[Federal Register Volume 59, Number 47 (Thursday, March 10, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-5477]
[[Page Unknown]]
[Federal Register: March 10, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-20111; 812-8648]
Composite Bond & Stock Fund, Inc., et al.; Notice of Application
March 3, 1994.
AGENCY: Securities and Exchange Commission (``SEC'' or ``Commission'').
ACTION: Notice of application for exemption under the Investment
Company Act of 1940 (the ``Act'').
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Applicants: Composite Bond & Stock Fund, Inc., Composite Growth Fund,
Inc., Composite Northwest 50 Fund Inc., Composite U.S. Government
Securities, Inc., Composite Income Fund, Inc., Composite Tax-Exempt
Bond Fund, Inc., Composite Cash Management Company (the ``Existing
Funds''), Composite Research & Management Co. (the ``Adviser''), and
Murphey Favre, Inc. (the ``Distributor'') on their own behalf and on
behalf of any other registered open-end management investment companies
which the Adviser may in the future serve as the investment adviser or
which the Distributor may in the future serve as the distributor that
are in the ``same group of investment companies,'' as defined in rule
11a-3 under the Act (together with the Existing Funds, the ``Funds'').
Relevant Act Sections: Exemption requested pursuant to section 6(c)
from sections 2(a)(32), 2(a)(35), 18(f), 18(g), 18(i), 22(c), 22(d) of
the Act and from rule 22c-1 thereunder.
Summary of Application: Applicants seek an order to permit the Funds:
(i) To issue and sell two classes of securities representing interests
in the same investment portfolio and (ii) to assess and, under certain
circumstances, waive or defer a CDSC on certain redemptions of their
shares.
FILING DATE: The application was filed on October 25, 1993 and amended
on January 6, 1994. In a letter dated March 2, 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 Commission by 5:30 p.m., on March
28, 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 may request
notification of a hearing by writing to the SEC's Secretary.
ADDRESSES: Secretarty, SEC, 450 Fifth Street NW., Washington, DC 20549.
Applicants, 601 West Riverside Avenue, Spokane, WA 99201-0694.
FOR FURTHER INFORMATION CONTACT:
James M. Curtis, Senior Counsel, at (202) 504-2406, or Barry D. Miller,
Senior Special Counsel, at (202) 272-3018 (Office of Investment Company
Regulation, Division of Investment Management).
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.
Applicants' Representations
1. Each Existing Fund is an open-end management investment company
registered under the Act. Composite Cash Management Company is the only
Existing Fund which currently has multiple series.
2. The Adviser, a wholly-owned, indirect subsidiary of Washington
Mutual Savings Bank, is registered with the Commission as an investment
adviser and provides investment advisory and management services to
each of the Existing Funds. Each Existing Fund has entered into a
management agreement with the Adviser.
3. The Distributor is a wholly-owned, indirect subsidiary of
Washington Mutual Savings Bank. Each Existing Fund has entered into a
distribution contract pursuant to which the Distributor acts as the
distributor for the Funds. Each Existing Fund currently reimburses the
Distributor for expenses incurred in connection with the distribution
of its shares pursuant to a plan adopted by the Existing Fund in
accordance with rule 12b-1 under the Act (a ``12b-1 Plan''). Murphey
Favre Securities Services, Inc., a wholly-owned indirect subsidiary of
Washington Mutual Savings Bank, provides transfer agent and related
services to each Existing Fund.
4. Each Existing Fund currently has only one class of shares.
Shares of each Existing Fund except Composite Cash Management Company
are currently sold at net asset value plus a sales load calculated as a
percentage of the offering price. Composite Cash Management Company is
a money market fund and its shares currently are sold at net asset
value with no front-end sales load.
5. The Directors of each Existing Fund, including all the members
of the Board of Directors who are not interested persons of that Fund
as defined in section 2(a)(19) of the Act (``Disinterested
Directors''), have approved the establishment of a multiple class
distribution system (the ``Multiple Class Distribution System''). The
Multiple Class Distribution System will enable a Fund to offer
investors the option of purchasing shares in one of two alternative
manners: (i) Subject to a conventional front-end sales load and a
separate 12b-1 Plan for that class (``Class A shares'') or (ii) subject
to no front-end sales load, but subject to a separate 12b-1 Plan for
that class with expected higher 12b-1 Plan fees and a CDSC (``Class B
shares'').
