a high total return through the combination of income and
capital appreciation by investing in a broadly diversified life of
securities including common stocks, bonds and money market instruments.
The investment objective of the Bond Fund is to generate a high level
of current income, consistent with the prudent limitation of investment
risk, through investment in a diversified portfolio of fixed-income
securities with maturities of up to 30 years. The investment objective
of the Money Market Fund is to seek the highest current income
available from money market instruments consistent with the
preservation of capital and liquidity by maintaining a dollar weighted
average portfolio maturity which does not exceed 90 days. The
investment objective of the Treasury 2000 Fund is to provide safety of
capital and a relative predictable payout upon portfolio maturity,
primarily by investing in stripped Treasury securities.
14. To date, the Fund has offered its shares only to CUNA Mutual
Life (as seed money investments), the Account, CUNA Mutual Life
Variable Annuity Account (``Annuity Account''), and CUNA Mutual Life
Group Variable Annuity Account (``Group Annuity Account''). The Fund
offers each series of shares to corresponding subaccounts of the
Account to support variable life insurance contracts (``VLI
contracts'') and to the Annuity Account and the Group Annuity Account
to support variable annuity contracts (``VA contracts,'' and together
with VLI contracts, ``variable contracts'').
15. Changes in the tax law have created the opportunity for the
Fund to substantially increase its assets based through the sale of
Fund shares to the Plans and the unaffiliated plans. Section 817(h) of
the Code imposes certain diversification standards on the assets
underlying variable contracts. The Code provides that variable
contracts shall not be treated as annuity contracts or life insurance
contracts for any period in which the underlying assets 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 variable contracts. Treas. Reg.
Sec. 1.817-5 (1989). The regulations provide that, to meet the
diversification requirements,
[[Page 41110]]
all of the beneficial interests in the investment company must be held
by the segregated asset accounts for 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 the trustee of a qualified pension or retirement plan without
adversely affecting the ability of shares in the same investment
company also to be held by the separate accounts of insurance companies
in connection with their variable contracts. Treas. Reg. Sec. 1.817-
5(f)(3)(iii). As a result of this exception to the general
diversification requirement, qualified pension and retirement plans
(such as the Plans or the unaffiliated plans) may hold Fund shares and
select an investment portfolio of the Fund as an investment option
without endangering the tax status of CUNA Mutual Life's VLI contracts
or VA contracts as life insurance or annuities, respectively.
16. Applicants propose that, in one or more discrete instances, the
Plans purchase Fund shares using investment securities held by the
Plans. The CUNA Mutual Life Defined Contribution Plans and the CUNA
Mutual Defined Contribution Plans would use investment securities
constituting a separate Plan investment portfolio, currently available
to participants as an investment option, to purchase Fund shares, while
the other Plans would use securities held by the Plan but not as a
separate Plan investment portfolio.
17. Applicants state that the CUNA Mutual Defined Contribution
Plans and the CUNA Mutual Life Defined Contribution Plans will each use
the assets of their capital appreciation investment portfolios to
purchase shares of the Fund's Capital Appreciation Stock Fund, use the
assets of their growth and income investment portfolios to purchase
shares of the Fund's Growth and Income Stock Fund, use the assets of
their bond investment portfolios to purchase shares of the Fund's Bond
Fund, use the assets of their balanced investment portfolio to purchase
shares of the Fund's Balanced Fund and use the assets of the money
market investment portfolios to purchase shares of the Fund's Money
Market Fund. If the proposed consolidations were to occur, the Plans
would initially acquire a substantial majority of the outstanding
shares of the Fund's Growth and Income Stock Fund, Bond Fund and Money
Market Fund as well as a controlling interest in the Fund's Capital
Appreciation Stock Fund.
Applicants' Legal Analysis
A. Request for Exemptions Under Section 6(c)
(i) General Grounds for Relief
1. CUNA Mutual Life, the Account and the Fund (the ``Section 6(c)
Applicants'') request that the Commission issue an order pursuant to
section 6(c) of the 1940 Act exempting them as well as any future
accounts and depositors and principal underwriters of any future
accounts from the provisions of sections 9(a), 13(a), 15(a) and 15(b)
of the 1940 Act, and Rule 6e-3(T)(b)(15) thereunder, to the extent
necessary for the Account and any future accounts to hold shares of the
Fund at the same time that the Plans or the unaffiliated plans hold
shares of the Fund or for the Account and any unaffiliated future
account to simultaneously hold shares of the Fund.
2. CUNA Mutual Life and the Account currently rely on the
exemptions provided by Rule 6e-3(T)(b)(15) under the 1940 Act, which
provides partial exemptions from sections 9(a), 13(a), 15(a) and 15(b)
of the 1940 Act for certain VLI contracts. However, the exemptions
granted by the rule are available only where: (i) the Fund offers its
shares exclusively to separate accounts of CUNA Mutual Life or any life
insurance company affiliate of CUNA Mutual Life offering either
scheduled premium variable life insurance contracts or flexible premium
variable life insurance contracts, or both; or (ii) the Fund offers its
shares to variable annuity separate accounts of CUNA Mutual Life or of
any life insurance company affiliate of CUNA Mutual Life. The Rule 6e-
3(T)(b)(15) exemptions would not be available to CUNA Mutual Life, the
Account or any future accounts (affiliated or unaffiliated) if the Fund
were to sell its shares to the Plans or to unaffiliated plans.
