[Federal Register Volume 77, Number 174 (Friday, September 7, 2012)]
[Notices]
[Pages 55235-55240]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-22017]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30188; 812-13933]


Cash Account Trust, et al.; Notice of Application

August 31, 2012.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order under sections 6(c) and 
17(b) of the Investment Company Act of 1940 (the ``Act'') for an 
exemption from section 17(a) of the Act.

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    Applicants: Cash Account Trust, on behalf of its series, Government 
& Agency Securities Portfolio and Money Market Portfolio; Cash 
Management Portfolio; Cash Reserve Fund, Inc., on behalf of its series, 
Prime Series; DWS Money Funds, on behalf of its series, DWS Money 
Market Prime Series; DWS Money Market Trust, on behalf of its series, 
DWS Money Market Series, Cash Management Fund, Cash Reserves Fund 
Institutional, and Daily Assets Fund Institutional; DWS Variable Series 
II, on behalf of its series, DWS Money Market VIP; and Investors Cash 
Trust, on behalf of its series, Treasury Portfolio, Central Cash 
Management Fund and DWS Variable NAV Money Fund (collectively, the 
``DWS Funds''), Deutsche Investment Management Americas Inc. 
(``DIMA''), and Deutsche Bank Securities, Inc. (``DBSI'').

SUMMARY:  Summary of Application: Applicants request an order to permit 
the Money Market Portfolios (as defined below) to engage in principal 
transactions in certain taxable money market instruments including 
repurchase agreements with DBSI.

DATES:  Filing Dates: The application was filed on August 1, 2011, and 
amended on January 27, 2012, and July 20, 2012.
    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 24, 2012, 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 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 20549-1090. Applicants: the DWS Funds and 
DIMA, 345 Park Avenue, New York, NY 10154; DBSI, 60 Wall Street, New 
York, NY 10005.

FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior 
Counsel, (202) 551-6879 or Mary Kay Frech, Branch Chief, (202) 551-6821 
(Office of Investment Company Regulation, Division of Investment 
Management).

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 DWS Funds are each a Massachusetts business trust (or, in 
the case of Cash Reserve Fund Inc., a Maryland corporation), each is 
registered under the Act as an open-end management investment company, 
and each has one or more series that operate as money market funds 
subject to rule 2a-7 under the Act (``Rule 2a-7''). In addition to the 
DWS Funds and their series that operate as money market funds subject 
to Rule 2a-7, relief is requested for any other existing or future 
funds registered under the Act that operate as money market funds 
subject to Rule 2a-7 under the Act and are advised or subadvised by an 
Adviser (as defined below). All such investment companies and their 
series that operate as money market funds subject to Rule 2a-7 under 
the Act, including DWS Funds and their series, are referred to 
individually as a ``Money Market Portfolio'' and collectively as the 
``Money Market Portfolios.'' Any Money Market Portfolios not existing 
as of the date of the application or that currently

[[Page 55236]]

