[Federal Register Volume 59, Number 49 (Monday, March 14, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-5809] [[Page Unknown]] [Federal Register: March 14, 1994] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Rel. No. IC-20118; 812-8484] The OneGroupSM, et al.; Notice of Application March 7, 1994. AGENCY: Securities and Exchange Commission (``SEC''). ACTION: Notice of application for exemption under the Investment Company Act of 1940 (the ``Act''). ----------------------------------------------------------------------- APPLICANTS: The One GroupSM (``The One Group''), The Kent Funds, Allmerica Funds, and The Valiant Funds (collectively, the ``Trusts''); Banc One Investment Advisors Corporation (``BOIAC''), Old Kent Bank and Trust Company (``Old Kent''), Allmerica Investment Management Company, Inc. (``AIMCO''), and Integrity Management & Research, Inc. (``IMR'') (collectively, the Advisers''); and Allmerica Investments, Inc. (``Allmerica''), 440 Financial Distributors, Inc. (``440 Distributors''), and Integrity Investments, Inc. (``Integrity'') (collectively, the ``Distributors''). Applicants also seek relief on behalf of future investment companies for which the Advisers, or any person controlled by or under common control with the Advisers, may serve as investment adviser, or for which the Distributors, or any person controlled by or under common control with the Distributors, may serve as distributor. RELEVANT ACT SECTIONS: Order requested pursuant to section 6(c) for exemptions from sections 2(a)(32), 2(a)(35), 18(f)(1), 18(g), 18(i), 22(c), and 22(d) of the Act and rule 22c-1 thereunder. SUMMARY OF APPLICATION: Applicants seek an order to permit the Funds to issue and sell multiple classes of shares representing interests in the same portfolios of securities, assess a contingent deferred sales charge (``CDSC'') on certain redemptions, and waive the CDSC in certain instances. FILING DATE: The application was filed on July 2, 1993, and amended on November 12, 1993, January 31, 1994, and February 23, 1994. Counsel, on behalf of the applicants, has agreed to file a further amendment during the notice period to make certain technical changes. This notice reflects the changes to be made to the application by such further amendment. HEARING OR NOTIFICATION OF HEARING: An order granting the application will be issued unless the SEC orders a hearing. Interested persons may request a hearing by writing to the SEC's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the SEC by 5:30 p.m. on April 1, 1994, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of the date of a hearing may request notification by writing to the SEC's Secretary. ADDRESSES: Secretary, SEC, 450 Fifth Street NW., Washington, DC 20549. Applicants, 440 Lincoln Street, Worcester, Massachusetts 01653. FOR FURTHER INFORMATION CONTACT: James E. Anderson, Staff Attorney, at (202) 272-7027, or C. David Messman, Branch Chief, at (202) 272-3018 (Division of Investment Management, Office of Investment Company Regulation). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application is available for a fee from the SEC's Public Reference Branch. APPLICANTS' REPRESENTATIONS: 1. Each of the Trusts is a registered open-end management investment company organized as a Massachusetts business trust. Each of the Trusts offers shares in separate series (the ``series''). BOIAC, Old Kent, AIMCO, and IMR act as investment advisers for The One Group, The Kent Funds, Allmerica Funds, and The Valiant Fund, respectively. 440 Distributors acts as distributor for The One Group, and will act as distributor for The Kent Funds beginning April 1, 1994. Allmerica and Integrity act as distributors for Allmerica Funds and The Valiant Fund, respectively. 440 Financial Group of Worcester, Inc. (``440 Financial'') serves as administrator and sub- transfer agent for The One Group, administrator and transfer agent for The Valiant Fund, and will serve as the administrator and transfer agent for The Kent Funds beginning April 1, 1994. AIMCO, Allmerica, 440 Distributors, and 440 Financial are all wholly-owned subsidiaries of State Mutual Life Assurance Company of America. 2. Series of The One Group currently offer shares in four classes pursuant to exemptive orders previously granted by the SEC.\1\ Class A shares of The One Group's series, other than class A shares of money market series, are sold subject to a front-end sales charge. Class B shares, which are available only with respect to non-money market series, are sold subject to a CDSC. Retirement class shares are offered to certain investors without any front-end or deferred sales charge. Fiduciary class shares are offered to certain investors without a front-end or deferred sales charge. Class A, class B, and the retirement class shares are authorized to pay 440 Distributors distribution and shareholder services fees pursuant to a rule 12b-1 plan in annual amounts up to .35%, 1%, and .75% of average daily net assets, respectively. --------------------------------------------------------------------------- \1\SEI Liquid Asset Trust, et al., Investment Company Act Release Nos. 17144 (Sept. 20, 1989) (notice) and 17169 (Oct. 18, 1989) (order), as amended, Investment Company Act Release Nos. 17878 (Nov. 27, 1990) (notice) and 17915 (Dec. 24, 1990) (order), as amended, Investment Company Act Release Nos. 19698 (Sept. 9, 1993) (notice) and 19756 (Oct. 1, 1993) (order). On November 17, 1993, The One Group received no-action relief so that, pending receipt of the order requested hereby, it can continue to offer its shares for up to one year in reliance on prior orders. --------------------------------------------------------------------------- 3. Series of The Kent Funds currently offer two classes of shares pursuant to an exemptive order granted to The Kent Funds and its current distributor.