[Federal Register Volume 70, Number 162 (Tuesday, August 23, 2005)]
[Notices]
[Pages 49331-49334]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4588]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 27029; 812-12930]


ACM Income Fund, Inc., et al.; Notice of Application

August 16, 2005.
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 (``Act'') for an exemption from 
sections 12(d)(1)(A) and (B) of the Act, under sections 6(c) and 17(b) 
of the Act for an exemption from section 17(a) of the Act, and under 
section 17(d) of the Act and rule 17d-1 under the Act to permit certain 
joint transactions.

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[[Page 49332]]

    Summary of Application: The applicants request an order that would 
permit certain registered management investment companies to invest 
uninvested cash and cash collateral in (i) affiliated money market 
funds or (ii) affiliated private investment companies excluded from the 
definition of investment company under section 3(c)(1) or 3(c)(7) of 
the Act that comply with rule 2a-7 under the Act.
    Applicants: ACM Income Fund, Inc., ACM Managed Dollar Income Fund, 
Inc., ACM Managed Income Fund, Inc., AllianceBernstein Americas 
Government Income Trust, Inc., AllianceBernstein Balanced Shares, Inc., 
AllianceBernstein Bond Fund, Inc., AllianceBernstein Global Strategic 
Income Trust, Inc., AllianceBernstein Growth and Income Fund, Inc., 
AllianceBernstein Global Health Care Fund, Inc., AllianceBernstein 
Institutional Funds, Inc., AllianceBernstein International Premier 
Growth Fund, Inc., AllianceBernstein Mid-Cap Growth Fund, Inc., 
AllianceBernstein Multi-Market Strategy Trust, Inc., AllianceBernstein 
Large Cap Growth Fund, Inc., AllianceBernstein Quasar Fund, Inc., 
AllianceBernstein Global Technology Fund, Inc., AllianceBernstein 
Variable Products Series Fund, Inc., AllianceBernstein Worldwide 
Privatization Fund, Inc., AllianceBernstein Focused Growth and Income 
Fund, Inc., AllianceBernstein Utility Income Fund, Inc., The 
AllianceBernstein Portfolios, and all existing and future registered 
management investment companies for which Alliance Capital Management 
L.P. (``ACM'') or an entity controlling, controlled by, or under common 
control with ACM serves in the future as an investment adviser 
(collectively, the ``Investment Companies''); and ACM.
    Filing Dates: The application was filed on February 14, 2003 and 
amended on April 14, 2005 and August 4, 2005.
    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 September 12, 2005, and should be accompanied by proof of 
service on the 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, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-9303; Applicants, c/o Emilie D. 
Wrapp, Alliance Capital Management, L.P., 1345 Avenue of the Americas, 
New York, NY 10105.

FOR FURTHER INFORMATION CONTACT: John Yoder, Attorney-Adviser, at (202) 
551-6878 or Mary Kay Frech, Branch Chief, at (202) 551-6821 (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 Desk, 100 F Street, NE., Washington DC 
20549-0102 (telephone (202) 551-5850).

