[Federal Register Volume 64, Number 62 (Thursday, April 1, 1999)]
[Notices]
[Pages 15842-15844]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7958]


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SECURITIES AND EXCHANGE COMMISSION

[Rel. No. IC-23762; File No. 812-11400]


Manufacturers Investment Trust, et al.; Notice of Application

March 25, 1999.
AGENCY: Securities and Exchange Commission (the ``Commission'').

ACTION: Notice of application for an order under section 17(b) of the 
Investment Company Act of 1940 (the ``Act'').

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SUMMARY OF APPLICATION: Applicants seek an order exempting them from 
the provisions of section 17(a) of the Act to the extent necessary to 
permit the merger of the Worldwide Growth Trust and the Capital Growth 
Bond Trust (collectively, the ``Transferor Portfolios'') of the 
Manufacturers Investment Trust (``Manulife Investment Trust'' or the 
``Investment Trust'') with and into the Global Equity Trust and the 
Investment Quality Bond Trust (collectively, the ``Acquiring 
Portions''), respectively, of the Investment Trust.

APPLICANTS: Manulife Investment Trust, Manufacturers Securities 
Services, LLC (``Manulife Securities''), The Manufacturers Life 
Insurance Company of North America (``Manulife North America''), The 
Manufacturers Life Insurance Company of New York (``Manulife New 
York''), The Manufacturers Life Insurance Company (``Manulife''), The 
Manufacturers Life Insurance Company of America (``Manufacturers 
America''), The Manufacturers Life Insurance Company (U.S.A.) 
(``Manufacturers U.S.A.''), and Manufacturers Adviser Corporation 
(``MAC'').

FILING DATES: The application was filed on November 13, 1998, and 
amended on March 18, 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 Secretary of the 
Commission 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 19, 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 who wish to be notified of a hearing may request 
notification by writing to the Secretary of the Commission.

ADDRESSES: For the Commission: Secretary, Securities and Exchange 
Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. For the 
Applicants: Manulife Investment Trust and Manulife Securities, 73 
Tremont Street, Boston, Massachusetts 02108; Manulife North America, 
116 Huntington Avenue, Boston Massachusetts 02116; Manulife New York, 
International Corporate Center at Rye, 555 Theodore Fremd Avenue, Suite 
C-209, Rye, New York 10580; Manulife, Manufacturers America, 
Manufacturers U.S.A. and MAC at 200 Bloor Street East, Toronto, 
Ontario, Canada M4W 1E5.

FOR FURTHER INFORMATION CONTACT: Keith E. Carpenter, Senior Counsel, or 
Kevin M. Kirchoff, Branch 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 is available for a fee from the 
Commission's Public Reference Branch, 450 Fifth St., NW, Washington, DC 
(tel (202) 942-8090).

Applicants' Representations

    1. Applicants state that Manulife Investment Trust is an open-end, 
series, management investment company registered under the Act, which 
currently offers 36 investment portfolios (collectively, the 
``Portfolios''). The Investment Trust receives investment advisory 
services from Manulife Securities. In addition, MAC serves as 
subadviser to the Capital Growth Bond Trust, one of the Portfolios 
involved in the proposed reorganization. The shares of Manulife 
Investment Trust are sold generally only to insurance companies and 
their separate accounts as the underlying investment medium for 
variable annuity and variable life insurance contracts issued by such 
insurance companies. Manulife North America, Manulife New York, 
Manufacturers America and Manufacturers U.S.A. and their separate 
accounts are the only shareholders of the Transferor Portfolios and the 
Acquiring Portfolios. Manulife North America is controlled by Manulife, 
a Canadian mutual life insurance company based in Toronto, Canada. 
Manulife New York, Manufacturers America and Manufacturers U.S.A. are 
indirect wholly-owned subsidiaries of Manulife.
    2. Applicants state that it is proposed that the Transferor 
Portfolios merge with and into the Acquiring Portfolios, respectively, 
(the ``Reorganization''), pursuant to the terms and conditions stated 
in the Agreement and Plan of Reorganization (the ``Plan''). In the 
Reorganization, all of the assets of each Transferor Portfolio will be 
transferred to a corresponding Acquiring Portfolio having a 
substantially similar investment objective. In exchange, each Acquiring 
Portfolio will issue and deliver to the corresponding Transferor 
Portfolio shares of such Acquiring Portfolio. The total value of all 
shares of each Acquiring Portfolio issued in the Reorganization will 
equal the total value of the net assets of the corresponding Transferor 
Portfolio being acquired by such Acquiring Portfolio. In connection 
with the Reorganization, shares of each Acquiring Portfolio will be 
distributed to holders of the shares of the respective corresponding 
Transferor Portfolio in liquidation of the Transferor Portfolio. The 
number of full and fractional shares of an Acquiring Portfolio received 
by a shareholder of the corresponding Transferor Portfolio will be 
equal in value to the value of that shareholder's

