[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Notices]
[Pages 63106-63110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29920]



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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-21561; File No. 812-9588]


American Skandia Life Assurance Corporation, et al.

December 1, 1995.
AGENCY: U.S. Securities and Exchange Commission (``SEC'' or 
``Commission'').

ACTION: Notice of Application for Exemption Under the Investment 
Company Act of 1940 (the ``1940 Act'').

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APPLICANTS: American Skandia Life Assurance Corporation (``ASLAC''), 
American Skandia Life Assurance Corporation Variable Account B (Class 
1) (``Account B--Class 1''), American Skandia Life Assurance 
Corporation Variable Account B (Class 2) (``Account B--Class 2''), and 
American Skandia Marketing, Inc. (``ASM'').

RELEVANT 1940 ACT SECTIONS: Sections 6(c), 17(a), 17(b), 17(d) and 
26(b) of the 1940 Act and Rule 17d-1 thereunder.

SUMMARY OF APPLICATION: Applicants seek an order of approval under 
Section 26(b) of the 1940 Act and exemptions from Sections 6(c), 17(a), 
17(b), 17(d) of the 1940 Act and Rule 17d-1 thereunder. The requested 
order would exempt Applicants from those Sections of the 1940 Act and 
the Rule set out above to the extent necessary to permit certain 
underlying mutual funds of the separate account to be substituted for 
certain other underlying mutual funds.

FILING DATE: The application was filed on May 2, 1995 and amended on 
November 17, 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 Secretary of the SEC 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 26, 
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 
Secretary of the SEC.

ADDRESSES: SEC, Secretary, 450 Fifth Street, NW., Washington, DC 20549. 
Applicants: John T. Buckley, Esq., Werner & Kennedy 1633 Broadway, New 
York, New York 10019 and American Skandia Life Assurance Corporation, 
c/o Jeffrey M. Ulness, Esq., One Corporate Drive, Shelton, CT 06484.

FOR FURTHER INFORMATION CONTACT:
Edward P. Macdonald, Staff Attorney, or Brenda D. Sneed, Chief (Office 
of Insurance Products), Division of Investment Management, at (202) 
942-0670.

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

Applicants' Representations

    1. ASLAC, the depositor of both Account B--Class 1 and Account B--
Class 2 (collectively, the ``Separate Account''), is a stock life 
insurance company organized under the laws of the State of Connecticut 
and wholly-owned by American Skandia Investment Holding Corporation 
(``ASIHC''), which is an indirect wholly-owned subsidiary of Skandia 
Insurance Company Ltd., a corporation organized under the laws of the 
Kingdom of Sweden.
    2. ASM, the underwriter of variable annuity contracts issued 
through the Separate Account and offered by ASLAC, is registered with 
the SEC and is a member of the NASD. ASM is 100% owned by ASIHC.
    3. The Separate Account is a separate account of ASLAC, and is 
registered under the 1940 Act as a unit investment trust. ASLAC 
established the Separate Account to the purpose of funding certain 
flexible purchase payment deferred variable annuity contracts (the 
``Contracts''). Account B--Class 1 subaccounts each invest exclusively 
in one of the corresponding portfolios of six open-end management 
investment companies. The following five Contracts are funded, through 
the sub-accounts of Account B--Class 1: American Skandia Advisors Plan 
(``ASAP'') [32]; \1\ ASAP II [21]; \2\ the LifeVest Personal Security 
Annuity (``PSA'') [32]; the Alliance Capital Navigator Annuity 
(``Alliance Navigator'') [15]; and the StageCoach Variable Annuity 
(``StageCoach'') [8] (collectively, the ``Class 1 Contracts'').

