[Federal Register Volume 66, Number 46 (Thursday, March 8, 2001)]
[Notices]
[Pages 13983-13984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5724]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 24884; 812-12338]


Barr Rosenberg Series Trust; AXA Rosenberg Investment Management 
LLC, and AXA Rosenberg Group LLC; Notice of Application

March 2, 2001.
AGENCY: Securities and Exchange Commission (``Commission'').

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

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    Summary of Application: Applicants request an order to permit a 
series of a registered open-end management investment company to 
acquire all of the assets, subject to the liabilities, of another 
series of the investment company. Because of certain affiliations, 
applicants may not rely on rule 17a-8 under the Act.
    Applicants G: Barr Rosenberg Series Trust (the ``Trust''), AXA 
Rosenberg Investment Management LLC (the ``Adviser''), and AXA 
Rosenberg Group LLC (``AXA Rosenberg Group'').
    Filing Dates: The application was filed on November 27, 2000, and 
was amended on March 2, 2001.
    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 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 March 23, 2001 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 Commission's Secretary.

ADDRESSES: Secretary, Commission, 450 Fifth Street, NW., Washington, DC 
20549-0609; Applicants: c/o J.B. Kittredge, Jr., Esq., Ropes & Gray, 
One International Place, Boston, Massachusetts 02110-2624, Kenneth Reid 
and Sara Ronan, AXA Rosenberg Investment Management LLC, Four Orinda 
Way, Building E, Orinda, California 94563.

FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, at 
(202) 942-0574 or Janet M. Grossnickle, 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 at the 
Commission's Public Reference Branch, 450 Fifth Street, NW., 
Washington, DC 20549-0102 (telephone (202) 942-8090).

Applicants' Representations

    1. The Trust, a Massachusetts business trust, is registered under 
the Act as an open-end management investment company and is currently 
comprised of ten series, including the AXA Rosenberg Japan Fund (the 
``Japan Fund'') and the AXA Rosenberg International Equity Fund (the 
``International Fund'' and together with the Japan Fund, the 
``Funds'').
    2. The Adviser is the investment adviser for the Funds, and is 
registered as an investment adviser under the Investment Advisers Act 
of 1940 (the ``Advisers Act''). The Adviser is owned 100% by AXA 
Rosenberg Group. AXA Rosenberg Group is indirectly controlled by AXA 
Group, a French holding company for an international group of insurance 
and related financial services companies. AXA Group also controls The 
Equitable Assurance Society of the United States (``Equitable''). AXA 
Rosenberg Group owns for its own account approximately 82% of the 
outstanding voting securities of the Japan Fund, and Equitable owns for 
its own account approximately 100% of the outstanding voting securities 
of the International Fund.
    3. On December 4, 2000, the board of directors of the Trust (the 
``Board''), including all of the directors who are not ``interested 
persons'' as defined in section 2(a)(19) of the Act (``Independent 
Directors''), unanimously approved an Agreement and Plan of 
Reorganization (the ``Plan''). The Plan provides that, on a date in the 
first quarter of 2001 (the ``Merger Date''), substantially all of the 
assets, subject to the liabilities, of the Japan Fund will be sold to 
the International Fund (the ``Merger''). The Plan provides that, as 
payment for such assets, the International Fund will issue to the Japan 
Fund a number of shares of designated classes which will be calculated 
to equal in aggregate value the net assets attributable to the shares 
of the corresponding classes of the Japan Fund acquired by the 
International Fund. The shares issued by each class of the 
International Fund will then be distributed to the shareholders of the

[[Page 13984]]

