[Federal Register Volume 64, Number 77 (Thursday, April 22, 1999)]
[Notices]
[Pages 19834-19838]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10021]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-23787; 812-11032]
Colchester Street Trust, et al.; Notice of Application
April 15, 1999.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of application for an order under the Investment Company
Act of 1940 (the ``Act'') under (i) section 6(c) of the Act granting an
exemption from sections 18(f) and 21(b) of the Act; (ii) section
12(d)(1)(J) of the Act granting an exemption from section 12(d)(1) of
the Act, (iii) sections 6(c) and 17(b) of the Act granting an exemption
from sections 17(a)(1) and 17(a)(3) of the Act, and (iv) section 17(d)
of the Act and rule 17d-1 under the Act to permit certain joint
transactions.
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SUMMARY OF APPLICATION: Applicants request an order that would
supersede an existing order permitting certain registered management
investment companies to participate in a joint lending and borrowing
facility.
APPLICANTS: Colchester Street Trust, Fidelity Aberdeen Street Trust,
Fidelity Advisor Emerging Asia Fund Inc., Fidelity Advisor Korea Fund
Inc., Fidelity Advisor Series I, Fidelity Advisor Series II, Fidelity
Advisor Series III, Fidelity Advisor Series IV, Fidelity Advisor Series
V. Fidelity Advisor Series VI, Fidelity Advisor Series VII, Fidelity
Advisor Series VIII, Fidelity Beacon Street Trust, Fidelity Boston
Street Trust, Fidelity California Municipal Trust, Fidelity California
Municipal Trust II, Fidelity Capital Trust, Fidelity Charles Street
Trust, Fidelity Commonwealth Trust, Fidelity Concord Street Trust,
Fidelity Congress Street Fund, Fidelity Contrafound, Fidelity Court
Street Trust, Fidelity Court Street Trust II, Fidelity Covington Trust,
Fidelity Destiny Portfolios, Fidelity Devonshire Trust, Fidelity
Exchange Fund, Fidelity Financial Trust, Fidelity Fixed-Income Trust,
Fidelity Hastings Street Trust, Fidelity Hereford Street Trust,
Fidelity Income Fund, Fidelity Investment Trust, Fidelity Magellan
Fund, Fidelity Massachusetts Municipal Trust, Fidelity Money Market
Trust, Fidelity Mt. Vernon Street Trust, Fidelity Municipal Trust,
Fidelity Municipal Trust II, Fidelity New York Municipal Trust,
Fidelity New York Municipal Trust II, Fidelity Phillips Street Trust,
Fidelity Puritan Trust, Fidelity Revere Street Trust, Fidelity School
Street Trust, Fidelity Securities Fund, Fidelity Select
[[Page 19835]]
Portfolios, Fidelity Summer Street Trust, Fidelity Trend Fund, Fidelity
Union Street Trust, Fidelity Union Street Trust II, Newbury Street
Trust, Variable Insurance Products Fund, Variable Insurance Products
Fund II, Variable Insurance Products Fund III (collectively, the
``Funds''), and Fidelity Management & Research Company (together with
any person controlling, controlled by, or under common control with
Fidelity Management & Research Company, ``FMR''), and any other
registered open-end management investment companies for which FMR
serves as investment adviser.\1\
\1\ All existing registered investment companies that currently
intend to rely on the order have been named as applicants, and any
other existing or future registered investment companies that
subsequently rely on the order will comply with the terms and
conditions in the application.
FILING DATES: The application was filed on February 27, 1998.
Applicants have agreed to file an amendment during the notice period,
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the substance of which is reflected in this notice.
HEARING OR NOTIFICATION OF HEARING: An order granting the requested
relief 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 May 10,
1999, 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, N.W., Washington DC 20549-
0609. Applicants, Fidelity Management & Research Company, 82 Devon
shire Street E17B, Boston, MA 02109.
FOR FURTHER INFORMATION CONTACT: Lisa McCrea, Attorney Adviser (202)
942-0562, or Nadya B. Roytblat, Assistant Director, 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 5th Street, N.W., Washington, DC,
20549-0102 (tel. 202-942-8090).
