[Federal Register Volume 70, Number 177 (Wednesday, September 14, 2005)]
[Notices]
[Pages 54417-54420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-5005]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 27058; 812-12893]


Eaton Vance Senior Income Trust, et al.; Notice of Application

September 7, 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) 
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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Summary of Application: Applicants request an order to permit certain 
registered management investment companies (``Investing Funds'') to use 
cash collateral received in connection with a securities lending 
program (``Cash Collateral'') to purchase shares of affiliated money 
market funds or an affiliated cash management vehicle that relies on 
section 3(c)(1) or 3(c)(7) of the Act.

Applicants: Eaton Vance Senior Income Trust, Eaton Vance Floating-Rate 
Income Trust, Eaton Vance Short Duration Diversified Income Fund, Eaton 
Vance Enhanced Equity Income Fund, Eaton Vance Enhanced Equity Income 
Fund II, Eaton Vance California Municipal Income Trust, Eaton Vance 
Florida Municipal Income Trust, Eaton Vance Massachusetts Municipal 
Income Trust, Eaton Vance Michigan Municipal Income Trust, Eaton Vance 
Municipal Income Trust, Eaton Vance New Jersey Municipal Income Trust, 
Eaton Vance New York Municipal Income Trust, Eaton Vance Ohio Municipal 
Income Trust, Eaton Vance Pennsylvania Municipal Income Trust, Eaton 
Vance Advisers Senior Floating-Rate Fund, Eaton Vance Prime Rate 
Reserves, EV Classic Senior Floating-Rate Fund, Eaton Vance 
Institutional Senior Floating-Rate Fund, Eaton Vance Growth Trust, 
Eaton Vance Investment Trust, Eaton Vance Municipals Trust, Eaton Vance 
Municipals Trust II, Eaton Vance Mutual Funds Trust, Eaton Vance Series 
Trust, Eaton Vance Series Trust II, Eaton Vance Special Investment 
Trust, Eaton Vance Variable Trust, Growth Portfolio, Global Growth 
Portfolio, Cash Management Portfolio, Government Obligations Portfolio, 
High Income Portfolio, Tax-Managed Growth Portfolio, Strategic Income 
Portfolio, Large-Cap Value Portfolio, Special Equities Portfolio, 
Utilities Portfolio, Senior Debt Portfolio, Floating-Rate Portfolio, 
Tax-Managed Small-Cap Growth Portfolio, Tax-Managed International 
Equity Portfolio, Tax-Managed Value Portfolio, Boston Income Portfolio, 
Tax-Managed Multi-Cap Opportunity Portfolio, Tax-Managed Mid-Cap Core 
Portfolio, Investment Grade Income Portfolio, Small-Cap Portfolio, 
Large-Cap Growth Portfolio, Large-Cap Core Portfolio, Small-Cap Growth 
Portfolio, Tax-Managed Small-Cap Value Portfolio, Eaton Vance Limited 
Duration Income Fund, Investment Portfolio, Capital Growth Portfolio, 
Eaton Vance Insured California Municipal Bond Fund, Eaton Vance Insured 
California Municipal Bond Fund II, Eaton Vance Insured Florida 
Municipal Bond Fund, Eaton Vance Insured Massachusetts Municipal Bond 
Fund, Eaton Vance Insured Michigan Municipal Bond Fund, Eaton Vance 
Insured Municipal Bond Fund, Eaton Vance Insured Municipal Bond Fund 
II, Eaton Vance Tax-Managed Buy-Write Income Fund, Eaton Vance Insured 
New Jersey Municipal Bond Fund, Eaton Vance Insured New York Municipal 
Bond Fund, Eaton Vance Insured New York Municipal Bond Fund II, Eaton 
Vance Insured Ohio Municipal Bond Fund, Eaton Vance Insured 
Pennsylvania Municipal Bond Fund, Eaton Vance Senior Floating-Rate 
Trust, Eaton Vance Tax-Advantaged Dividend Income Fund, Eaton Vance 
Tax-Advantaged Global Dividend Income Fund, Eaton Vance Tax-Advantaged 
Global Dividend Opportunities Fund, on behalf of themselves or their 
series (each, a ``Fund,'' and collectively, the ``Funds'');

[[Page 54418]]

Eaton Vance Management (``EVM''), Boston Management & Research, Atlanta 
Capital Management Company, LLC, Fox Asset Management, Inc., and 
Parametric Portfolio Associates LLC (each, an ``Adviser'' and together 
with EVM, the ``Advisers'').

Filing Dates: The application was filed on October 4, 2002, and amended 
on September, 2, 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 October 3, 2005, 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 may request notification of a hearing 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 Robert A. 
Wittie, Esq., Kirkpatrick & Lockhart, LLP, 1800 Massachusetts Avenue, 
NW., Washington, DC 20036.

