[Federal Register Volume 75, Number 4 (Thursday, January 7, 2010)]
[Notices]
[Pages 1007-1009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-1]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-29101; 812-13549]
MetLife, Inc. and MetLife Capital Trust V; Notice of Application
December 30, 2009.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of an application under section 6(c) of the Investment
Company Act of 1940 (the ``Act'') for an exemption from all provisions
of the Act.
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Summary of Application: MetLife Capital Trust V (the ``Trust'') and
MetLife, Inc. (``MetLife'') request an order that would permit the
Trust to sell debt securities or non-voting preferred stock and use the
proceeds to finance the business operations of its parent company or a
controlled company of the parent company.
Filing Dates: The application was filed on July 21, 2008, and amended
on January 16, 2009, August 13, 2009, November 16, 2009 and November
27, 2009.
Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicant with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on January 25, 2010, and should be accompanied by proof of
service on applicant, 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, 200 Park Avenue,
New York, NY 10166-0188.
FOR FURTHER INFORMATION CONTACT: Laura L. Solomon, Senior Counsel, at
(202) 551-6915, or Julia Kim Gilmer, Branch Chief, at (202) 551-6871
(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 via the
Commission's Web site by searching for the file number, or an applicant
using the Company name box, at http://www.sec.gov/search/search.htm or
by calling (202) 551-8090.
Applicants' Representations
1. The Trust is a statutory trust formed under Delaware law and
pursuant to a Declaration of Trust that MetLife signed as sponsor. As
sponsor, MetLife is currently the sole beneficial owner of the
Trust.\1\ MetLife, a Delaware corporation, is an insurance holding
company that, through its subsidiaries and affiliates, offers life
insurance, annuities, automobile and homeowners insurance, retail
banking and other financial services to individuals, as well as group
insurance and retirement and savings products and services to
corporations and other institutions.\2\
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\1\ If the Trust issues common securities, MetLife or a
Controlled Company (defined below) will own all of the common
securities issued by the Trust. MetLife, as sponsor, will at all
times control the Trust in all material respects, including having
the sole right to select, remove or replace the Trust
administrators. A Controlled Company may be a wholly-owned or
majority-owned subsidiary of MetLife through which MetLife conducts
its insurance, banking and broker-dealer business, or an entity that
is or would be, after giving effect to the requested order,
``controlled by'' MetLife within the meaning of paragraph (b)(3) of
rule 3a-5 under the Act.
\2\ Applicants request that the order also apply to any existing
or future company controlled by MetLife that is an insurance company
or a bank (as defined in section 2(a) of the Act) or a holding
company primarily engaged in the business of an insurance company or
a bank, that relies on section 3(c)(3) and/or section 3(c)(6) of the
Act, and that, except for its reliance on section 3(c)(3) and/or
section 3(c)(6), acts as a ``parent company'' within the meaning of
rule 3a-5 under the Act (such companies, together with MetLife,
``Parent Companies'' and each, individually, a ``Parent Company'')
and to certain finance subsidiaries wholly owned by a Parent Company
or a controlled company of such Parent Company (``Controlled Company
of the Parent Company'') that currently exist or that may be
established or acquired in the future (such finance subsidiaries,
together with the Trust, ``MetLife Finance Subsidiaries''). The
Trust is the only MetLife Finance Subsidiary that presently intends
to rely on the requested order. Any MetLife entity that relies on
the requested order in the future will comply with the terms and
conditions of the application.
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2. The Trust was formed for the purpose of funding the operations
of MetLife or its Controlled Companies through the issuance of debt
securities or non-voting preferred stock (the ``Finance Subsidiary
Securities''). The Trust has not yet begun operations.
3. MetLife currently contemplates that a MetLife Finance Subsidiary
will offer Finance Subsidiary Securities in private placement
transactions in reliance on an exemption from the registration
requirements of the Securities Act of 1933, as amended (the
``Securities Act''), or through public offerings that are registered
under the Securities Act.
[[Page 1008]]
Applicants propose to use the proceeds from any such offerings to
finance the business operations of the MetLife Finance Subsidiary's
Parent Company or a Controlled Company of the Parent Company.
4. A Parent Company will unconditionally guarantee in conformity
with rule 3a-5, any debt securities constituting Finance Subsidiary
Securities as to payment of principal, interest and premium, if any,
and any non-voting preferred securities constituting Finance Subsidiary
Securities as to the payment of dividends, liquidation preference and
sinking fund payments, if any. The guarantee will provide that, in the
event of a default by the MetLife Finance Subsidiary in payment of any
such amount, the holders of Finance Subsidiary Securities may institute
legal proceedings directly against the Parent Company that guaranteed
the Finance Subsidiary Securities to enforce the guarantee without
first proceeding against the MetLife Finance Subsidiary.
5. Any Finance Subsidiary Securities that are convertible or
exchangeable will be convertible or exchangeable only for securities
issued by the Parent Company that guaranteed the Finance Subsidiary
Securities or for other securities issued by the MetLife Finance
Subsidiary that meet the applicable requirements of rule 3a-5(a)(1)
through (a)(3) of the Act. Each MetLife Finance Subsidiary, through
loans or an investment, will transfer at least 85% of the proceeds from
the sale of the Finance Subsidiary Securities to its Parent Company or
a Controlled Company of the Parent Company as soon as practicable, but
in no event later than six months after receipt of such proceeds.
