[Federal Register Volume 64, Number 124 (Tuesday, June 29, 1999)]
[Notices]
[Pages 34834-34835]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16497]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IA-1805; File No. 803-134]
CSX Financial Management, Inc.; Notice of Application
June 23, 1999.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of Application for Exemption under the Investment
Advisers Act of 1940 (``Advisers Act'').
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Applicant: CSX Financial Management, Inc.
Relevant Advisers Act Sections: Exemption requested under section
202(a)(11)(F) from section 202(a)(11).
Summary of Application: Applicant requests an order declaring it to
be a person not within the intent of section 202(a)(11), which defines
the term ``investment adviser.''
Filing Dates: The application was filed on January 25, 1999 and
amended on June 1, 1999.
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 applicant with a copy of the request, personally or by mail.
Hearing requests should be received by the SEC by 5:30 p.m. on July 19,
1999, and should be accompanied by proof of service or applicant, 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. Applicant, CSX Financial Management, Inc., One James Center, 16th
Floor, 901 East Cary Street, Richmond, Virginia 23219.
FOR FURTHER INFORMATION CONTACT: Karen L. Goldstein, Staff Attorney, at
(202) 942-0646, Jennifer L. Sawin, Special Counsel, at (202) 942-0532
(Division of Investment Management, Task Force on Investment Adviser
Regulation).
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.
Applicant's Representations
1. Applicant was organized as a Delaware corporation in 1989. Sea-
Land Service, Inc. (``Sea-Land''), a wholly-owned subsidiary of CSX
Corporation (``CSX''), owns all of the outstanding stock of Applicant.
2. Applicant serves as an investment adviser for CSX and certain
CSX subsidiaries, now existing or to be formed in the future, of which
CSX owns, directly or indirectly, more than 50% of the outstanding
voting shares (such existing and future subsidiaries, together with
CSX, the ``CSX Companies''). From time to time there are more than 15
companies included within the CSX Companies.
3. Since 1993, Applicant has been registered with the SEC as an
investment adviser. Applicant has never provided advisory services to
any other person or entity other than the CSX Companies.
Applicant's Legal Analysis
1. Section 202(a) (11) of the Advisers Act defines the term
``investment adviser'' to mean ``any person who, for compensation,
engages in the business of advising others, either directly or through
publications or writings, as to the value of securities or as to the
advisability of investing in, purchasing, or selling securities, or
who, for compensation and as a part of a regular business, issues or
promulgates analyses or reports concerning securities. . .'' Section
202(a) (11) (F) of the Advisers Act authorizes the SEC to exclude from
the definition of ``investment adviser'' persons that are not within
the intent of section 202(a)(11).
2. Section 203(a) of the Advisers Act requires investment advisers
to register with the SEC. Section 203(b) of the Advisers Act provides
exemptions from this registration requirement. Applicant asserts that
it does not appear to qualify for any of the exemptions provided by
section 203(b).
3. Applicant requests that the SEC declare it to be a person not
within the intent of section 202(a) (11). Applicant submits that its
advisory services to the CSX Companies should not be considered
services to ``others''. Although Applicant is a corporation, and
therefore a separate legal entity from the CSX Companies, Applicant
describes its relationship to the CSX Companies as internal.
Applicant's financial results are reported in CSX's financial
statements, which reflect results for all the CSX Companies on a
consolidated basis. Applicant states that CSX owns more than 50% of the
outstanding voting shares of Applicant and of each CSX Company.
4. Applicant submits that the protections of the Advisers Act may
be considered unnecessary when an adviser and client, although separate
legal entities, in reality, form a single economic entity. Applicant
states that it exists solely to provide investment advisory services to
the CSX Companies. Applicant represents that it has never provided, and
does not intend to provide in the future, any investment advisory
services to the general public or to any persons or entities other than
the CSX Companies. Applicant states the CSX, the indirect parent of
Applicant, views its investment in Applicant as a method of obtaining
advisory services for the CSX Companies and not as a portfolio asset.
Applicant asserts that there is no public interest in requiring it to
be registered under the Advisers Act.
5. Applicant states that it does not hold itself out to the public
as an investment adviser. Applicant states that it is not listed in the
phone book under ``investment advisory services.'' Applicant represents
that it does not engage in any advertising, attend investment
management conferences as a vendor, or conduct any marketing
activities.
[[Page 34835]]
Applicant's Condition
Applicant agrees that the requested order shall be subject to the
condition that Applicant continues to provide investment advisory
services only with respect to the assets of the CSX Companies and does
not solicit public clients.
For the SEC, by the Division of Investment Management, under
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-16497 Filed 6-28-99; 8:45 am]
BILLING CODE 8010-01-M