3. In general, section 9(a) of the 1940 Act disqualifies any person
convicted of certain offenses, and any company affiliated with that
person, from acting or serving in various capacities with respect to a
registered investment company. Section 9(a)(3) provides that it is
unlawful for any company to serve as investment adviser or principal
underwriter for any registered open-end investment company if an
affiliated person of that company is subject to a disqualification
enumerated in sections 9(a) (1) or (2). However, Rule 6e-3(T)(b)(15)
(i) and (ii) provide exemptions from section 9(a), under certain
circumstances and subject to certain conditions that limit the
application of the eligibility restrictions of Section 9(a) to
affiliated individuals or companies that directly participate in the
management of the Fund.
4. The section 6(c) Applicants assert that the partial relief
provided by Rule 6e-3(T)(b)(15) effectively limits the amount of
monitoring of personnel that CUNA Mutual Life and its affiliates (or
future account depositors and their affiliates) would have to conduct
to ensure compliance with section 9 to that which is appropriate in
light of the policy and purposes of section 9. The section 6(c)
Applicants further assert that the rule recognizes that it is not
necessary for the protection of investors or the purposes fairly
intended by the policy and provisions of the 1940 Act to apply to
provisions of section 9(a) to the many hundreds of individuals in a
large insurance company complex, most of whom typically have no
involvement in matters pertaining to investment companies affiliated
with that organization.
5. Rule 6e-3(T)(b)(15)(iii) provides partial exemptions from
sections 13(a), 15(a) and 15(b) of the 1940 Act to permit CUNA Mutual
Life, under certain limited circumstances, to: (i) disregard the voting
instructions of VLI contract owners if following such instructions
would cause CUNA Mutual Life to make (or refrain from making) certain
investments that would result in changes in the subclassification or
investment objectives of the Fund; or (ii) (subject to the provisions
of paragraphs (b)(5)(i) and (b)(7)(ii)(A) of Rule 6e-3(T)) approve or
disapprove any contract between the Fund and CIMCO (or another
investment adviser), when such action is mandated by an insurance
regulatory authority.
6. The section 6(c) Applicants assert that historically, the
exclusivity provision in Rule 6e-3(T)(b)(15) evolved from the
Commission's concern about possible divergent interests between or
among different classes of investors (e.g., VA owners and VLI owners)
in mutual funds supporting variable life insurance separate accounts.
The unit investment trust structure for supporting VLI contracts
created the opportunity for a mutual fund underlying a trust also to
offer its shares to a variable annuity separate account (hereinafter,
``mixed funding''). This structure also created the opportunity for a
mutual fund underlying such a separate account also to offer its shares
to separate accounts of two or more insurance companies that are not
affiliated persons of each other (hereinafter, ``shared funding'').
7. The section 6(c) Applicants state that the Commission addressed
its
[[Page 41111]]
concerns about divergent interests among investors when it adopted Rule
6e-2 (the primary exemptive rule for scheduled premium variable life
insurance). Rule 6e-2 does not permit mixed or shared funding. Several
insurers relying on Rule 6e-2 sought and obtained individual exemptions
to permit mixed funding, subject to certain conditions designed to
identify and resolve potential or existing conflicts of interest among
variable contract owners. The section 6(c) Applicants maintain that,
ultimately, Rule 6e-3(T)(b)(15) was designed to permit a separate
account supporting both flexible and scheduled premium VLI contracts to
share the same underlying fund and engage in mixed funding.
8. The section 6(c) Applicants maintain that qualified retirement
plan investors in the Fund would have substantially the same interests
as current variable contract owners. Like variable contract owners,
qualified retirement plan investors are long-term investors. Therefore,
most can be expected not to withdraw their assets from the Plans or the
unaffiliated plans. In addition, since neither variable contract owners
nor Plan and unaffiliated plan in investors would be taxed on the
investment return of their respective investments in the Fund, they
would share a strong interest in the Fund operating in a manner that
preserves its tax status.
9. The section 6(c) Applicants represent that the Account and the
Plans are governed in similar ways as would be future accounts and
unaffiliated plans. Plan committees (and other plan fiduciaries) have a
fiduciary duty to participants that is similar to the obligations that
CUNA Mutual Life or any other life insurance company has to look after
the interests of variable contract owners.
10. The section 6(c) Applicants assert that, because investors in
the Plans and unaffiliated plans would have beneficial interests
similar to those of current investors, the addition of the Plans and
unaffiliated plans as shareholders of the Fund and the addition of
participants as persons having beneficial interests in the Fund should
not increase the risk of material irreconcilable conflicts among and
between investors. The section 6(c) Applicants further assert that even
if a material irreconcilable conflict involving the Plans or the
unaffiliated plans or their respective participants arose, the
fiduciaries of the Plans and the trustees (or other fiduciaries) of the
unaffiliated plans can, if their fiduciary duty to the participants
requires it, redeem the shares of the Fund held by the Plans or the
unaffiliated plans and make alternative investments without obtaining
prior regulatory approval. Similarly, the Plans and most, if not all,
of the unaffiliated plans may hold cash or other liquid assets pending
their reinvestment in a suitable alternative investment.