\2\ Investment class shares of The Kent Funds' series, other than investment class shares of money market series, are sold subject to a front-end sales charge. Institutional class shares of the Kent Funds' series are sold without a front-end or deferred sales charge. Each series of The Kent Funds is authorized to pay 440 Distributors a monthly shareholder services fee of up to .25% of the series' average daily net assets pursuant to a rule 12b-1 plan. --------------------------------------------------------------------------- \2\The Kent Funds, et al., Investment Company Act Release Nos. 19033 (Oct. 15, 1992) (notice) and 19094 (Nov. 12, 1992) (order). On February 15, 1994, The Kent Funds received no-action relief so that it can continue to rely on that order for an interim period of up to one year, if any, between the assumption by 440 Distributors of the role as The Kent Funds' distributor and the granting of an order pursuant the application. --------------------------------------------------------------------------- 4. Shares of series of Allmerica Funds, other than money market series, are sold subject to a front-end sales charge. For purchases of $1,000,000 or more of shares of Allmerica Funds' non-money market series, no front-end sales charge is imposed but a 1% CDSC is imposed on certain redemptions. The CDSC is assessed in reliance upon an exemptive order granted by the SEC.\3\ Under a rule 12b-1 plan, series of Allmerica Funds pay Allmerica a shareholder services fees in the amount of up to .25% of average daily net assets of the non-money market series, and up to .10% of the average daily net assets of the money market series. --------------------------------------------------------------------------- \3\Investment Company Act Release Nos. 19236 (Jan. 26, 1993) (notice) and 19291 (Feb. 23, 1993) (order). --------------------------------------------------------------------------- 5. The Valiant Fund offers its series at net asset value without any sales charge. The Valiant Fund has adopted a rule 12b-1 plan, but no payments have been authorized or will be made during the current fiscal year. 6. Applicants seek relief to implement a proposed multiple pricing system (the ``Multiple Pricing System''). Under applicants' proposal, the non-money market series of the Trusts will provide investors the option of purchasing shares: (a) with a front-end sales load and in certain circumstances a distribution fee of up to .75% (``Class A shares''); (b) subject to a CDSC and distribution and shareholder services fees of up to 1% (``Class B shares''); (c) subject to a CDSC that will normally be lower than the CDSC imposed on Class B shares and a distribution and shareholder services fees of up to 1% (``Class C shares''); and (d) without a sales charge and either with or without distribution and shareholder services fees of up to .75% (``Class D shares''). Each of the money market series of the Trusts will provide investors the option of purchasing shares: (a) without a sales load and subject to a distribution fee of up to .35% (``Class E shares''); (b) without a sales load and subject to distribution and shareholder services fees of up to .75% (``Class F shares''); and (c) without sales charges or distribution fees (``Class G''). Each series' rule 12b-1 plan will be amended as necessary to accommodate the proposed fee arrangements of each class. 7. Existing shares of The One Group correspond to shares authorized under the Multiple Pricing System as follows: Class A shares of the non-money market series correspond to Class A shares, and class A shares of the money market series correspond to Class E shares; class B shares correspond to Class B shares; retirement class shares of the non-money market series correspond to Class D shares, and retirement class shares of the money market series correspond to Class F shares; fiduciary class shares of the non-money market series correspond to Class D shares, and fiduciary class shares of the money market series correspond to Class G shares. Existing shares of The Kent Fund correspond to shares authorized under the Multiple Pricing System as follows: investment class shares of the non-money market series correspond to Class A shares, and investment class shares of the money market series correspond to Class E shares; institutional class shares of the non-money market series correspond to Class D shares, and institutional class shares of the money market series correspond to Class F shares. Shares of Allmerica Funds' existing non-money market series will be redesignated Class A, and shares of the existing money market series will be redesignated Class E. 8. From time to time each Trust also may offer additional classes of shares. Certain of these additional classes (``Indirect Investor Classes'') will be offered only to Qualified Institutional Investors (as defined herein). All classes of shares other than the Indirect Investor Classes, including Classes A, B, C, D, E, F, and