[Federal Register Volume 64, Number 54 (Monday, March 22, 1999)]
[Notices]
[Pages 13834-13835]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6918]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 23739; 812-11298]
TCAW Galileo Funds, Inc., et al.; Notice of Application
March 16, 1999.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of an application under section 12(d)(1)(J) of the
Investment Company Act of 1940 (the ``Act'') for an exemption from
section 12(d)(1)(G)(i)(II) of the Act.
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SUMMARY OF APPLICATION: Applicants request an order to permit a fund of
funds relying on section 12(d)(1)(G) of the Act to invest directly in
certain equity securities.
APPLICANTS: TCW Galileo Funds, Inc. (``Company''), on behalf of its
series TCW Galileo International Equities Fund (``International
Fund''), and TCW Funds Management, Inc. (``Adviser'').
FILING DATES: The application was filed on September 8, 1998 and
amended on January 6, 1999 and March 12, 1999.
HEARING OR NOTIFICATION OF HEARING: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on April 8, 1999 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 may request notification of a hearing by writing the
Commission's Secretary.
ADDRESSES: Secretary, Securities and Exchange Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549-0609. Applicant, c/o Phillip K.
Holl, TCW Funds Management, Inc., 865 South Figueroa Street, Suite
1800, Los Angeles, CA 90017.
FOR FURTHER INFORMATION CONTACT: Emerson S. Davis, Sr., Senior Counsel,
at (202) 942-0714, or George J. Zornada,
[[Page 13835]]
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 Commission's Public Reference Branch, 450 Fifth Street, N.W.,
Washington, D.C. 20549-0102 (telephone (202) 942-8090).
Applicants' Representations
1. The Company, a Maryland corporation, is registered under the Act
as an open-end management investment company. The Company currently is
comprised of twenty-one series, including the International Fund. The
Adviser, a California corporation, is registered under the Investment
Advisers Act of 1940 and is investment adviser to each series of the
Company. The Adviser is a wholly-owned subsidiary of The TCW Group,
Inc.
2. The International Fund is a fund of funds relying on section
12(d)(1)(G) of the Act. The International Fund's investment objective
is long-term capital appreciation through the allocation of assets,
within predetermined percentage ranges approved by the board of
directors of the Company (``Board''), including a majority of the
directors who are not interested persons, as defined in section
2(a)(19) of the Act (``Independent Directors''), among the Company's
other separate series (or any new series) which, except for a money
market fund, invest in foreign securities (Underlying Funds'').
Applicants request relief to permit the International Funds to invest
directly in equity securities of companies located in Australia and New
Zealand (``Australia and New Zealand Securities''). No Underlying Funds
invest in Australia or New Zealand Securities and applicants state
shareholders of the International Fund would be disadvantaged if the
International Fund could not diversify and capture any performance
benefit in these markets.
Applicants' Legal Analysis
1. Section 12(d)(1)(A) of the Act provides that no registered
investment company may acquire securities of another investment company
if such securities (i) represent more than 3% of the acquired company's
outstanding voting stock; (ii) more than 5% of the acquiring company's
total assets; or (iii) if such securities, together with the securities
of other acquired investment companies, represent more than 10% of the
acquiring company's total assets. Section 12(d)(1)(B) of the Act
provides that no registered open-end investment company may sell its
securities to another investment company if the sale will (i) cause the
acquiring company to own more than 3% of the acquired company's voting
stock, or (ii) cause more than 10% of the acquired company's voting
stock to be owned by investment companies.
2. Section 12(d)(1)(G) of the Act provides that section 12(d)(1)
will not apply to securities of an acquired company purchased by an
acquiring company if: (a) the acquiring company and the acquired
company are part of the same group of investment companies; (b) the
acquiring company holds only securities of acquired companies that are
part of the same group of investment companies, government securities;
and short-term paper; (c) the aggregate sales loads and distribution-
related fees of the acquiring company and the acquired company are not
excessive under rules adopted pursuant to section 22(b) of the Act or
section 22(c) of the Act by a securities association registered under
section 15A of the Securities Exchange Act of 1934 or the Commission;
and (d) the acquired company has a policy that prohibits it from
acquiring securities of registered open-end investment companies or
registered unit investment trusts in reliance on section 12(d)(1)(F) or
(G). Applicants believe that the proposed arrangement would comply with
the provisions of section 12(d)(1)(G), except for the fact that the
International Fund would like the flexibility to invest a portion of
its assets directly in Australia and New Zealand Securities.
3. Section 12(d)(1)(J) of the Act provides that the Commission may
exempt, conditionally or unconditionally, persons or transactions from
the provisions of section 12(d)(1) if, and to the extent that, the
exemption is consistent with the public interest and the protection of
investors. Applicants believe that permitting the International Fund to
invest in Australia and New Zealand Securities as described in the
application would not raise any of the concerns that the requirements
of section 12(d)(1)(G) were designed to address.
Applicants' Conditions
Applicants agree that any order granting the requested relief will
be subject to the following conditions.
1. Before approving any advisory contract under section 15 of the
Act, the Board, on behalf of the International Fund, including a
majority of the Independent Directors, will find that the advisory
fees, if any, charged under such contract are based on services
provided that are in addition to, rather than duplicative of, services
that are provided under any Underlying Fund's advisory contract. The
finding, and the basis upon which the finding was made, will be
recorded fully in the minute books of the International Fund.
2. Applicants will comply with all of the provisions of section
12(d)(1)(G) of the Act, except for section 12(d)(1)(G)(i)(II) to the
extent that it restricts the International Fund from investing in
securities as described in the application.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-6918 Filed 3-19-99; 8:45 am]
BILLING CODE 8010-01-M