do not intend to rely on the requested order are referred to 
individually as a ``Future Money Market Portfolio'' and collectively as 
the ``Future Money Market Portfolios.'' \1\
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    \1\ Any Money Market Portfolio that currently intends to rely on 
the requested order is named as an applicant. Any other Money Market 
Portfolio that relies on the order in the future will comply with 
the terms and conditions of the application.
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    2. DIMA, a Delaware corporation and wholly owned subsidiary of 
Deutsche Bank Americas Holding Corporation, a wholly owned subsidiary 
of Taunus Corporation, which is a wholly owned subsidiary of Deutsche 
Bank A.G. (``DB''), is registered as an investment adviser under the 
Investment Advisers Act of 1940, as amended (the ``Advisers Act''). 
Each Money Market Portfolio has an investment advisory agreement with 
DIMA, pursuant to which DIMA provides investment advisory and 
management services. In addition to DIMA, applicants request relief for 
any other existing or future investment adviser registered under the 
Advisers Act which acts as investment adviser or sub-adviser to a DWS 
Fund and which controls, is controlled by, or is under common control 
(as defined in section 2(a)(9) of the Act) with DIMA (individually, a 
``Future Adviser'' and collectively, the ``Future Advisers''). DIMA and 
the Future Advisers are referred to individually as an ``Adviser'' and 
collectively as the ``Advisers.'' \2\
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    \2\ Any Adviser that currently intends to rely on the requested 
order is named as an applicant. Any other Adviser that relies on the 
order in the future will comply with the terms and conditions of the 
application. Each Future Adviser will be registered as an investment 
adviser under the Advisers Act.
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    3. DBSI, a Delaware corporation and wholly owned subsidiary of DB 
U.S. Financial Markets Holding Corporation, a wholly owned subsidiary 
of Taunus Corporation, which, as noted above, is a wholly owned 
subsidiary of DB, is registered as a broker-dealer under the Securities 
Exchange Act of 1934, as amended (the ``1934 Act'').\3\ DBSI, which is 
a primary dealer in U.S. Government securities, is currently one of the 
largest dealers in commercial paper, repurchase agreements and other 
money market instruments in the United States (such money market 
instruments and repurchase agreements collectively are referred to as 
``Money Market Instruments''). Applicants believe that DBSI's extensive 
dealing in Taxable Money Market Instruments (as defined below) makes it 
a very significant source for both investment opportunities and 
information and expertise.\4\
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    \3\ DBSI also is registered as an investment adviser under the 
Advisers Act. For purposes of the application, the relief sought 
applies to DBSI as broker-dealer only. The requested relief will not 
extend to any investment company advised or sub-advised by DBSI.
    \4\ The term ``Taxable Money Market Instruments'' refers to 
taxable securities which are eligible for purchase by money market 
funds under Rule 2a-7, including short-term U.S. Government 
securities, short-term U.S. Governmental agency securities, bank 
money market instruments, bank notes, commercial paper and other 
short-term fixed income instruments, including appropriate medium-
term notes, asset-backed floating rate notes, and repurchase 
agreements.
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    4. Applicants state that DBSI and the Adviser are functionally 
independent of each other and operate as completely separate entities 
under the umbrella of DB. While each of these corporations is under 
common control, DBSI and the Adviser have their own separate officers 
and employees, are separately capitalized, and maintain their own books 
and records, except for one dual officer as more fully discussed in the 
application. In addition, the Adviser and DBSI operate on different 
sides of appropriate information barriers with respect to portfolio 
management activities and investment banking activities, and maintain 
physically separate offices.
    5. Investment management decisions for the Money Market Portfolios 
are determined solely by the Adviser. The portfolio managers and other 
employees that are responsible for portfolio management for registered 
investment companies are employed solely by the Adviser (and not DBSI) 
and have lines of reporting responsibility solely within the Adviser. 
The compensation of persons assigned to the Adviser will not depend on 
the volume or nature of trades effected by the Adviser for the Money 
Market Portfolios with DBSI under the requested exemption, except to 
the extent that such trades may affect the profits and losses of DB and 
its subsidiaries as a whole.
    6. Each Money Market Portfolio and Future Money Market Portfolio, 
consistent with its stated investment objectives and practices, may 
invest in Money Market Instruments. Practically all trading in Taxable 
Money Market Instruments takes place in over-the-counter markets 
consisting of groups of dealers that are primarily major securities 
firms or large commercial banks. Taxable Money Market Instruments are 
generally traded in lots of $1,000,000 or more on a net basis and do 
not normally involve either brokerage commissions or transfer taxes. 
The cost of portfolio transactions to the Money Market Portfolios 
consists primarily of dealer or underwriter spreads. Spreads vary among 
Money Market Instruments but generally spread levels are in the range 
of 1 to 5 basis points (.01% to .05%). In the Money Market Portfolios' 
experience, there is not a great deal of variation in the spreads 
quoted by the various dealers, except during turbulent market 
conditions.
    7. The money market consists of elaborate communications networks 
among dealer firms, principal issuers of Taxable Money Market 
Instruments and principal institutional buyers of such instruments. 
Because the money market is a dealer market rather than an auction 
market, there is not a single obtainable price for a given instrument 
that generally prevails at any given time. A dealer acts either as 
``agent'' on behalf of issuer clients or as ``principal'' for its own 
account. In either capacity, a dealer posts rates throughout its 
internal and external distribution networks that are intended to 
reflect ``market clearing price levels,'' as determined by the dealer. 
Only customers of dealers seeking to purchase Money Market Instruments 
have access to these postings.
    8. Because of the variety of types of Taxable Money Market 
Instruments, the money market tends to be somewhat segmented. The 
markets for the various types of instruments will vary in terms of 
price, volatility, liquidity and availability. Although the rates for 
the different types of instruments tend to fluctuate closely together, 
there may be significant differences in yield among the various types 
of instruments, and even within a particular instrument category, 
depending upon the maturity date and the credit quality of the issuer. 
Moreover, from time to time segmenting exists within Money Market 
Instruments with the same maturity date and rating. The segmenting is 
based on such factors as whether the issuer is an industrial or 
financial company, whether the issuer is domestic or foreign and 
whether the securities are asset-backed or unsecured. Because dealers 
tend to specialize in certain types of Taxable Money Market 
Instruments, the particular needs of a potential buyer or seller in 
terms of type of security, maturity or credit quality may limit the 
number of dealers who can provide optimum pricing and execution. Hence, 
with respect to any given type of instrument, there may be only a few 
dealers that have the instrument available and can be in a position to 
quote an acceptable price.
    9. DBSI is one of the world's largest dealers in Taxable Money 
Market Instruments, ranking among the top firms in each of the major 
markets and product areas, as more fully discussed in the application. 
For the calendar year ended 2011, DBSI ranked seventh in terms of 
market share in commercial paper, conducting business with 51% of