1. The section 6(c) Applicants maintain that variable contract
owners would benefit from the expected increase in net assets of the
Fund's portfolios resulting from additional investments by the Plans
and unaffiliated plans. Such additional investments should lower some
of the costs of investing for variable contract owners, promote
economies of scale, permit increased safety through greater portfolio
diversification, provide the Fund's investment adviser with greater
flexibility because of a larger portfolio, and make the addition of new
portfolios in the future more feasible.
12. The section 6(c) Applicants note that when the Commission last
revised Rule 6e-3(T) in 1987, the Treasury Department had not issued
Treasury Regulation 1.817-5 which permits the Fund to sell shares to
qualified pension or retirement plans without adversely affecting the
tax status of variable contracts. The section 6(c) Applicants submit
that, although proposed regulations had been published, the Commission
did not envision this possibility when it last examined Rule 6e-
3(T)(b)(15), and might well have broadened the exclusivity provision of
the rule at that time to include plans such as the Plans (or the
unaffiliated plans) had this possibility been apparent.
(ii) Voting Rights
13. The section 6(c) Applicants do not see any inherent conflicts
arising between or among the interests of variable contract owners, or
Plan participants because of the potential for the Plans to hold a
controlling interest in a portfolio of the Fund. If the exemptions
requested herein are granted, the trustees or the plan committee of
each Plan would enter into a participation agreement with the Fund that
contains certain conditions, as discussed below. These conditions would
serve to enhance the ability of the Fund's board of trustees and CUNA
Mutual Life as well as depositors of future accounts to protect the
interests of variable contract owners and minimize any potential for
material conflicts between or among the interests of plan investors on
the one hand and variable contract owners on the other.
14. The section 6(c) Applicants maintain that there is no reason to
believe that the trustees or the plan committees of the various Plans
as a group would vote in a manner that would disadvantage variable
contract owners. Moreover, because a majority of the Fund's trustees
will not be interested persons of the Fund, the trustees, the plan
committees and other affiliated persons of the Plans will not be in a
position to exercise undue influence over the Fund or any of its
portfolios.
15. Also, with regard to resolving or remedying possible material
conflicts of interest related to voting, the Plans' investment in the
Fund does not present any complications not otherwise occasioned by
traditional mixed funding as permitted by Rule 6e-3(T)(b)(15). The
section 6(c) Applicants submit that the interests and opinions of Fund
investors may differ, but this does not mean that inherent conflicts of
interest exist between or among such investors.
16. Section 403(a) of ERISA provides that, with few exceptions,
trustees of the unaffiliated plans would have the exclusive authority
and responsibility for exercising voting rights attributable to their
respective plan's investment securities. Where a named fiduciary
appoints an investment adviser, the adviser has the authority and
responsibility to exercise such voting rights unless the authority and
responsibility is reserved to the trustee(s) or a non-trustee
fiduciary.
17. The section 6(c) Applicants generally expect many of the
unaffiliated plans to have their trustees or other fiduciaries
exercise, in their discretion, voting rights attributable to investment
securities held by the unaffiliated plans. Some of the unaffiliated
plans, however, may provide for the trustee(s), an investment adviser
(or advisers), or another named fiduciary to exercise voting rights in
accordance with instructions from participants.
18. Where unaffiliated plans do not provide participants with the
right to give voting instructions, the section 6(c) Applicants do not
see any potential for material irreconcilable conflicts of interest
between variable contract owners and unaffiliated plan investors with
respect to voting of Fund shares. In this regard, the section 6(c)
Applicants submit that investment in the Fund by the unaffiliated plans
will not create any of the voting complications occasioned by
traditional mixed and shared funding, or by the Plans' proposed
investment in the Fund.
19. Where unaffiliated plans provide participants with the right to
give voting instructions, the section 6(c) Applicants do not believe
that participants in unaffiliated plans generally or those in
[[Page 41112]]
a particular unaffiliated plan, either as a single group or in
combination with participants in other unaffiliated plans, would vote
in a manner that would disadvantage variable contract owners. The
purchase of Fund shares by the unaffiliated plans that provide voting
rights does not present any complications not otherwise occasioned by
mixed and shared funding.
20. In light of Treasury Regulation 1.817-5(f)(3)(iii) which
specifically permits ``qualified pension or retirement plans'' and
separate accounts to share the same underlying management investment
company, the section 6(c) Applicants have concluded that neither the
Code, nor other Treasury Regulations or revenue rulings thereunder,
would create any inherent conflicts of interest between or among
participants and variable contract owners.
(iii) Tax Treatment of Distributions
21. Although there are differences in the manner in which
distributions from the Plans or the unaffiliated plans and
distributions from variable contracts are taxed, the section 6(c)
Applicants maintain that these differences will have no impact on the
Fund. The Account, any future accounts, the Plans, and the unaffiliated
plans each will purchase and redeem Fund shares at net asset value in
conformity with Rule 22c-1 under the 1940 Act.