6. The Multiple Class Distribution System will be implemented by
having the Funds create and issue two classes of shares, with the
currently authorized shares of each Existing Fund being redesignated as
Class A shares. The actual creation and issuance of multiple classes of
shares will be made on a Fund-by-Fund basis. Each class of a Fund will
represent interests in the same portfolio of investments of such Fund.
Each class of a Fund will be identical except that: (i) Each class will
be subject to a different 12b-1 Plan and may pay different 12b-1 Plan
fees pursuant thereto; (ii) each class will bear different Class
Expenses (as defined below); (iii) each class will vote separately as a
class with respect to the 12b-1 Plan for that class except as provided
in condition 15 below; (iv) each class will have different exchange
privileges; (v) only Class B will have a conversion feature; and (vi)
each class will bear a different name or designation.
7. Investors purchasing Class A shares of the Funds other than
Composite Cash Management Company will do so at net asset value plus a
front-end sales load. The front-end sales load charges, volume
discounts and waivers for Class A shares of each Existing Fund are
initially expected to remain the same as currently in existence for
that Existing Fund. Class A shares of each Fund will also pay 12b-1
Plan fees pursuant to the 12b-1 Plan for that class (the ``Class A
Distribution Plan'').
8. Investors purchasing Class B shares will do so at net asset
value without the imposition of a front-end sales load. Class B shares
will pay an asset-based distribution charge pursuant to a 12b-1 Plan
for that class at an annual rate not to exceed 0.75% per annum of the
average daily net asset value of the Class B shares (the ``Class B
Distribution Plan'') and a service fee of 0.25% per annum.\1\ In
addition, a redemption of Class B shares made within a specified period
of their purchase generally will be subject to a CDSC imposed by the
Distributor. The CDSC will decrease over the applicable CDSC period, so
that redemptions of shares held after that period will not be subject
to a CDSC. The Class B alternative is designated to permit the investor
to purchase Class B shares without the assessment of a front-end sales
load and at the same time permit the Distributor to pay financial
intermediaries (typically broker-dealers) selling shares of each Fund a
commission on the sale of Class B shares.
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\1\The term ``service fee'' has the meaning given that term in
Article III, Section 26(d)(9) of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. (``NASD'') (NASD
Manual, CCH 2176). Applicants will comply with the provisions of
Section 26(d).
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9. Under the Multiple Class Distribution System, a Fund's Board of
Directors, acting in its sole discretion, could determine that any of
certain expenses attributable to the shares of a particular class
(``Class Expenses'') would be borne by the class to which they are
attributable. In addition to 12b-1 Plan fees, Class Expenses borne by a
class of shares will be limited solely to: (a) Transfer agency fees
attributable to a particular class; (b) printing and postage expenses
related to preparing and distributing to a particular class materials
such as shareholder reports, prospectuses and proxy statements; (c)
state and federal registration fees incurred by a specific class of
shares; and (d) legal expenses relating to a particular class of
shares.
10. Under the Multiple Class Distribution System, expenses that
were attributable to a particular series of a Fund, but not to a
particular class thereof, would be borne by each class on the basis of
the aggregate net assets of such class.
11. Because of the varying 12b-1 Plan fees and Class Expenses that
could be borne by each class of shares, the net income of (and
dividends payable with respect to) each class could be different from
the net income of (and dividend payable with respect to) the other
class of shares of a Fund. Dividends, however, paid to each class of
shares in a Fund would be declared and paid on the same days and at the
same times and, except as noted with respect to the varying 12b-1 Plan
fees and Class Expenses, would be determined and paid in the same
manner.
12. Under the Multiple Class Distribution System, Class A shares of
a Fund will be exchangeable for (i) Class A shares of the other Funds
or (ii) shares of any Fund which offers only one class of shares
(provided such Fund does not impose a CDSC), on the basis of relative
net asset value per share, plus any applicable front-end sales charge.
Class B shares of a Fund will be exchangeable for: (i) Class B shares
of the other Funds or (ii) shares of any Fund which offers only one
class (and which imposes a CDSC), on the basis of relative net asset
value per share, without the payment of any CDSC that might otherwise
be due on redemption of the Class B shares being exchanged. The
exchange privileges applicable to each of the classes of shares will
comply with rule 11a-3 under the Act.