G, will be referred to herein as ``Direct Investor Classes.'' Qualified Institutional Investors eligible to purchase Indirect Investor Classes are limited to the following five categories: (a) benefit plans such as qualified retirement plans, other than individual retirement accounts and retirement plans of self-employed persons, with total assets in excess of $5 million or such other amounts as the Trusts may establish and with such other characteristics as the Trusts may establish; (b) defined contribution retirement plans maintained by the Advisers or their affiliates for the benefit of their employees; (c) banks and insurance companies purchasing shares for their own accounts; (d) registered investment companies not affiliated with 440 Financial or with any of the Advisers; and (e) endowment funds of non-profit organizations. 9. The benefit plans in category (a) will have a separate trustee for the plan who is vested with investment discretion as to plan assets. The plan beneficiaries will have limited ability to access their plan investments without incurring adverse tax consequences. Applicants will exclude self-directed plans from this category. The assets of the tax-exempt retirement plans in category (b) will be held in trust by a trustee, and the employees who participate in such plans will have limited pre-retirement access to their plan investments. The investors in categories (c), (d), and (e) will share with category (a) the essential features of substantial assets under management and investment decision-making by institutional management. Investors in the Direct Investor Classes will not be eligible to purchase shares of the Indirect Investor Classes. 10. Applicants propose to convert Class B shares, other than Class B shares acquired through the reinvestment of dividends and distributions, automatically to Class A shares a certain number of years after the end of the calendar month in which the shareholders' order to purchase was accepted. Shares purchased through the reinvestment of dividends and distributions will be considered held in a separate sub-account, and each time any Class B shares convert to Class A shares, a pro rata portion of the Class B shares purchased through the reinvestment of dividends or distributions also will convert. The purpose of the conversion feature is to relieve the holders of the Class B shares from continuing to pay a high ongoing distribution fee after the Class B shares have been outstanding long enough for the Distributor to have recouped its distribution expenses. 11. Shares of one class of a series generally may be exchanged for a corresponding class of another series belonging to the same ``family of funds'' (as defined in rule 11a-3). Each Trust is a separate family of funds. Exchanges will not be permitted between Direct Investor Classes of shares and Indirect Investor Classes of shares. 12. Applicants seek exemptive relief to permit them to impose a CDSC on redemptions of shares of Classes B and C. In no event would the aggregate amount of the Class B CDSC exceed 6% of the aggregate purchase payments made by an investor for Class B shares of a series. The CDSC for the Class C shares of a series will not exceed 1% of the aggregate purchase payments. The CDSC will be calculated as the lesser of the amount that represents a specified percentage of the net asset value of the shares at the time of purchase or redemption. In determining the applicability and rate of any CDSC, it will be assumed that a redemption is made first of shares representing capital appreciation, next of shares representing reinvestment of dividends and capital gains distributions, and finally of other shares held by the shareholder for the longest period of time. 13. The Trusts intend to waive the CDSC in the event of one or more of the following occurrences: (a) on redemptions following the death or disability, as defined in section 72(m)(7) of the Internal Revenue Code or 1986, as amended (the ``Code''), of a shareholder if redemption is made within one year of death or disability of a shareholder, as relevant; (b) in connection with a lump-sum or other distribution following retirement or, in the case of an IRA or Keough Plan or a custodial account pursuant to section 403(b)(7) of the Code, after attaining age 59\1/2\ or, in connection with redemptions which result from a tax-free return of an excess contribution pursuant to section 408(d) (4) or (5) of the Code or from the death or disability of the employee; (c) in connection with redemptions of shares purchased by officers, directors or trustees, and employees of the series, the Advisers and their affiliated entities the Distributors and their affiliated entities, and by the members of the immediate families of such persons; (d) in connection with redemptions of shares made pursuant to a shareholder's participation in any systematic withdrawal plan adopted by a series; (e) in connection with redemptions effected by advisory accounts managed by the Advisers and their affiliated entities; (f) in connection with redemptions by tax-exempt employee benefit plans as a result of the enactment or promulgation of any law or regulation pursuant to which continuation of the investment in the series would be improper; and (g) in connection with redemptions effected by a registered investment company in connection with the combination of the investment company with a series by merger, acquisition of assets, or by any other transaction. In addition, the Trusts intend to reduce the CDSC in connection with redemptions by large accountholders. 