    \1\ The numbers in brackets denote the number of portfolios 
which are currently available under the Contracts.
    \2\ ASAP II, the Alliance Navigator and the Stagecoach Contracts 
will not be subject to the proposed substitutions.
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    Account B--Class 2 sub-accounts each invest exclusively in one of 
the corresponding portfolios of six open-end management investment 
companies. ASLAC currently offers two Contracts that invest in Account 
B--Class 2: the Wrap Fee Contracts (``Wrap Fee'') [42].
    4. Under the Contracts affected by the proposed substitutions, six 
open-end management investment companies currently offer shares of 
several of their portfolios to the Separate Account: The Alger American 
Fund (``Alger Fund''); Alliance Variable Products Series Fund, Inc. 
(``AVP''); Neuberger & Berman Advisers Management Trust (``AMT''); 
American Skandia Trust (``AST''); and Scudder Variable Life Investment 
Fund (``Scudder''). In addition, six portfolios of the Janus Aspen 
Series (``Janus'') are offered to Account B--Class 2 but not Account 
B--Class 1. All such investment companies in which the Separate Account 
invest are collectively referred to as ``Underlying Funds.''
    5. The proposed substitutions would result in a reduction in 
variable investment options and corresponding portfolios available as 
follows. ASAP and PSA would be reduced to 21 (a reduction of 11 each) 
and Wrap Fee would be reduced to 21 (a reduction of 21). Applicants 
state that funding such varied products through a consolidated fund 
structure will aid in the growth of the Underlying Funds resulting in 
lower operating costs through economies of scale. Applicants further 
state that regardless of whether one Contract achieves more popularity 
or appeal, or is no longer marketed by ASLAC, the interests of Contract 
owners will be protected by like underlying portfolios of all ASLAC 
nonproprietary variable annuities.
    6. Of the Underlying Funds, only AST is affiliated with ASLAC or 
the Separate Account. None of the Underlying Funds, their investment 
managers, or underwriters are affiliated with ASLAC, the Separate 
Account or AST through any corporate ownership.
    7. Applicants state that in the registration statements filed by 
the Separate Account, ASLAC expressly reserved the right both on its 
own behalf and on behalf of the Separate Account to eliminate sub-
accounts, combine two or more sub-accounts, or substitute one or more 
Underlying Funds for others in which its sub-accounts are invested.
    8. ASLAC, on its own behalf and on behalf of the Separate Account, 
proposes to effect the following substitutions of shares of the 
following portfolios (the ``Transferee Portfolios'') for shares of 
other portfolios (the ``Transferor Portfolios'') (collectively, the 
``Substitution(s)''): (i) the AST Phoenix Balanced Asset Portfolio will 
be substituted for the Alger Balanced, Alliance Total Return, AMT 
Balanced, Scudder Balanced, and Janus Aspen 