[[Page 15843]]

shares of the corresponding Transferor Portfolio as of the close of 
regularly scheduled trading on the New York Stock Exchange on the 
closing date of the Reorganization. As a result of the Reorganization, 
each holder of shares of each Transferor Portfolio will become a holder 
of shares of the Acquiring Portfolio.
    3. Applicants state that Reorganization will be affected in two 
distinct but contemporaneous transfers. The Global Equity Trust will 
acquire the assets and liabilities of the Worldwide Growth Trust and 
the Investment Quality Bond Trust will acquire the assets and 
liabilities of the Capital Growth Bond Trust.
    4. Applicants state that the Reorganization will be submitted to a 
vote of the shareholders of the Transferor Portfolios for approval at a 
special shareholders' meeting in accordance with Massachusetts law, the 
Act and Commission rules. The shareholders of the Transferor Portfolios 
are Manulife North America, Manulife New York, Manufacturers America 
and Manufacturers U.S.A., through their registered and unregistered 
separate accounts. Manulife North America, Manulife New York, 
Manufacturers America and Manufacturers U.S.A. thus have the right to 
vote upon matters that are required by the Act to be approved or 
ratified by shareholders and to vote upon any other matters that may be 
voted upon at a special shareholders' meeting. However, each of 
Manulife North America, Manulife New York, Manufacturers America and 
Manufacturers U.S.A. will vote all shares of the Transferor Portfolios 
in accordance with and in proportion to timely instructions received 
from owners of the variable contracts issued by it participating in 
separate accounts registered under the Act, the values of which are 
invested in shares of the Transferor Portfolios through such separate 
accounts at the record date. Shares of each Transferor Portfolio for 
which properly executed voting instruction forms are not received, 
including shares not attributable to variable contracts, will be voted 
in the same proportion as that of shares of such Transferor Portfolio 
for which instructions are received. Prior to voting on the 
Reorganization, contractholders participating in registered separate 
accounts holding shares of the Transferor Portfolios will receive a 
Notice of Special Meeting of Shareholders and combined prospectus/proxy 
statement containing all material disclosures, including any material 
differences in investment objectives and policies.
    5. Applicants represent that a description of the respective 
subadvisory fees for the Transferor Portfolios and the corresponding 
Acquiring Portfolios and a pro forma presentation of expenses after 
giving effect to the Reorganization were included in the materials 
presented to the Board of Trustees and will be included in the 
prospectus/proxy statement delivered to shareholders of the Transferor 
Portfolios, in each case in connection with their consideration of the 
Reorganization. It is anticipated that the investment management fees 
and the annualized expenses as a percentage of average net assets paid 
by the Acquiring Portfolios generally will be comparable to or lower 
than those paid by the corresponding Transferor Portfolios.