FOR FURTHER INFORMATION CONTACT: Marc R. Ponchione, Senior Counsel, at 
(202) 551-6874, or Nadya B. Roytblat, Assistant Director, 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 Branch, 100 F Street, NE., Washington DC 
20549-0102 (tel. 202-551-5850).

Applicants' Representations

    1. Each Investing Fund is registered under the Act as an open-end 
or closed-end management investment company and is organized as a 
business trust formed under the laws of Massachusetts or a trust formed 
under the laws of New York. Each Adviser is registered as an investment 
adviser under the Investment Advisers Act of 1940. EVM is a direct 
wholly-owned subsidiary of Eaton Vance Corp. (``EV Corp.'') and Boston 
Management & Research is a direct wholly-owned subsidiary of EVM. 
Atlanta Capital Management Company, LLC, Fox Asset Management, Inc., 
and Parametric Portfolio Associates LLC each are indirect majority-
owned subsidiaries of EV Corp. Each Investing Fund has entered into a 
management or advisory and service contract with one of the Advisers 
pursuant to which the Adviser provides investment management advice and 
manages the Investing Fund's business affairs.\1\ Applicants request 
that the relief extend to any entity controlling, controlled by, or 
under common control with EVM (included in the term ``Adviser'') and 
any other registered management investment company or series thereof 
that is advised by an Adviser (included in the term ``Funds'').\2\
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    \1\ Under their respective management or advisory contracts, 
certain closed-end Investing Funds will calculate their advisory 
fees on a gross assets basis, which includes Cash Collateral, to 
reflect investment leverage. These closed-end Investing Funds, and 
any other Investing Fund that calculates its advisory fee on a basis 
that includes Cash Collateral are referred to as the ``Cash 
Collateral Fee Investing Funds.''
    \2\ All entities that currently intend to rely on the requested 
relief have been named as applicants. Any entity that relies on the 
requested relief will do so only in accordance with the terms and 
conditions of the application.
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    2. The Investing Funds have the ability to increase their income by 
lending portfolio securities to borrowers, such as registered broker-
dealers or other institutional investors deemed by the Adviser to be of 
good credit standing, through a securities lending program 
(``Securities Lending Program''). Loans will be continuously secured by 
collateral, the value of which will range from between 100% and 105%, 
depending on the type of collateral posted and securities loaned, plus 
any interest accrued to date. Collateral will consist of cash and other 
types of instruments such as U.S. Government securities or irrevocable 
letters of credit. The Securities Lending Program, including the 
investment of any Cash Collateral, will comply with all present and 
future applicable Commission and staff positions regarding securities 
lending arrangements.
    3. Applicants request relief to permit: (a) Each Investing Fund to 
use its Cash Collateral to purchase shares of money market Funds that 
are in the same group of investment companies (as defined in section 
12(d)(1)(G) of the Act) as the Investing Fund and comply with rule 2a-7 
under the Act (``Money Market Funds'') and a cash management vehicle 
that is excluded from the definition of investment company under 
section 3(c)(1) or 3(c)(7) of the Act and is advised by an Adviser 
(``Private Fund,'' and together with the Money Market Funds, the 
``Central Funds''), and the Central Funds to sell their respective 
shares to and to purchase (or redeem) such shares from the Investing 
Funds; and (b) the Advisers to effect such purchases and sales.

Applicants' Legal Analysis

    1. Section 12(d)(1)(A) of the Act provides that no registered 
investment company may acquire securities of another investment company 
representing more than 3% of the acquired company's outstanding voting 
stock, more than 5% of the acquiring company's total assets, or, 
together with the securities of other investment companies, more than 
10% of the acquiring company's total assets. Section 12(d)(1)(B) of the 
Act prohibits a registered open-end investment company, its principal 
underwriter, and any broker or dealer from selling any security of the 
investment company 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. Section 
12(d)(1)(J) of the Act provides that the Commission may exempt any 
person or transaction 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.
    2. Applicants request an exemption under section 12(d)(1)(J) to 
permit the Investing Funds to use Cash Collateral to purchase shares of 
the Money Market Funds in excess of the limits imposed by section 
12(d)(1)(A), and each Money Market Fund, its principal underwriter, and 
any broker or dealer to sell the Money Market Fund's shares to the 
Investing Funds in excess of the limits in section 12(d)(1)(B). 
Applicants represent that the proposed transactions will not result in 
an inappropriate layering of fees because shares of the Central 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 Rule 
2830(b)(9) of the Conduct Rules of the National Association of 
Securities Dealers (``NASD Conduct Rules''), or if such shares are 
subject to any such sales load, redemption fee, distribution fee, or 
service fee, the Adviser will waive its advisory fee for each Investing 
Fund in an amount that offsets the amount of such fees incurred by the 
Investing Fund. For Cash Collateral Fee Investing Funds, before the 
next meeting of the board of trustees (``Board'') of a Cash Collateral 
Fee Investing Fund is held for