Applicants' Representations
1. Each of the Funds is registered under the Act as an open-end
management investment company. FMR, an investment adviser registered
under the Investment Advisers Act of 1940, serves as investment adviser
to the Funds.
2. Applicants have an existing SEC order that permits the Funds to
participate in a joint lending and borrowing facility (the ``1990
Order'').\2\ FMR administers the credit facility under its existing
advisory agreements with the Funds, and does not receive any additional
compensation for its administration of the credit facility. Applicants
request an order that would supersede the 1990 Order.
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\2\ In the Matter of Daily Money Fund, et al., Investment
Company Act Release Nos. 17257 (Dec. 8, 1989) (notice) and 17303
(Jan. 11, 1990) (order).
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3. Applicants state that the credit facility was designed to permit
the Funds to lend money to each other for temporary purposes, such as
when redemptions exceed anticipated levels. The credit facility was
designed to reduce substantially the Funds' borrowing costs and to
enhance their ability to earn higher rates of interest on investment of
their short-term cash balances. While bank borrowings continue to be a
source of liquidity pending the sale and settlement of portfolio
securities, the rates charged under the credit facility are normally
below those offered by banks on short-term loans, and Funds making
loans through the credit facility are able to earn interest at a rate
higher than they could obtain from investing their cash in short-term
repurchase agreements or jointly through FICASH.\3\
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\3\ FICASH was established pursuant to SEC exemptive orders. In
the Mater of Daily Money Fund, et al., Investment Company Act
Release Nos. 11962 (Sept. 29, 1981) (notice) and 12061 (Nov. 27,
1981) (order); In the Mater of Daily Money Fund, et al., Investment
Company Act Release Nos. 19594 (July 26, 1993) (notice) and 19647
(Aug. 23, 1993) (order). Pursuant to these orders, during each
trading day, the Funds' cash balances may be deposited in FICASH.
FICASH invests these cash balances in one or more large, short-term
repurchase agreements. FMR administers FICASH as part of its duties
under its existing advisory contract with each of the Funds, and
does not charge any additional fee for this service.
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4. When the Funds lend money to and borrow money from each other
than the credit facility (``Interfund loans''), interest rates
(``Interfund Loan Rates'') are based on the average of the overnight
repurchase agreement rate for that day for the Funds' joint account
(``FICASH Rate'') and a benchmark rate established periodically to
approximate the lowest rate available from at least three banks on
loans to the Funds.
5. On each business day, the Cash Management Department of Fidelity
Service Company, Inc., the transfer, pricing and bookkeeping agent for
most of the Funds, (the ``Cash Management Department'') compares the
Interfund Loan Rate with the FICASH Rate negotiated that day and
available short-term borrowing rates quoted to any of the Funds by
banks with which any Fund has a loan agreement. At least three such
quotations will be obtained each day in which any Fund borrows through
the credit facility prior to such borrowing. The Cash Management
Department will make cash available for Interfund Loans only if the
Interfund Loan Rate is more favorable to the lending Fund than the
FICASH Rate and more favorable to the borrowing Fund than the lowest
quoted back loan rate.
6. The Cash Management Department on each business day collects
data on uninvested cash balances and borrowing requirements of all
participating Funds from the Funds' custodians. The Cash Management
Department will not solicit cash for the facility from any Fund or
prospectively publish or disseminate total loan demand data to
portfolio managers. No portfolio manager is able to direct that a
Fund's cash balances be loaned to any particular Fund or otherwise
intervene in the Cash Mangement Department's allocation of loans. A
portfolio manager for a money market Fund, however, may decline to
enter into a loan if he or she believes the loan is inconsistent with
portfolio strategy. The Cash Management Department allocates borrowing
cash and cash available for lending among Funds on an equitable basis,
subject to certain administrative procedures applicable to all Funds,
such as the time of filing requests to participate, minimum loan lot
sizes, and the need to mininize the number and associated
administrative costs of transactions.
7. All Funds whose investment policies and boards of trustees (the
``Boards'') permit, may participate as potential borrowers and/or
lenders in the credit facility. The money market Funds typically would
not participate as borrowers because they rarely need to borrow cash to
meet redemptions. A Fund would not participate as a lender unless it
was also eligible to participate in FICASH.
