[Federal Register Volume 59, Number 224 (Tuesday, November 22, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-28735]
[[Page Unknown]]
[Federal Register: November 22, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-20705; 812-9196]
AFD Exchange Reserves, et al.; Notice of Application
November 15, 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: AFD Exchange Reserves, The Alliance Fund, Inc., The
Alliance Portfolios, Alliance All-Asia Investment Fund, Inc., Alliance
Balanced Shares, Inc., Alliance Bond Fund, Inc., Alliance Counterpoint
Fund, Alliance Global Dollar Government Fund, Inc., Alliance Global
Small Cap Fund, Inc., Alliance Growth and Income Fund, Inc., Alliance
Income Builder Fund, Inc., Alliance International Fund, Alliance
Mortgage Securities Income Fund, Inc., Alliance Mortgage Strategy
Trust, Inc., Alliance Multi-Market Strategy Trust, Inc., Alliance
Municipal Income Fund, Inc., Alliance Municipal Income Fund II,
Alliance New Europe Fund, Inc., Alliance North American Government
Income Trust, Inc., Alliance Premier Growth Fund, Inc., Alliance Quasar
Fund, Inc., Alliance Short-Term Multi-Market Trust, Inc., Alliance
Technology Fund, Inc., Alliance Utility Income Fund, Inc., Alliance
Worldwide Privatization Fund, Inc. (individually a ``Fund'' and
collectively the ``Funds''), Alliance Capital Management L.P. (the
``Adviser'') and Alliance Fund Distributors, Inc. (the
``Distributor''). Applicants request that any order apply to all future
series of the Funds, or any registered open-end investment companies
that are part of the same group of investment companies and (a) whose
investment adviser is Adviser or an investment adviser that is under
common control with Adviser, (b) whose principal underwriter is
Distributor or a principal underwriter that is under common control
with Distributor, (c) which hold themselves out to investors as being
related for purposes of investment and investor services, and (d) whose
shares are divided into up to four classes of securities whose sales
load, CDSC, rule 12b-1 fees, exchange privileges, conversion feature
and differences in voting rights are identical to those in the
application.\1\
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\1\A registered open-end investment company of the same group of
investment companies as the Funds includes such a company organized
in the future and such a company that is currently registered whose
board of directors or trustees in the future determines to establish
a distribution system pursuant to which up to four classes of shares
may be offered and sold as described in the application. Any such
series or companies will be subject to each of the conditions
contained in the application.
relevant act sections: Exemptions requested pursuant to section 6(c) of
the Act for an order exempting applicants 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-
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1 thereunder.
summary of application: Applicants seek an order permitting the Funds
and future series of the Funds to issue up to four classes of shares
and to impose a contingent deferred sales charge (``CDSC'') in
connection with the redemption of shares of the Funds.
filing date: The application was filed on August 23, 1994 and amended
on October 24, 1994 and November 14, 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 December 9,
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 notification by writing to the
SEC's Secretary.
addresses: Secretay, SEC, 450 Fifth Street N.W., Washington, D.C.
20549. Applicants, 1345 Avenue of the Americas, New York, New York
10105.
FOR FURTHER INFORMATION CONTACT:
Joseph G. Mari, Senior Special Counsel, at (202) 942-0567, or Barry D.
Miller, Senior Special Counsel, 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.
Applicants' Representations
1. Each Fund is an open-end management investment company
registered under the Act. Adviser serves as each Fund's investment
adviser and manager and Distributor acts as the principal underwriter
of each of the Fund's shares.
2. The Funds currently are permitted to offer up to three classes
of shares and to impose a CDSC on certain redemptions of two classes of
shares and to waive the CDSC in certain circumstances pursuant to prior
exemptive orders (the ``Prior Orders'').\2\
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\2\Investment Company Act Release Nos. 17295 (Jan. 12, 1990)
(notice) and 17330 (Feb. 2, 1990) (order); The Alliance Fund, Inc.,
Invsetment Company Act Release Nos. 18734 (May 27, 1992) (notice)
and 18805 (June 23, 1992) (order); The Alliance Fund, Inc.,
Investment Company Act Release Nos. 19203 (Dec. 31, 1992) (notice)
and 19235 (Jan. 26, 1993) (order); and The Alliance Fund, Inc.,
Invsetment Company Act Release Nos. 19328 (Mar. 11, 1993) (notice)
and 19386 (Apr. 6, 1993) (order).