[[Page 55237]]

the market. Applicants state that DBSI plays a relatively significant 
role in the repurchase agreement market and that DBSI's market position 
is among the ten leading dealers. For the calendar year ended 2010, 
DBSI's average daily repurchase agreement sales volume was $165 
billion. The U.S. Treasury market consists of U.S. government 
obligations that are sold through public auctions. According to the 
Federal Reserve Bank of New York, there are currently only 21 primary 
dealers. DBSI's primary dealer desk actively participates in the U.S. 
Treasury market and is a leading primary dealer. For the calendar year 
ended 2011, DBSI bid on average for 8% to 20% of all the Treasury 
securities auctioned and received on average 2% to 8% of the primary 
distribution of Treasury securities. DBSI actively transacts in 
securities issued by U.S. Government agencies and government sponsored 
enterprises (``GSEs''). DBSI serves as a primary distributor for each 
of the GSEs for their unsecured debt and mortgage-backed securities. 
DBSI ranked sixth in underwriting primary issuances of agency and GSE 
securities in 2011 with a market share of 6.3%. DBSI is also one of the 
leading participants in the market for medium-term notes (``MTNs''). 
MTNs are offered continuously in public or private offerings, with 
maturities beginning at nine months. MTNs represent a significant 
portion of the longer-term money market investment alternatives because 
commercial paper is not issued with maturities greater than nine 
months. DBSI is a very significant dealer in the MTN market, and 
through December 31, 2011, ranked as the tenth largest manager or co-
manager of MTNs, bank notes and CD programs in the United States with a 
5.5% market share.
    10. Applicants state that in recent years mergers and acquisitions 
in the investment banking and commercial banking industries have caused 
dealers that were formerly independent and competing with one another 
to combine their operations. As a result, there is a substantially 
smaller number of major dealers who are active in the money market than 
was the case a decade ago. Applicants also state that the reduction in 
the number of participants has generally decreased the liquidity 
available in the market, since fewer dealers will make a market in any 
particular security. Applicants further state that, as the number of 
dealers with whom the Money Market Portfolios can transact business has 
decreased, it has become even more important for the Money Market 
Portfolios to have access to all of the major dealers in Money Market 
Instruments in order to diversify each Money Market Portfolio's 
investments, to maintain portfolio liquidity, and to increase 
opportunities for obtaining best price and execution with respect to 
portfolio trades. In addition, applicants state that, given the 
relative significance of DBSI in the market for Money Market 
Instruments in which the Money Market Portfolios invest, not having 
access to DBSI may place the Money Market Portfolios at a competitive 
disadvantage.
    11. Subject to the general oversight of the board of directors/
trustees of each DWS Fund (each a ``Board''), the Adviser is 
responsible for portfolio decisions and executing transactions in Money 
Market Instruments. The Money Market Portfolios have no obligation to 
deal with any dealer or group of dealers in the execution of their 
portfolio transactions. When placing orders, the Adviser must attempt 
to obtain the best net price and the most favorable execution of its 
orders. In doing so, it takes into account such factors as price, the 
size, type and difficulty of the transaction involved and the dealer's 
general execution and operational facilities. For repurchase agreements 
in particular, the Adviser places great emphasis on the 
creditworthiness of the counterparty.