(iv) Potential Future Conflicts Arising From Tax Law Changes
22. The section 6(c) Applicants do not see any greater potential
for material irreconcilable conflicts arising between the interests of
plan investors and other Fund investors from possible future changes in
the federal tax laws than that which already exists with regard to such
conflicts arising between VLI contract owners and VA contract owners.
(v) Grounds for Relief for Shared Funding
23. The section 6(c) Applicants maintain that the holding of Fund
shares by separate accounts of unaffiliated insurance companies would
not entail greater potential for material irreconcilable conflicts
arising between or among the interests of VLI owners and VA owners than
does traditional mixed funding. Likewise, the holding of Fund shares by
separate accounts of unaffiliated insurance companies would not create
greater potential for material irreconcilable conflicts arising between
or among the interests of variable contract owners and plan investors
than would be the case if only separate accounts of CUNA Mutual Life's
insurance company affiliates and plan investors held Fund shares.
24. The section 6(c) 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, or all, states. The
section 6(c) Applicants note that where insurers are domiciled in
different states, it is possible that the state insurance regulatory
body in a state in which one 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 insurance
companies are domiciled. The section 6(c) Applicants submit that this
possibility is no different from and no greater than what exists where
a single insurer and its affiliates offer their insurance products in
several states.
25. The section 6(c) Applicants also assert that the right of an
insurance company to disregard VLI contract owner voting instructions
does not raise any issues different from those raised by the authority
of different state insurance regulators over separate accounts.
Affiliation does not eliminate the potential for divergent judgments by
such companies as to the advisability or legality of a change in
investment policies, principal underwriting, or investment adviser of
an open-end management investment company in which their separate
account invests. The section 6(c) Applicants assert that the potential
for disagreement between or among insurance companies is limited by the
requirement that the insurance company's disregard of voting
instructions be both reasonable and based on specific good faith
determinations. Moreover, in the event that a decision of CUNA Mutual
Life or the depositor of a future account to disregard VLI contract
owners' instructions represents a minority position or would preclude a
majority vote at a Fund shareholders meeting, CUNA Mutual Life or such
depositor could be required, at the election of the Fund, to withdraw
its investment in that Fund.
(vi) Conditions for Relief
Applicants represent and agree that if the exemptions required in
the application pursuant to section 6(c) are granted, CUNA Mutual Life
and the Account will only rely on such exemptions to purchase and hold
Fund shares if the following conditions are met:
1. The board of trustees of the Fund, including a majority of
those trustees who are not interested persons of the Fund or
interested persons of such persons, adopts a resolution approving
the sale of Fund shares to the Plans and the unaffiliated plans. for
this purpose, interested person means ``interested persons'' as
defined by Section 2(a)(19) of the 1940 Act, and rules thereunder,
and as modified by any applicable Commission orders, except that if
this condition is not met by reason of the death, disqualification,
or bona fide resignation of any trustee or trustees, then the
operation of this condition shall be suspended for (a) a period of
45 days of the vacancy or vacancies may be filled by the remaining
trustees, (b) a period of 60 days if a vote of shareholders is
required to fill the vacancy or vacancies, or (c) such longer period
as the Commission may prescribe by order upon application.
2. The board of trustees of the Fund, a majority of whom shall
not be interested persons of the Fund or interested persons of such
persons, shall monitor the Fund for the existence of any material
irreconcilable conflicts between or among the interests of VLI
owners, VA owners and plan investors and determine what action, if
any, should be taken in response to those conflicts. 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 (c) a public ruling,
private letter ruling, no-action or interpretive letter, or any
similar action by insurance, tax, or securities regulatory
authorities, (d) the manner in which the investments of any Fund are
being managed, (e) a difference in voting instructions given by VLI
owners, VA owners and plan investors, (f) a decision by CUNA Mutual
Life to disregard variable contract owner voting instructions, and
(g) a decision by a Plan trustee (or other Plan fiduciary) to
disregard voting instructions of Plan participants.
3. CUNA Mutual Life will monitor its operations and those of the
Fund for the purpose of identifying any material conflicts or
potential material conflicts between or among the interests of plan
investors, VA owners and VLI owners.
4. CUNA Mutual Life and CIMCO will report any such conflicts or
potential conflicts to the Fund's board of trustees and will provide
the board at least annually, with all information reasonably
necessary for the board to consider any issues raised by such
existing or potential conflicts. CUNA Mutual Life will also assist
the board in carrying out this obligation including, but not limited
to: (a) informing the board whenever it disregards VLI owner voting
instructions, and (b) providing such other information and reports
as the board may reasonably request. CUNA Mutual Life will carry out
these obligations with a view only to the interests of VA owners and
VLI owners.
5. CUNA Mutual Life will provide ``pass-through'' voting
privileges to VA owners and VLI owners as long as the Commission
interprets the 1940 Act to require such privileges in such cases.
CUNA Mutual Life will vote Fund shares held by it that are not
attributable to VA contract or VLI contract reserves in the same
proportion as instructions received in a timely fashion from
[[Page 41113]]
VA owners and VLI owners and shall be responsible for ensuring that
the Account and the Annuity Account each calculate ``pass-through''
votes in a consistent manner.