[[Page 63107]]
Balanced Portfolios; (ii) The Lord Abbett Growth & Income Portfolio 
(AST) will be substituted for the Alger Income & Growth and Alliance 
Growth & Income Portfolios; (iii) the Seligman Henderson International 
Equity Portfolio (AST) will be substituted for the Alliance 
International, Scudder International, and Janus Aspen Worldwide Growth 
Portfolios; (iv) the Alger Growth Portfolio will be substituted for the 
Alliance Premier Growth, AST Phoenix Capital Growth, AST Eagle Growth 
Equity, Scudder Capital Growth, and the Janus Aspen Aggressive Growth 
Portfolios; (v) the PIMCO Limited Maturity Bond Portfolio (AST) will be 
substituted for the Alliance Short-Term Multi-Market, Alliance U.S. 
Government/High Grade Securities, AMT Limited Maturity Bond, and Janus 
Short-Term Bond Portfolios; (vi) the AMT Partners Portfolio will be 
substituted for the AMT Growth Portfolio; (vii) the PIMCO Total Return 
Bond Portfolio (AST) will be substituted for the Scudder Bond and Janus 
Aspen Flexible Income Portfolios; and, (viii) the JanCap Growth 
Portfolio (AST) will be substituted for the Janus Aspen Growth 
Portfolio. Applicants note that allocations to the Alliance Fund 
Transferor Portfolios available under Separate Account Contracts will 
be substituted, except for those amounts allocated under the Alliance 
Navigator Contract (Account B--Class 1). Allocations under the Alliance 
Navigator Contract will remain unaffected by the Substitutions.
    9. The Substitution process will include two periods during which 
Contract owners may make cost free transfers to the remaining 
portfolios of their choice. The first free transfer period will start 
prior to the ``Automatic Selection Date.'' The Automatic Selection Date 
is the date ASLAC will schedule the Substitutions to occur. Such date 
will be as soon as practicable following the issuance of an order by 
the SEC. Moreover, any transfers of account value from any of the 
Transferor Portfolios from May 1, 1995 (the date the relevant Contract 
prospectuses reflected the proposed Substitutions), will not be counted 
toward the twelve free transfers permitted under relevant Contracts.
    10. For several months prior to the Automatic Selection Date, and 
in all cases since May 1, 1995, relevant Contract prospectuses 
reflected the Substitutions. Such registration statements as in effect 
as of May 1, 1995 for ASAP, PSA and Wrap Fee also contain information 
of the investment policies of the Transferee Portfolios.
    11. The first free transfer period will start before the Automatic 
Selection Date. Within approximately five days after the Applicant's 
notice of application appearing in the Federal Register, ASLAC will 
mail a written notice to all Contract owners who, as of the date the 
notice of application appears in the Federal Register, have allocations 
in any Transferor Portfolio. The notice will contain information as to 
the Substitutions and will provide instructions regarding the ability 
of Contract owners to make transfers of account value out of any 
Transferor Portfolio without transfer fees or similar charges, and 
without such transfer being counted as a free transfer. After notice is 
mailed and up until the Automatic Selection Date, any Contract owner 
making an allocation or transfer (i.e., new money) to any Transferor 
Portfolio during the first free transfer period will be sent a similar 
notice with their confirmation statement (the ``Affected Contract 
owners'').
    12. As of the Automatic Selection Date, allocations or transfers to 
a Transferor Portfolio will automatically be allocated to the 
corresponding Transferee Portfolio. No Transferor portfolio will accept 
additional premium payments (i.e., new money) on or after the Automatic 
Selection Date.
    3. On the Automatic Selection Date, all account values allocated to 
each Transferor Portfolio, if any, will be transferred to the 
corresponding Transferee Portfolio (``Automatic Selection Option''). 
Applicants state that the Automatic Selection Options (which may only 
occur if Contract owners do not give timely instructions during the 
first free transfer period) are temporary in character because Contract 
owners can always exercise their own judgment as to the most 
appropriate alternative investment. Applicants also state that Affected 
Contract owners will have an additional free transfer period after the 
Automatic Selection Date. No sales load deductions will be made in 
connection with any transfers among the portfolios because of the 
Substitutions or otherwise. Contract owners who have not annuitized may 
at any time, before or after the Substitutions, transfer their account 
value to any of the other portfolios offered under their respective 
Contracts.
    14. The second free transfer period will start after the Automatic 
Selection Date. For thirty (30) calendar days, or if the thirtieth day 
is not a business day then the following business day after the 
Automatic Selection Date, Affected Contract owners may transfer account 
values out of the Transferee Portfolios to any other available 
portfolios without transfer fees or similar charges and without 
transfer being counted as a free transfer. Within five (5) days of the 
Automatic Selection Date, ASLAC will send Affected Contract owners 
written notice of the Substitution identifying units of the Transferee 
Portfolios. ASLAC will include in this notice information regarding the 
second free transfer period. Applicants state that if Affected Contract 
owners have telephone transfer privileges, telephone instructions will 
be accepted during both free transfer periods.
    15. Applicants anticipate that some or all Substitutions may be 
effected partly for cash and partly for securities as a partial 
redemption ``in-kind'' at the net asset values of the portfolios (such 
transfer will be in conformity with Sections 22(c) and 22(g) of the 
1940 Act and Rule 22c-1 thereunder). The transfers will be effected by 
selling the securities of the applicable Transferor Portfolios and 
applying the proceeds to the purchase price of securities issued by the 
Transferee Portfolios selected by Contract owners. At all times all 
contract values will remain unchanged, no fees or charges will be 
incurred, all Contract owner rights will be unaffected, and ASLAC's 
obligations under any Contract will not be altered in any way because 
of the Substitutions.
    16. To the extent ``in-kind'' redemptions are not utilized, 
Applicants anticipate that Transferor Portfolios will incur brokerage 
fees and expenses to the extent not assumed by Applicants, or the 
adviser or sub-adviser of the Transferee Portfolios in connection with 
the redemption of shares of the affected Transferor Portfolios.
    Applicants state that they will effect the redemptions ``in-kind'' 
to the extent consistent with investment objectives and applicable 
diversification requirements. ASLAC states that it will establish 
procedures to ensure that ``in-kind'' redemptions will be effected in a 
fair and equitable manner from the perspective of the Separate Account, 
the Transferor Portfolios, and other separate accounts which currently 
invest in the Transferor Portfolios, and other separate accounts which 
currently invest in the Transferor Portfolios. These procedures will 
provide that: (i) the Transferor Portfolio investment adviser identify 
prior to the effective date of the Substitutions the securities to be 
included in the ``in-kind'' transfer; and (ii) the investment adviser 
to the Transferee Portfolio reviews and agrees to accept the securities 
so identified as payment for the purchase of Transferee Portfolio 
shares. The valuation of ``in-kind'' transfers will be on a basis 
consistent with the valuation 