Applicants' Legal Analysis

    1. Applicants request an order pursuant to sections 6(c) and 17(b) 
of the Act exempting certain transactions from the provisions of 
section 17(a) of the Act to permit DBSI, acting as principal, to sell 
Taxable Money Market Instruments to, or purchase Taxable Money Market 
Instruments from, the Money Market Portfolios, and to engage in 
repurchase agreement transactions with the Money Market Portfolios, 
subject to the conditions set forth below.
    2. Section 17(a) of the Act generally prohibits an affiliated 
person or principal underwriter of a registered investment company, or 
any affiliated person of such a person, acting as principal, from 
selling to or purchasing from such registered company, or any company 
controlled by such registered company, any security or other property. 
Because DBSI and the Adviser are under common control of DB, DBSI and 
the Adviser are affiliated persons of each other within the meaning of 
section 2(a)(3)(C) of the Act. Accordingly, DBSI could be deemed to be 
an affiliated person of an affiliated person of the Money Market 
Portfolios, because the Adviser, as the investment adviser of the Money 
Market Portfolios, could be deemed to be an affiliated person of the 
Money Market Portfolios under section 2(a)(3)(E) of the Act. Thus, 
section 17(a) would prohibit the Money Market Portfolios from selling 
or purchasing Taxable Money Market Instruments to or from DBSI to the 
extent DBSI is deemed an affiliated person of an affiliated person of 
the Money Market Portfolios.
    3. Section 17(b) of the Act provides that the Commission, upon 
application, may exempt a transaction from the provisions of section 
17(a) if evidence establishes that the terms of the proposed 
transaction, including the consideration to be paid, are reasonable and 
fair, and do not involve overreaching on the part of any person 
concerned, and that the proposed transaction is consistent with the 
policy of the registered investment company concerned and with the 
general purposes of the Act. Section 6(c) of the Act provides that the 
Commission 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 or of any rule or regulation thereunder, if and 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.
    4. Applicants contend that the rationale behind the proposed order 
is based upon the reduction in the number of participants in the money 
market, the growing and significant role played in the money market by 
DBSI and the growing investment requirements of the Money Market 
Portfolios. In particular, applicants note the following:
    (a) With over $59.15 billion invested in Money Market Instruments 
as of June 30, 2012, the Money Market Portfolios are major buyers and 
sellers in the money market with a strong need for access to large 
quantities of high quality Money Market Instruments. Applicants believe 
that access to a major dealer, such as DBSI, would increase the Money 
Market Portfolios' ability to obtain suitable portfolio securities.
    (b) The policy of the Money Market Portfolios of investing in 
securities with short maturities and repurchase agreements, combined 
with the active portfolio management techniques employed by the 
Adviser, results in high portfolio activity and the need to make 
numerous purchases and sales of Money Market Instruments. This high 
portfolio activity likewise emphasizes the importance of increasing 
opportunities to obtain suitable portfolio securities and best price 
and execution.

[[Page 55238]]

    (c) The money market, including the market for repurchase 
agreements, is highly competitive and maintaining a dealer as prominent 
as DBSI in the pool of dealers with which the Money Market Portfolios 
could conduct principal transactions may provide the Money Market 
Portfolios with improved opportunities to purchase and sell Money 
Market Instruments, including Money Market Instruments not available 
from any other source.
    (d) DBSI is such a major factor in the money market that removing 
DBSI from the dealers with which the Money Market Portfolios may 
conduct principal transactions may indirectly deprive the Money Market 
Portfolios of obtaining best price and execution even when the Money 
Market Portfolios trade with unaffiliated dealers.
    5. Applicants believe that the requested order will provide the 
Money Market Portfolios with broader and more complete access to the 
money market, which is necessary to carry out the policies and 
objectives of each of the Money Market Portfolios in seeking the best 
price, execution and quality in all portfolio transactions. In 
addition, applicants respectfully submit that the requested relief will 
provide the Money Market Portfolios with important information sources 
in the money market, to the direct benefit of the investors in the 
Money Market Portfolios. Applicants believe that the transactions 
contemplated by the application are identical to those in which they 
are currently engaged except for the proposed participation of DBSI, 
and that such transactions are consistent with the policies of the 
Money Market Portfolios as recited in their registration statements and 
reports filed under the Act. Applicants also submit that the procedures 
to be followed with respect to transactions with DBSI are structured in 
such a way as to ensure that the transactions will be, in all 
instances, reasonable and fair, will not involve overreaching on the 
part of any person concerned, and that the requested exemption is 
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' Conditions