13. The CDSC will not be imposed on redemptions of: (a) Shares
which were purchased more than six years (the ``CDSC Period'') prior to
their redemption, or (b) Class B Shares derived from reinvestment of
distributions. Furthermore, no CDSC will be imposed on an amount which
represents an increase in the value of the shareholder's account
resulting from capital appreciation above the amount paid for shares
purchased during the CDSC Period. In determining the applicability and
rate of a CDSC, it will be assumed that a redemption is made first of
any shares that were not subject to a CDSC and then of other shares in
the order purchased.
14. Applicants reserve the right to change from time to time the
CDSC and CDSC Period for any Fund. The CDSC Period, however, will not
exceed six years. In all cases, however, any change in the terms of a
CDSC would be reflected in the affected Fund's prospectus. In addition,
such changes would not affect shares that had already been issued
unless the change resulted in terms more favorable to the holders of
such shares.
15. Under the proposed CDSC arrangement, the CDSC will be
accompanied by a conversion feature. Under this conversion feature,
after the expiration of a specified conversion period, Class B shares
automatically convert at their net asset value into Class A shares. For
purposes of the conversion of Class B shares to Class A shares, all
Class B shares in a shareholder's Fund account that were purchased
through reinvestment of dividends and other distributions paid in
respect of Class B shares (and that have not converted) would be
considered to be held in a separate sub-account. Each time any Class B
shares in the shareholder's Fund account convert, an equal pro rata
portion of shares then in the sub-account also would convert and would
no longer be considered held in the sub-account. The portion would be
determined by the ratio that the shareholder's Class B shares being
converted bears to the shareholder's total Class B shares subject to
the conversion feature.
16. Under the proposed CDSC arrangement, any conversion of Class B
shares would be subject to the continuing availability of an opinion of
counsel or a private letter ruling from the Internal Revenue Service to
the effect that the conversion of shares did not constitute a taxable
event under federal income tax law. Conversion of Class B shares to
Class A shares might be suspended if such a opinion or ruling were no
longer available.
17. The Funds may waive the CDSC on redemptions of Class B shares:
(i) Following the death or disability of a shareholder, (ii) in
connection with certain distributions from an IRA or other retirement
plan,\2\ (iii) pursuant to the Funds' systematic withdrawal plan but
limited to 12% annually of the initial value of the account at the date
upon which the plan was established, and (iv) effected pursuant to the
right of the Fund to liquidate a shareholder's account.
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\2\The charge may be waived for any total or partial redemption
in connection with a lump-sum or other distribution from an
Individual Retirement Account (``IRA''), a custodial account
maintained pursuant to Internal Revenue Code of 1986, as amended
(``IRC'') section 403(b)(7), or a qualified pension or profit
sharing plan (``Retirement Plans'') following retirement or, in the
case of an IRA or Keogh Plan or custodial account pursuant to IRC
section 403(b)(7), after attaining age 59\1/2\. The charge also may
be waived on any redemption which results from a tax-free return of
an excess contribution pursuant to section 408(d) (4) or (5) of the
IRC, the return of excess deferral amounts pursuant to IRC section
401(k)(8) or 402(g)(2), or from the death or disability of the
employee. In sum, the CDSC may be waived on redemptions of Class B
shares which constitute Retirement Plan distributions which are
permitted to be made without penalty pursuant to the IRC, other than
tax-free rollovers or transfers of assets.
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18. The Funds may defer the CDSC on a redemption of Class B shares
of a Fund which is followed by a reinvestment of Class B shares of such
Fund or another Fund within 120 days after the redemption. The deferral
will be effected by reimbursement of the CDSC previously paid, with the
reimbursement being made by credit to the shareholder's account and
being paid by the Distributor. The Class B shares acquired upon such
reinvestment will remain subject to the CDSC applicable to the redeemed
shares. In computing the holding period of the Class B shares acquired
upon such reinvestment for purposes of the CDSC arrangement and the
conversion feature, the holding period of the redeemed shares will be
``tacked'' to the holding period of the acquired shares.