[[Page 63108]]
procedures of the applicable Transferor and Transferee Portfolios.
    17. ASLAC or the investment adviser of the Transferee Portfolio 
will assume the transfer and custodial expenses and legal and 
accounting fees of the Substitutions, and Contract owners will not 
incur any fees or charges as a result of the transfer of account value 
from any portfolio. The Substitutions will not increase Contract and 
Separate Account fees and charges after the Substitutions. In addition, 
Applicants state that the Substitutions have been designed to avoid any 
adverse federal income tax impact on Contract owners.
    18. Following the Substitutions, the sub-accounts which invest in 
the Transferor Portfolios will be terminated.

Applicants' Legal Analysis

Request for an Order Pursuant to Section 26(b) of the 1940 Act

    1. Section 26(b) of the 1940 Act provides that it shall be unlawful 
for any depositor or trustee of a registered unit investment trust 
holding the security of a single issuer to substitute another security 
for such security unless the Commission shall have approved such 
substitution; and the Commission shall issue an order approving such 
substitution if the evidence establishes that it is consistent with the 
protection of investors and the purpose fairly intended by the policy 
and provisions of the 1940 Act.
    2. Section 26(b) protects the expectation of investors in a UIT 
that the UIT will accumulate shares of a particular issuer. The Section 
also prevents unscrutinized security to redeem their shares, thereby 
incurring either a loss of the sales load deducted from initial 
proceeds, an additional sales load upon reinvestment of the redemption 
proceeds, or both. Section 26(b) affords protection to investors by 
preventing a depositor or trustee of a unit investment trust (holding 
the shares of one issuer) from substituting the shares of another 
issuer for those shares, unless the Commission approves the 
Substitutions.
    3. Applicants represent that the purposes, terms, and conditions of 
the Substitutions will not entail any of the abuses that Section 26(b) 
is designed to prevent for the following reasons:
    a. The proposed Substitutions are for shares of the Transferee 
Portfolios with investment objectives of the corresponding Transferor 
Portfolios so as to provide a means for Contract owners to continue 
their current investment goals and risk expectations.
    b. The proposed Automatic Selection Options will be only temporary 
because Contract owners may always exercise their own judgment as to 
the most appropriate alternative investment vehicles. No sales load 
deductions will be made in connection with any transfers among the 
portfolios by reason of the Substitutions. After the Substitutions, the 
Affected Contracts would still offer a broad array of variable 
investment options and Contract owners who have not annuitized may at 
any time transfer their account value to any of the other portfolios 
offered under their respective Contracts.
    c. the transactions effecting the proposed Substitutions including 
the redemption of Transferor Portfolio shares and the purchase of 
Transferee Portfolio shares will be effected at net asset value in 
conformity with Section 22(c) of the 1940 Act and Rule 22c-1 
thereunder.
    d. The anticipated utilization of ``in-kind'' redemptions by the 
Transferor Portfolios for the purchase by the Separate Account of 
Transferee Portfolio shares, in conformity with Section 22(g) of the 
1940 Act, may reduce transaction costs of the Substitutions.
    e. ASLAC or the Transferee Portfolio investment adviser will assume 
various expenses and transaction costs relating to the Substitutions, 
including custodial and transfer fees incurred by use of any ``in 
kind'' redemptions, and legal and accounting fees.
    f. The Substitutions will not alter or affect the insurance 
benefits provided by ASLAC to Contract owners or the terms or 
obligations under the terms of the Contracts.
    g. The Substitutions are designed to avoid any adverse effects upon 
the tax benefits available to Contract owners; the Substitutions are 
designed not to give rise to any current federal income tax to Contract 
owners.
    h. The Substitutions are expected to confer economic benefits by 
virtue of the enhanced asset size of the Transferee Portfolios.
    4. Applicants state that under the circumstances it is in the best 
interest of Contract owners to proceed with the Substitutions. The 
Substitutions are appropriate because the overall investment objectives 
of the Transferee Portfolios are similar and their investment 
objectives are compatible to the Transferor Portfolios.
    5. Applicants also represent that total fees and expenses as a 
percentage of net assets for the Transferee Portfolios are expected to 
decrease through economies of scale caused by the anticipated increase 
in asset size and the increased similarity of available portfolios in 
applicable Contracts as a result of the Substitutions.

