[Federal Register Volume 66, Number 127 (Monday, July 2, 2001)]
[Notices]
[Pages 34971-34972]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-16557]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 25049; 812-12478]


UBS PaineWebber Inc. et al.; Notice of Application

June 26, 2001.
AGENCY: Securities and Exchange Commission (``SEC'' or ``Commission'').

ACTION: Notice of an application to amend a prior order under sections 
6(c) and 17(b) of the Investment Company Act of 1940 (the ``Act'') 
exempting applicants from sections 17(a) and 17(e) of the Act, and 
under section 17(d) of the Act and rule 17d-1 permitting certain joint 
transactions.

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SUMMARY OF THE APPLICATION: Applicants seek an order (``Amended 
Order'') to amend a prior order that permits certain registered 
investment companies to use cash collateral from securities lending 
transactions and uninvested cash to purchase shares of an unregistered 
investment vehicle formed and advised by UBS PaineWebber Inc. (``UBS 
PaineWebber'') or Brinson Advisor, Inc. (``Brinson Advisors'') or a 
person controlling, controlled by, or under common control with UBS-
PaineWebber and Brinson Advisors (``New Fund''); UBS Paine Webber and 
Brinson Advisors to accept fees from certain other registered 
investment companies; UBS PaineWebber and certain affiliated broker-
dealers to borrow portfolio securities from certain affiliated 
registered investment companies and to receive brokerage commissions 
from, and engage in principal securities transactions with, the other 
registered investment companies (``Prior Order'').\1\
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    \1\ PaineWebber America Fund, Investment Company Act Release 
Nos. 23284 (June 24, 1998) (notice) and 23322 (July 21, 1998) 
(order).

Applicants: UBS PaineWebber; Brinson Advisors; UBS PaineWebber 
Cashfund, Inc., Brinson Managed Investments Trust, UBS PaineWebber 
Managed Municipal Trust, Brinson Master Series, Inc., Brinson Financial 
Services Growth Fund Inc., UBS PaineWebber RMA Money Fund, Inc., UBS 
PaineWebber RMA Tax-Free Fund, Inc., Brinson Securities Trust, Brinson 
Series Trust, Strategic Global Income Fund, Inc., 2002 Target Term 
Trust Inc., All-American Term Trust Inc., Global High Income Dollar 
Fund Inc., Investment Grade Municipal Income Fund Inc., Insured 
Municipal Income Fund Inc., UBS PaineWebber Municipal Money Market 
Series, Brinson Investment Trust, Liquid Institutional Reserves, 
PaineWebber PACE Select Advisors Trust, Brinson Index Trust, Managed 
High Yield Plus Fund Inc., and Brinson Money Series (collectively, the 
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``Affiliated Funds'').

Filing Dates: The application was filed on March 15, 2001 and amended 
on June 13, 2001.

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 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 SEC's 
Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth Street, NW., Washington, DC 20549-
0609. Applicants, 1285 Avenue of the Americas, New York, New York 
10019.

FOR FURTHER INFORMATION CONTACT: Marilyn Mann, Senior Counsel, at (202) 
942-0582, or 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 at the 
SEC's Public Reference Branch, 460 Fifth Street, NW., Washington, DC 
20549-0102 (tel. 202-942-8090).

Applicant's Representations

    1. Each Affiliated fund is registered as an open-end or closed-end 
investment company under the Act. USB PaineWebber, a wholly owned 
subsidiary of UBS Americas Inc., currently serves as investment adviser 
and Brinson Advisors, also a wholly owned subsidiary of USB Americas 
Inc., serves as sub-adviser to USB PaineWebber Cashfund, Inc., UBS 
PaineWebber RMA Money Fund, Inc., UBS PaineWebber RMA Tax-Free Fund, 
Inc., UBS PaineWebber Managed Municipal Trust, UBS PaineWebber 
Municipal Money Market Series and Liquid Institutional Reserves. 
Brinson Advisors serves as investment adviser to the remaining 
Affiliated Funds.\2\ UBS PaineWebber and Brinson Advisors are broker-
dealers registered under the Securities Exchange Act of 1934, and 
investment advisers registered under the Investment Advisers Act of 
1940.
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    \2\ Applicants request that the Amended Order also apply to any 
other registered investment company or series thereof that currently 
is, or in the future may be, advised by UBS PaineWebber or Brinson 
Advisors or any other entity controlling, controlled by, or under 
common control (as defined in section 2(a)(9) of the Act) with, UBS 
PaineWebber or Brinson Advisors. All registered investment companies 
advised by UBS PaineWebber or Brinson Advisors or an entity 
controlling, controlled by, or under common control with UBS 
PaineWebber or Brinson Advisors that currently intend to rely on the 
Amended Order have been named as applicants. Any other existing or 
future registered investment companies that may rely on such relief 
in the future will do so in accordance with the terms and conditions 
of the application.
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    2. On July 21, 1998, the Commission issued the Prior Order under 
sections 6(c) and 17(b) of the Act granting an exemption from sections 
17(a) and 17(e) of the Act, and under section 17(d) of the Act and rule 
17d-1 under the Act, permitting certain joint transactions. The Prior 
Order permits: (a) The Affiliated Funds and any other registered 
investment company or series thereof that may invest in shares of 
beneficial interest (``Shares'') issued by New Fund (each such other 
registered investment company, an ``Other Fund'' and collectively, the 
``Other Funds'' and, together with the Affiliated Funds, the 
``Investing Funds''), to purchase and redeem Shares issued by New Fund

