[Federal Register Volume 59, Number 102 (Friday, May 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12939]
[[Page Unknown]]
[Federal Register: May 27, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-20308; 812-8878]
Security Equity Fund, et al.; Notice of Application
May 20, 1994.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of Application for Exemption under the Investment
Company Act of 1940 (the ``Act'').
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APPLICANTS: Security Equity Fund, Security Growth and Income Fund,
Security Ultra Fund, Security Income Fund, Security Tax-Exempt Fund,
and Security Cash Fund, on behalf of themselves and each other
registered open-end management investment company for which Security
Management Company, or any entity controlling, controlled by, or under
common control with Security Management Company, in the future may
serve as investment adviser or for which Security Distributors, Inc.,
or any entity controlling, controlled by, or under common control with
Security Distributors, Inc. in the future may serve as distributor (the
``Funds''); Security Management Company (the ``Adviser''); and Security
Distributors, Inc. (the ``Distributor'').
RELEVANT ACT SECTIONS: Order requested pursuant to section 6(c) to
amend a previous order that granted applicants exemptive relief from
sections 2(a)(32), 2(a)(35), 18(f), 18(g), 18(i), 22(c), and 22(d) of
the Act and rule 22c-1 thereunder.
SUMMARY OF APPLICATION: Applicants seek to amend a prior order (the
``Prior Order'') that permits the Funds to offer multiple classes of
shares, assess a contingent deferred sales charge (``CDSC'') on certain
redemptions of shares, and waive the CDSC in certain cases.\1\ The
requested order would replace two of the waiver categories described in
the Prior Order with more inclusive categories, and would permit the
Funds to waive the CDSC in three additional cases.
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\1\Security Equity Fund, et al., Investment Company Act Release
Nos. 19732 (Sept. 23, 1993) (notice) and 19802 (Oct. 19, 1993)
(order).
FILING DATE: The application was filed on March 10, 1994 and amended on
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May 13, 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 June 14, 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, 700 Harrison, Topeka, Kansas 66636.
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 is available for a fee from the
SEC's Public Reference Branch.
Applicant's Representations
1. Each Fund is an open-end management investment company
registered under the Act. The Adviser serves as each Fund's investment
adviser and the Distributor acts as principal underwriter of the Funds'
shares. As permitted by the Prior Order, Security Equity Fund, Security
Growth and Income Fund, Security Ultra Fund, Security Income Fund, and
Security Tax-Exempt Fund presently offer a class of shares for sale
subject to a front-end sales charge, except that on shares purchased in
amounts of $1,000,000 or more, no front-end sales charge is assessed
but a CDSC of 1% is imposed if such shares are redeemed within two
years of purchase (``Class A shares''). The Funds also may offer a
second class of shares at net asset value subject to a CDSC.
2. Under the Prior Order, the Funds may waive the CDSC on
redemptions: (a) Following the death or disability, as defined in
section 72(m)(7) of the Internal Revenue Code of 1986 (the ``Code''),
of a shareholder if redemption is made within one year after death or
disability; (b) otherwise payable by employees participating in
qualified or non-qualified employee benefit plans or other programs
where (i) the employers or affiliated employers maintaining such plans
or programs have a minimum of 250 employees eligible for participation
in such plans or programs, or (ii) such plan's or program's aggregate
initial investment in the Security family of funds or other products
made available through the Distributor exceeds $1,000,000; and (c) in
connection with a distribution following retirement under a tax-
deferred retirement plan or attaining age 70\1/2\ in the case of an IRA
or Keogh plan or custodial account pursuant to section 403(b) of the
Code.
3. Applicants seek to amend these waiver categories to permit the
Funds to waive the CDSC on redemptions: (a) Following the death or
disability, as defined in section 72(m)(7) of the Internal Revenue Code
of 1986 (the ``Code''), of a shareholder if redemption is made within
one year after death or disability; (b) in connection with required
minimum distributions in the case of an IRA, SAR-SEP or Keogh or any
other retirement plan qualified under section 401(a), 401(k) or 403(b)
of the Code; (c) in the case of distributions from retirement plans
qualified under section 401(a) or 401(k) of the Code due to (i) returns
of excess contributions to the Plan, (ii) retirement of a participant
in the plan, (iii) a loan from the plan (repayment of loans, however,
will constitute new sales for purposes of assessing the CDSC), (iv)
``financial headship'' of a participant in the plan, as that term is
defined in Treasury Regulation section 1.401(k)-1(d)(2), as amended
from time to time, (v) termination of employment of a participant in
the plan, and (vi) any other permissible withdrawal under the terms of
the plan; (d) in connection with redemptions by (i) directors,
officers, and employees of Security Benefit Life Insurance Company and
its subsidiaries, (ii) agents licensed with Security Benefit Life
Insurance Company, (iii) spouses or minor children of any such agents,
(iv) the spouses, grandparents, parents, children, grandchildren,
siblings, nieces, and nephews of the directors, officers, and employees
(and their spouses) listed in (i), and (v) any trust, pension, profit
sharing or other benefit plan established by and of the foregoing
corporations for persons described above; (e) in connection with
redemption of shares of the Funds pursuant to a systematic withdrawal
program; and (f) of Class A shares purchased in an amount of $1,000,000
or more if such redemption occurs between 13 and 24 months of initial
purchase.
4. If the directors of a Fund determine to discontinue the waiver
of a CDSC or otherwise change the CDSC to the disadvantage of
shareholders, the disclosure in the Fund's prospectus will be revised
appropriately. Any shares purchased prior to the termination of such
waiver or the implementation of a change to the CDSC that disadvantages
shareholders will have the CDSC and waivers applied as provided in the
appropriate Fund's prospectus at the time the shares were purchased.
Applicants' Condition
Applicants agree that any order granting the requested relief shall
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.
[FR Doc. 94-12939 Filed 5-26-94; 8:45 am]
BILLING CODE 8010-01-M