Applicants' Representations

    1. Each of the Investment Companies, other than ACM Income Fund, 
Inc., ACM Managed Dollar Income Fund, Inc., and ACM Managed Income 
Fund, Inc., is registered under the Act as an open-end management 
investment company. ACM Income Fund, Inc., ACM Managed Dollar Income 
Fund, Inc., and ACM Managed Income Fund, Inc. are registered under the 
Act as closed-end management investment companies. Most of the open-end 
Investment Companies are series companies consisting of one or more 
series, each with separate investment objectives and policies. As used 
herein, the term ``Fund'' refers to each separate series of an 
Investment Company that is organized as a series company or, for an 
Investment Company that is not organized as a series company, that 
Investment Company.\1\ ACM is an investment adviser registered under 
the Investment Advisers Act of 1940 and serves as investment adviser to 
each Fund. Each Fund has, or may be expected to have, cash that has not 
been invested in portfolio securities (``Uninvested Cash''). Uninvested 
Cash may result from a variety of sources, including dividends or 
interest received on portfolio securities, unsettled securities 
transactions, reserves held for investment strategy purposes, scheduled 
maturity of investments, liquidation of investment securities to meet 
anticipated redemptions, dividend payments or money from investors. 
Certain Funds also may participate in a securities lending program 
(``Securities Lending Program'') under which a Fund may lend its 
portfolio securities to registered broker-dealers or other 
institutional investors. The loans are secured by collateral, including 
cash collateral (``Cash Collateral'' and together, with Uninvested 
Cash, ``Cash Balances''), equal at all times to at least the market 
value of the securities loaned.
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    \1\ All existing Funds that currently intend to rely on the 
requested order are named as applicants. Any other existing or 
future Funds 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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    2. Applicants request an order to permit: (i) Each of the Funds to 
use their Cash Balances to purchase shares of one or more of the Funds 
that are money market funds and comply with rule 2a-7 under the Act 
(the ``Registered Money Market Funds'') or shares of private investment 
companies advised by ACM that are excluded from the definition of 
investment company pursuant to section 3(c)(1) or 3(c)(7) of the Act 
and comply with rule 2a-7 under the Act (the ``Non-Registered Money 
Market Funds'') (the Registered Money Market Funds and the Non-
Registered Money Market Funds, collectively, the ``Money Market 
Funds'') (such Funds, including Registered Money Market Funds that 
purchase shares of other Money Market Funds, are referred to as the 
``Investing Funds''); and (ii) the Money Market Funds to sell their 
shares to, and purchase (redeem) such shares from, the Investing Funds.
    3. The investment of Cash Balances in shares of the Money Market 
Funds will be made only in accordance with each Investing Fund's 
investment restrictions and policies as set forth in its prospectus and 
statement of additional information. Applicants believe that the 
proposed transactions may reduce transaction costs, create more 
liquidity, increase returns, and diversify holdings.

Applicants' Legal Analysis

    1. Section 12(d)(1)(A) of the Act provides that no investment 
company may acquire securities of a registered investment company if 
such securities represent more than 3% of the acquired company's 
outstanding voting stock, more than 5% of the acquiring company's total 
assets, or if such securities, together with the securities of other 
acquired 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 cause the acquiring company 
to own more than 3% of the acquired company's voting stock, or if the 
sale will cause more than 10% of the acquired company's voting stock to 
be owned by investment companies.

[[Page 49333]]

