[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