6. In the event that a conflict of interest arise between VA
owners or VLI owners and plan investors, CUNA Mutual Life will, at
its own expense, take whatever action is necessary to remedy such
conflict as it adversely affects VA owners or VLI owners up to and
including (1) establishing a new registered management investment
company, and (2) withdrawing assets attributable to reserves for the
VA contracts or VLI contracts subject to the conflict form the Fund
and reinvesting such assets in a different investment medium
(including another portfolio of the Fund) or submitting the question
of whether such withdrawal should be implemented to a vote of all
affected VA owners or VLI owners, and, as appropriate, segregating
the asset supporting the contracts of any group of such owners that
votes in favor of such withdrawal, or offering to such owners the
option of making such a change. CUNA Mutual Life will carry out the
responsibility to take the foregoing action with a view only to the
interests of VA owners and VLI owners. Notwithstanding the
foregoing, CUNA Mutual Life will not be obligated to establish a new
funding medium for any group of VA contracts or VLI contracts if an
offer to do so has been declined by a vote of a majority of the VA
owners or VLI owners adversely affected by the conflict.
7. If a material irreconcilable conflict arises because of CUNA
Mutual Life's decision to disregard the voting instructions of VLI
owners and that decision represents a minority position or would
preclude a majority vote at any Fund shareholder meeting, then, at
the request of the Fund's board of trustees, CUNA Mutual Life will
redeem the shares of the Fund to which the disregarded voting
instructions relate. No charge or penalty, however, will be imposed
in connection with such a redemption.
8. A majority vote of the disinterested trustees of the Fund
shall represent a conclusive determination as to the existence of a
material irreconcilable conflict between or among the interests of
VLI owners, VA owners and plan participants. A majority vote of the
disinterested trustees of the Fund shall represent a conclusive
determination as to whether any proposed action adequately remedies
any material irreconcilable conflict between or among the interests
of VLI owners, VA owners and plan participants. The Fund shall
notify CUNA Mutual Life, depositors of future accounts, Plans and
unaffiliated plans in writing of any determination of the foregoing
type.
9. All reports sent by CUNA Mutual Life, the depositors of the
future accounts, the Plans or the unaffiliated plans to the board of
trustees of the Fund or notices sent by the board to CUNA Mutual
Life, the depositors of the future accounts, the Plans or the
unaffiliated plans notifying the recipient of the existence of or
potential for a material conflict between the interests of VA
owners, VLI owners and plan investors as well as board deliberations
regarding conflicts or potential conflicts shall be recorded in the
board meeting minutes of the Fund or other appropriate records, and
such minutes or other records shall be made available to the
Commission upon request.
10. The Fund's prospectus shall disclose that (1) its shares are
offered in connection with mixed funding, shared funding and to
401(a) plans, (2) both mixed funding, shared funding and investment
by 401(a) plans in the Fund may present certian conflicts of
interest between VA owners, VLI owners and plan investors and (3)
the Fund's board of trustees will monitor for the existence of any
material conflict of interest. The Fund shall also notify the Plan
trustees, the trustees of unaffiliated plans, CUNA Mutual Life and
the life insurance company depositors of the future accounts that
similar prospectus disclosure may be appropriate in separate account
prospectuses or any plan prospectuses or other plan disclosure
documents.
11. CUNA Mutual Life and the Account will continue to rely on
Rule 6e-3(T)(b)(15) and to comply with all of its conditions. In the
event that Rule 6e-3(T) is amended, or any successor rule is
adopted, CUNA Mutual Life and the Account will instead comply with
such amended or successor rule.
12. Each Plan will execute a participation agreement with the
Fund requiring the trustees or plan committees of the Plan to: (a)
monitor the Plan's operations and those of the Fund for the purpose
of identifying any material conflicts or potential material
conflicts between or among the interests of plan investors, VA
owners and VLI owners, (b) report any such conflicts or potential
conflicts to the Fund's board of trustees, and (c) provide the
board, at least annually, with all information reasonably necessary
for the board to consider any issues raised by such existing or
potential conflicts and any other information and reports that the
board may reasonably request, (d) ensure that the Plan votes Fund
shares as required by applicable law and governing Plan documents.
13. In the event that a conflict of interest arises between plan
investors and VA owners or other investors in the Fund, each Plan
will, at its own expense, take whatever action is necessary to
remedy such conflict as it adversely affects that Plan or
participants in that Plan up to and including (1) establishing a new
registered management investment company, and (2) withdrawing Plan
assets subject to the conflict from the Fund and reinvesting such
assets in a different investment medium (including another portfolio
of the Fund) or submitting the question of whether such withdrawal
should be implemented to a vote of all affected plan participants,
and, as appropriate, segregating the assets of any group of such
participants that votes in favor of such withdrawal, or offering to
such participants the option of making such a change. Each Plan will
carry out the responsibility to take the foregoing action with a
view only to the interests of the plan investors in its Plan.
Notwithstanding the foregoing, no Plan will be obligated to
establish a new funding medium for any group of participants if an
offer to do so has been declined by a vote of a majority of the
Plan's participants adversely affected by the conflict.