Applicants' Legal Analysis

    1. Section 17(a) of the Act provides in part that it is unlawful 
for any affiliated person of a registered investment company, or any 
affiliated person of such an affiliated person, acting as principal, 
knowingly to sell to such investment company or to purchase from such 
investment company any securities or other property.
    2. Applicants state that as a result of the relationships described 
above, the Transferor Portfolios and the Acquiring Portfolios may be 
deemed to be under common control, and therefore, affiliated persons of 
each other as defined by section 2(a)(3) of the Act, and for the 
purposes of the prohibitions of section 17(a) of the Act. 
Alternatively, they may be deemed to be affiliated persons of 
affiliated persons of each other.
    3. Section 17(b) of the Act permits a person to file with the 
Commission an application for an order exempting a proposed transaction 
from one or more of the prohibitions of section 17(a). The Commission 
shall grant such application if evidence establishes that the terms of 
the proposed transaction are fair and reasonable and do not involve 
overreaching on the part of any person concerned, and the proposed 
transaction is consistent with the policy of each registered investment 
company concerned and with the general purposes of the Act. Applicants 
seek an order of the Commission, pursuant to section 17(b) of the Act, 
exempting them from the provisions of section 17(a) of the Act.
    4. Rule 17a-8 under the Act provides, in part, that a merger of 
registered investment companies which are affiliated persons solely by 
reason of having a common investment adviser, directors, and/or 
officers is exempt from the prohibitions of Section 17(a). Applicants 
state that Rule 17a-8 is not availale because of the share ownership by 
the affiliated insurance companies. Applicants state that, as a 
substantive matter, the Reorganization is consistent with the routine 
mergers that otherwise do not require exemptive relief, as well as with 
the spirit of Rule 17a-8. Applicants state that the additional 
affiliations presented arise out of the nature of variable product 
investing and are negated by the fact that contractholders 
participating in registered separate accounts holding shares of the 
Transferor Portfolios will have the opportunity to provide voting 
instructions on the Reorganization and that all shares technically 
owned by Manulife North America, Manulife New York, Manufacturers 
America and Manufacturers U.S.A. will be vetoed in proportion to voting 
instructions received.
    5. The Board of Trustees of Manulife Investment Trust, including 
the disinterested Trustees, has reviewed the contemplated transactions 
and determined that the participation by each Transferor Portfolio and 
each corresponding Acquiring Portfolio in the Reorganization is in the 
best interest of each Transferor Portfolio and each corresponding 
Acquiring Portfolio, as well as in the best interests of shareholders 
and the contractholders whose contract values are invested in shares of 
the Transferor Portfolios and the corresponding Acquiring Portfolios, 
and that the interests of existing shareholders and contractholders 
will not be diluted as a result of the Reorganization. Accordingly, if 
Rule 17a-8 were available, its conditions would be satisfied.
    6. Applicants represent that the Plan will provide that the 
exchange of assets and liabilities of the Transferor Portfolios for 
shares of capital stock of the Acquiring Portfolios shall be 
accomplished on the basis of the net asset value of the respective 
Portfolios, and thus the Reorganization will not involve dilution of 
the interests of existing shareholders or contractholders. Applicants 
submit that the terms of the proposed transactions are fair and 
reasonable and do not involve overreaching on the part of any person 
concerned.
    7. Applicants represent that the proposed transactions have been 
reviewed by the Board of Trustees for consistency with the policies of 
the Transferor Portfolios and the Acquiring Portfolios. Material 
differences, if any, between a Transferor Portfolio and its 
corresponding Acquiring Portfolio, including differences in investment

[[Page 15844]]

policies have been reviewed by the Board of Trustees and described in 
the prospectus/proxy statement. Applicants state that this is precisely 
the same process followed with respect to reorganizations that fit 
within the technical requirements of Rule 17a-8.
    8. Applicants state that the proposed transactions are also 
consistent with the general purposes of the Act as stated in the 
Findings and Declaration of Policy in Section 1 of the Act, and that 
the proposed transactions do not result in any of the self-dealing 
abuses that the Act was designed to prevent.
    9. Applicants represent that the terms of the proposed transactions 
are consistent with the provisions, policies and purposes of the Act in 
that they are reasonable and fair to all parties, do not involve 
overreaching, and are consistent with the investment objective and 
policies of each Transferor Portfolio and of each Acquiring Portfolio 
participating in the proposed transactions. The participation in the 
Reorganization by each portfolio is at respective net asset value, and 
not on a basis different or less advantageous than that of other 
participants. Contractholders will have the opportunity to provide 
voting instructions as to whether the Reorganization should be approved 
with respect to each Transferor Portfolio.

Conclusion

    For the reasons stated herein, Applicants state that the terms of 
the contemplated transactions meet all the requirements of section 
17(b) of the Act.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-7958 Filed 3-31-99; 8:45 am]
BILLING CODE 8010-01-M