8. No Fund may participate in the credit facility unless: (i) the
Fund has obtained shareholder approval for its participation or, if
such approval is not required by law, the Fund's prospectus and/or
statement of additional information have disclosed at all times the
possibility of the Fund's participation in the credit facility upon
receipt of requisite regulatory approval; (ii) the Fund has fully
disclosed all material information concerning the credit facility in
its prospectus and/or
[[Page 19836]]
statement of additional information; and (iii) the Fund's participation
in the credit facility is consistent with its investment objectives,
limitations, and/or Declaration of Trust.
9. Applicants seek to amend the 1990 Order to reduce certain
administrative burdens associated with the credit facility and give
participating Funds greater flexibility consistent with the purposes of
the credit facility and investor protection. Applicants state that the
anticipated benefits of the 1990 Order have not been realized,
primarily because the administrative burdens and related costs of
complying with certain conditions of the 1990 Order often made the use
of the credit facility inefficient. Applicants assert that modifying
these conditions would benefit both those Funds that are borrowers and
those Funds that are lenders.
10. The 1990 Order prohibited a Fund from borrowing through the
credit facility if the Fund's outstanding borrowings from all sources
immediately after the interfund borrowing exceeded 15% of the Fund's
total assets. Applicants seek to raise that limit to 33\1/3\%.
Applicants state that this limit would provide greater flexibility in
the use of the credit facility consistent with the Act. Applicants also
state that the other conditions in the application governing Funds'
borrowing through the credit facility (such as the conditions
addressing unsecured borrowing) provide adequate safeguards against any
misuse of the credit facility.
11. Applicants also seek to modify the condition in the 1990 Order
that permitted an equity, taxable bond or money market Fund to lend
through the credit facility only if the Fund's aggregate outstanding
loans through the credit facility do not exceed 5%, 7.5% and 10%,
respectively, of the Fund's net assets at the time of the loan.
Applicants seek to permit any type of Fund to make loans through the
credit facility in an amount of up to 15% of the Fund's current net
assets at the time of the loan. Applicants state that the percentage
limitations in the 1990 Order created artificial distinctions that were
not related to a Fund's particular circumstances and unnecessarily
restricted a Fund's ability to effectively manage its cash balances.
Applicants further state that, if a Fund has large cash balances, its
ability to invest the cash at a more attractive rate should not be
unnecessarily limited.
12. Finally, applicants seek to remove the condition in the 1990
Order that provided that a Fund's borrowing through the credit facility
will not exceed 125% of the Fund's total net cash redemptions for the
preceding seven calendar days. Applicants assert that this condition is
difficult to monitor and ineffective. Applicants state that the
condition was designed to protect the Funds from the dangers of
borrowing for investment, and the resulting leverage, especially in a
declining securities market. Applicants assert that this condition may
be ineffective in addressing a Fund's need for cash in the case of
unanticipated levels of redemption (such as in the event of a sharp
market correction). Applicants also assert that the condition may not
necessarily prevent a fund from borrowing from investment. Applicants
state that each Fund's fundamental investment limitations provide that
the Fund may borrow money only for temporary or emergency purposes and
prohibit borrowing for purposes of leverage or investment (except that
certain Funds also may engage in reverse repurchase agreements in which
the Fund is a seller for any purpose). Applicants assert that this
fundamental policy is a more effective safeguard that will prevent
inappropriate use of the credit facility. Applicants propose as a
condition to the requested order that each Fund borrowing through the
facility have this fundamental policy.
Applicants' Legal Analysis
1. Section 17(a)(3) generally prohibits any affiliated person, or
affiliated person of an affiliated person, from borrowing money or
other property from a registered investment company. Section 21(b)
generally prohibits any registered management investment company from
lending money or other property to any person if that person controls
or is under common control with the company. Section 2(a)(3)(c) of the
Act defines an ``affiliated person'' of another person, in part, to be
any person directly or indirectly controlling, controlled by, or under
common control with, the other person. Applicants state that the Funds
may be deemed to be under common control because FMR serves as their
common investment adviser.
