[Federal Register Volume 59, Number 92 (Friday, May 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11704]


[[Page Unknown]]

[Federal Register: May 13, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Rel. No. 20283; 812-8946]

 

Select Advisors Trust, et al.; Application

May 6, 1994.
AGENCY: Securities and Exchange Commission (``SEC'').

ACTION: Application for exemption under the Investment Company Act of 
1940 (``Act'').

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APPLICANTS: Select Advisors Trust (``Trust I'') and Select Advisors 
Trust II (``Trust II''), on behalf of themselves and any registered 
open-end investment companies that are part of the same group of 
investment companies and: (a) Whose principal underwriter is the 
Distributor (as defined below), or a principal underwriter that is 
under common control with the Distributor, and (b) which hold 
themselves out to investors as being related for purposes of investment 
and investor services (the ``Trusts'')\1\ and Interactive Financial 
Solutions, Inc. (the ``Distributor'').

    \1\A registered open-end investment company of the same group of 
investment companies as Trust I and Trust II includes companies 
organized in the future and existing companies whose board of 
directors or board of trustees in the future determines to establish 
a contingent deferred sales charge (``CDSC'') as described below. 
Applicants undertake that any such company will be subject to each 
of the conditions contained in the application.
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RELEVANT ACT SECTIONS: Order requested under section 6(c) for 
exemptions from sections 2(a)(32), 2(a)(35), 22(c), and 22(d) and rule 
22c-1.

SUMMARY OF APPLICATION: Applicants seek an order to permit the Trusts 
to assess a CDSC on certain redemptions of shares, and to waive the 
CDSC in certain cases.

FILING DATE: The application was filed on April 22, 1994.

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 May 31, 1994, 
and should be accompanied by proof of service on applicants, in the 
form of an affidavit or, for lawyers, a certificate of service. Hearing 
requests should state the nature of the writer's interest, the reason 
for the request, and the issues contested. Persons who wish to be 
notified of a hearing may request such notification by writing to the 
SEC's Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth Street, NW., Washington, DC 20549. 
Applicants, 318 Broadway, Cincinnati, Ohio 45202.

FOR FURTHER INFORMATION CONTACT: James E. Anderson, Staff Attorney, at 
(202) 942-0573, or Robert A. Robertson, Branch Chief, at (202) 942-0564 
(Division of Investment Management, Office of Investment Company 
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee from 
the SEC's Public Reference Branch.