14. Each series may provide a pro rata credit for any CDSC paid in connection with a redemption of shares from a series followed by a reinvestment in the series effected within 365 days, or a shorter period, of the redemption. The credit will be paid for by the series' distributor. Applicants' Legal Analysis 1. Applicants request an order exempting them from the provisions of sections 18(f)(1), 18(g), and 18(i) to the extent that the proposed issuance and sale of various classes of shares representing interests in the same Trust might be deemed: (a) to result in a ``senior security'' within the meaning of section 18(g); (b) prohibited by section 18(f)(1); and (c) to violate the equal voting provisions of section 18(i). 2. Applicants believe that the proposed multi-class arrangement will better enable the Trusts to meet the competitive demands of today's financial services industry. Under the multiclass arrangement, an investor will be able to choose the method of purchasing shares that is most beneficial given the amount of his or her purchase, the length of time the investor expects to hold his or her shares, and other relevant circumstances. The proposed arrangement would permit the Trusts to facilitate both the distribution of their securities and provide investors with a broader choice as to the method of purchasing shares without assuming excessive accounting and bookkeeping costs or unnecessary investment risks. 3. The proposed allocation of expenses and voting rights relating to the rule 12b-1 plans in the manner described is equitable and would not discriminate against any group of shareholders. In addition, such arrangements should not give rise to any conflicts of interest because the rights and privileges of each class of shares are substantially identical. 4. Applicants believe that the proposed multi-class arrangement does not present the concerns that section 18 was designed to address. The multi-class arrangement will not increase the speculative character of the shares of the Trusts. The multi-class arrangement does not involve borrowing, nor will it affect the Trust's existing assets or reserves, and does not involve a complex capital structure. Nothing in the multi-class arrangement suggests that it will facilitate control by holders of any class of shares. 5. Applicants submit that the requested exemption to permit the Trusts to implement the proposed CDSCs is appropriate in the public interest, consistent with the protection of investors, and consistent with the purposes fairly intended by the policy and provisions of the Act. The proposed CDSC arrangements will provide shareholders the option of having their full payment invested for them at the time of their purchase of shares of the Trusts with no deduction of an initial sales charge. Applicants' Conditions Applicants agree that any order 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 series and be identical in all respects, except as set forth below. The only differences among various classes of shares of the same series will relate solely to: (a) the method of financing certain expenses that may be imposed upon a particular class of shares and which are limited to (i) incremental transfer agent fees identified by the transfer agent as being attributable to a specific class of shares, (ii) printing and postage expenses related to preparing and distributing materials such as shareholder reports, prospectuses, and proxies to current shareholders of a specific class of shares, (iii) blue sky registration fees incurred by a class of shares, (iv) SEC registration fees incurred by a class of shares, (v) the expenses of administrative personnel and services as required to support the shareholders of a specific class, (vi) litigation or other legal expenses relating solely to one class of shares, (vii) trustees' fees incurred as a result of issues relating to one class of shares, and (viii) any other incremental expenses subsequently identified that should be properly allocated to one class of shares which shall be approved by the SEC pursuant to an amended order, (collectively, ``Class Expenses''); (b) the impact of different rule 12b-1 plan (if any) or shareholder services plan (if any) payments made by a particular class of shares; (c) voting rights on matters which pertain to rule 12b-1 plans or shareholder services plans; (d) the conversion feature applicable to classes of shares sold subject to a CDSC which are convertible into a class of shares not subject to a CDSC; and (e) the designation of each class of shares of a series. 