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3. Applicants seek on order, which will supersede the Prior Orders,
to allow the Funds to issue and sell up to four classes of shares
pursuant to a multiple distribution system (the ``Multiple Distribution
System''). Under the requested order, applicants may offer (i) ``Class
A'' shares sold subject to a conventional front-end sales load and a
rule 12b-1 fee which includes a service fee and, under certain
circumstances, a CDSC; (ii) ``Class B'' shares sold subject to a CDSC
(for a period typically within a range of three to six years) and a
rule 12b-1 fee which includes a service fee; (iii) ``Class C'' shares
sold subject to a rule 12b-1 fee which includes a service fee and a
CDSC; and (iv) a class of shares (the ``Class Y'' shares) to be offered
and sold without any front-end sales load, CDSC or rule 12b-1 fee
payable by the Fund. Class Y shares will be sold to certain types of
investors, including certain institutional investors, as described in a
Fund's prospectus.
4. Each of the four classes of shares will represent interests in
the same portfolio of investments of a Fund. Each of the four classes
of shares will be identical except that
(i) the rule 12b-1 fees (which include a service fee within the
meaning of Article III, Section 26 of the Rules of Fair Practice of the
National Association of Securities Dealers (``NASD'') (``service
fee'')) payable by the Fund to Distributor will be higher for Class B
and Class C shares than they will be for Class A shares;
(ii) the transfer agency costs attributable to each class may
differ;
(iii) each class may bear different Class Expenses, as defined in
condition 1 below;\3\
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\3\Class expenses include fees under a non-rule 12b-1
shareholder services plan. None of the Funds currently has adopted a
non-rule 12b-1 shareholder services plan. Any such plan adopted in
the future would comply with condition 16 below.
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(iv) the four classes will have different exchange privileges;
(v) only Class B shares will have a conversion feature; and
(vi) each affected class of shares will vote separately as a class
with respect to the Fund's rule 12b-1 plan and on other matters for
which separate class voting is appropriate under applicable law;
provided that, if the Fund submits to a vote of both the Class A
shareholders and the Class B shareholders an amendment to the Fund's
rule 12b-1 plan that would materially increase the amount to be paid
thereunder with respect to the Class A shares, the Class A shareholders
and the Class B shareholders will vote separately by class.
5. The distribution structure for all classes of shares will comply
with the applicable NASD Rules of Fair Practice relating to sales
charges, including front-end, deferred and asset-based sales charges.
Additionally, any service fees paid by the Funds will meet NASD
requirements for the imposition of a service fee.
6. All Class B shares of the Funds will automatically convert to
Class A shares a certain number of years after the end of the calendar
month in which the shareholder's order to purchase was accepted. Such
number of years, which will depend on the conversion schedule that
applied at the time the Class B shares were originally purchased, may
be up to eight. Shares purchased through the reinvestment of dividends
and other distributions in respect of Class B shares will be treated as
Class B shares for purposes of the higher rule 12b-1 fee. However, for
purposes of conversion to Class A shares, all shares in a shareholder's
account which are purchased through the reinvestment of dividends and
distributions paid in respect of Class B shares (and which have not
converted to Class A shares as provided in the following sentence) will
be considered held in a separate sub-account. Each time any Class B
shares in the shareholder's account (other than those in the sub-
account referred to in the preceding sentence) convert to Class A
shares, an equal pro rata portion of the Class B shares in the sub-
account will also convert to Class A shares. The conversion of Class B
to Class A shares may be suspended if the opinion of counsel obtained
by the Funds that the conversion does not constitute a taxable event
under current federal income tax law is no longer available.
7. Adviser or Distributor may choose to reimburse or waive rule
12b-1 fees, transfer agency costs or any Class Expenses on certain
classes on a voluntary, temporary basis. The amount of rule 12b-1 fees,
transfer agency costs or any Class Expenses waived or reimbursed by
Adviser or Distributor may vary from class to class. Rule 12b-1 fees,
transfer agency costs and any Class Expenses are by their nature
specific to a given class and obviously expected to vary from one class
to another. Applicants thus believe that it is acceptable and
consistent with shareholder expectations to reimburse or waive rule
12b-1 fees, transfer agency costs or any Class Expenses at different
levels for different classes of the same Fund.