Applicant's Representations

    1. The Trusts are diversified, open-end management investment 
companies. Trust I currently has eight series: Emerging Growth Fund, 
International Equity Fund, Growth & Income Fund, Balanced Fund, Income 
Opportunity Fund, Bond Fund, Municipal Bond Fund, and Standby Reserve 
Fund. Trust II currently has seven series: Emerging Growth Fund, 
International Equity Fund, Growth & Income Fund, Balanced Fund, Income 
Opportunity Fund, Bond Fund, and Municipal Bond Fund. The series of 
Trust I and Trust II are referred to collectively as the ``Series.''
    2. The Trusts invest the assets of each of their Series (with the 
exception of the Standby Reserve Fund) in a corresponding portfolio 
that is a series of the Select Advisors Portfolios (the ``Portfolio 
Trust''), an open-end management investment company which currently 
offers seven series. Investments in the Portfolio Trust are made 
through the Signature Financial Group, Inc. (``Signature'') Hub and 
Spoke financial service method. The Portfolio Trust on behalf 
of each portfolio, and Trust I on behalf of the Standby Reserve Fund, 
have entered into an investment advisory agreement with Touchstone 
Investment Advisors, Inc. (the ``Adviser'') and an administrative 
services and fund accounting agreement with Signature. The Trusts have 
entered into an agreement for administrative services and fund 
accounting services with Signature and a distribution agreement with 
the Distributor.
    3. Shares of Trust I (other than Standby Reserve Fund, which has no 
sales charge) are offered at net asset value plus a front-end sales 
charge at a rate of up to 5.75% of the offering price. Each Series of 
Trust I (other than Standby Reserve Fund) also imposes a rule 12b-1 
distribution fee at an annual rate of up to .25% of its average daily 
net assets. No front-end sales charge is payable with respect to 
purchases of $1,000,000 or more of shares of Trust I. Shares of Trust 
II are offered without an initial sales charge, but are subject to rule 
12b-1 distribution and shareholder services fees at an annual rate of 
up to 1% of each Series' average daily net assets. Applicants now 
propose to allow the Trusts to impose a CDSC on certain redemptions of 
shares and to waive the CDSC under certain circumstances.
    4. Under the proposed CDSC arrangement, applicants generally will 
impose a CDSC of 1% on redemptions of shares of Trust I which have been 
acquired without a sales charge through a purchase of $1,000,000 or 
more and are redeemed within one year of their purchase. Applicants 
also propose to impose a CDSC of 1% on redemption of shares of Trust II 
made within one year of their date of purchase. Applicants in the 
future may decide to increase or reduce the CDSC percentage, shorten 
the applicable holding period, or create a scheduled range of CDSC 
percentages. Any future changes or variations will be disclosed in each 
affected prospectus and will not affect any shares of the Trusts that 
were issued prior to the disclosure thereof.
    5. The CDSC will be equal to a percentage of the lesser of (a) the 
net asset value of the shares at the time of purchase, or (b) the net 
asset value of the shares at the time of redemption. No CDSC will be 
imposed on amounts derived from capital appreciation, shares purchased 
through the reinvestment of dividends or capital gains distributions. 
In determining whether a CDSC is applicable, it will be assumed that 
shares not subject to the CDSC are redeemed first and that other shares 
are then redeemed in the order purchased.
    6. No CDSC will be imposed on exchanges or Trust shares in 
compliance with rule 11a-3. If, however, the shares acquired in an 
exchange are redeemed within one year following the original 
investment, the CDSC will be assessed. No CDSC will be imposed on 
shares purchased prior to the date the SEC grants the requested order.
    7. The Distributor will provide a pro rata refund, out of its own 
assets, of any CDSC paid in connection with a redemption of shares of a 
Trust (by crediting such refunded CDSC to the shareholder's account) 
if, within 90 days of such redemption, all or any portion of the 
redemption proceeds are reinvested in shares of the Trusts. The 
reinvested amount will be subject to the CDSC applicable prior to the 
redemption, and the CDSC time period will run from the original 
investment date but will be extended by the number of days between the 
redemption and reinvestment date.
    8. The CDSC will be waived or reduced in the following instances: 
(a) In connection with distributions from qualified retirement plans 
and other employee benefit plans qualified under section 401(a) of the 
Internal Revenue Code (the ``Code''); (b) distributions from a 
custodial account under section 403(b)(7) of the Code or an individual 
retirement account (an ``IRA'') due to death, disability, or attainment 
of age 59\1/2\; (c) a tax-free return of an excess contribution to an 
IRA; (d) for any partial or complete redemptions following death or 
disability (as defined in section 72(m)(7) of the Code) of a 
shareholder from an account in which the deceased or disabled is named, 
provided the redemption is made within one year of death or initial 
determination of disability; (e) involuntary redemptions as described 
in each prospectus; and (f) redemptions by (i) current or retired 
directors, trustees, partners, officers, and employees of Trust I, 
Trust II, the Portfolio Trust, the Distributor, the Advisor, family 
members of these persons, and trusts or plans primarily for such 
persons, (ii) trustees or other fiduciaries purchasing shares for 
certain retirement plans; and (iii) participants in pension, profit-
sharing or employee benefit plans that are sponsored by the Distributor 
and its affiliates.

Applicants' Legal Conclusion

    Applicants submit that the proposal to impose a CDSC is fair, in 
the public interest and the interest of the Trust's shareholders, and 
consistent with the protection of investors and the purposes fairly 
intended by the policy and the provisions of the Act. Consequently, 
applicants request an order of the Commission pursuant to section 6(c) 
of the Act for an exemption from sections 2(a)(32), 2(a)(35), 22(c), 
and 22(d) of the Act and rule 22c-1 thereunder to the extent necessary 
to permit the proposed CDSC arrangement.

Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    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. 94-11704 Filed 5-12-94; 8:45 am]
BILLING CODE 8010-01-M