2. Section 17(d) authorizes the SEC to exempt a proposed
transaction from section 17(a) provided that the terms of the
transaction, including the consideration to be paid or received, are
fair and reasonable and do not involve overreaching on the part of any
person concerned, and the transaction is consistent with the policy of
the investment company as recited in its registration statement and
with the general purposes of the Act. Section 6(c) under the Act
provides that an exemptive order may be granted where an example 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 proposed
arrangements satisfy these standards for the reasons discussed below.
3. Applicants submit that sections 17(a)(3) and 21(b) of the Act
were intended to prevent a party with potential adverse interests to
and influence over the investment decisions of a registered investment
company from causing or inducing the investment company to engage in
lending transactions that are detrimental to the best interests of the
investment company and its shareholders. Applicants assert that the
credit facility does not raise these concerns because (i) FMR
administers the credit facility as a disinterested fiduciary; (ii) the
Interfund Loans consist only of uninvested cash reserves that the Fund
otherwise would invest in short-term repurchase agreements or other
short-term instruments directly, through FICASH or in affiliated money
market funds (``Central Funds''); \4\ (iii) the Interfund Loans do not
involve a significantly greater risk than such other investments; (iv)
the lending Fund would receive interest at a rate higher than it could
obtain through such other investments; and (v) the borrowing Fund would
pay interest at a rate lower than otherwise available to it under its
bank loan agreements. Moreover, applicants believe that the other
conditions governing the credit facility effectively preclude the
possibility of any undue advantage.
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\4\ See In the Matter of Daily Money Fund, et al., Investment
Company Act Release Nos. 22236 (Sept. 20, 1996) (notice) and 22285
(Oct. 16, 1996) (order).
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4. Section 17(a)(1) generally prohibits an affiliated person of a
registered investment company, or an affiliated person of an affiliated
person, from selling any securities or other property to the company.
Section 12(d)(1) of the Act generally makes it unlawful for a
registered investment company to purchase or otherwise acquire any
security issued by any other investment company except in accordance
with the limitations set forth in that section. Applicants believe that
the obligation of a borrowing Fund to repay an Interfund Loan may
constitute a security under sections 17(a)(1) and 12(d)(1).
5. Section 12(d)(1)(J) provides that the SEC may exempt persons or
transactions from any provision of section 12(d)(1) if and to the
extent such exception is consistent with the public interest and the
protection of investors. Applicants contend that the standards under
[[Page 19837]]
sections 6(c), 17(b) and 12(d)(1) are satisfied for all the reasons set
forth above in support of their request for relief from sections
17(a)(3) and 21(b) and for the reasons discussed below.
6. Applicants state that section 12(d)(1) was intended to prevent
the pyramiding of investment companies in order to avoid duplicative
costs and fees attendant upon multiple layers of investment companies.
Applicants submit that the credit facility does not involve these
abuses because there would be no duplicative costs or fees to the Funds
or shareholders, and that FMR would receive no additional compensation
for its services in administering the credit facility.
7. Section 18(f)(1) prohibits an open-end investment company from
issuing any senior security except that the company is permitted to
borrow from any bank; provided that immediately after any such
borrowing there is an asset coverage of at least 300 per centum for all
borrowings of the company. Under section 18(g) of the Act, the term
``senior security'' includes any bond, debenture, note, or similar
obligation or instrument constituting a security and evidencing
indebtedness. Applicants request exemptive relief from section 18(f)(1)
to the limited extent necessary to implement the credit facility
(because the lending Funds are not banks). Applicants believe that
granting relief under section 6(c) is appropriate because the Funds
would remain subject to the requirement of section 18(f)(1) that all
borrowings of the Fund, including combined credit facility and bank
borrowings, have at least 300% asset coverage. Based on the conditions
and safeguards described in the application, applicants also submit
that to allow the Funds to borrow from other Funds pursuant to the
credit facility is consistent with the purposes and policies of section
18(f)(1).
8. Section 17(d) and rule 17d-1 generally prohibit any affiliated
person of a registered investment company, or affiliated person of an
affiliated person, when acting as principal, from effecting any joint
transaction in which the company participates unless the transaction is
approved by the SEC. Rule 17d-1 provides that in passing upon such
applications, the SEC will consider whether the participation of a
registered investment company in a joint enterprise on the basis
proposed is consistent with the provisions, policies, and purposes of
the Act and the extent to which the company's participation is on a
basis different from or less advantageous than that of other
participants.
