[Federal Register Volume 66, Number 184 (Friday, September 21, 2001)]
[Notices]
[Pages 48721-48722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23617]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 25156]


Investment Company Act of 1940; Order Under Sections 6(c), 17(b) 
and 38(a) of the Investment Company Act of 1940 Granting Exemptions 
From Certain Provisions of the Act and Certain Rules Thereunder

September 14, 2001.
    In light of the recent events affecting the financial markets, the 
Commission finds that the exemptions set forth below:
    Are necessary and appropriate to the exercise of the powers 
conferred on it by the Act;
    Are necessary and 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; and
    Permit transactions the terms of which, including the consideration 
to be paid or received, are reasonable and fair and do not involve 
overreaching on the part of any person concerned.
    The necessity for immediate action of the Commission does not 
permit prior notice of the Commission's action. Accordingly,
    It Is Ordered:

I. In-Person Meetings and Voting of Directors Required by the 
Investment Company Act

    For 30 calendar days beginning on September 14, 2001, a registered 
management investment company and any investment adviser of or 
principal

[[Page 48722]]

underwriter for such registered investment company is exempt from the 
requirements imposed under sections 15(c) and 32(a) of the Investment 
Company Act and rules 12b-1(b)(2) and 15a-4(b)(2)(ii) under the 
Investment Company Act with respect to the renewal of any existing 
contract, plan or arrangement, that votes of the registered investment 
company's Board of Directors be cast in person, provided that:
    (i) The votes required to be cast at an in-person meeting are 
instead cast at a meeting in which Directors may participate by any 
means of communication that allows all Directors participating to 
communicate with each other simultaneously during the meeting;
    (ii) The action does not result in any material change to the 
existing contract, plan or arrangement under consideration; and
    (iii) The Board of Directors, including a majority of the Directors 
who are not interested persons of the investment company, ratifies the 
action taken pursuant to this exemption by vote cast at an in-person 
meeting within 90 calendar days of the date that the action is taken.

II. Ability of a Registered Open-End Investment Company or 
Insurance Company Separate Account To Borrow From an Affiliated 
Person

    For five business days beginning on the date of the first reopening 
of trading on the U.S. equities and options markets after September 11, 
2001, a registered open-end investment company or an insurance company 
separate account registered as a unit investment trust is exempt from 
sections 12(d)(3) and 17(a) to the extent necessary to permit it to 
borrow money from any affiliated person that is not itself a registered 
investment company if the Board of Directors of the registered open-end 
investment company, including a majority of the Directors who are not 
interested persons of the investment company, or the insurance company 
on behalf of the separate account, reasonably determines in the 
exercise of its judgment that such borrowing is in the best interests 
of the registered investment company and its shareholders or 
unitholders.

III. Ability of a Registered Open-End Investment Company To Borrow 
From Entities Other Than Banks

    For five business days beginning on the date of the first reopening 
of trading on the U.S. equities and options markets after September 11, 
2001, a registered open-end investment company is exempt from section 
18(f)(1) of the Investment Company Act to the extent necessary to 
permit it to borrow money from an entity other than a bank, provided 
that the Board of Directors of the registered open-end investment 
company, including a majority of the Directors who are not interested 
persons of the investment company, reasonably determines in the 
exercise of its judgment that such borrowing is in the best interests 
of the investment company and its shareholders.

IV. Interfund Lending Arrangements

    For five business days beginning on the date of the first reopening 
of trading on the U.S. equities and options markets after September 11, 
2001, any registered investment company currently able to rely on a 
Commission order permitting an interfund lending and borrowing facility 
(``Order'') may make loans through the facility in an aggregate amount 
that does not exceed 25 percent of its current net assets at the time 
of the loan notwithstanding any lower limitation in the Order, as long 
as the loan otherwise is made in accordance with the terms and 
conditions of the Order.

V. Ability of a Registered Open-End Investment Company To Deviate 
From Its Fundamental Policy With Respect to Borrowing

    For five business days beginning on the date of the first reopening 
of trading on the U.S. equities and options markets after September 11, 
2001, a registered open-end investment company is exempt from sections 
13(a)(2) and 13(a)(3) of the Investment Company Act to the extent 
necessary to permit it to enter into borrowing transactions that 
deviate from any relevant policy recited in its registration statement 
without prior shareholder approval, provided that:
    (i) The Board of Directors of the registered open-end investment 
company, including a majority of the Directors who are not interested 
persons of the investment company, reasonably determines in the 
exercise of its judgment that each such transaction is in the best 
interests of the registered open-end investment company and its 
shareholders; and
    (ii) The registered open-end investment company promptly notifies 
its shareholders of the deviation.

    By the Commission.
Jonathan G. Katz,
Secretary.
[FR Doc. 01-23617 Filed 9-20-01; 8:45 am]
BILLING CODE 8010-01-M