[Federal Register Volume 62, Number 172 (Friday, September 5, 1997)]
[Notices]
[Pages 47076-47078]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23600]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 22803; 812-10758]
Robertson Stephens Investment Trust, et al.; Notice of
Application
August 29, 1997.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of application for exemption under section 6(c) of the
Investment Company Act of 1940 (the ``Act'') from section 15(a) of the
Act.
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SUMMARY OF APPLICATION: Robertson, Stephens & Company Group, L.L.C. and
Robertson, Stephens & Company, Inc., parent companies (``Parents'') of
Robertson, Stephens & Company Investment Management, L.P. (``RSIM,
L.P.''), and Robertson Stephens Investment Management, Inc. (``RSIM,
Inc.'') (each of RSIM, L.P. and RSIM, Inc., an ``Adviser,'' and
together, the ``Advisers''), have entered into an agreement and plan of
merger with BankAmerica Corporation (``BankAmerica'') to merge with a
wholly-owned subsidiary of BankAmerica. The indirect change in control
of the Advisers will result in the assignment, and thus the
termination, of the existing advisory contracts between Robertson
Stephens Investment Trust (the ``Trust'') and the Advisers. The order
would permit the implementation, without shareholder approval, of a new
investment advisory agreement for a period of up to 60 days following
the date of the change in control of the Advisers. The order also would
permit the Advisers to receive all fees earned under the new advisory
agreement following shareholder approval.
APPLICANTS: Trust, RSIM, L.P. and RSIM, Inc.
FILING DATES: The application was filed on August 15, 1997.
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 September 24,
1997, 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 Fifth Street NW., Washington, DC 20549.
Applicants, 555 California Street, San Francisco, CA 94104.
FOR FURTHER INFORMATION CONTACT:
Joseph B. McDonald, Jr., Senior Counsel, at (202) 942-0533, or Mary Kay
Frech, 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, 450 Fifth Street NW., Washington, DC
20549 (tel. 202-942-8090).
Applicant's Representations
1. The Trust is a Massachusetts business trust registered under the
Act as an open-end management investment company. The Trust currently
offers twelve separate series (the ``Funds'') to the public. The
Advisers are registered investment advisers under the Investment
Advisers Act of 1940. RSIM, L.P. serves as investment adviser to eleven
of the Funds and RSIM, Inc. serves as investment adviser to the Twelfth
Fund.
2. On June 8, 1997, BankAmerica entered into an agreement and plan
of merger with the Parents and their affiliates, under which each of
the Parents would be merged into a subsidiary of BankAmerica (the
``Merger''). As a result of the Merger, BankAmerica will become the
owner of the entire beneficial interest in RSIM, L.P. and RSIM, Inc.
Applicants expect consummation of the Merger on September 30, 1997.
3. Applicants request an exemption to permit implementation, prior
to obtaining shareholder approval, of new investment advisory
agreements (``New Advisory Agreements'') with the Advisers. The
requested exemption will cover an interim period of not more than 60
days beginning on the date the Merger is consummated and continuing, in
respect of each Fund, through the
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date on which a New Advisory Agreement is approved or disapproved by
the Fund's shareholders (the ``Interim Period''). The New Advisory
Agreements will contain terms and conditions identical to those of the
existing advisory agreements (``Existing Advisory Agreements''), except
for their effective dates, termination dates, and escrow provisions.
The aggregate contractual rate chargeable for the advisory services
under each New Advisory Agreement will remain the same as under the
Existing Advisory Agreements.
4. On July 22, 1997, the board of trustees of the Trust (the
``Board'') held a meeting to discuss the Merger and its implications
for the Funds. At the meeting, a majority of the members of the Board,
including a majority of the Board members who are not ``interested
persons'' of the Funds, as that term is defined in section 2(a)(19) of
the Act (the ``Independent Trustees''), voted in accordance with
section 15(c) of the Act to approve the New Advisory Agreements and to
submit the New Advisory Agreements to the shareholders of each of the
Funds at a meeting to be held on September 30, 1997 (the ``Meeting'').
The Board will meet in person prior to the start of the Interim Period
to approve the escrow provisions of each of the New Advisory Agreements
in accordance with section 15(c) of the Act.
5. Applicants state that proxy materials for the Meeting were
mailed on August 20, 1997. Applicants believe that it is possible that
shareholders of each of the Funds will approve the New Advisory
Agreements at the Meeting. However, it is also possible that an
insufficient number of votes will have been received by that date to
act upon the New Advisory Agreements in respect of one or more Funds,
and that if may be necessary to adjourn the meeting for a period not to
exceed 60 days following the Merger to permit additional shareholders
to vote their shares by proxy. Applicants believe that the requested
relief is necessary to permit continuity of investment management of
the Funds during the period following the Merger so that the investment
program and the delivery of related services for each Fund will not be
disrupted if the Meeting for that Fund is adjourned.
6. Applicants also request an exemption to permit the Advisers to
receive from each Fund, upon approval of that Fund's shareholders, any
and all fees earned (plus interest) under the related New Advisory
Agreement in effect during the Interim Period. Applicants state that
the fees paid during the Interim Period will be unchanged from the fees
paid under the Existing Advisory Agreements.
7. Applicants propose to enter into an escrow arrangement with an
unaffiliated financial institution. The fees payable to an Adviser
during the Interim Period under a New Advisory Agreement will be paid
by the Fund into an interest-bearing escrow account maintained by the
escrow agent. The escrow agent will release the monies held in the
escrow account (including any interest earned): (a) To the Adviser only
upon approval of the New Advisory Agreement by the Fund's shareholders
in accordance with section 15 of the Act; or (b) to the Fund if the
Interim Period has ended and the New Advisory Agreement has not
received the requisite shareholder approval. Before any such release is
made, the Board will be notified.