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the purpose of voting on an advisory contract with the Adviser under 
section 15 of the Act, the Adviser will provide the Board with specific 
information regarding the approximate cost to the Adviser of, or the 
portion of the advisory fee under the existing advisory contract with 
the Adviser attributable to, managing the Cash Collateral of the Cash 
Collateral Fee Investing Fund that can be expected to be invested in 
the Central Funds. Before approving any advisory contract with the 
Adviser for a Cash Collateral Fee Investing Fund, the Board, including 
a majority of the trustees who are not ``interested persons,'' as 
defined in section 2(a)(19) of the Act (``Independent Trustees''), 
shall consider to what extent, if any, the advisory fees charged to the 
Cash Collateral Fee Investing Fund by the Adviser should be reduced to 
account for reduced services provided to the Cash Collateral Fee 
Investing Fund as a result of Cash Collateral being invested in the 
Central Funds. Applicants also represent that the Central Funds will 
not acquire securities of any 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, except that a Money Market Fund may 
acquire shares of another Money Market Fund in reliance on section 
12(d)(1)(E) of the Act. Applicants further state that the Money Market 
Funds will be managed specifically to maintain a highly liquid 
portfolio and, therefore, will not be susceptible to control through 
the threat of large scale redemptions. For these reasons, applicants 
believe that the proposed transactions will not give rise to the abuses 
that sections 12(d)(1)(A) and (B) under the Act were designed to 
prevent.
    3. Sections 17(a)(1) and 17(a)(2) of the Act prohibit an affiliated 
person of a registered investment company, or any affiliated person of 
the affiliated person (``second-tier affiliate'') from selling any 
security to, or purchasing any security from, the registered investment 
company. Section 2(a)(3) of the Act defines an ``affiliated person'' of 
another person 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 voting securities are directly or indirectly 
owned, controlled, or held with power to vote, by such other person; 
any person directly or indirectly controlling, controlled by, or under 
common control with, the other person; and, in the case of an 
investment company, its investment adviser. Control is defined in 
section 2(a)(9) of the Act to mean ``the power to exercise a 
controlling influence over the management or policies of a company, 
unless such power is solely the result of an official position with 
such company.''
    4. Applicants state that because the Advisers will serve as 
investment advisers of the Investing Funds and the Central Funds, the 
Advisers could be deemed to control the Investing Funds and the Central 
Funds, and the Advisers are under common control. Accordingly, the 
Investing Funds and the Central Funds may be deemed to be under common 
control and affiliated persons of each other. In addition, if an 
Investing Fund acquires 5% or more of the outstanding voting securities 
of a Central Fund, the Central Fund could be deemed an affiliated 
person of the Investing Fund. As a result, applicants state that the 
sale of shares of the Central Funds to the Investing Funds, and the 
redemption of such shares in connection with the investment of Cash 
Collateral may be prohibited under Section 17(a).
    5. Section 17(b) of the Act authorizes the Commission to exempt a 
transaction from section 17(a) 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 provides that the 
Commission may exempt any person, security, or transaction 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 request an order under sections 6(c) and 17(b) of the 
Act to permit the Investing Funds to use Cash Collateral to purchase 
shares of the Central Funds, and the Central Funds to sell their 
respective shares to and to purchase (or redeem) such shares from the 
Investing Funds. Applicants state that the Investing Funds will retain 
their ability to invest Cash Collateral directly in money market 
instruments as authorized by their respective investment objectives and 
policies if they can achieve a higher return or for any other reason. 
Applicants state that the Investing Funds will invest in the Central 
Funds on the same basis as any other holder of Central Fund shares. 
Applicants state that an Investing Fund will invest its Cash Collateral 
in a Central Fund only if the Central Fund has been approved for 
investment by the Investing Fund. For these reasons, applicants believe 
that the terms of the proposed transactions are reasonable and fair and 
are consistent with the general purposes of the Act as well as with the 
policy of each Investing Fund.
    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. Under rule 17d-1, in passing on applications for 
orders under section 17(d), the Commission considers whether the 
participation of the registered investment company 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.
    8. Applicants state that the Investing Funds, by purchasing shares 
of the Central Funds, the Advisers, by managing the assets of the 
Investing Funds invested in the Central Funds, and the Central Funds, 
by selling shares to and redeeming shares from the Investing Funds, 
could be deemed to be participants in a joint enterprise or other joint 
arrangement within the meaning of section 17(d) and rule 17d-1. 
Applicants request an order pursuant to rule 17d-1 under the Act to 
permit certain joint transactions in accordance with section 17(d) of 
the Act and rule 17d-1 thereunder.
    9. In considering whether to approve a joint transaction under rule 
17d-1, the Commission considers whether the investment company's 
participation in the proposed 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 Central Funds would be on the 
same basis and indistinguishable from any other shareholder account 
maintained by the Central Fund. Accordingly, applicants believe that 
the conditions for relief under rule 17d-1 under the Act are satisfied.

