[Federal Register Volume 61, Number 251 (Monday, December 30, 1996)]
[Notices]
[Pages 68803-68804]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-33057]


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SECURITIES AND EXCHANGE COMMISSION

[Rel. No. IC--22414; 812--10448]


PIMCO Advisors Funds, et al.; Notice of Application

December 20, 1996.
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: PIMCO Advisors Funds (``PAF''), Cash Accumulation Trust 
(``CAT''), PIMCO Funds, and PIMCO Funds: Equity Advisors Series 
(``PFEAS'') (collectively, the ``Funds''), PIMCO Advisors L.P. 
(``PALP'').

RELEVANT ACT SECTIONS: Order requested under section 6(c) of the Act 
for an exemption from sections 13(a)(2), 13(a)(3), 17(a)(1), 18(f)(1), 
22(f) and 22(g) of the Act and rule 2a-7 thereunder and pursuant to 
section 17(d) of the Act and rule 17d-1 thereunder.

SUMMARY OF APPLICATION: Applicants request an order to amend a prior 
order (the ``Order'') \1\ that permitted certain entities to enter into 
deferred fee arrangements with certain of their trustees. The requested 
order would extend the relief granted in the Order to PALP, PIMCO, 
Funds, PFEAS and other open-end investment companies in the same 
``group of investment companies'' as the Funds, as that term is defined 
under Rule 11a-3 under the Act, or any other registered open-end 
investment company for which PALP, or any entity controlling, 
controlled by, or under common control with PALP, serves as investment 
adviser.\2\

    \1\ Thompson Fund Group, Investment Company Release Nos. 18894 
(Aug. 14, 1992) (notice) and 18939 (Sept. 9, 1992) (order).
    \2\ All currently existing investment companies that currently 
intend to rely on the amended order are named as applicants herein.
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FILING DATE: The application was filed on November 27, 1996 and amended 
on December 19, 1996.

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

[[Page 68804]]

received by the SEC by 5:30 p.m. on January 14, 1997, and should be 
accompanied by proof of service on the 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 Fifth Street, N.W., Washington, D.C. 
20549. Applicants, c/o Newton B. Schott, Jr., PIMCO Advisors L.P. 2187 
Atlantic Street, Stamford, CT 06902.

FOR FURTHER INFORMATION CONTACT: Suzanne Krudys, Senior Attorney, at 
(202) 942-0641, or Mercer E. Bullard, 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.

Applicants' Representation

    1. PAF, CAT, PIMCO Funds and PFEAS are registered as open-end 
management series investment companies and organized as Massachusetts 
business trust currently consisting of 16, 1, 19 and 14 separate 
investment portfolios, respectively.
    2. PALP is organized as a Delaware limited partnership and is 
registered as an investment adviser under the Investment Advisers Act 
of 1940 (the ``Advisers Act''). PALP serves as investment adviser to 
PAF, CAT and PFEAS. The general partner of PALP is Pimco Partners G.P., 
a general partnership between an indirect wholly owned subsidiary of 
Pacific Mutual Life Insurance Company and PIMCO Partners, LLC, a 
limited liability company controlled by the managing directors of 
Pacific Investment Management Company (``PIMCO''). PIMCO, an affiliate 
and subsidiary partnership of PALP, is registered as an investment 
adviser under the Advisers Act and serves as investment adviser to 
PIMCO Funds.
    3. On September 9, 1992, the SEC issued the Order pursuant to 
section 6(c) exempting Thomson Fund Group (``TFG'') (predecessor of 
PAF), CAT, and Thomson Advisory Group L.P. (``TAG'') (predecessor of 
PALP) and any registered investment companies for which TAG 
subsequently serves as adviser from the provisions sections 13(a)(2), 
17(a)(1), 18(f)(1), 22(f) and 22(g) and rule 2a-7 and, with respect to 
the Thomson U.S. Government Fund only (predecessor of PAF U.S. 
Government Fund), from Section 13(a)(3), and under section 17(d) and 
rule 17d-1 to permit TFG and CAT to offer deferred compensation 
arrangements to their trustees who are not ``interested persons'' 
within the meaning of section 2(a)(19) of the Act.
    4. In November 1994, the investment advisory businesses of TAG and 
its affiliates were consolidated with the investment advisory 
businesses of Pacific Financial Asset Management Corporation 
(``PFAMCo''), then a wholly owned subsidiary of Pacific Mutual, which 
included the investment advisory businesses of PIMCO (the 
``Consolidation''). The Consolidation involved the transfer of the 
investment advisory operations of PFAMCo and its subsidiaries to TAG in 
return for units of limited partnership interest of TAG and the 
substitution of PIMCO Partners G.P. for the former general partner of 
TAG. TAG as a legal entity survived the Consolidation and was 
subsequently renamed PIMCO Advisors L.P. (``PALP'').
    5. In order to ensure that PALP, PIMCO Funds, PFEAS and all funds 
advised by PALP, of any entity controlling, controlled by, or under 
common control with PALP may rely on the Order, applicants request that 
the Order be amended to make the relief available not only to 
investment companies advised by PALP, but also to any open-end 
investment company in the same ``group of investment companies'' as the 
Funds, within the meaning of Rule 11a-3 under the Act and any other 
open-end investment company for which PALP, or any entity controlling, 
controlled by, or under common control with PALP, serves as investment 
adviser. The immediate effect of the amendment would be to render the 
relief granted in the Order available to PIMCO Funds, should its 
trustees elect to participate in the deferred compensation plan.

Applicants Legal Analysis

    1. Section 6(c) of the Act provides that the SEC may exempt a 
person, transaction or class of transactions from any provision of the 
Act or any rule thereunder, if and to the extent that the 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.
    2. Section 17(d) of the Act and rule 17d-1 thereunder prohibit an 
affiliated person of an investment company, acting as principal, from 
participating in or effecting any transaction in connection with any 
joint enterprises or joint arrangement in which the investment company 
participates. Rule 17d-1 permits the SEC to approve a proposed joint 
transaction. In determining whether to approve a transaction, the SEC 
is to consider whether the proposed transaction is consistent with the 
provisions, policies, and purposes of the Act, and the extent to which 
the participation of the investment companies is on a basis different 
from or less advantageous than that of the other participants.
    3. Applicants confirm the arguments made in the original 
application under the Order and confirm that the terms of applicants' 
request for an amended order are consistent with the provisions, 
policies and purposes of the Act, that the requested exemption are 
necessary or appropriate in the public interest and consistent with the 
protection of investors, and that each Fund's participation in the 
proposed arrangements is on a basis no different from or less 
advantageous than that of any other participant.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. With respect to the requested relief from rule 2a-7, any money 
market series of a Fund that values its assets using the amortized cost 
method or the penny rounding method will buy and hold the Underlying 
Securities that determine the performance of Deferred Fee Accounts to 
achieve an exact match between such series' liability to pay deferred 
fees and the assets that offset that liability.\3\
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    \3\ The terms Underlying Securities and Deferred Fee Arrangement 
have the same meaning as under the Order.
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    2. If a fund purchases Underlying Securities issued by an 
affiliated Fund, the Fund will vote such shares in proportion to the 
votes of all other shareholders of such affiliated Fund.
    3. Any Fund that enters into a deferred fee arrangement will comply 
with all of the terms of the Order.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-33057 Filed 12-27-96; 8:45 am]
BILLING CODE 8010-01-M