Applicants' Legal Analysis
1. Section 15(a) of the Act provides, in pertinent part, that it
shall be unlawful for any person to serve or act as an investment
adviser of a registered investment company, except pursuant to a
written contract that has been approved by the vote of a majority of
the outstanding voting securities of such registered investment
company. Section 15(a) further requires that such written contract
provide for automatic termination in the event of its ``assignment.''
Section 2(a)(4) of the Act defines ``assignment'' to include any direct
or indirect transfer of a contract by the assignor, or of a controlling
block of the assignor's outstanding voting securities by a security
holder of the assignor. Section 2(a)(9) of the Act defines ``control''
as the power of exercise a controlling influence over the management or
policies of a company, and beneficial ownership of more than 25% of the
voting securities of a company is presumed under section 2(a)(9) to
reflect control.
2. Applicants state that, following the completion of the Merger,
BankAmerica will own 100% of the voting securities of the Parents.
Applicants believe, therefore, that the Merger will result in an
``assignment'' of the Existing Advisory Agreements and that the
Existing Advisory Agreements will terminate by their terms upon
consummation of the Merger.
3. Rule 15a-4 provides, in pertinent part, that if an investment
advisory contract with an investment company is terminated by an
assignment in which the adviser does not directly or indirectly receive
a benefit, the adviser may continue to act as such for the company for
120 days under a written contract that has not been approved by the
company's shareholders, provided that: (a) The new contract is approved
by that company's board of director (including a majority of the non-
interested directors); (b) the compensation to be paid under the new
contract does not exceed the compensation that would have been paid
under the contract most recently approved by the company's
shareholders; and (c) neither the adviser nor any controlling person of
the adviser ``directly or indirectly receives money or other benefit''
in connection with the assignment. Applicants state that because of the
Advisers and their affiliates may be deemed to receive a benefit in
connection with the Merger, applicants may not rely on rule 15a-4.
4. Section 6(c) provides that the SEC may exempt any person,
security, or transaction from any provision of the Act, if and to the
extent that 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.
Applicants believe that the requested relief meets this standard.
5. Applicants note that the terms and timing of the Merger were
determined by the Parents and BankAmerica in response to a number of
factors beyond the scope of the Act and unrelated to the Funds and the
Advisers. Applicants submit that it is in the best interests of
shareholders to have sufficient time to consider and return proxies and
to hold a shareholder meeting. Applicants believe that the Interim
Period would facilitate the orderly and reasonable consideration of the
New Advisory Agreements with respect to those Funds whose shareholders
have not voted in sufficient numbers by the date of the Meeting.
6. Applicants submit that the scope and quality of services
provided to the Portfolios during the Interim Period will not be
diminished. During the Interim Period, the Advisers would operate under
the New Advisory Agreements, which are substantively the same as the
Existing Advisory Agreements. The Advisers have advised the Board that
they are not aware of any material changes in the personnel who will
provide investment management services during the Interim Period.
Accordingly, the Funds should receive, during the Interim Period, the
same advisory services, provided in the same manner and at the same fee
levels, by substantially the same personnel as they received before the
Merger.
7. Applicants contend that the relationship between each of the
Funds and the Advisers has been a beneficial
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one to the shareholders of the Funds, and that it would be in no one's
interests for the relationship to be impaired because the Advisers
cannot receive fees for the services they provide during the Interim
Period. In addition, the fees to be paid during the Interim Period will
be unchanged from the fees paid under the Existing Advisory Agreements.
Applicants' Conditions
Applicants agree as conditions to the issuance of the exemptive
order requested by the application that:
1. Each New Advisory Agreement will have the same terms and
conditions as the respective Existing Advisory Agreements, except for
the effective date, termination date, and escrow provisions.
2. Advisory fees payable by a Fund to an Adviser during the Interim
Period will be maintained in an interest-bearing escrow account, and
amounts in the account (including interest earned on such amounts) will
be paid: (a) to the Adviser in accordance with the relevant New
Advisory Agreement, after the requisite approval is obtained; or (b) to
the Fund, in the absence of such approval.
3. The Trust will hold a meeting of shareholders to vote on
approval of the New Advisory Agreements for the Funds on September 30,
1997, or within the 60-day period thereafter.
4. None of the Funds will bear the costs of preparing and filing
the application, or any costs relating to the solicitation of the
shareholder approval of the Funds' shareholders necessitated by the
consummation of the Merger.
5. The Advisers will take all appropriate actions to ensure that
the scope and quality of advisory and other services provided to the
Funds during the Interim Period will be at least equivalent, in the
judgment of the Board, including a majority of the Independent
Trustees, to the scope and quality of services previously provided. In
the event of any material change in personnel providing services
pursuant to the New Advisory Agreements caused by the Merger, the
Advisers will apprise and consult with the Board to assure that the
Board, including a majority of the Independent Trustees, is satisfied
that the services provided will not be diminished in scope or quality.
6. The Board, including a majority of the Independent Trustees,
will have approved the escrow provisions of the New Advisory Agreements
in accordance with the requirements of section 15(c) of the Act prior
to the termination of the Existing Advisory Agreements.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 97-23600 Filed 9-4-97; 8:45 am]
BILLING CODE 8010-01-M