Request for Order Pursuant to Section 6(c) and 17(b) of the 1940 Act

    6. Applicants seek an exemption from Section 17(a) through both 
Sections 17(b) and 6(c) of the 1940 Act because Section 17(b) permits 
the Commission to exempt a single ``proposed transaction'' whereas 
Section 6(c) enables the Commission to exempt a series of transactions.
    7. Under certain circumstances, Section 17(a)(1) of the 1940 Act 
prohibits any affiliated person of a registered investment company, or 
an affiliated person of an affiliated person, from selling any security 
or other property to such registered investment company. Section 
17(a)(2) of the 1940 Act prohibits any affiliated person of the persons 
described above from purchasing any security or other property from 
such registered investment company.
    8. Applicants state that since the Substitutions may be deemed to 
involve one or more purchases or sales of securities between and among 
affiliated persons, the Substitutions may involve transactions 
prohibited by Section 17(a) of the 1940 Act. Applicants also state that 
the Substitutions may not be exempt from Section 17 of the 1940 Act 
pursuant to Rule 17a-7 thereunder, since the affiliations among some of 
the parties do not arise solely through having common investment 
advisers, common directors and/or common officers.
    9. Section 17(b) authorizes the SEC to issue an order exempting a 
proposed transaction from Section 17(a) if evidence establishes that: 
(1) the proposed transaction is fair and reasonable and does not 
involve overreaching on the part of any person concerned; (2) the 
proposed transaction is consistent with the policy of each registered 
investment company concerned; and (3) the proposed transaction is 
consistent with the general purposes of the 1940 Act. Applicant 
represent that the terms of the Substitutions are consistent with the 
standard for relief described in Section 17(b) of the 1940 Act.
    10. The Substitutions will be effected at the net asset value of 
the securities involved. ASLAC or the adviser of the Transferee 
Portfolios will bear those expenses associated with the transfers. The 
Substitutions and transfers of securities are consistent with the 
policies of each investment company involved and of the 1940 Act.
    11. As a condition to the granting of an order of exemption under 
Section 

[[Page 63109]]
17(b), Applicants represent that they will company with the conditions 
set forth in Rule 17a-7 except for sub-paragraph (a), which requires 
that the transaction be ``for no consideration other than cash 
payment.'' Although the consideration in some cases will be 
``securities'' and not cash, Applicants state that these transactions 
are in substance the type of transactions currently exempted by Rule 
17a-7.
    12. Applicants further state that the terms of the Substitutions 
and the transfer of the securities meet all the requirements of Section 
17(b) and represent that for the terms of the Substitutions and 
transfers of securities are reasonable and fair and do not involve 
overreaching on the part of any person concerned.
    13. Applicants also represent that with respect to the ``in-kind'' 
portion of the Substitutions established procedures will guard against 
inappropriate or unfair exchanges.
    14. Since Applicants may be deemed to be affiliated persons of each 
other or affiliated persons of an affiliated person under Section 
2(a)(3) of the 1940 Act the Substitutions may be deemed to entail one 
or more purchases or sales of securities or property between 
Applicants. Accordingly, Applicants believe that the Substitutions may 
require an order exempting the transactions prohibited under Sections 
17(a)(1) and 17(a)(2) of the 1940 Act, pursuant to Section 17(b) of the 
1940 Act.
    15. Rule 17a-7 under the 1940 Act exempts from the prohibitions of 
Section 17(a) a purchase or sale transaction between registered 
investment companies or separate series of registered investment 
companies which may be affiliated persons, or affiliated persons of 
affiliated persons, solely by reason of having a common investment 
adviser or investment advisers which are affiliated persons of each 
other, common directors and/or common officers, subject to certain 
specified conditions. As the affiliation among the Applicants, however, 
does not arise solely by reason of having common investment advisors, 
directors, and/or officers, and redemption by the Transferor Portfolios 
may involve redemptions of securities ``in-kind'' rather than for cash, 
the Substitutions likely would not satisfy the technical requirements 
of Rule 17a-7. Nonetheless, Applicants represent that the Substitutions 
will comply with the underlying intent of Rule 17a-7 in all respects 
for the following reasons. First, although the Substitutions would 
involve partial redemption of securities ``in-kind'' rather than the 
``all-cash,'' as required under subsection (a) of Rule 17a-7, such 
transactions likely would be less amenable to self-dealing than 
corresponding ``all-cash'' transactions. Moreover, redemptions in kind 
would reduce brokerage commissions or other remuneration ordinarily 
paid in connection with securities transactions. Second, because the 
Substitutions will be effected at the independent current market price 
and are consistent with the policies of each of the Transferor and the 
Transferee Portfolios, the Substitutions would comply with both the 
technical requirements and underlying intent of subsections (b) and (c) 
of the Rule. Third, to the extent consistent with investment objectives 
and applicable diversification requirements, Applicants will effect 
redemption ``in-kind'' to reduce any brokerage commissions or other 
remuneration usually paid in connection with securities transactions, 
as contemplated by subsection (d) of the Rule. Finally, because the 
Substitutions would occur only once, the formal written compliance 
procedure required under subsections (e) and (f) of the Rule would 
prove inapplicable.