9. Applicants submit that the purpose of section 17(d) is to avoid
overreaching by and unfair advantage to investment company insiders.
Applicants believe that the credit facility is consistent with the
provisions, policies and purposes of the Act in that it offers both
reduced borrowing costs and enhanced returns on loaned moneys to all
participating Funds and their shareholders. Applicants note that each
Fund would have an equal opportunity to borrow and lend on equal terms
consistent with its investment policies and fundamental investment
limitations. Applicants therefore believe that each Fund's
participation in the credit facility will be on terms which are no
different from or less advantageous than that of other participating
Funds.
Applicants' Conditions
Applicants agree that the requested order will be subject to the
following conditions:
1. The interest rate to be charged to the Funds under the credit
facility will be the average of the current FICASH Rate and a benchmark
rate established periodically to approximate the lowest rate available
from banks on loans to the Funds.
2. The Cash Management Department on each business day will compare
the Interfund Loan Rate set pursuant to the formula calculated as
provided in condition 1 with the FICASH Rate negotiated that day and
all short-term borrowing rates quoted to any of the Funds by any bank
with which any Fund has a loan agreement. At least three such
quotations will be obtained each day in which any Fund borrows through
the credit facility prior to such borrowing. The Cash Management
Department will make cash available for Interfund Loans only if the
Interfund Loan Rate is more favorable to the lending Fund than the
FICASH Rate and more favorable to the borrowing Fund than the lowest
quoted bank loan rate.
3. If a Fund has outstanding borrowings from one or more banks, any
Interfund Loans to the Fund (a) will be at an interest rate equal to or
lower than any outstanding bank loan, (b) will be secured at least on
an equal priority basis with at least an equivalent percentage of
collateral to loan value as any outstanding bank loan that requires
collateral, (c) will have a maturity no longer than any outstanding
bank loan (and in no event over seven days), and (d) will provide that,
if an event of default occurs under any agreement evidencing an
outstanding bank loan, it will automatically (without need for action
or notice by the lending Fund) constitute an immediate event of default
under the Interfund Loan agreement entitling the lending Fund to call
the loan (and exercise all rights with respect to any collateral) and
that such call will be made if the lending bank exercises its right to
call its loan under its agreement with the borrowing Fund.
4. A Fund may make an unsecured borrowing through the credit
facility if its outstanding borrowings from all sources immediately
after the interfund borrowing total 10% or less of its total assets,
provided that if the Fund has a second loan outstanding from any other
lender, including but not limited to another Fund, the Fund's interfund
borrowing will be secured on at least an equal priority basis with at
least an equivalent percentage of collateral to loan value as any
outstanding loan that requires collateral. If a Fund's total
outstanding borrowings immediately after interfund borrowing would be
greater than 10% of its total assets, the Fund may borrow through the
credit facility only on a secured basis. A Fund could not borrow
through the credit facility or from any other source if its total
outstanding borrowings immediately after the interfund borrowing would
be more than 33\1/3\% of its total assets.
5. Before any Fund that has outstanding interfund borrowings may,
through additional borrowings, cause its outstanding borrowings from
all sources to exceed 10% of its total assets, the Fund must first
secure each outstanding Interfund Loan by the pledge of segregated
collateral with a market value at least equal to 102% of the
outstanding principal value of the loan. If the total outstanding
borrowings of a Fund with outstanding Interfund Loans exceeds 10% of
its total assets for any other reason (such as decline in net asset
value or because of shareholder redemptions), the Fund will within one
business day thereafter: (a) repay all its outstanding Interfund Loans,
(b) reduce its outstanding indebtedness to 10% or less of its total
assets, or (c) secure each outstanding Interfund Loan by the pledge of
segregated collateral with a market value at least equal to 102% of the
outstanding principal value of the loan until, the Fund's total
outstanding borrowings cease to exceed 10% of its total assets, at
which time the collateral called for by this condition (5) shall no
longer be required. Until each Interfund Loan that is outstanding at
any time that a Fund's total outstanding borrowings exceeds 10% is
repaid or the Fund's total outstanding borrowings cease to exceed 10%
of its total assets, the Fund will mark the value of the collateral to
market each day and will pledge such additional collateral as is
necessary to
[[Page 19838]]
maintain the market value of the collateral that secures each
outstanding Interfund Loan at least equal to 102% of the outstanding
principal value of the loan.
