[Federal Register Volume 65, Number 155 (Thursday, August 10, 2000)]
[Notices]
[Pages 49035-49036]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-20212]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 24593; 812-12182]


MPAM Funds Trust; Notice of Application

August 3, 2000.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order 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 the Application: Applicant MPAM Funds Trust requests an 
order to permit a fund of funds relying on section 12(d)(1)(G) of the 
Act to invest in securities and other financial instruments.
    Filing Dates: The application was filed on July 21, 2000 and 
amended on July 31, 2000. Applicant has agreed to file an amendment, 
the substance of which is reflected in this notice, during the notice 
period.
    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 applicant with a copy of the request, personally 
or by mail. Hearing requests should be received by the Commission by 
5:30 p.m. on August 28, 2000, 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 interests, 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 Commission's Secretary.

ADDRESSES: Secretary, Commission, 450 Fifth Street, NW., Washington, DC 
20549-0609. Applicant, c/o Donald W. Smith, Esq., Kirkpatrick & 
Lockhart LLP, 1800 Massachusetts Avenue, NW., 2nd Floor, Washington, DC 
20036.

FOR FURTHER INFORMATION CONTACT: 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 
Commission's Public Reference Branch, 450 Fifth Street, NW., 
Washington, DC 20549-0102 (tel. 202-942-8090).

Applicant's Representations

    1. MPAM Funds Trust (the ``Trust'') is a Massachusetts business 
trust registered under the Act as an open-end management investment 
company. The Trust will consist of thirteen series,\1\ one such series 
will be the MPAM Balanced Fund (``Balanced Fund''). MPAM Advisers (the 
``Adviser''), a division of The Dreyfus Corporation, is an investment 
adviser registered under the Investment Advisers Act of 1940, and will 
serve as the investment adviser to each series of the Trust. The 
Balanced Fund will invest in shares of the other series of the Trust 
(collectively, the ``Underlying Funds''), as well as directly in 
stocks, bonds, and other securities. Applicant requests that the relief 
also apply to the other series of the Trust and any additional series 
organized in the future (an ``Upper Tier Fund'') that wish to invest in 
(a) any existing or future Underlying Fund or (b) any open-end 
management investment company or series thereof that is advised by the 
Adviser and is part of the same ``group of investment companies'' (as 
defined in section 12(d)(1)(G)(ii) of the Act) as the investing Upper 
Tier Fund.\2\
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    \1\ The Trust filed its initial registration statement on April 
14, 2000. The registration statement is expected to become effective 
in September 2000.
    \2\ Applicant represents that any registered open-end management 
investment company that may rely on the order in the future will do 
so only in accordance with the terms and conditions of the 
application.
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Applicant's 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 represent more than 3% of the acquired company's 
outstanding voting stock or more than 5% of the acquiring company's 
total assets, or if such securities, together with the securities of 
other 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 cues the acquiring company 
to own more than 3% of the acquired company's voting stock, or 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: (i) The acquiring company and the acquired 
company are part of the same group of investment companies: (ii) 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; (iii) 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) or section 
22(c) of the act by a securities association registered under section 
15A of the Securities Exchange Act of 1934 or by the Commission; and 
(iv) the acquired company has a policy that prohibits it from acquiring 
securities of registered open-end management investment companies or 
registered unit investment trusts in reliance on section 12(d)(1)(F) of 
(G) of the Act. Applicant states that the proposed arrangement

[[Page 49036]]

would comply with the provisions of section 12(d)(1)(G), but for the 
fact that the Balanced Funds' investment policies contemplate that its 
investments will include direct investments in equity securities, 
bonds, and other instruments. \3\ as well as shares of the Underlying 
Funds.
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    \3\ Applicant states that these investments will not include 
shares of any registered investment companies that are not in the 
same group of investment companies as the Trust.
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    3. Section 12(d)(1)(J) of the Act provides that the Commission may 
exempt persons or transactions from any provision of section 12(d)(1) 
if, and to the extent that, the exemption is consistent with the public 
interest and the protection of investors. Applicant requests an order 
under section 12(d)(1)(J) exempting it from section 12(d)(1)(G)(i)(II). 
Applicant asserts that permitting the Balanced Fund and other Upper 
Tier Funds to invest in Underlying Funds and directly in securities as 
proposed, would not raise any of the concerns that the requirements of 
section 12(d)(1)(G) were designed to address.

Applicant's Conditions

    Applicant agrees 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 of trustees of the Trust on behalf of the Balanced Fund 
or an Upper Tier Fund, including a majority of the trustees who are not 
``interested persons'' as defined in section 2(a)(19) of the Act, will 
find that advisory fees, if any, charged under the contract are based 
on services provided that are in addition to, rather than duplicative 
of, services provided pursuant to any Underlying Fund's advisory 
contract. This finding, and the basis upon which it was made, will be 
recorded fully in the minute books of the Balanced Fund or Upper Tier 
Fund.
    2. Applicant will comply with all 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 Balanced Fund or an Upper Tier Fund from investing 
directly 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. 00-20212 Filed 8-9-00; 8:45 am]
BILLING CODE 8010-01-M