14. If a material irreconcilable conflict arises because of a
Plan trustee's (or other fiduciary's) decision to disregard the
voting instructions of Plan participants (if such Plan should
provide voting rights to its participants) and that decision
represents a minority position or would preclude a majority vote at
any shareholder meeting, then, at the request of the Fund's board of
trustees, the Plan will redeem the shares of the Fund to which the
disregarded voting instructions relate. No charge or penalty,
however, will be imposed in connection with such a redemption.
15. The Fund will comply with all the provisions of the 1940 Act
relating to security holder (i.e., persons such as VLI owners and VA
owners or participants in plans that provide participants with
voting rights) voting including Sections 16(a), 16(b) (when
applicable) and 16(c) (even though the Fund is not a trust of the
type described therein).
Applicants also represent that, with regard to the reliance of the
future accounts (including their life insurance company depositors) on
the section (6(c) exemptions requested in the application, the Fund
will only sell shares to future accounts if the life insurance company
depositors enter into a participation agreement with the Fund requiring
the depositor to comply with conditions 3, 4, 5, 6, 7, 8 and 11 in the
same manner as will CUNA Mutual Life. Likewise, the Fund will only sell
shares to unaffiliated plans holding 10% or more of the shares of any
investment portfolio of the Fund if such plans enter into a
participation agreement with the Fund requiring the trustees or other
appropriate plan fiduciaries to comply with conditions 8, 12, 13, and
14 in the same manner as will the Plans.
B. Request for Exemptions Under Section 17(b)
1. CIMCO and the Plans request that the Commission issue an order
pursuant to section 17(b) of the 1940 Act exempting them from the
provisions of section 17(a) of the 1940 Act to the extent necessary to
permit the Plans to purchase shares of the Fund with investment
securities of the Plans. Section 17(a)(1) of the 1940 Act, in relevant
part, prohibits any affiliated person of a registered investment
company, or any affiliated person of such person, acting as principal,
from knowingly selling any security or other property to that company.
Section 17(a)(2) of the 1940 Act generally prohibits the persons
described above, acting as principals, from knowingly purchasing any
security or other property from the registered investment company.
2. Section 17(b) of the 1940 Act provides that the Commission may,
upon application, grant an order
[[Page 41114]]
exempting any transaction from the prohibitions of section 17(a) if the
evidence establishes that: (i) The terms of the proposed transaction,
including the consideration to be paid or received, are reasonable and
fair and do not involve overreaching on the part of any person
concerned; (ii) the proposed transaction is consistent with the policy
of each registered investment company concerned, as recited in its
registration statement and reports filed under the 1940 Act; and (iii)
the proposed transaction is consistent with the general purposes of the
1940 Act.
3. Section 2(a)(3) of the 1940 Act defines the term ``affiliated
person of another person'' in relevant part as: ``(A) any person
directly or indirectly owning, controlling, or holding with power to
vote, 5 per centum or more of the outstanding voting securities of such
other person; (B) any person 5 per centum or more of whose outstanding
voting securities are directly or indirectly owned, controlled, or held
with power to vote, by such person; (C) any person directly or
indirectly controlling, controlled by, or under common control with,
such other person.* * *''
4. CIMCO and the Plans assert that since a person under common
control with a registered investment company is an affiliated person of
that investment company, CIMCO and the CUNA Mutual Life Plans are
affiliated persons of the Fund and of all of its investment portfolios.
In addition, because CUNA Mutual Life owns of record more than 5% of
the shares of each of the Fund's investment portfolios, CUNA Mutual
Life is an affiliated person of the Fund and each of the Fund's
investment portfolios. The Plans' proposal to purchase Fund shares with
investment securities would entail the sale of such securities by the
Plans (or by CIMCO and the Plans), acting as principal, to the Fund and
therefore would contravene section 17(a).
5. Because each person who is under common control with a
registered investment adviser is an affiliated person of that adviser,
the CUNA Mutual Plans are affiliated persons of an affiliated person of
the Fund.
6. CIMCO and the Plans assert that because CUNA Mutual Life owns of
record all shares of the Fund and because section 2(a)(9) of the 1940
Act establishes a presumption that a person owning 25% or more of
another person's outstanding voting securities controls the latter
person, the Fund and each of its investments portfolios is arguably
under the control of CUNA Mutual Life notwithstanding the fact that
variable contract owners may be considered the beneficial owners of any
such shares. CIMCO and the Plans further submit that, because CIMCO and
the CUNA Mutual Life Plans are controlled by CUNA Mutual Life, they,
the Fund, and the Fund's portfolios are under the common control of
CUNA Mutual Life. Because CIMCO is also controlled by CUNA Mutual as
are the CUNA Mutual Plans, CIMCO and the CUNA Mutual Plans are under
common control.
7. CIMCO and the Plans represent that the terms of the proposed
transactions as set froth in the application, including the
consideration to be paid and received: (i) Are reasonable and fair and
do not involve overreaching on the part of any person concerned; (ii)
are consistent with the policies of the Fund and of its Capital
Appreciation Stock Fund, Growth and Income Stock Fund, Balanced Fund,
Bond Fund and its Money Market Fund, as recited in its current
registration statement and reports filed under the 1940 Act; and (iii)
are consistent with the general purposes of the 1940 Act.