2. If a series implements any amendment to its rule 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 a class of shares under the plan into which another class will convert (the ``Target Class''), existing shares of the class that will convert (``Purchase Class'') will stop converting into Target Class shares unless the Purchase Class shareholders, voting separately as a class, approve the proposal. The trustees shall take such action as is necessary to ensure that existing Purchase Class shares are exchanged or converted into a new class of shares (``New Target Class''), identical in all material respects to the Target Class as it existed prior to implementation of the proposal, no later than such shares previously were scheduled to convert into Target Class shares. If deemed advisable by the trustees to implement the foregoing, such action may include the exchange of all existing Purchase Class shares for a new class (``New Purchase Class''), identical to existing Purchase Class shares in all material respects except that New Purchase Class shares will convert into New Target Class shares. New Target Class or New Purchase Class may be formed without further exemptive relief. Exchanges or conversions described in this condition shall be effected in any manner that the trustees reasonably believe will not be subject to federal taxation. In accordance with condition 6 below, any additional cost associated with the creation, exchange, or conversion of New Target Class or New Purchase Class shall be borne solely by the Advisers and the Distributors. Purchase Class shares sold after the implementation of the proposal may convert into Target Class shares subject to the higher maximum payment, provided that the material features of the Target Class plan and the relationship of such plan to the Purchase Class shares are disclosed in an effective registration statement. 3. Any class of shares with a conversion feature will convert into another class of shares on the basis of the relative net asset values of 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. 4. The trustees of each of the Trusts, including a majority of the independent trustees, shall have approved the Multiple Pricing System, prior to the implementation of the Multiple Pricing System by a particular series. The minutes of the meetings of the trustees regarding their deliberations with respect to the approvals necessary to implement the Multiple Pricing System will reflect in detail the reasons for determining that the Multiple Pricing System is in the best interest of both the series and their respective shareholders. 5. The initial determination of the Class Expenses, if any, that will be allocated to a particular class of a series and any subsequent changes thereto will be reviewed and approved by a vote of the trustees, including a majority of the independent trustees. Any person authorized to direct the allocation and disposition of monies paid or payable by a series to meet Class Expenses shall provide to the trustees, and the trustees shall review, at least quarterly, a written report of the amounts so expended and the purpose for which such expenditures were made. 6. On an ongoing basis, the trustees, pursuant to their fiduciary responsibilities under the Act and otherwise, will monitor each series for the existence of any material conflicts among the interests of the various classes of shares. The trustees, including a majority of the independent trustees, shall take such action as is reasonably necessary to eliminate any such conflicts that may develop. The Advisers and the Distributors will be responsible for reporting any potential or existing conflicts to the trustees. If a conflict arises, the Advisers and the Distributors at their own costs will remedy such conflict up to and including establishing a new registered management investment company. 7. The trustees will receive quarterly and annual statements concerning distribution and shareholder 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 distribution expenditures properly attributable to the sale or servicing of a class of shares will be used to support any rule 12b-1 plan or shareholder services plan expenditures charged to such class. Expenditures not related to the sale or servicing of a specific class will not be presented to the trustees to support rule 12b-1 plan or shareholder services plan expenditures charged to shareholders of such class of shares. The statements, including the allocations upon which they are based, will be subject to the review and approval of the independent trustees in the exercise of their fiduciary duties. 8. If any class will be subject to a shareholder services plan, such shareholder services plan will be adopted and operated in accordance with the procedures set forth in rule 12b-1(b) through (f) as if the expenditures made thereunder were subject to rule 12b-1, except that shareholders will not enjoy the voting rights specified in rule 12b-1. 9. Dividends paid by a series 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 expenditures associated with any rule 12b-1 plan or shareholder services plan and any Class Expense will be borne by the affected class. 10. The methodology and procedures for calculating the net asset value and dividends/distributions of the various classes and the proper allocation of income and expenses among such classes has been reviewed by an expert (the ``Expert''). The Expert has rendered a report to the applicants (and such report has been filed with the SEC as an exhibit to the application), stating 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 in which the calculations and allocations are being made and based upon such review, will render at least annually a report to the Trusts 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 SEC pursuant to sections 30(a) and 30(b)(1) of the Act. The work papers of the Experts with respect to such reports, following request by the Trusts (which the Trusts agree to make), will be available for inspection by the SEC staff upon the written request for such work papers by a senior member of the Division of Investment Management or of a Regional Office of the SEC, limited to the Director, an Associate Director, the Chief Accountant, the Chief Financial Analyst, any Assistant Director, and any Regional Administrator or Associate and Assistant Administrator. 