    Applicants agree that the order granting the requested relief will 
be subject to the following conditions:
    1. Transactions Subject to the Exemption--The exemption shall be 
applicable to principal transactions in the secondary market and 
primary or secondary fixed-price dealer offerings not made pursuant to 
underwriting syndicates. The principal transactions that may be 
conducted pursuant to the exemption will be limited to transactions in 
Eligible Securities.\5\ As the Money Market Portfolios are subject to 
Rule 2a-7, such Eligible Securities must meet the portfolio maturity 
and credit quality requirements of paragraphs (c)(2) and (c)(3) of Rule 
2a-7. Additionally:
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    \5\ Underlined terms are defined as set forth in paragraph (a) 
of Rule 2a-7 under the Act, unless otherwise indicated.
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    (a) No Money Market Portfolio shall make portfolio purchases 
pursuant to the exemption that would result directly or indirectly in 
the Money Market Portfolio investing pursuant to the exemption more 
than 2% of its Total Assets in securities which, when acquired by the 
Money Market Portfolio (either initially or upon any subsequent 
rollover) are Second Tier Securities; provided that any Money Market 
Portfolio may make portfolio sales of Second Tier Securities pursuant 
to the exemption without regard to this limitation.
    (b) The exemption shall not apply to an Unrated Security other than 
a Government Security.
    (c) The exemption shall not apply to any instrument, other than a 
repurchase agreement, issued by DB or any affiliated person thereof or 
to any instrument subject to a Demand Feature or Guarantee issued by DB 
or any affiliated person thereof.
    2. Repurchase Agreement Requirements--The Money Market Portfolios 
may engage in repurchase agreements with DBSI only if DBSI has: (a) net 
capital, as defined in rule 15c3-1 under the 1934 Act, of at least $100 
million and (b) a record (including the record of predecessors) of at 
least five years continuous operations as a dealer during which time it 
engaged in repurchase agreements relating to the kind of instrument 
subject to the repurchase agreement. DBSI shall furnish the Adviser 
with financial statements for its most recent fiscal year and the most 
recent semi-annual financial statements made available to its 
customers. The Adviser shall determine that DBSI complies with the 
above requirements and with other repurchase agreement guidelines 
adopted by the Board. Each repurchase agreement will be Collateralized 
Fully.
    3. Price Test--In the case of purchase and sale transactions, a 
determination will be required in each instance, based upon the 
information available to the Money Market Portfolios and the Adviser, 
that the price available from DBSI is at least as favorable as that 
available from other sources. In the case of ``swaps'' involving trades 
of one instrument for another, the price test shall be based upon the 
transaction viewed as a whole, and not upon the two components thereof 
individually. With respect to transactions involving repurchase 
agreements, a determination will be required in each instance, based on 
the information available to the Money Market Portfolios and the 
Adviser, that the income to be earned from the repurchase agreement is 
at least equal to that available from other sources in connection with 
comparable repurchase agreements.
    4. Information Required to Document Compliance with Price Test--
Before any transaction may be conducted pursuant to the exemption, the 
relevant Money Market Portfolio or Adviser must obtain such information 
as it deems reasonably necessary to determine that the price test (as 
defined in condition 3 above) applicable to such transaction has been 
satisfied. In the case of each purchase or sale transaction, the 
relevant Money Market Portfolio or Adviser must make and document a 
good faith determination with respect to compliance with the price test 
based on current price information obtained through the contemporaneous 
solicitation of bona fide offers in connection with the type of 
instrument involved (comparable security falling within the same 
category of instrument, credit rating, maturity and segment, if any, 
but not necessarily the identical instrument or issuer). With respect 
to prospective purchases of securities by a Money Market Portfolio, 
these dealers must be those who have, in their inventories, or who 
otherwise have access to taxable money market instruments of the 
categories and the types desired and who are in a position to quote 
favorable prices with respect thereto. With respect to the prospective 
sale of securities by a Money Market Portfolio, these dealer firms must 
be those who, in the experience of the Money Market Portfolios and the 
Adviser, are in a position to quote favorable prices. Before any 
repurchase agreements are entered into pursuant to the exemption, the 
Money Market Portfolios or the Adviser must obtain and document 
competitive quotations from at least two other dealers with respect to 
repurchase agreements comparable to the type of repurchase agreement 
involved, except that if quotations are unavailable from two such 
dealers, only one other competitive quotation is required.
    5. Volume Limitations on Transactions--Transactions other than 
repurchase agreements conducted