Request for Order Pursuant to Section 6(c) and Rule 17d-1 of the 1940 
Act

    16. Section 17(d) of the 1940 Act prohibits any affiliated person 
of a registered investment company, or any affiliated person of such 
affiliated person, acting as principal, from effecting any transaction 
in which such registered investment company, or a company controlled by 
such registered investment company, is a joint participant with such 
person, in contravention of Commission rules designed to limit or 
prevent participation by the registered investment company ``on a basis 
different from or less advantageous than'' that of the affiliated 
person. Rule 17d-1(a) prohibits any of the persons described above, 
acting as principal, from participating in, or effecting ``any 
transaction in connection with, any joint enterprise or other joint 
arrangement or profit-sharing plan in which any such registered 
investment company, or a company controlled by such registered company, 
is a participant'' unless the Commission has approved the joint 
enterprise, arrangement or plan.
    17. Applicants state that they may be deemed to be affiliated 
persons of each other under Section 2(a)(3) of the 1940 Act, and that 
the Substitutions will involve transactions that may be deemed to 
implicate Section 17(d) of the 1940 Act and Rule 17d-1 thereunder.
    18. The simultaneous purchase and sale transactions involve a 
number of registered investment companies, and each such purchase and 
sale transaction is dependent on the other. Each transaction therefore 
may be deemed to be in connection with a joint arrangement within the 
contemplation of Section 17(d) of the 1940 Act and Rule 17d-1 
thereunder. Applicants request an order pursuant to Section 6(c) and 
Rule 17d-1 to eliminate any question of compliance with Section 17(d) 
and Rule 17d-1.
    19. Rule 17d-1 provides for the Commission to grant an order upon 
request. In passing upon such request, the Commission is to consider 
whether the participation of the management investment companies is 
consistent with the provisions, policies and purposes of the 1940 Act 
and the extent to which such participation is on a basis different from 
or less advantageous than that of other participants.
    20. Section 6(c) of the 1940 Act provides that the Commission may 
grant an order exempting persons and transactions from any provision or 
provisions of the 1940 Act as may be 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 1940 Act. 
For all the reasons stated herein, Applicants submit that the 
Substitutions are consistent with the provisions, policies and purposes 
of the 1940 Act and that the participation of each of the parties to 
the Substitutions will be on an equal basis and consistent with their 
respective participation in the Substitutions, and is consistent with 
the provisions, policies and purposes of the 1940 Act.
    21. Based on the foregoing, Applicants represent that the 
Substitutions and the related transactions meet all the requirements of 
Section 6(c) of the 1940 Act and Rule 17d-1 thereunder, and are 
consistent with applicable precedent, and request that an order of 
exemption from Section 17(d) and approval pursuant to Section 6(c) and 
Rule 17d-1 be granted.

Conclusion

    For the reasons set forth above, Applicants represent that the 
exemptions requested are necessary and appropriate in the public 
interest and consistent with the protection of investors and purposes 
fairly intended by the policy and provisions of the 1940 Act.


[[Page 63110]]

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-29920 Filed 12-7-95; 8:45 am]
BILLING CODE 8010-01-M