[Federal Register Volume 64, Number 93 (Friday, May 14, 1999)]
[Notices]
[Pages 26466-26467]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12231]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 23829; 812-11232]
New England Funds Trust I, et al,; Notice of Application
May 10, 1999.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of application for an order under section 6(c) of the
Investment Company Act of 1940 (the ``Act'') to amend a prior order
that granted an exemption from section 15(a) of the Act and rule 18f-2
Under the Act.
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SUMMARY OF APPLICATION: Applicants request an order amending a prior
order that permits them to enter into and materially amend investment
sub-advisory contracts without receiving shareholder approval (``Prior
Order'').\1\
\1\ New England Funds Trust I, et al., Investment Company Act
Release Nos. 22796 (Aug. 22, 1997) (notice) and 22824 (Sept. 17,
1997) (order).
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APPLICANTS: New England Funds Trust I, New England Funds Trust II, New
England Funds Trust III, New England Cash Management Trust, New England
Tax Exempt Money Market Trust (the ``New England Funds''), New England
Zenith Fund (the ``Zenith Fund'') (together with the New England Funds,
the ``Trusts'') New England Funds Management, L.P. (``NEFM''), and TNE
Advisers, Inc. (``TNE Advisers'').
FILING DATES: The application was filed on July 24, 1998, and amended
on December 2, 1998, and on March 4, 1999. Applicants have agreed to
file an amendment during the notice period, the substance of which is
included 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 June 3,
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 to the SEC's Secretary.
ADDRESSES: Secretary, SEC, 450 5th Street, NW, Washington, DC 20549-
0609. Applicants, 399 Boylston Street, 4th Floor, Boston, MA 02116.
FOR FURTHER INFORMATION CONTACT: Mary Kay Frech, 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 SAC's Public Reference Branch, 450 5th Street, N.W., Washington,
DC, 20549-0102 (tel. 202-942-8090).
Applicants' Representations
1. The Trusts are open-end management investment companies
registered under the Act. The Zenith Fund serves as a funding vehicle
for certain variable annuity and variable life insurance products is
sued by Metropolitan Life Insurance Company, and its subsidiary, New
England Life Insurance Company.
2. NEFM and TNE Advisers are registered as investment advisers
under the Investment Advisers Act of 1940. NEFM serves as investment
adviser to each of the New England Funds, except the New England Growth
Fund Series. TNE Advisers serves as investment adviser for each series
of the Zenith Fund, except the Capital Growth Series.
3. Each series of each of the New England Funds (except the New
England Growth Fund Series) and of the Zenith Fund (except the Capital
Growth Series) (together, the ``Series'') utilizes an adviser/sub-
adviser management structure. Under this structure, either NEFM or TNE
Advisers acts as each Series' investment adviser, delegating the day-
to-day portfolio management for each Series to one or more sub-
advisers.
4. On September 17, 1997, applicants received the Prior Order
permitting NEFM and TNE Advisers to enter into sub-advisory agreements
for the Series without obtaining shareholder approval. Among other
things, the Prior Order is subject to a condition that requires that a
notice, in the form of an information statement, be sent to
shareholders following the hiring of a new sub-adviser or the
implementation of a material change to a sub-advisory agreement.
Applicants seek to amend the Prior Order to preserve the requirement to
provide notice to shareholders regarding the hiring of a new sub-
adviser, but eliminate the
[[Page 26467]]
requirement to provide a notice in the form of an information statement
of other material changes to a sub-advisory agreement.
5. Applicants assert that the requested amendment would save the
Series the expense of preparing and mailing an information statement to
shareholders, and would be consistent with the relief granted in the
Prior Order. Applicants also state that any amendments to sub-advisory
agreements which are material so as to warrant disclosure in the
prospectus would be disclosed to shareholders by means of prospectus
supplements commonly known as ``stickers''.
Applicants' Legal Analysis
1. Section 6(c) of the Act authorizes the SEC to exempt persons or
transactions from the provisions of the Act to the extent that such
exemptions are 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 submit
that amending the Prior Order as requested would be consistent with the
standards of section 6(c) of the Act.
Applicants' Conditions
Applicants agree that the order granting the requested relief will
be subject to the conditions of the Prior Order, with condition 3 of
the Prior Order modified to read as follows:
Within 90 days after the hiring of any new sub-adviser, the Trusts
will furnish shareholders with all information about a new sub-adviser
or sub-advisory agreement that would be included in a proxy statement.
The information will include any change in the disclosure caused by the
addition of a new sub-adviser. The Series will meet this condition by
providing shareholders with an information statement meeting the
requirements of Regulation 14C and Schedule 14C under the Securities
Exchange Act of 1934 (the ``Exchange Act''). The information statement
also will meet the requirements of Item 22 of Schedule 14A under the
Exchange Act. The Zenith Fund will ensure that the information
statement is furnished to the unitholders of any separate account for
which the Zenith Fund serves as a funding vehicle.
For the SEC, by the Division of Investment Management, under
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-12231 Filed 5-13-99; 8:45 am]
BILLING CODE 8010-01-M