[[Page 55239]]

pursuant to the exemption shall be limited to no more than 25% of (a) 
the direct or indirect purchases or sales, as the case may be, by each 
Money Market Portfolio of Eligible Securities other than repurchase 
agreements; and (b) the purchases or sales, as the case may be, by DBSI 
of Eligible Securities other than repurchase agreements. Transactions 
comprising repurchase agreements conducted pursuant to the exemption 
shall be limited to no more than 10% of (a) the repurchase agreements 
directly or indirectly entered into by the relevant Money Market 
Portfolio and (b) the repurchase agreements transacted by DBSI. These 
calculations shall be measured on an annual basis (the fiscal year of 
each Money Market Portfolio and of DBSI) and shall be computed with 
respect to the dollar volume thereof.
    6. Permissible Dealer Spread--DBSI's spreads in regard to any 
transaction with the Money Market Portfolios will be no greater than 
its customary dealer spreads, which will in turn be consistent with the 
average or standard spread charged by dealers in taxable money market 
instruments for the type of instrument and the size of transaction 
involved.
    7. The Parties Must Be Factually Independent--The Adviser, on the 
one hand, and DBSI, on the other, will operate on different sides of 
appropriate walls of separation with respect to the Money Market 
Portfolios and Eligible Securities. The walls of separation will 
include all of the following characteristics, and such others that DBSI 
and the Adviser consider reasonable to facilitate the factual 
independence of the Adviser from DBSI:
    (a) The Adviser will maintain offices physically separate from 
those of DBSI.
    (b) The compensation of persons assigned to the Adviser (i.e., 
executive, administrative or investment personnel) will not depend on 
the volume or nature of trades effected by the Adviser for the Money 
Market Portfolios with DBSI under the exemption, except to the extent 
that such trades may affect the profits and losses of DB and its 
subsidiaries as a whole.
    (c) DBSI will not share any of its respective profits or losses on 
such transactions with the Adviser, except to the extent that such 
profits and losses affect the general firm-wide compensation of DB and 
its subsidiaries as a whole.
    (d) Personnel assigned to the Adviser's investment advisory 
operations on behalf of the Money Market Portfolios will be exclusively 
devoted to the business and affairs of the Adviser. Personnel assigned 
to DBSI will not participate in the decision-making process for the 
Adviser or otherwise seek to influence the Adviser other than in the 
normal course of sales and dealer activities of the same nature as are 
simultaneously being carried out with respect to nonaffiliated 
institutional clients. The Adviser, on the one hand, and DBSI, on the 
other, may nonetheless maintain affiliations other than with respect to 
the Money Market Portfolios, and in addition with respect to the Money 
Market Portfolios as follows:
    (i) Adviser personnel may rely on research, including credit 
analysis and reports prepared internally by various subsidiaries and 
divisions of DBSI.
    (ii) Certain senior executives of DB that have responsibility for 
overseeing operations of various divisions, subsidiaries and affiliates 
of DB are not precluded from exercising those functions over the 
Adviser because they oversee DBSI as well, provided that such persons 
shall not have any involvement with respect to proposed transactions 
pursuant to the exemption and will not in any way attempt to influence 
or control the placing by the Money Market Portfolios or the Adviser of 
orders in respect of Eligible Securities with DBSI.
    8. Record-Keeping Requirements--The Money Market Portfolios and the 
Adviser will maintain such records with respect to those transactions 
conducted pursuant to the exemption as may be necessary to confirm 
compliance with the conditions to the requested relief. In this regard:
    (a) Each Money Market Portfolio shall maintain an itemized daily 
record of all purchases and sales of securities pursuant to the 
exemption, showing for each transaction: (i) The name and quantity of 
securities; (ii) the unit purchase or sale price; (iii) the time and 
date of the transaction; and (iv) whether the security was a First Tier 
Security or a Second Tier Security. For each transaction, these records 
shall document two quotations received from other dealers for 
comparable securities (except that, in the case of repurchase 
agreements and consistent with condition 4, if quotations are 
unavailable from two such dealers only one other competitive quotation 
is required), including the following: (i) The name of the dealers; 
(ii) the name of the securities; (iii) the prices quoted; (iv) the 
times and dates the quotations were received; and (v) whether such 
securities were First Tier Securities or Second Tier Securities.
    (b) Each Money Market Portfolio shall maintain records sufficient 
to verify compliance with the volume limitations contained in condition 
5 above. DBSI will provide the Money Market Portfolios with all records 
and information necessary to implement this requirement.
    (c) Each Money Market Portfolio shall maintain a ledger or other 
record showing, on a daily basis, the percentage of the Money Market 
Portfolio's Total Assets represented by Second Tier Securities acquired 
from DBSI.
    (d) Each Money Market Portfolio shall maintain records sufficient 
to verify compliance with the repurchase agreement requirements 
contained in condition 4 above.
    The records required by this condition 8 will be maintained and 
preserved in the same manner as records required under rule 31a-1(b)(1) 
under the Act.
    9. Guidelines--The Adviser and DBSI, with the assistance of their 
compliance departments, will prepare and administer guidelines for 
personnel of DBSI and the Adviser to make certain that transactions 
conducted pursuant to the exemption comply with the conditions set 
forth in the exemption and that the parties generally maintain arm's 
length relationships. In the training of DBSI's personnel, particular 
emphasis will be given to the fact that the Money Market Portfolios are 
to receive rates as favorable as other institutional purchasers buying 
the same quantities. The compliance departments will periodically 
monitor the activities of DBSI and the Adviser to make certain that the 
conditions set forth in the exemption are adhered to.
    10. Audit Committee Review--The audit committee or another 
committee which, in each case, consists of members of the Board who are 
not interested persons as defined in section 2(a)(19) of the Act 
(``Independent Trustees''), will approve, periodically review and 
update as necessary, guidelines for the Adviser and DBSI reasonably 
designed to ensure that transactions conducted pursuant to the 
exemption comply with the conditions set forth herein and that the 
procedures described herein are followed in all respects. The 
respective audit committees will periodically monitor the activities of 
the Money Market Portfolios, the Adviser and DBSI in this regard to 
ensure that these matters are being accomplished.
    11. Board Review--The Board, including a majority of the 
Independent Trustees, will have approved each Money Market Portfolio's 
participation in transactions conducted pursuant to the exemption and 
determined that such participation by the Money Market