19. All front-end sales loads, asset-based sales charges, and CDSCs
of each Fund will comply with Article III, section 26(d) of the Rules
of Fair Practice of the NASD.
Applicants' Legal Analysis
1. Applicants request an exemptive order to the extent that the
proposed issuance and sale of Class A and Class B shares representing
interests in the Funds might be deemed: (i) To result in the issuance
of a ``senior security'' within the meaning of section 18(g) of the Act
and thus be prohibited by section 18(f)(1) of the Act and (ii) to
violate the equal voting provisions of section 18(i) of the Act. The
creation of multiple classes of shares may result in shares of a class
having ``priority over [another] class as to * * * payment of
dividends'' and having unequal voting rights, because under the
proposed arrangement: (1) The holders of different classes would pay
different fees pursuant to different 12b-1 Plans and different Class
Expenses and (2) each class would vote separately with respect to its
12b-1 Plan.
2. Moreover, owners of each class of shares may be relieved under
the Multiple Class Distribution System of a portion of the fixed costs
normally associated with investing in mutual funds since the costs
would, potentially, be spread over a greater number of shares than they
would be otherwise. Similarly, if sales increase because of the
addition of Class B shares, the owners of each class of shares could
expect to enjoy, under the proposed arrangement, lower effective
investment management fee rates than they would enjoy if the
arrangement were not implemented. Therefore, in order to achieve these
potential benefits and obviate the risks associated with the creation
of a separate series for each new class of shares, the Funds propose to
establish the Multiple Class Distribution System.
3. Applicants believe that the proposed allocation of expenses and
voting rights relating to the 12b-1 Plans in the manner described above
is equitable and would not discriminate against either group of
shareholders. Moreover, the possibility that the interests of the two
classes of shares will ever conflict would be remote. The rights and
privileges of each class are substantially identical and the interests
of each class of shareholders are adequately protected by the
requirements of rule 12b-1, including the requirement that the 12b-1
Plan be approved and continued on an annual basis by the Directors of
each Fund, including the Disinterested Directors.
4. The abuses that section 18 of the Act is intended to redress are
set forth in section 1(b) of the Act which declares ``that the national
public interest and the interest of investors are adversely affected *
* * (7) when investment companies by excessive borrowing and the
issuance of excessive amounts of senior securities increase unduly the
speculative character of their junior securities; or (8) when
investment companies operate without adequate assets or reserves.'' The
Multiple Class Distribution System described in the application does
not involve borrowings and does not affect the Fund's existing assets
or reserves. Nor will the proposed arrangement increase the speculative
character of the shares of the Funds, since all shares will participate
pro rata in all of each Fund's income and expenses (with the exception
of the differing 12b-1 Plan fees and expenses).
5. Each class of shares will be redeemable at all times. No class
of shares will have any preference or priority over the other class in
each Fund. No class will have distribution or liquidation preferences
with respect to particular assets, nor any right to require that lapsed
dividends be paid before dividends are declared on the other class, nor
any protection by a reserve or other account. The similarities and,
with respect to the 12b-1 Plans and associated voting rights and the
exchange privileges, dissimilarities, of the Class A and Class B
shares, will be fully disclosed in each Fund's prospectus. Investors
will not be given misleading impressions as to the safety or risk of
any class of shares and the nature of the Class A and Class B shares
will not be rendered speculative.
Applicants' Conditions
Applicants agree that the order of the Commission granting the
requested relief shall be subject to the following conditions:
1. Each class of shares will represent interests in the same
portfolio of investments of a Fund, and be identical in all respects,
except as set forth below. The only differences among the various
classes of a Fund will relate solely to: (a) The different payments
pursuant to the different 12b-1 Plans of each class; (b) the different
Class Expenses, which will be limited to: (i) Transfer agency fees
attributable to a particular class; (ii) printing and postage expenses
related to preparing and distributing to a particular class materials
such as shareholder reports, prospectuses, and proxy statements; (iii)
state and federal registration fees incurred by a particular class; and
(iv) legal expenses relating to a particular class; (c) the separate
class voting rights of each class with respect to the 12b-1 Plans
except as provided in condition 15 below, (d) the different exchange
privileges of each class; (e) only Class B will have a conversion
feature; and (f) the different name or designation of each class of
shares of the Funds. Any additional expenses not specifically
identified above that are subsequently identified and determined to be
properly allocated to one class of shares shall not be so allocated
until approved by the Commission.