8. In addition, Adviser or Distributor may waive or reimburse Fund
expenses (with or without a waiver or reimbursement of rule 12b-1 fees,
transfer agency costs or any Class Expenses) but only if the same
proportionate amount of Fund expenses are waived or reimbursed for each
class. Thus, any Fund expenses that are waived or reimbursed would be
in turn credited to each class of shares of the Fund based on the
relative net assets of the classes. Fund expenses apply equally to all
classes of a Fund. Accordingly, it may not be appropriate to waive or
reimburse Fund expenses at different levels for different classes of a
Fund.
9. Adviser's or Distributor's ability to effect any of the waivers
or reimbursements described above is subject to the Funds' receipt of a
ruling of the Internal Revenue Service that the effecting of such
waivers or reimbursements does not result in any Fund's dividends or
distributions constituting ``preferential dividends'' under the
Internal Revenue Code.
10. Under the Multiple Distribution System, each of the four
classes may be given exchange privileges. Shares of each class
generally will be permitted to be exchanged only for shares of a class
with similar characteristics in another Fund. Class Y shares of a Fund
may be exchangeable for Class Y shares of other Funds and shares of
certain money market funds sponsored by Adviser. If the aggregate net
asset value of shares of all Funds held by an investor reaches the
minimum amount at which an investor in a Fund may purchase Class A
shares of the Fund at net asset value without a front-end sales load or
more on or before December 15 in any year, all Class B or Class C
shares of the Fund held by the investor may be exchanged, at the
investor's request, at net asset value, without any front-end sales
load or CDSC, for Class A shares of the Fund. All exchanges that are
made at other than relative net asset values of the respective
securities to be exchanged will be made in accordance with rule 11a-3.
11. Applicants seek an order to permit the Funds to assess a CDSC
on redemptions of Class A shares sold pursuant to a complete front-end
sales load waiver applicable to large purchases in addition to a CDSC
on certain redemptions of Class B and Class C shares and to waive such
a CDSC in certain circumstances. The CDSC will not be imposed on
redemptions of shares that were purchased more than a specified period
(the ``CDSC Period'') prior to their redemption or that were derived
from the reinvestment of distributions; or 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 period. Any CDSC will be imposed only on the
lesser of the value of the shares redeemed (exclusive of reinvested
distributions) or the total cost of such shares. In determining whether
a CDSC is applicable, it is assumed, unless the shareholder otherwise
specifically directs, that a redemption is made first of any shares in
the shareholder's Fund account that are not subject to a CDSC, second
of shares derived from reinvestment of dividends, third of shares held
for a period longer than the CDSC Period, and fourth of shares held for
a period no longer than the CDSC Period. In determining the rate of any
applicable CDSC, it is assumed that shares held by the investor for the
longest period of time within the CDSC Period are redeemed. No CDSC
will be imposed on any shares issued by the Funds prior to the date of
the order requested by this application except as allowed by the Prior
Orders.
12. If a Fund waives or reduces the CDSC, such waiver or reduction
will be uniformly applied to all offerees in the class specified. In
waiving or reducing a CDSC, the Funds will comply with the requirements
of rule 22d-1 under the Act as if such CDSC were a sales load. If the
Directors/Trustees of a Fund determine to discontinue a waiver of a
CDSC, the disclosure in the Fund's prospectus will be appropriately
revised. Any Class A, Class B or Class C shares purchased prior to the
termination of such waiver would be able to have the CDSC waived as
provided in the Fund's prospectus as in effect at the time of the
purchase of such shares.
Applicants' Legal Analysis
1. Applicants request an exemptive order to the extent the proposed
issuance and sale of any of the classes of shares might be deemed to
result in a ``senior security'' within the meaning of section 18(g) of
the Act and to be prohibited by section 18(f)(1) of the Act and to
violate the equal voting provisions of section 18(i) of the Act. In
addition, applicants request 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 Funds to implement the proposed CDSC
arrangement.