    2. Section 12(d)(1)(J) of the Act provides that the Commission may 
exempt any person, security, or transaction from any provision of 
section 12(d)(1) if and to the extent that such exemption is consistent 
with the public interest and the protection of investors. Applicants 
request relief under section 12(d)(1)(J) to permit the Investing Funds 
to use their Cash Balances to acquire shares of the Registered Money 
Market Funds in excess of the percentage limitations in section 
12(d)(1)(A), provided however, that in all cases an Investing Fund's 
aggregate investment of Uninvested Cash in shares of the Money Market 
Funds will not exceed 25% of the Investing Fund's total assets at any 
time. Applicants also request relief to permit the Registered Money 
Market Funds to sell their securities to the Investing Funds in excess 
of the percentage limitations in section 12(d)(1)(B).
    3. Applicants state that the proposed arrangement will not result 
in the abuses that sections 12(d)(1)(A) and (B) were intended to 
prevent. Applicants state that there is no threat of redemption to gain 
undue influence over the Registered Money Market Funds due to the 
highly liquid nature of each Registered Money Market Fund's portfolio. 
Applicants state that the proposed arrangement will not result in 
inappropriate layering of fees. Shares of the Money Market Funds sold 
to the Investing Funds will not be subject to a sales load, redemption 
fee, distribution fee under a plan adopted in accordance with rule 12b-
1 under the Act or service fee (as defined in NASD Conduct Rule 
2830(b)(9)). If a Money Market Fund offers more than one class of 
shares in which an Investing Fund may invest, the Investing Fund will 
invest its Cash Balances only in the class with the lowest expense 
ratio at the time of investment. In connection with approving any 
advisory contract for an Investing Fund, the board of directors or 
trustees of each Investing Fund (``Board''), including a majority of 
the directors/trustees who are not ``interested persons,'' as defined 
in section 2(a)(19) of the Act (``Independent Trustees''), will 
consider to what extent, if any, the advisory fees charged to the 
Investing Fund by ACM should be reduced to account for reduced services 
provided to the Investing Fund by ACM as a result of the investment of 
Uninvested Cash in a Money Market Fund. In this regard, ACM will 
provide the Board with specific information regarding the approximate 
cost to ACM of, or portion of the advisory fee under the existing 
advisory contract attributable to, managing the Uninvested Cash of the 
Investing Fund that can be expected to be invested in the Money Market 
Funds. Applicants represent that no Money Market Fund whose shares are 
held by an Investing Fund will acquire securities of any other 
investment company, or company relying on section 3(c)(1) or 3(c)(7) of 
the Act, in excess of the limitations contained in section 12(d)(1)(A) 
of the Act.
    4. Section 17(a) of the Act makes it unlawful for any affiliated 
person of a registered investment company, acting as principal, to sell 
or purchase any security to or from the investment company. Section 
2(a)(3) of the Act defines an affiliated person of an investment 
company to include 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, any person 5% or 
more of whose outstanding securities are directly or indirectly owned, 
controlled, or held with power to vote by the other person, any person 
directly or indirectly controlling, controlled by, or under common 
control with the other person, and any investment adviser to the 
investment company. Because the Investing Funds and the Money Market 
Funds have ACM as their investment adviser, they may be deemed to be 
under common control and thus affiliated persons of each other. In 
addition, if an Investing Fund purchases more than 5% of the voting 
securities of a Money Market Fund, the Money Market Fund and the 
Investing Fund may be affiliated persons of each other. As a result, if 
a Money Market Fund were deemed to be an affiliated person of an 
Investing Fund, section 17(a) would prohibit the sale of the shares of 
Money Market Funds to the Investing Funds, and the redemption of the 
shares by the Investing Funds.
    5. Section 17(b) of the Act authorizes the Commission to exempt a 
transaction from section 17(a) of the Act if the terms of the proposed 
transaction, including the consideration to be paid or received, are 
reasonable and fair and do not involve overreaching on the part of any 
person concerned, and the proposed transaction is consistent with the 
policy of each registered investment company concerned and with the 
general purposes of the Act. Section 6(c) of the Act permits the 
Commission to exempt persons or transactions from any provision of the 
Act, if the exemption is necessary or 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.
    6. Applicants submit that their request for relief to permit the 
purchase and redemption of shares of the Money Market Funds by the 
Investing Funds satisfies the standards in sections 6(c) and 17(b) of 
the Act. Applicants note that shares of the Money Market Funds will be 
purchased and redeemed at their net asset value, the same consideration 
paid and received for these shares by any other shareholder. Applicants 
state that the Investing Funds will retain their ability to invest Cash 
Balances directly in money market instruments as authorized by their 
respective investment objectives and policies. Applicants state that a 
Money Market Fund has the right to discontinue selling shares to any of 
the Investing Funds if the Money Market Fund's Board determines that 
such sale would adversely affect the Money Market Fund's portfolio 
management and operations.
    7. Section 17(d) of the Act and rule 17d-1 under the Act prohibit 
an affiliated person of a registered investment company, acting as 
principal, from participating in or effecting any transaction in 
connection with any joint enterprise or joint arrangement in which the 
investment company participates, unless the Commission has approved the 
joint arrangement. Applicants state that the Investing Funds and the 
Money Market Funds, by participating in the proposed transactions, and 
ACM, by managing the proposed transactions, could be deemed to be 
participating in a joint arrangement within the meaning of section 
17(d) and rule 17d-1.
    8. In considering whether to approve a joint transaction under rule 
17d-1, the Commission considers whether the investment company's 
participation in the joint transaction is consistent with the 
provisions, policies and purposes of the Act, and the extent to which 
the participation is on a basis different from or less advantageous 
than that of other participants. Applicants state that the investment 
by the Investing Funds in shares of the Money Market Funds would be on 
the same basis and no different from or less advantageous than that of 
other participants. Applicants submit that the proposed transactions 
meet the standards for an order under rule 17d-1.

Applicants' Conditions

    Applicants agree that the order granting the requested relief shall 
be subject to the following conditions:
    1. Shares of the Money Market Funds sold to and redeemed by the 
Investing

[[Page 49334]]