2. The Directors of each Fund, including a majority of the
Disinterested Directors of the Fund, shall have approved the Multiple
Class Distribution System. The minutes of the meetings of the Directors
of each Fund regarding the deliberations of the Directors with respect
to the approvals necessary to implement the Multiple Class Distribution
System will reflect in detail the reasons for the Directors'
determination that the proposed Multiple Class Distribution System is
in the best interests of Fund and its shareholders.
3. The initial determination of the Class Expenses that will be
applied to a class of shares and any subsequent changes thereto will be
reviewed and approved by votes of the Directors of each Fund, including
a majority of the Disinterested Directors of the Fund. Any person
authorized to direct the allocation and disposition of monies paid or
payable by the Fund to meet Class Expenses shall provide to the
Directors, and the Directors shall review, at least quarterly, a
written report of the amount so expended and the purposes for which
such expenditures were made.
4. On an ongoing basis, the Directors of each Fund, pursuant to
their fiduciary responsibilities under the Act and otherwise, will
monitor the Fund for the existence of any material conflicts among the
interests of the various classes of shares. The Directors, including a
majority of the Disinterested Directors of the Fund shall take such
action as is reasonably necessary to eliminate any such conflicts that
may develop. The Adviser and the Distributor will be responsible for
reporting any potential or existing conflicts to the Directors. If a
conflict arises, the Adviser and the Distributor at their own cost will
remedy such conflict up to and including establishing a new registered
management investment company.
5. The Directors of each Fund will receive quarterly and annually
Statements concerning distribution and shareholders servicing
expenditures complying with paragraph (b)(3)(ii) of rule 12b-1, as it
may be amended from time to time. In the Statements, only expenditures
properly attributable to the sale or servicing of a particular class of
shares will be used to support the 12b-1 fee charged to shareholders of
that class of shares. Expenditures not related to the sale or servicing
of a particular class will not be presented to the Directors to justify
any fee attributable to that class of shares. The Statements, including
the allocations upon which they are based, will be subject to the
review and approval of the Disinterested Directors in the exercise of
their fiduciary duties.
6. Dividends paid by a Fund with respect to each class of shares,
to the extent any dividends are paid, will be calculated in the same
manner at the same time on the same day and will be in the same amount,
except that 12b-1 Plan fee payments and Class Expenses relating to each
respective class of shares will be borne exclusively by that class.
7. The methodology and procedures for calculating the net asset
value and dividends and distribution of the various classes and the
proper allocation of income and expenses among such classes have been
reviewed by an expert (the ``Expert'') who has rendered a report to
Applicants, which has been provided to the staff of the Commission,
that such methodology and procedures are adequate to ensure that such
calculations and allocations will be made in an appropriate manner. On
an ongoing basis, the Expert, or an appropriate substitute Expert, will
monitor the manner which the calculations and allocations are being
made and, based upon such review, will render at least annually a
report to the Funds that the calculations and allocations are being
made properly. The reports of the Expert shall be filed as part of the
periodic reports filed with the Commission pursuant to Section 30(a)
and 30(b)(1) of the 1940 Act. The work papers of the Expert with
respect to such reports, following the request by the Funds (which each
Fund agrees to provide), will be available for inspection by the
Commission staff upon the written request for such work papers by a
senior member of the Division of Investment Management, limited to the
Director, an Associate Director, the Chief Accountant, the Chief
Financial Analyst, an Assistant Director and any Regional Administrator
or Associate and Assistant Administrators. The initial report of the
Expert is a ``report on policies and procedures placed in operation''
and the ongoing reports will be ``reports on policies and procedures
placed in operation and tests of operating effectiveness'' as defined
and described in SAS No. 70 of the AICPA, as it may be amended from
time to time, or in similar auditing standards as may be adopted by the
AICPA from time to time.