Applicants' Conditions

    Applicants agree that any order of the Commission granting the 
requested

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relief will be subject to the following conditions:
    1. 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 arrangement and its results no less frequently than 
annually and determine that any investment of Cash Collateral in the 
Central Funds is in the best interest of the shareholders of the 
Investing Fund.
    2. Investment of Cash Collateral in shares of the Central Funds 
will be in accordance with each Investing Fund's respective investment 
restrictions and policies as recited in the Investing Fund's prospectus 
and statement of additional information. An Investing Fund will invest 
Cash Collateral in a Central Fund only if the Central Fund has been 
approved for investment by the Investing Fund.
    3. The Central Funds shall not acquire securities of any 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, 
except that a Money Market Fund may acquire the shares of another Money 
Market Fund in reliance on section 12(d)(1)(E) of the Act.
    4. Shares of the Central Funds sold to the Investing Funds either 
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 sales load, redemption fee, 
distribution fee, or service fee, the Adviser will waive its advisory 
fee for each Investing Fund in an amount that offsets the amount of 
such fees incurred by the Investing Fund.
    5. Each Investing Fund will purchase and redeem shares of the 
Private 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 Private Fund. A separate 
account will be established in the shareholder records of the Private 
Fund for the account of each Investing Fund.
    6. The Private Fund will comply with sections 17(a), (d), and (e) 
and section 18 of the Act as if the Private Fund were a registered 
open-end investment company. With respect to all redemption requests 
made by an Investing Fund, the Private Fund will comply with section 
22(e) of the Act. The Adviser, as sole trustee or managing member of 
the Private Fund, will adopt procedures designed to ensure that the 
Private Fund complies with sections 17(a), (d), and (e), 18 and 22(e) 
of the Act. The Adviser to the Private Fund will 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.
    7. The Private Fund will use the amortized cost method of valuation 
as defined in rule 2a-7 under the Act and will comply with rule 2a-7. 
The Adviser to the Private Fund will adopt and monitor the procedures 
described in rule 2a-7(c)(7) under the Act and will take such other 
actions as are required to be taken under those procedures. An 
Investing Fund may only purchase shares of the Private Fund if the 
Adviser determines on an ongoing basis that the Private Fund is in 
compliance with rule 2a-7 under the Act. The Adviser will preserve for 
a period not less than six years from the date of determination, the 
first two years in an easily accessible place, a record of the 
determination and the basis upon which the determination was made. This 
record will be subject to examination by the Commission and the staff.
    8. Each Investing Fund and each Central Fund that may rely on the 
order shall be advised by an Adviser. Each Investing Fund and Money 
Market Fund will be in the same group of investment companies as 
defined in section 12(d)(1)(G) of the Act.
    9. Before the next meeting of the Board of a Cash Collateral Fee 
Investing Fund is held for the purpose of voting on an advisory 
contract with the Adviser under section 15 of the Act, the Adviser will 
provide the Board with specific information regarding the approximate 
cost to the Adviser of, or the portion of the advisory fee under the 
existing advisory contract with the Adviser attributable to, managing 
the Cash Collateral of the Cash Collateral Fee Investing Fund that can 
be expected to be invested in the Central Funds. Before approving any 
advisory contract with the Adviser for a Cash Collateral Fee Investing 
Fund, the Board, including a majority of the Independent Trustees, 
shall consider to what extent, if any, the advisory fees charged to the 
Cash Collateral Fee Investing Fund by the Adviser should be reduced to 
account for reduced services provided to the Cash Collateral Fee 
Investing Fund as a result of Cash Collateral being invested in the 
Central Funds. In addition, the Cash Collateral Fee Investing Fund's 
minute books will record fully the Board's consideration in approving 
the advisory contract with the Adviser, including the considerations 
relating to fees referred to above.
    10. The Board of any Investing Fund will satisfy the fund 
governance standards as defined in Rule 0-1(a)(7) under the Act by the 
compliance date for the rule.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. E5-5005 Filed 9-13-05; 8:45 am]
BILLING CODE 8010-01-P