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. 11. Applicants have adequate facilities in place to ensure implementation of the methodology and procedures for calculating the net asset value and dividends/distributions among the various classes of shares and the proper allocation of income and expenses among such classes of shares and this representation will be concurred with by the Expert in the initial report referred to in condition 10 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 10 above. The applicants agree to take immediate corrective action if the Expert, or appropriate substitute Expert, does not so concur in the ongoing reports. 12. The prospectuses of the series relating to each class of shares will contain a statement to the effect that financial institutions, groups, and any other person entitled to receive any compensation for selling series shares may receive different levels of compensation for selling one particular class of shares over another in a series. 13. The series' Distributor will adopt compliance standards as to when shares of a particular class may appropriately be sold to particular investors. Applicants will require all persons selling shares to agree to conform to these standards. Applicants' compliance standards will require the investors eligible to purchase an Indirect Investor Class of shares of a non-money series offering such shares to invest in the Indirect Investor Class of shares, rather than the Direct Investor Classes of shares of such non-money market series. Applicants' compliance standards will also require all investors eligible to purchase an Indirect Investor Class of shares of a money market series offering such shares, to invest in an Indirect Investor Class of shares of such money market series. 14. The conditions pursuant to which the exemptive order is granted and the duties and responsibilities of the trustees with respect to the Multiple Pricing System will be set forth in guidelines which will be furnished to the trustees. 15. Each Trust will disclose the respective expenses, performance data, distribution arrangements, service fees, initial sales loads, deferred sales loads, and exchange privilege applicable to each Director Investor Class of shares in every prospectus offering any Direct Investor Classes of shares. Each Trust will disclose the respective expenses, performance data, distribution arrangements, service fees, initial sales loads, deferred sales loads, and exchange privileges, if any, applicable to each Indirect Investor Class of shares in every prospectus offering Indirect Investor Classes of shares. The Indirect Investor Classes will be offered solely pursuant to separate prospectus(es). The prospectus(es) for the Indirect Investor Classes will disclose the existence of the Trust's Direct Investor Classes and will identify the entities eligible to purchase such shares, and the prospectuses for the Trust's Direct Investor Classes will disclose the existence of the Indirect Investor Classes and will identify the persons eligible to purchase shares of such classes. Each Trust will disclose the respective expenses and performance data applicable to all classes in every shareholder report. The shareholder reports will contain, in the statement of assets and liabilities and statement of operations, information related to the trust as a whole generally, and not on a per class basis. Each Trust's per share data, however, will be prepared on a per class basis with respect to all classes of shares of such Trust. To the extent any advertisement or sales literature describes the expenses or performance data applicable to any Direct Investor Class of shares, it will also disclose the expenses and/or performance data applicable to all Direct Investor Classes of shares. Advertising materials reflecting the expenses or performance data for the Indirect Investor Classes will be available only to Qualified Institutional Investors eligible to purchase such Indirect Investor Classes and to the extent any such advertisement or sales literature describes the expenses or performance data applicable to any one Indirect Investor Class of shares, it will also disclose the expenses or performance data applicable to all Indirect Investor Classes of shares. The information provided by applicants for publication in any newspaper or similar listing of the Trusts' asset values and public offering prices for Direct Investor Classes of shares will present each class of shares, except the Indirect Investor Classes, separately. 16. Applicants acknowledge that the grant of the exemptive order requested by this application will not imply SEC approval, authorization, or acquiescence in any particular level of payments that the Trust may make pursuant to a rule 12b-1 distribution plans or shareholder services plans in reliance on the exemptive order. 17. Applicants will comply with the provisions of proposed Rule 6c- 10 under the Act, Investment Company Act Release No. 16169 (Nov. 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. 94-5809 Filed 3-11-94; 8:45 am] BILLING CODE 8010-01-M