[Federal Register Volume 73, Number 189 (Monday, September 29, 2008)]
[Notices]
[Pages 56619-56620]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-22749]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 28388; 812-13529]
Morgan Stanley Series Funds, et al.; Notice of Application
September 23, 2008.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of an application under section 6(c) of the Investment
Company Act of 1940 (``Act'') for an exemption from rule 12d1-2(a)
under the Act.
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Summary of Application: Applicants request an order to permit funds of
funds relying on rule 12d1-2 under the Act to invest in certain
financial instruments.
Applicants: Morgan Stanley Series Fund (the ``Trust''), Morgan Stanley
Investment Advisors, Inc. (the ``Adviser''), Morgan Stanley Investment
Management Ltd. (the ``Sub-Adviser'') and Morgan Stanley Distributors
Inc. (the ``Distributor'').
Filing Date: The application was filed on May 18, 2008 and amended on
September 19, 2008.
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 20, 2008 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, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-1090; Applicants, 522 Fifth Avenue,
New York, NY 10036.
FOR FURTHER INFORMATION CONTACT: Lewis Reich, Senior Counsel, at (202)
551-6919, or Janet M. Grossnickle, 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 Room, 100 F Street, NE., Washington, DC
20549-1520 (telephone (202) 551-5850).
Applicants' Representations
1. The Trust is organized as a Massachusetts business trust and is
registered as an open-end management investment company under the Act.
Applicants request the exemption to the extent necessary to permit any
existing or future registered open-end management investment companies
and their series advised by the Adviser or any entity controlling,
controlled by, or under common control with, the Adviser that operate
as ``funds of funds'' (the ``Applicant Funds'') and invest in other
registered investment companies in reliance on section 12(d)(1)(G) of
the Act and which is also eligible to invest in securities (as defined
in section 2(a)(36) of the Act) in reliance on rule 12d1-2 under the
Act (together with the Trust and its series, the ``Applicant Funds''),
to also invest, to the extent consistent with its investment objective,
policies, strategies and limitations, in financial instruments that may
not be securities within the meaning of section 2(a)(36) of the Act
(``Other Investments'').\1\
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\1\ Every existing entity that currently intends to rely on the
requested order is named as an applicant. Any existing or future
entity that relies on the order in the future will do so only in
accordance with the terms and conditions in the application.
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2. The Adviser and Sub-Adviser are both wholly-owned subsidiaries
of Morgan Stanley registered as investment advisers under the
Investment Advisers Act of 1940 (the ``Advisers Act''). The Adviser is
the investment adviser for each series of the Trust. The Sub-Adviser
serves as investment sub-
[[Page 56620]]
adviser to certain series of the Trust. The Distributor is a wholly-
owned subsidiary of Morgan Stanley and a registered broker-dealer under
the Securities Exchange Act of 1934. The Distributor provides marketing
and distribution services to the Trust.
3. Consistent with its fiduciary obligations under the Act, each
Applicant Fund's board of trustees or directors will review the
advisory fees charged by the Applicant Fund's investment adviser to
ensure that they are based on services provided that are in addition
to, rather than duplicative of, services provided pursuant to the
advisory agreement of any investment company in which the Applicant
Fund may invest.
Applicants' Legal Analysis
1. Section 12(d)(1)(A) of the Act provides that no registered
investment company (``acquiring company'') may acquire securities of
another investment company (``acquired company'') if such securities
represent more than 3% of the acquired company's outstanding voting
stock or more than 5% of the acquiring company's total assets, or if
such securities, together with the securities of other 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 cause more than
10% of the acquired company's voting stock to be owned by investment
companies.
2. Section 12(d)(1)(G) of the Act provides that section 12(d)(1)
will not apply to securities of an acquired company purchased by an
acquiring company if: (i) The acquiring company and acquired company
are part of the same group of investment companies; (ii) the acquiring
company holds only securities of acquired companies that are part of
the same group of investment companies, government securities, and
short-term paper; (iii) the aggregate sales loads and distribution-
related fees of the acquiring company and the acquired company are not
excessive under rules adopted pursuant to section 22(b) or section
22(c) of the Act by a securities association registered under section
15A of the Exchange Act or by the Commission; and (iv) the acquired
company has a policy that prohibits it from acquiring securities of
registered open-end management investment companies or registered unit
investment trusts in reliance on section 12(d)(1)(F) or (G) of the Act.
3. Rule 12d1-2 under the Act permits a registered open-end
investment company or a registered unit investment trust that relies on
section 12(d)(1)(G) of the Act to acquire, in addition to securities
issued by another registered investment company in the same group of
investment companies, government securities, and short-term paper: (1)
Securities issued by an investment company that is not in the same
group of investment companies, when the acquisition is in reliance on
section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (2) securities (other
than securities issued by an investment company); and (3) securities
issued by a money market fund, when the investment is in reliance on
rule 12d1-1 under the Act. For the purposes of rule 12d1-2,
``securities'' means any security as defined in section 2(a)(36) of the
Act.
4. Section 6(c) of the Act provides that the Commission may exempt
any person, security, or transaction from any provision of the Act, or
from any rule under the Act, if such exemption is necessary or
appropriate in the public interest and consistent with the protection
of investors and the purposes fairly intended by the policies and
provisions of the Act.
5. Applicants state that the proposed arrangement would comply with
the provisions of rule 12d1-2 under the Act, but for the fact that the
Applicant Funds may invest a portion of their assets in Other
Investments. Applicants request an order under section 6(c) of the Act
for an exemption from rule 12d1-2(a) to allow the Applicant Funds to
invest in Other Investments. Applicants assert that permitting the
Applicant Funds to invest in Other Investments as described in the
application would not raise any of the concerns that the requirements
of section 12(d)(1) were designed to address.
Applicants' Condition
Applicants agree that any order granting the requested relief will
be subject to the following condition:
Applicants will comply with all provisions of rule 12d1-2 under the
Act, except for paragraph (a)(2) to the extent that it restricts any
Applicant Fund from investing in Other Investments as described in the
Application.
For the Commission, by the Division of Investment Management,
under delegated authority.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-22749 Filed 9-26-08; 8:45 am]
BILLING CODE 8010-01-P