corresponding class of the Japan fund on a pro rata basis. The Japan 
Fund will then be liquidated. Each Japan Fund shareholder will receive 
International Fund shares having an aggregate net asset value equal to 
the aggregate net asset value of the corresponding Japan Fund shares 
held by that shareholder, determined as of 4 p.m. on the Merger Date. 
The assets and liabilities of both funds will be valued at 4 p.m. on 
the Merger Date consistently in accordance with the valuation 
procedures set forth in the Trust's Registration Statement.
    4. Applicants state that although not identical, the investment 
objectives, policies, and restrictions of the Funds are generally 
similar. The Japan Fund offers two classes of shares: Institutional 
Shares and Investor Shares. The International Fund offers five classes 
of shares: Class A, Class B, Class C, Institutional and Investor 
Shares. No shares of Classes A, B, and C are outstanding. Investor 
Shares of both Funds pay a distribution and shareholder service fee. 
Institutional and Investor Shares of both Funds are sold without any 
front-end or deferred sales charge. Institutional and Investor Shares 
of the International Fund have rights and obligations, and enjoy 
shareholders services that are identical in all respects to those of 
the corresponding class of Japan Fund shares. No sales charge or fee of 
any kind will be charged to either Fund's shareholders in connection 
with the Merger, and the Funds will incur no brokerage expenses or 
finders fee in connection with the transfer of assets of the Japan Fund 
to the International Fund.
    5. On December 4, 2000, the Board determined that the Merger is in 
the best interests of each of the Funds and their shareholders and that 
the interests of existing shareholders of the Funds will not be diluted 
as a result of the Merger. In making this determination, the Board 
considered, among other things: (a) the terms and conditions of the 
Merger; (b) the tax-free nature of the Merger; (c) the anticipated 
expenses of the Merger, including the fact that the Adviser will pay 
such expenses except brokerage expenses, if any, in connection with the 
pre-Merger disposition of certain of the Japan Fund's assets; and (d) 
the compatibility of the Funds' investment objectives, policies and 
restrictions.
    6. The Merger is subject to a number of conditions precedent, 
including: (a) the Plan shall have been approved by the holders of a 
majority of the outstanding shares of the Japan Fund; (b) the parties 
shall have complied with all material aspects of the Plan on or before 
the Merger Date; (c) the applicants shall have received from the 
Commission the exemptive relief requested in the application; (d) the 
registration statement filed with the Commission shall have become 
effective; (e) the Funds shall have received opinions of legal counsel 
concerning the tax-free nature of the Merger; and (f) the Japan Fund 
shall have declared and paid dividends and other distributions on or 
before the Merger Date. The Plan may be terminated and the Merger 
abandoned by mutual agreement of the parties at any time prior to the 
Merger Date. In addition, the Plan may be terminated by either party 
under certain circumstances specified in the Plan. The applicants agree 
that they will not make any material changes to the Plan without first 
obtaining the prior approval of the Commission.
    7. A Registration and Information Statement on Form N-14 was filed 
with the Commission on February 2, 2001. It is anticipated that the 
Prospectus/Information Statement will be mailed to the Japan Fund's 
shareholders on or about March 6, 2001, and that AXA Rosenberg Group 
will execute a majority shareholder consent approving the Merger on or 
about March 27, 2001. Applicants state that because AXA Rosenberg Group 
has indicated that it will approve the Merger, no shareholder proxies 
will be solicited.

Applicants' Legal Analysis

    1. Section 17(a) of the Act generally prohibits an affiliated 
person of a registered investment company, or an affiliated person of 
such a person, acting as principal, from selling any security to, or 
purchasing any security from, the company. Section 2(a)(3) of the Act 
defines an ``affiliated person'' of another person to include (a) any 
person directly or indirectly owning, controlling, or holding with 
power to vote 5% or more of the outstanding voting securities of the 
other person; (b) any person 5% or more of whose securities are 
directly or indirectly owned, controlled, or held with power to vote by 
the other person; (c) any person directly or indirectly controlling, 
controlled by, or under common control with the other person; and (d) 
if the other person is an investment company, any investment adviser of 
that company. Applicants state that the Funds may be deemed affiliated 
persons and thus the Merger may be prohibited by section 17(a).
    2. Rule 17a-8 under the Act exempts from the prohibitions of 
section 17(a) mergers, consolidations, or purchases or sales of 
substantially all of the assets of registered investment companies that 
are affiliated persons, or affiliated persons of an affiliated person, 
solely be reason of having a common investment adviser, common 
directors, and/or common officers, provided that certain conditions are 
satisfied.
    3. Applicants state that they may not rely on rule 17a-8 because 
the Funds may be deemed to be affiliated for reasons other than those 
set forth in the rule. The Japan Fund and International Fund may also 
be deemed to be affiliated because of (a) AXA Rosenberg Group's 
estimated 82% ownership interest in the Japan Fund and its 100% 
ownership of the Adviser, and (b) the common control of AXA Rosenberg 
Group, the Adviser and Equitable, together with Equitable's ownership 
of approximately 100% of the outstanding shares of the International 
Fund.
    4. Section 17(b) of the Act provides that the Commission may exempt 
a transaction from the provisions of section 17(a) if the evidence 
establishes that the terms of the proposed transaction, including the 
considerations to be paid, are reasonable and fair and do not involve 
overreaching on the part of any person concerned, and that the proposed 
transaction is consistent with the policy of each registered investment 
company concerned and with the general purposes of the Act.
    5. Applicants request an order under section 17(b) of the Act 
exempting them from section 17(a) of the Act to the extent necessary to 
complete the Merger. Applicants submit that the Merger satisfies the 
standards of section 17(b) of the Act. Applicants state that the Board, 
including all of the Disinterested Trustees, has determined that 
participation in the Merger is in the best interests of each Fund, and 
that the interests of the Funds' shareholders will not be diluted as a 
result of the Merger. The applicants also state that the Merger will be 
based on the Funds' relative net asset values.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-5724 Filed 3-7-01; 8:45 am]
BILLING CODE 8010-01-M