[[Page 34972]]

using cash from normal operations (``Uninvested Cash'') or cash 
received as collateral in connection with portfolio securities lending 
(``Cash Collateral''), (b) New Fund to sell Shares to the Investing 
Funds and redeem Shares from the Investing funds, (c) UBS PaineWebber, 
Brinson Advisors, the Investing Funds, New Fund and the trustee/
managing member of New Fund (``Trustee'') to engage in certain 
transactions incident to the Investing Funds' investment in the Shares, 
(d) UBS PaineWebber and any other broker-dealer that may be controlled 
by or under common control with UBS PaineWebber (collectively, the 
``Affiliated Broker-Dealers'') to borrow portfolio securities from the 
Affiliated Funds, (e) UBS PaineWebber and the Affiliated Broker-Dealers 
to engage in principal transactions in securities with the Other Funds, 
(f) UBS PaineWebber and the Affiliated Broker-Dealers to borrow 
securities from the Other Funds, (g) the Other Funds to pay, and UBS 
PaineWebber and the Affiliated Broker-Dealers to receive, commissions 
from the Other Funds for acting as brokers in connection with the 
purchase or sale of securities for the Other Funds, and (h) the Other 
Funds to pay, and UBS PaineWebber to accept, fees based on a share of 
the revenue generated from securities lending transactions and Brinson 
Advisors to accept fees for providing certain services in connection 
with securities lending transactions.\3\
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    \3\ The Prior Order grants relief for the Other Funds to the 
extent that the Other Funds are affiliated with UBS PaineWebber, 
Brinson Advisors, Affiliated Broker-Dealers, or New Fund solely by 
reason of owning 5% or more of the shares of a series of New Fund.
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    3. New Fund is an investment vehicle that serves as an investment 
option for managing Cash Collateral and Uninvested Cash of the 
Investing Funds. New Fund operates as a private investment company and 
is not registered under the Act in reliance on section 3(c)(7) of the 
Act. Brinson Advisors currently serves as New Fund's Trustee and 
investment adviser. New Fund currently has one series, which operates 
as a money market portfolio and complies with the requirements of 
rule2a-7 under the Act.
    4. Condition 9 to the Prior Order provides that UBS PaineWebber or 
Brinson Advisors will reduce its advisory fee charged to an Affiliated 
Fund that invests in Shares of New Fund in an amount equal to the net 
asset value of the Affiliated Fund's holdings in New Fund multiplied by 
the rate at which advisory fees are charged by Brinson Advisors to New 
Fund. Applicants seek to amend the Prior Order to modify condition 9 so 
that it would apply only with respect to an Affiliated Fund's 
investment of Uninvested Cash in New Fund and would not apply with 
respect to an Affiliated Fund's investment of Cash Collateral in New 
Fund. Since investment advisory fees are calculated on the net, rather 
than the total, assets of the Affiliated Funds, and since Cash 
Collateral does not increase net assets because it is offset by the 
liability to repay it to the borrower, the Affiliated Funds will pay no 
additional advisory fees with respect to investments made with Cash 
Collateral. Applicants will continue to comply with all the other 
conditions to the Prior Order.

Applicants' Condition

    Applicants agree that condition 9 to the Prior Order is revised to 
read as follows:
    9. With respect to any Affiliated Fund that invests Uninvested Cash 
in Shares of New Fund, UBS PaineWebber or Brinson Advisors will reduce 
its advisory fee charged to the Affiliated Fund in an amount (the 
``Reduction Amount'') equal to the net asset value of the Affiliated 
Fund's Uninvested Cash invested in the New Fund multiplied by the rate 
at which advisory fees are charged by Brinson Advisors to the New Fund. 
Any fees remitted or waived pursuant to this condition will not be 
subject to recoupment by UBS PaineWebber or Brinson Advisors or their 
affiliates at a later date.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 01-16557 Filed 6-29-01; 8:45 am]
BILLING CODE 8010-01-M