[Federal Register Volume 60, Number 28 (Friday, February 10, 1995)]
[Notices]
[Pages 8106-8107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3371]



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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 20882; 812-9356]


Nicholas-Applegate Mutual Funds, et al.; Notice of Application

February 6, 1995.
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: Nicholas-Applegate Mutual Funds (the ``Trust''), Nicholas-
Applegate Capital Management (the ``Adviser''), and Nicholas-Applegate 
Securities (the ``Distributor'').

RELEVANT ACT SECTIONS: Order requested to amend a prior order under 
section 6(c) that granted an exemption from sections 2(a)(32), 
2(a)(35), 22(c), and 22(d), and rule 22c-1.

SUMMARY OF APPLICATION: Applicants seek to amend an order permitting 
them to assess a contingent deferred sales charge (``CDSC'') on certain 
redemptions of shares of certain series of the Trust. The amended order 
would permit applicants to impose a CDSC on redemptions of shares of 
certain other series of the Trust not covered by the previous order.

FILING DATES: The application was filed on December 9, 1994, and 
amended on February 3, 1995.

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 March 6, 1995, 
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: Secretary, SEC, 450 5th Street, N.W., Washington, D.C. 
20549. Applicants, 600 West Broadway, 30th Floor, San Diego, California 
92101.

FOR FURTHER INFORMATION CONTACT:
James J. Dwyer, Staff Attorney, at (202) 942-0581, or C. David Messman, 
Branch Chief, at (202) 942-0564 (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. The Trust and Nicholas-Applegate Investment Trust (the ``Master 
Trust'') are open-end management investment companies organized as 
Delaware business trusts. Under a ``master-feeder'' structure, each of 
the Trust's portfolios invests all of its assets in a corresponding 
series of the Master Trust. The Adviser is a registered investment 
adviser that serves as investment adviser to the Master Trust. The 
Distributor serves as principal underwriter of the shares of the 
portfolios of the Trust.
    2. On March 30, 1993, the SEC issued an order (the ``Existing 
Order'')\1\ permitting certain existing portfolios of the Trust (the 
``Portfolios'') to impose a CDSC on certain redemptions and waive the 
CDSC under certain circumstances. The application for the Existing 
Order sought, and accordingly the Existing Order granted, relief on 
behalf of the Trust only with respect to the Trust's Portfolio A 
Series, Portfolio B Series, and Money Market Portfolio. The Existing 
Order also applied to all other open-end management investment 
companies or series thereof that invest substantially all of their 
assets in a registered investment company for which the Adviser serves 
in the future as investment adviser and that are in the same ``group of 
investment companies'' as the Portfolios, as defined in rule 11a-3 
under the Act, the shares of which will be distributed on substantially 
the same basis as those of the Portfolios.

    \1\Investment Company Act Release Nos. 19315 (March 5, 1993) 
(Notice) and 19367 (March 30, 1993) (order).
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    3. Applicants seek to amend the Existing Order to permit other 
portfolios of the Trust (the ``Portfolio C Series'') to impose a CDSC. 
Shares of the Portfolio C Series would be offered at net asset value 
without a front-end sales load. The shares would be offered under a 
distribution plan and shareholder service plan, each adopted pursuant 
to rule 12b-1 under the Act. Under the distribution plan, each 
Portfolio C Series may pay the Distributor an amount equal to .75% of 
the average daily net assets of the series to compensate the 
Distributor for selling the shares of the series. Under the shareholder 
service plan, each series pays the Distributor an annual fee of up to 
.25% of the series' average daily net assets as reimbursement for 
certain expenses incurred in connection with shareholder services 
provided by the Distributor.
    4. If the shares of a Portfolio C CDSC are redeemed within 
specified periods after their purchase date, the redemption proceeds 
will be reduced by a percentage of the lesser of the value of the 
shares redeemed or the total cost of such shares. The percentage will 
vary depending on the period the shares were held, as set forth in the 
applicable prospectus. The Distributor will retain the CDSC as 
compensation for dealer commissions paid with respect to sales of 
shares of the series and to recover a portion of the sales and 
marketing expenses incurred in marketing such shares. Applicants may in 
the future reduce the CDSC percentage, shorten the applicable holding 
period, or temporarily or permanently discontinue the CDSC.
    5. No CDSC will be imposed on exchanges of shares of a Portfolio C 
Series for shares of other Portfolio C Series or for shares of the 
Trust's Money Market Portfolio Series. No CDSC will be imposed on the 
amount which represents a capital appreciation of shares, reinvestment 
of dividends, or capital gains distributions. In determining whether a 
CDSC is applicable, it will be assumed that a redemption is made first 
of shares not subject to the CDSC, including shares derived from 
reinvestment of dividends or capital gains distributions, and then of 
other shares in the order of purchase.
    6. Applicants request relief to permit each investment company or 
series thereof that would assess a CDSC under the requested order to 
waive or reduce the CDSC in certain circumstances. Any waiver or 
reduction will comply with the conditions in paragraphs (a) through (d) 
of rule 22d-1. In addition, applicants will comply with rule 11a-3 with 
respect to any exchanges of shares.
    7. The Distributor will refund out of its own assets any CDSC paid 
in connection with a redemption of shares of a Portfolio C Series upon 
reinvestment in a Portfolio C Series within 90 days of such redemption.

Applicants' Legal Analysis

    Section 6(c) provides that the SEC may exempt any transactions from 
any transactions from any provision of the Act if such exemption is 
necessary or appropriate in the public interest and consistent with the 
protection of investors and the purposes fairly intended by the policy 
and provisions of the Act. For the reasons set forth in the 
[[Page 8107]] application for the Existing Order, applicants believe 
that the requested exemption satisfies the standards set forth in 
section 6(c).

Applicants' Condition

    Applicants will comply with the provisions of proposed rule 6c-10 
under the Act, Investment Company Act Release No. 16619 (Nov. 2, 1988), 
as such rule is currently proposed and as it may be reproposed, adopted 
or amended.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-3371 Filed 2-9-95; 8:45 am]
BILLING CODE 8010-01-M