2. Applicants believe that the proposed allocation of expenses and
voting rights is equitable and would not discriminate against any group
of shareholders. The proposed arrangement will not involve borrowing
and will not affect the Funds' assets or reserves; it also will not
increase the speculative character of the shares in a Fund, since all
the shares will participate in all of the Fund's income and all of the
Fund's expenses (with the exception of the differing rule 12b-1 fees,
transfer agency costs and Class Expenses, if any) on the basis of the
relative net assets of the classes.
3. Under the Multiple Distribution System, mutuality of risk will
be preserved with respect to all classes of shares in a Fund. Further,
since all classes of shares will be redeemable at all times, no class
of shares will have any preference or priority over any other class in
a Fund in the usual sense (that is, no class will have distribution or
liquidation preferences with respect to particular assets, no class
will have any right to require that lapsed dividends be paid before
dividends are declared on the class and no class will be protected by
any reserve or other account).
Applicants' Conditions
Applicants agree that any order of the Commission granting the
requested relief shall be subject to the following conditions:
1. The Class A, Class B, Class C and Class Y 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 Class A, Class B, Class C and Class Y shares of a
Fund will relate solely to: (a) the impact of the disproportionate rule
12b-1 fees allocated to each of the Class A, Class B and Class C shares
of the Fund and the fact that the Class Y shares will not bear any rule
12b-1 fees; (b) the impact of the disproportionate transfer agency
costs attributable to each of the Class A, Class B, Class C and Class Y
shares; (c) the different Class Expenses, if any, which shall be
limited to the following expenses determined by the Directors/Trustees
to be attributable to a specific class of shares:
(i) printing and postage expenses related to preparing and
distributing materials such as shareholder reports, prospectuses and
proxy statements to current shareholders of a specific class,
(ii) Commission registration fees incurred with respect to a
specific class of shares,
(iii) blue sky registration fees incurred with respect to a
specific class of shares,
(iv) the expenses of administrative personnel and services required
to support the shareholders of a specific class,
(v) litigation or other legal expenses relating to a specific class
of shares,
(vi) Directors/Trustees fees or expenses incurred as a result of
issues relating to a specific class of shares,
(vii) accounting expenses relating to a specific class of shares;
(viii) any fees imposed pursuant to a non-rule 12b-1 shareholder
services plan; and
(ix) any other incremental expenses subsequently identified that
lawfully may be allocated to one class which shall be approved by the
Commission pursuant to an amended order; (d) the fact that the Class A,
Class B and Class C shares will each vote separately as a class with
respect to the Fund's rule 12b-1 plan and that the Class A, Class B,
Class C and Class Y shares will each vote separately as a class with
respect to other matters for which separate class voting is appropriate
under applicable law, provided that, if the Fund submits to a vote of
both the Class A shareholders and Class B shareholders an amendment to
the Fund's rule 12b-1 plan that would materially increase the amount to
be paid thereunder with respect to the Class A shares, the Class A
shareholders and the Class B shareholders will vote separately by class
as provided in condition 2 below; (e) the different exchange privileges
of the Class A, Class B, Class C and Class Y shares; (f) the fact that
only Class B shares will have a conversion feature; and (g) the
designation of each class of shares of the Fund.
2. If a Fund 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 the Class A shares under the
plan, existing Class B shares will stop converting into Class A unless
the Class B shareholders, voting separately by a class, approve the
proposal. The Directors/Trustees 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 such shares previously were scheduled to
convert into Class A. If deemed advisable by the Directors/Trustees 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/Trustees 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.
3. The Directors/Trustee of each of the Funds, including a majority
of the independent Directors/Trustees, shall have approved the Multiple
Distribution System prior to the implementation of the Multiple
Distribution System by a particular Fund. The minutes of the meetings
of the Directors/Trustees of each of the Funds regarding the
deliberations of the Directors/Trustees with respect to the approvals
necessary to implement the Multiple Distribution System will reflect in
detail the reasons for determining that the Multiple Distribution
System is in the best interests of both the Funds and their respective
shareholders.
4. On an ongoing basis, the Directors/Trustees of the Funds,
pursuant to their fiduciary responsibilities under the Act and
otherwise, will monitor each Fund for the existence of any material
conflicts among the interests of the four classes of shares. The
Directors/Trustees, including a majority of the independent Directors/
Trustees, shall take such action as is reasonably necessary to
eliminate any such conflicts that may develop. Adviser and Distributor
will be responsible for reporting any potential or existing conflicts
to the Directors/Trustees. It a conflict arises, Adviser and
Distributor at their own cost will remedy such conflict up to and
including establishing one or more new registered management investment
companies.