6. No Fund may loan funds through the credit facility if the loan
would cause its aggregate outstanding loans through the credit facility
to exceed 15% of its current net assets at the time of the loan.
7. A Fund's Interfund Loans to any one Fund will be limited to 5%
of the lending Fund's net assets.
8. The duration of Interfund Loans will be limited to the time
required to receive payment for securities sold, but in no event more
than seven days. Loans effected within seven days of each other will be
treated as separate loan transactions for purposes of this condition.
9. All loans may be called on one business day's notice by a
lending Fund and may be repaid on any day by a borrowing Fund.
10. A Fund's participation in the credit facility must be
consistent with its investment policies and limitations and Declaration
of Trust. No Fund may borrow through the credit facility unless the
Fund has a fundamental policy that prevents the Fund from borrowing for
other than temporary or emergency purposes (and not for leveraging),
except that certain Funds may engage in reverse repurchase agreements
for any purpose.
11. The Cash Management Department will calculate total Fund
borrowing and lending demand through the credit facility, and allocate
loans on an equitable basis among Funds, without the intervention of
the portfolio manager of any Fund. The Cash Management Department will
not solicit cash for the credit facility from any Fund or prospectively
publish or disseminate loan demand data to portfolio managers. The Cash
Management Department will invest amounts remaining after satisfaction
of borrowing demand in FICASH or Central Funds or return remaining
amounts for investment directly by the portfolio managers of the money
market Funds.
12. FMR will monitor the interest rates charged and the other terms
and conditions of the Interfund Loans and will make a quarterly report
to the Board concerning the participation of the Funds in the credit
facility and the terms and other conditions of any extensions of credit
thereunder.
13. Each Fund's Board, including a majority of the trustees who are
not interested persons of the Funds as defined in section 2(a)(19) of
the Act (``Independent Trustees''), will: (a) review, no less
frequently than quarterly, the Fund's participation in the credit
facility during the preceding quarter for compliance with the
conditions of any order permitting such transactions; (b) establish the
bank loan rate formula used to determine the interest rate on Interfund
Loans, and review, no less frequently than annually, the continuing
appropriateness of such benchmark rate formula; and (c) review, no less
frequently than annually, the continuing appropriateness of the Fund's
participation in the credit facility.
14. In the event an Interfund Loan is not paid according to its
terms and such default is not cured within two business days from its
maturity or from the time the lending Fund makes a demand for payment
under the provisions of the Interfund Loan agreement, FMR will promptly
refer such loan for arbitration to a retired Independent Trustee
previously selected by the Board of each Fund, who no longer has any
fiduciary responsibilities to any Fund, and who will serve as
arbitrator of disputes concerning Interfund Loans. The arbitrator will
resolve any problem promptly, and the arbitrator's decision will be
binding on both Funds. The arbitrator will submit, at least annually, a
written report to the Boards setting forth a description of the nature
of any dispute and the actions taken by the Funds to resolve the
dispute.
15. Each Fund will maintain and preserve for a period of not less
than six years from the end of the fiscal year in which any transaction
under the credit facility occurred, the first two years in an easily
accessible place, written records of all such transactions setting
forth a description of the terms of the transaction, including the
amount, the maturity, and the rate of interest on the loan, the rate of
interest available at the time on short-term repurchase agreements and
commercial bank borrowings, and such other information presented to the
Fund's Board in connection with the review required by conditions 12
and 13.
16. Compliance with the conditions to any order issued on the
application will be considered by the external auditors as part of
their internal accounting control procedures, performed in connection
with Fund audit examinations, which form the basis, in part, of the
auditors' report on internal accounting controls in Form N-SAR.
17. No Fund will participate in the credit facility unless it has
fully disclosed in its registration statement all material facts abut
its intended participation.
For the SEC, by the Division of Investment Management, under
delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 99-10021 Filed 4-21-99; 8:45 am]
BILLING CODE 8010-01-M