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Portfolio is in the best interests of the Money Market Portfolio and 
its shareholders. The minutes of the meeting of the Board at which this 
approval was given must reflect in detail the reasons for the Board's 
determination. The Board will review no less frequently than annually 
each Money Market Portfolio's participation in transactions conducted 
pursuant to the exemption during the prior year and determine whether 
the Money Market Portfolio's participation in such transactions 
continues to be in the best interests of the Money Market Portfolio and 
its shareholders. Such review will include (but not be limited to): (a) 
A comparison of the volume of transactions in each type of security 
conducted pursuant to the exemption to the market presence of DBSI in 
the market for that type of instrument, which market data may be based 
on good faith estimates to the extent that current formal data is not 
reasonably available, and (b) a determination that the Money Market 
Portfolios are maintaining appropriate trading relationships with other 
sources for each type of security to ensure that there are appropriate 
sources for the quotations required by condition 4. The minutes of the 
meeting of the Board at which such determinations are made will reflect 
in detail the reasons for the Board's determinations.
    12. Scope of Exemption--Applicants expressly acknowledge that any 
order issued on the application would grant relief from section 17(a) 
of the Act only, and would not grant relief from any other section of, 
or rule under, the Act including, without limitation, Rule 2a-7.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-22017 Filed 9-6-12; 8:45 am]
BILLING CODE 8011-01-P