Applicant's Legal Analysis
1. Applicants request an order under section 6(c) of the Act for an
exemption from all provisions of the Act. Rule 3a-5 under the Act
provides an exemption from the definition of investment company for
certain companies organized primarily to finance the business
operations of their parent companies or companies controlled by their
parent companies.
2. Rule 3a-5(b)(2)(i) in relevant part defines a ``parent company''
to be any corporation, partnership, or joint venture that is not
considered an investment company under section 3(a) of the Act or that
is excepted or exempted by order from the definition of investment
company by section 3(b) of the Act or by the rules or regulations under
section 3(a) of the Act. Applicants state that while MetLife is not an
investment company within the definition of section 3(a) of the Act,
MetLife may in the future, choose to rely on section 3(c)(6) of the Act
for an exclusion from the definition of an investment company. To the
extent MetLife or another Parent Company derives its non-investment
company status from section 3(c)(6) of the Act, MetLife would not
qualify as an eligible parent company under rule 3a-5(b)(2)(i).
Accordingly, applicants request exemptive relief to permit MetLife or
another Parent Company that does not satisfy a portion of the
definition of a ``parent company'' in rule 3a-5(b)(2)(i) solely because
it is an ``insurance company'' or ``bank'' as defined in section 2(a)
of the Act and is excepted from the definition of an investment company
under sections 3(c)(3) or 3(c)(6) of the Act or a holding company
primarily engaged in the business of an insurance company or a bank
that is excepted from the definition of an investment company under
section 3(c)(6) of the Act to guarantee Finance Subsidiary Securities
issued by a MetLife Finance Subsidiary that is wholly-owned by the
Parent Company or a Controlled Company of the Parent Company.
3. Rule 3a-5(b)(3)(i) in relevant part defines a ``company
controlled by the parent company'' to be any corporation, partnership,
or joint venture that is not considered an investment company under
section 3(a) of the Act or that is excepted or exempted by order from
the definition of investment company by section 3(b) of the Act or by
the rules and regulations under section 3(a) of the Act. MetLife
requests exemptive relief to permit a Controlled Company of the Parent
Company that is excepted from the definition of an investment company
under section 3(c)(2), 3(c)(3), 3(c)(4), 3(c)(5)(A), 3(c)(5)(B) or
3(c)(6) of the Act to receive funds from a MetLife Finance Subsidiary
that is wholly owned by its Parent Company or a Controlled Company of
the Parent Company.
4. Applicants state that the purpose of each MetLife Financing
Subsidiary is to provide funds for the operations of its Parent Company
or Controlled Company of the Parent Company. Applicants state that
neither any Parent Company nor any Controlled Company of the Parent
Company presents the potential for investment company activities.
5. Applicants seek exemptive relief that would include Parent
Companies that have not been named as applicants to the application.
Without the requested relief, a newly acquired MetLife insurance
company or bank subsidiary that may seek (or such existing subsidiary
that may determine in the future) to act as a ``parent company'' within
the meaning of rule 3a-5 would have to submit another application
seeking essentially the same relief as sought here. Such an application
would not raise any significant issue that applicants have not already
analyzed in the application.
6. Section 6(c) of the Act, in pertinent part, provides that the
Commission, by order upon application, may conditionally or
unconditionally exempt any person, security or transaction, or any
class or classes of persons, securities or transactions, from any
provision or provisions of the Act to the extent that such 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. Applicants submit that the exemptive request
meets the standards set forth in section 6(c) of the Act.
Applicants' Conditions
Applicants agree that any order granting the requested relief will
be subject to the following conditions:
Applicants will comply with all of the provisions of rule 3a-5
under the Act, except that:
(1) A Parent Company may not meet the portion of the definition
of a ``parent company'' in rule 3a-5(b)(2)(i) solely because it is
excluded from the definition of an investment company under sections
3(c)(3) or 3(c)(6) of the Act; and
(2) a Controlled Company of the Parent Company may not meet the
portion of the definition of a ``company controlled by the parent
company'' in rule 3a-5(b)(3)(i) solely because it is excluded from
the definition of an investment company under sections 3(c)(2),
3(c)(3), 3(c)(4), 3(c)(5)(A), 3(c)(5)(B) or 3(c)(6) of the Act;
provided that:
(a) any Controlled Company of the Parent Company excluded from
the definition of investment company under section 3(c)(5) of the
Act will fall within section 3(c)(5)(A) or section 3(c)(5)(B) solely
by reason of its holdings of accounts receivable of either its own
customers or the customers of another Controlled Company of the
Parent Company, or by reason of loans made to its customers or the
customers of another Controlled Company of the Parent Company; and
(b) any Parent Company or Controlled Company of a Parent Company
excluded from the definition of investment company under section
3(c)(6) of the Act will not engage primarily, directly, or through
majority-owned subsidiaries in one or more of the businesses
described in section 3(c)(5) of the Act (except as permitted by (a)
above).
[[Page 1009]]
For the Commission, by the Division of Investment Management,
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-1 Filed 1-6-10; 8:45 am]
BILLING CODE 8011-01-P