Funds will not be subject to a sales load, redemption fee, distribution 
fee under a plan adopted in accordance with rule 12b-1 under the Act, 
or service fee (as defined in rule 2830(b)(9) of the NASD Conduct 
Rules) or if such shares are subject to any such fee, ACM will waive 
its advisory fee for each Investing Fund in an amount that offsets the 
amount of such fees incurred by the Investing Fund.
    2. Prior to reliance on the order with respect to Uninvested Cash, 
an Investing Fund will hold a meeting of the Board for the purpose of 
voting on the advisory contract under section 15 of the Act. In that 
context, before approving any advisory contract for the Investing Fund, 
the Board, including a majority of the Independent Trustees, taking 
into account all relevant factors, shall consider to what extent, if 
any, the advisory fees charged to the Investing Fund by ACM should be 
reduced to account for reduced services provided to the Investing Fund 
by ACM as a result of the Uninvested Cash being invested in the Money 
Market Funds. In connection with this consideration, ACM will provide 
the Board with specific information regarding the approximate cost to 
ACM of, or portion of the advisory fee under the existing advisory 
contract attributable to, managing the Uninvested Cash of the Investing 
Fund that can be expected to be invested in the Money Market Funds. The 
minute books of the Investing Fund will record fully the Board's 
considerations in approving the advisory contract, including the 
considerations relating to fees referred to above.
    3. Investment of Cash Balances in shares of the Money Market Funds 
will be in accordance with each Investing Fund's respective investment 
restrictions and will be consistent with each Investing Fund's 
investment policies set forth in its prospectus and statement of 
additional information.
    4. Each Investing Fund and each Money Market Fund relying on the 
order will be advised by ACM. An Investing Fund that is subadvised, but 
not advised, by ACM may rely on the order provided that ACM manages the 
Cash Balances and the Investing Fund is in the same group of investment 
companies (as defined in section 12(d)(1)(G) of the Act) as the Money 
Market Fund in which the Investing Fund invests its Cash Balances.
    5. No Money Market Fund whose shares are held by an Investing Fund 
shall acquire securities of any other investment company, or company 
relying on section 3(c)(1) or 3(c)(7) of the Act, in excess of the 
limits contained in section 12(d)(1)(A) of the Act.
    6. Before an Investing Fund may participate in the Securities 
Lending Program, a majority of the Board, including a majority of the 
Independent Trustees, will approve the Investing Fund's participation 
in the Securities Lending Program. The Board also will evaluate the 
Securities Lending Program and its results no less frequently than 
annually and determine that any investment of Cash Collateral in the 
Money Market Funds is in the best interests of the shareholders of the 
Investing Fund.
    7. Each Investing Fund will invest Uninvested Cash in, and hold 
shares of, the Money Market Funds only to the extent that the Investing 
Fund's aggregate investment of Uninvested Cash in the Money Market 
Funds does not exceed 25% of the Investing Fund's total assets.
    8. The Non-Registered Money Market Funds will comply with the 
requirements of sections 17(a), (d), and (e), and 18 of the Act as if 
the Non-Registered Money Market Funds were registered open-end 
investment companies. With respect to all redemption requests made by 
an Investing Fund, the Non-Registered Money Market Funds will comply 
with section 22(e) of the Act. ACM will adopt procedures designed to 
ensure that each Non-Registered Money Market Fund complies with 
sections 17(a), (d), and (e), 18 and 22(e) of the Act. ACM will also 
periodically review and update as appropriate such procedures and will 
maintain books and records describing such procedures, and maintain the 
records required by rules 31a-1(b)(1), 31a-1(b)(2)(ii), and 31a-1(b)(9) 
under the Act. All books and records required to be made pursuant to 
this condition will be maintained and preserved for a period of not 
less than six years from the end of the fiscal year in which any 
transaction occurred, the first two years in an easily accessible 
place, and will be subject to examination by the Commission and its 
staff.
    9. Each Non-Registered Money Market Fund will comply with rule 2a-7 
under the Act and use the amortized cost method of valuation. With 
respect to such Non-Registered Money Market Fund, ACM will adopt and 
monitor the procedures described in rule 2a-7(c)(7) and will take such 
other actions as are required to be taken under those procedures. An 
Investing Fund may only purchase shares of a Non-Registered Money 
Market Fund if ACM determines on an ongoing basis that the Non-
Registered Money Market Fund is in compliance with rule 2a-7. ACM will 
preserve for a period of not less than six years from the date of 
determination, the first two years in an easily accessible place, a 
record of such determination and the basis upon which the determination 
was made. This record will be subject to examination by the Commission 
and its staff.
    10. Each Investing Fund will purchase and redeem shares of any Non-
Registered Money Market Fund as of the same time and at the same price, 
and will receive dividends and bear its proportionate share of expenses 
on the same basis, as other shareholders of the Non-Registered Money 
Market Fund. A separate account will be established in the shareholder 
records of each Non-Registered Money Market Fund for the account of 
each Investing Fund that invests in such Non-Registered Money Market 
Fund.
    11. The Board will satisfy the fund governance standards as defined 
in rule 0-1(a)(7) under the Act by the compliance date set for the 
rule.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4588 Filed 8-22-05; 8:45 am]
BILLING CODE 8010-01-P