8. Subject to certain enumerated conditions, Rule 17a-7 under the
1940 Act exempts from the prohibitions of section 17(a) a purchase or
sale transaction between: (i) Registered investment companies or
separate series of registered investment companies, which are
affiliated persons, or affiliated persons of affiliated persons, of
each other, (ii) between separate series of a registered investment
company; or (iii) between a registered investment company or a separate
series of a registered investment company and a person which is an
affiliated person of such registered investment company (or affiliated
person of such person) solely by reason of having a common investment
adviser or investment advisers which are affiliated persons of each
other, common directors, and/or common officers
9. CIMCO and the CUNA Mutual Plans submit that they cannot rely on
Rule 17a-7 because they are not affiliated persons of the Fund (or of
the Bond Fund, Money Market Fund or the Treasury 2000 fund) solely by
reason of having acommon investment adviser or affiliated investment
advisers, common directors, and/or common officers. Likewise, the CUNA
Mutual Plans cannot rely on Rule17a-7 because they are not affiliated
persons of an affiliated person of the Fund solely by reason of having
a common investment adviser or affiliated investment advisers, common
directors, and/or common officers. Moreover, CIMCO and the Plans also
note that since the proposed purchase of Fund shares by the Plans
involves the purchase and sale of securities for securities, the
proposed transaction does not meet the condition of Rule 17a-7 that the
transaction be a purchase or a sale for no consideration other than
cash payment against prompt delivery of a security for which market
quotations are readily available.
10. CIMCO and the Plans maintain that the terms of the proposed
transactions, including the consideration to be received by the Fund,
are reasonable, fair, and do not involve overreaching by investment
company affiliates principally because the transactions will conform in
all material respects with the substance of all but one of the
conditions enumerated in Rule 17a-7. CIMCO and the Plans assert that
where, as here, they or the relevant investment company would comply in
substance with, but cannot literally meet all of the requirements of,
Rule 17a-7, the Commission should consider the extent to which they
would meet the Rule 17a-7 or other similar conditions, and issue an
order if the protections of Rule 17a-7 would be provided in substance.
11. CIMCO and the Plans submit that the proposed transactions would
offer to the Fund the same degree of protection from overreaching that
Rule 17a-7 offers to investment companies generally in connection with
qualifying non-investment company affiliates of such investment
companies. Although the transactions will not be for cash, each will be
effected based upon: (i) The independent market price of the Plans'
investment securities valued as specified in Rule 17a-7(b), and (ii)
the net asset value per share of the Capital Appreciation Stock Fund,
Growth and Income Stock Fund, Balanced Fund, Bond Fund or the Money
Market Fund, valued in accordance with the procedures disclosed in the
Fund's registration statement and as required by Rule 22c-1 under the
1940 Act. CIMCO and the Plans represent that no brokerage commission,
fee, or other remuneration will be paid to any party in connection with
the proposed transactions. In addition, although the board of trustees
of the Fund will not adopt specific procedures to govern the proposed
transactions (because there will be at most only one such transaction
for each Plan), it will scrutinize and specifically approve by
resolution each such transaction, including the price to be paid for
the Fund's shares and the nature and quality of the securities offered
in payment for such shares.
12. CIMCO and the Plans represent that the proposed sale of
additional shares is consistent with the investment
[[Page 41115]]
policy of the Capital Appreciation Stock Fund, Growth and Income Stock
Fund, Balanced Fund, Bond Fund and Money Market Fund, as recited in the
Fund's registration statement, and the sale of shares for investment
securities, as contemplated by the proposed transactions, is also
consistent with these investment policies provided that: (i) The shares
are sold at net asset value, and (ii) the securities are of the type
and quality that each investment portfolio would have acquired with the
sale proceeds had the shares been sold for cash. As recited in the
conditions listed below, the Fund's board of trustees will examine the
portfolios of each CUNA Mutual Life and CUNA Mutual Defined
Contribution Plan, capital appreciation stock investment portfolio,
growth and income stock investment portfolio, balanced investment
portfolio, bond investment portfolio and money market portfolio as well
as any securities offered by the other Plans and only approve the
proposed transactions if they, including a majority of these trustees
who are not interested persons of the Fund, or interested persons of
such persons, determine that (i) and (ii) would be met.
13. The proposed transactions, as described herein, are consistent
with the general purposes of the 1940 Act as stated in the Findings and
Declaration of Policy in Section 1 of the 1940 Act. The proposed
transactions do not present any of the conditions or abuses that the
1940 Act was designed to prevent.
14. CIMCO and the Plans also assert that the proposed transactions,
in addition to meeting the standards of Section 17(b) vis-a-vis the
Fund, are fair and reasonable to the Plans and are in the best
interests of the Plan participants as determined by the plan committees
of each Plan. In particular, CIMCO and the Plans submit that the
proposed transactions are consistent with the policy and purpose of the
Plans as recited in each Plan's plan documents, and are consistent with
the provisions of ERISA (applicable to defined contribution plans)
regarding reporting and disclosure, participation and vesting, funding,
fiduciary responsibility, administration and enforcement.