5. The Directors/Trustees of the Funds 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 expenditures
properly attributable to the sale or servicing of a particular class of
shares will be used to justify any distribution or service fee charged
to that class. Expenditures not related to the sale or servicing of a
particular class will not be presented to the Directors/Trustees to
justify any fee attributable to that class. The statements, including
the allocations upon which they are based, will be subject to the
review and approval of the independent Directors/Trustees in the
exercise of their fiduciary duties.
6. Dividends paid by a Fund with respect to its Class A, Class B,
Class C and Class Y 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 rule 12b-1 fee payments
relating to each respective class of shares will be borne exclusively
by that class and any incremental transfer agency costs or Class
Expenses relating to the Class A, Class B, Class C or Class Y shares
will be borne exclusively by that class.
7. The methodology and procedures for calculating the net asset
value and dividends and distributions of the Class A, Class B, Class C
and Class Y shares, and the proper allocation of income and expenses
among the classes, have been reviewed by an expert (the ``Expert'').
The Expert has rendered a report to applicants, which has been provided
to the staff of the Commission as Exhibit D to this 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 under the Multiple Distribution System 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 Sections 30(a) and
30(b)(1) of the Act. The work papers of the Expert with respect to such
reports, following request by the Funds (which the Funds agree to
provide), will be available for inspection by the Commission staff upon
the written request to the Funds 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
Administrators or Associate and Assistant Administrators. The initial
report of the Expert is a ``report on policies and procedures placed in
operation,'' as defined and described in SAS No. 70 of the American
Institute of Certified Public Accountants (``AICPA''), 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 initial determination of Class Expenses, if any, that will
be allocated to a class and any subsequent changes thereto has been or
will be reviewed and approved by the Directors/Trustees, including a
majority of the independent Directors/Trustees. Any person authorized
to direct the allocation and disposition of monies paid or payable by a
Fund to meet Class Expenses shall provide to the Directors/Trustees,
and the Directors/Trustees shall review at least quarterly, a written
report of the amounts so expended and the purposes for which such
expenditures were made.
9. Applicants have adequate facilities in place to ensure
implementation of the methodology and procedures for calculating the
net asset value and dividends and distributions of the four classes of
shares and the proper allocation of expenses among the four classes of
shares. 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. Applicants will take immediate corrective measures
if the Expert or appropriate Substitute Expert does not so concur in
the ongoing reports.
10. The prospectuses of the Funds relating to the Class A, Class B,
Class C and Class Y shares will contain a statement to the effect that
a salesperson and any other person may receive different levels of
compensation for selling or servicing one particular class of shares
over another in a Fund.
11. The Distributor will adopt compliance standards as to when
Class A, Class B, Class C and Class Y shares may appropriately be sold
to particular investors. Applicants will require all persons selling
shares of the Funds to agree to conform to such standards.
12. The conditions pursuant to which the exemptive order is granted
and the duties and responsibilities of the Directors/Trustees of the
Funds with respect to the Multiple Distribution System will be set
forth in guidelines which will be furnished to the Directors/Trustees
as part of the materials setting forth the duties and responsibilities
of the Directors/Trustees.
13. 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. The shareholder reports of each Fund
will disclose the respective expenses and performance data applicable
to each class of shares. 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
or performance data applicable to Class A, Class B, Class C or Class Y
shares, it will disclose the expenses and/or performance data
applicable to the four classes. The information provided by applicants
for publication in any newspaper or similar listing of the Funds' net
asset values and public offering prices will present separately Class
A, Class B, Class C and Class Y shares.
14. Applicants acknowledge that the grant of the exemptive order
requested by this application will not imply Commission approval,
authorization or acquiescence in any particular level of payments that
the Funds may make pursuant to their rule 12b-1 or non-rule 12b-1
shareholder services plans in reliance on the exemptive order.
15. Class B shares will convert into Class A 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.
16. Any non-rule 12b-1 shareholder services plan adopted by a Fund
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 need
not enjoy the voting rights specified in rule 12b-1.
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. 94-28735 Filed 11-21-94; 8:45 am]
BILLING CODE 8010-01-M