8. The applicants have adequate facilities in place to ensure
implementation of the methodology and procedures for calculating the
net asset value and dividends and distributions among the classes of
shares and the proper allocation of income and expenses among such
classes of shares and this representation has been concurred with by
the Expert in the initial report referred to in condition 7 above and
will be concurred with by the Expert, or an appropriate substitute
Expert, on an ongoing basis at least annually in the ongoing reports
referred to in condition 7 above. The applicants agree to take
immediate corrective measures if this representation is not concurred
in by the Expert or appropriate substitute Expert.
9. The prospectus of each Fund will contain a statement to the
effect that a salespersons and any other person entitled to receive
compensation for selling or servicing Fund shares may receive different
compensation with respect to one particular class of shares over
another in the Fund.
10. The Distributor will adopt compliance standards to assist
registered representatives in determining when Class A and Class B
shares may be sold to particular investors. The applicants will require
all persons selling shares of the Fund to agree to conform to such
standards.
11. The conditions pursuant to which the exemptive order is granted
and the duties and responsibilities of the Directors of each Fund with
respect to the Multiple Class Distribution System will be set forth in
guidelines that will be furnished to the Directors.
12. Each Fund will disclose the respective expenses, performance
data, distribution arrangements, services, fees, sales loads, deferred
sales loads, and exchange privileges applicable to each class of shares
in every prospectus, regardless of whether all classes of shares are
offered through each prospectus. Each Fund will disclose the respective
expenses and performance data applicable to all classes of shares in
every shareholder report. The shareholder reports will contain, in the
statement of assets and liabilities and statement of operations,
information related to the Fund as a whole generally and not on a per
class basis. Each Fund's per share data, however, will be prepared on a
per class basis with respect to all classes of shares of such Fund. To
the extent any advertisement or sales literature describes the expenses
of performance data applicable to Class A or Class B, it will disclose
the expenses and/or performance data applicable to all classes of
shares. The information provided by applicants for publication in any
newspaper or similar listing of the Fund's net asset value and public
offering price will separately present Class A and Class B shares.
13. The applicants acknowledge that the grant of the exemptive
order requested by the application will not imply Commission approval,
authorization, or acquiescence in any particular level of payments that
the Fund may make pursuant to their 12b-1 Plans in reliance on the
exemptive order.
14. Class B shares will convert into Class A shares on the basis of
the relative net asset values to the two classes, without the
imposition of any sales load, fee, or other charge. After conversion,
the converted shares will be subject to an asset-based sales charge
and/or service fee (as those terms are defined in Article III, Section
26 of the NASD's Rules of Fair Practice), if any, that in the aggregate
are lower than the asset-based sales charge and service fee to which
they were subject prior to the conversion.
15. If a Fund implements any amendment to its 12b-1 plan (or, if
presented to shareholders, adopts or implements any amendment of a non-
rule 12b-1 shareholder services plan) that would increase materially
the amount that may be borne by the Class A shares under the plan,
existing Class B shares will stop converting into Class A unless the
Class B shareholders, voting separately as a class, approve the
proposal. The Directors shall take such action as is necessary to
ensure that existing Class B shares are exchanged or converted into a
new class of shares (``New Class A''), identical in all material
respects to Class A as it existed prior to implementation of the
proposal, no later than the date such shares previously were scheduled
to convert into Class A. If deemed advisable by the Directors to
implement the foregoing, such action may include the exchange of all
existing Class B shares for a new class (``New Class B''), identical to
existing Class B shares in all material respects except that New Class
B will convert into New Class A. New Class A or New Class B may be
formed without further exemptive relief. Exchanges or conversions
described in this condition shall be effected in a manner that the
Directors reasonably believe will not be subject to federal taxation.
In accordance with condition 4 any additional cost associated with the
creation, exchange, or conversion of New Class A or New Class B shall
be borne solely by the Adviser and the Distributor. Class B shares sold
after the implementation of the proposal may convert into Class A
shares subject to the higher maximum payment, provided that the
material features of the Class A plan and the relationship of such plan
to the Class B shares are disclosed in an effective registration
statement.
16. The relief requested from the provisions of sections 2(a)(32),
2(a)(35), 22(d), and 22(c) of the Act and rule 22c-1 thereunder shall
be subject to applicants' compliance with the provisions of proposed
Rule 6c-10 under the Act (Investment Company 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. 94-5477 Filed 3-9-94; 8:45 am]
BILLING CODE 8010-01-M