15. CIMCO and the Plans represent that the plan committee of each
Plan will determine that the proposed transactions are in the best
interests of participants in their Plan, and are consistent with the
policies and purpose of the Plan as recited in the Plans themselves. In
particular, the plan committee of each CUNA Mutual Life Defined
Contribution Plan and CUNA Mutual Defined Contribution Plan will
determine that the Fund's Capital Appreciation Stock Fund has
substantially the same investment objects as the Plans' capital
appreciation stock investment portfolio, the Fund's Growth and Income
Stock Fund has substantially the same investment objects as the Plans'
growth and income stock investment portfolio, the Fund's Balanced Fund
has substantially the same investment objectives as the Plans' balanced
investment portfolio, the Fund's Bond Fund has substantially the same
investment objectives as the Plans' bond investment portfolio, and that
the Fund's Money Market Fund has substantially the same investment
objectives as the Plans' money market investment portfolio.
16. CIMCO and the Plans represent that Plan participants will
benefit from the fact that the expense of liquidating Plan assets,
purchasing Fund shares with cash, and reinvesting the cash in
substantially the same assets, would be avoided. CIMCO and the Plans
further represent that, in light of the fact that the plan committees
of the CUNA Mutual Life and the CUNA Mutual Defined Contribution Plans
will have determined that the Fund's Capital Appreciation Stock Fund,
Growth and Income Stock Fund, Balanced Fund, Bond Fund and Money Market
Fund should replace the Plans' current capital appreciation stock
investment portfolio, growth and income stock investment portfolio,
balanced investment portfolio, bond investment portfolio and money
market investment portfolio, respectively, the proposed transactions
would greatly diminish the expense of this replacement to Plan
participants.
17. CIMCO and the Plans represent that the proposed transactions
are consistent with the provisions of ERISA applicable to defined
contribution plans regarding reporting and disclosure, participation
and vesting, funding, fiduciary responsibility, administration and
enforcement.
18. CIMCO and the plans represent and agree that if the exemptions
requested in the application pursuant to section 17(b) of the 1940 Act
are granted, the Plans will purchase shares of the Fund with investment
securities only if the following conditions are met:
1. The transactions are effected at the ``independent current
market price'' of the investment securities as that term is defined
in Rule 17a-7 under the 1940 Act, and at the net asset value of
appropriate Fund shares next computed after the closing of the
transaction.
2. No brokerage commission, fee (except for customary transfer
fees), or other remuneration is paid in connection with the
transactions.
3. The Fund's board of trustees, including a majority of those
trustees who are not interested persons of the Fund, or interested
persons of such persons, reviews the terms of the transactions, the
composition of the investment portfolios of the Plans to be used as
the purchase price in the transactions, and the value (and the
valuation method) of the investment securities comprising the
purchase price in the transactions; and adopts a resolution
determining separately for each transaction, that the transaction is
reasonable and fair to the existing investors in the appropriate
Fund investment portfolio, that the transaction would not subject
the Fund to overreaching and that the investment securities offered
by the Plan trustees on behalf of each Plan in that transaction are
consistent with the investment objective, policies and restrictions
of the related Fund investment portfolio.
4. The Fund agrees in writing that it will maintain and preserve
for a period of not less than six years from the end of the fiscal
year in which the transaction occurs, the first two years in an
easily accessible place, a written record of each such transaction
setting forth a description of the investment securities used as the
purchase price for Fund shares, the terms of such transaction, and
the information and materials upon which the determinations
described in condition 3 above were made.
Conclusion
1. CIMCO and the Plans request an order of the Commission pursuant
to section 17(b) of the 1940 Act, exempting them from section 17(a) of
the 1940 Act to the extent necessary to permit the Plans to purchase
shares of the Fund with investment securities of the Plans. CIMCO and
the Plans represent that, for the reasons stated above, the terms of
the proposed transactions, including the consideration to be paid and
received, are reasonable and fair to the Fund, to its Capital
Appreciation Stock Fund, its Growth and Income Stock Fund, its Balanced
Fund, its Bond Fund and its Money Market Fund, to shareholders and the
variable contract owners invested in each of these Funds and do not
involve overreaching on the part of any person concerned. Furthermore,
the proposed transactions will be consistent with the policies of the
Fund and of its Capital Appreciation Stock Fund, its Growth and Income
Stock Fund, its Balanced Fund, its Bond Fund and its Money Market Fund
as stated in the Fund's current registration statement and reports
filed under the 1940 Act and with the general purposes of the 1940 Act.
2. In addition, the section 6(c) Applicants request an order of the
Commission pursuant to section 6(c) of the 1940 Act, exempting them and
any future accounts from the provisions of
[[Page 41116]]
sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act, and Rule 6e-
3(T)(b)(15) thereunder, to the extent necessary for the Account and any
future accounts to hold shares of the Fund at the same time that the
Plans and the unaffiliated plans hold shares of the Fund or for the
Account and any unaffiliated future account simultaneously hold shares
of the Fund. The section 6(c) Applicants submit that, for the reasons
stated above, 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.
Jonathan G. Katz,
Secretary.
[FR Doc. 97-20048 Filed 7-30-97; 8:45 am]
BILLING CODE 8010-01-M
