Notices. Notice of 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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/register/2005/09/01/05-17425A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
BILLING CODE 7905-01-P SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request *Upon Written Request, Copies Available From:* Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549. *Extension:* Rule 17f-5; SEC File No. 270-259; OMB Control No. 3235-0269. Rule 17f-7; SEC File No. 270-470; OMB Control No. 3235-0529. Form N-17D-1; SEC File No. 270-231; OMB Control No. 3235-0229. Rule 19b-1; SEC File No. 270-312;
OMB Control No. 3235-0354. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange Commission (“Commission”) has submitted to the Office of Management and Budget (“OMB”) requests for extension of the previously approved collections of information discussed below. *Rule 17f-5.* Rule 17f-5 under the Investment Company Act of 1940 [15 U.S.C. 80a] (“Investment Company Act” or “Act”) governs the custody of the assets of registered management investment companies (“funds”) with custodians outside the United States. 1 Under rule 17f-5, the fund's board of directors must find that it is reasonable to rely on each delegate it selects to act as the fund's foreign custody manager.
The delegate must agree to provide written reports that notify the board when the fund's assets are placed with a foreign custodian and when any material change occurs in the fund's custody arrangements. The delegate must agree to exercise reasonable care, prudence, and diligence, or to adhere to a higher standard of care. When the foreign custody manager selects an eligible foreign custodian, it must determine that the fund's assets will be subject to reasonable care if maintained with that custodian, and that the written contract that governs each custody arrangement will provide reasonable care for fund assets.
The contract must contain certain specified provisions or others that provide at least equivalent care. The foreign custody manager must establish a system to monitor the contract and the appropriateness of continuing to maintain assets with the eligible foreign custodian. 1 17 CFR 270.17f-5. All references to rules 17f-5, 17f-7, 17d-1, or 19b-1 in this notice are to 17 CFR 270.17f-5, 17 CFR 270.17f-7, 17 CFR 270.17d-1, and 17 CFR 270.19b-1, respectively. The collection of information requirements in rule 17f-5 are intended to provide protection for fund assets maintained with a foreign bank custodian whose use is not authorized by statutory provisions that govern fund custody arrangements, 2 and that is not subject to regulation and examination by U.S. regulators.
The requirement that the fund board determine that it is reasonable to rely on each delegate is intended to ensure that the board carefully considers each delegate's qualifications to perform its responsibilities. The requirement that the delegate provide written reports to the board is intended to ensure that the delegate notifies the board of important developments concerning custody arrangements so that the board may exercise effective oversight. The requirement that the delegate agree to exercise reasonable care is intended to provide assurances to the fund that the delegate will properly perform its duties. 2 See section 17(f) of the Investment Company Act [15 U.S.C. 80a-17(f)].
The requirements that the foreign custody manager determine that fund assets will be subject to reasonable care with the eligible foreign custodian and under the custody contract, and that each contract contain specified provisions or equivalent provisions, are intended to ensure that the delegate has evaluated the level of care provided by the custodian, that it weighs the adequacy of contractual provisions, and that fund assets are protected by minimal contractual safeguards.
The requirement that the foreign custody manager establish a monitoring system is intended to ensure that the manager periodically reviews each custody arrangement and takes appropriate action if developing custody risks may threaten fund assets. The Commission's staff estimates that each year, approximately 207 registrants 3 could be required to make an average of one response per registrant under rule 17f-5, requiring approximately 2 hours of director time per response, to make the necessary findings concerning foreign custody managers.
The total annual burden associated with these requirements of the rule would be up to approximately 414 hours (207 registrants × 2 hours per registrant). The staff further estimates that during each year, approximately 15 global custodians 4 would be required to make an average of 4 responses per custodian concerning the use of foreign custodians other than depositories. The staff estimates that each response would take approximately 275 hours, requiring approximately 1100 total hours annually per custodian.
The total annual burden associated with these requirements of the rule would be approximately 16,500 hours (15 global custodians × 1100 hours per custodian). Therefore, the total annual burden of all collection of information requirements of rule 17f-5 is estimated to be up to 16,914 hours (414 + 16,500). The total annual cost of burden hours is estimated to be $1,032,000 (414 hours × $500/hour for director time, plus 16,500 hours × $50/hour of professional time). Compliance with the collection of information requirements of the rule is necessary to obtain the benefit of relying on the rule's permission for funds to maintain their assets in foreign custodians. 3 This figure is an estimate of the number of new funds each year, based on data reported by funds in 2004 on Form N-1A and Form N-2 [17 CFR 274.101].
In practice, not all funds will use foreign custody managers, and the actual figure may be smaller. 4 This estimate is the same used in connection with the adoption of the amendments to rule 17f-5 and of rule 17f-7 in 1999, based on staff review of custody contracts and other research. The number of global custodians has not changed significantly since 1999. *Rule 17f-7.* Rule 17f-7 permits funds to maintain their assets in foreign securities depositories based on conditions that reflect the operations and role of these depositories. 5 Rule 17f-7 contains some “collection of information” requirements.
An eligible securities depository has to meet minimum standards for a depository. The fund or its investment adviser generally determines whether the depository complies with those requirements based on information provided by the fund's primary custodian (a bank that acts as global custodian). The depository custody arrangement has to meet certain risk limiting requirements. The fund can obtain indemnification or insurance arrangements that adequately protect the fund against custody risks.
The fund or its investment adviser generally determines whether indemnification or insurance provisions are adequate. If the fund does not rely on indemnification or insurance, the fund's contract with its primary custodian is required to state that the custodian will provide to the fund or its investment adviser a custody risk analysis of each depository, monitor risks on a continuous basis, and promptly notify the fund or its adviser of material changes in risks. The primary custodian and other custodians also are required to agree to exercise reasonable care. 5 Custody of Investment Company Assets Outside the United States, Investment Company Act Release No.
IC-23815 (April 29, 1999) [64 FR 24489 (May 6, 1999)]. The collection of information requirements in rule 17f-7 are intended to provide workable standards that protect funds from the risks of using securities depositories while assigning appropriate responsibilities to the fund's primary custodian and investment adviser based on their capabilities. The requirement that the depository meet specified minimum standards is intended to ensure that the depository is subject to basic safeguards deemed appropriate for all depositories.
The requirement that the custody contract state that the fund's primary custodian will provide an analysis of the custody risks of depository arrangements, monitor the risks, and report on material changes is intended to provide essential information about custody risks to the fund's investment adviser as necessary for it to approve the continued use of the depository. The requirement that the primary custodian agree to exercise reasonable care is intended to provide assurances that its services and the information it provides will meet an appropriate standard of care.
The alternative requirement that the fund obtain adequate indemnification or insurance against the custody risks of depository arrangements is intended to provide another, potentially less burdensome means to protect assets held in depository arrangements. The staff estimates that each of approximately 980 investment advisers 6 would make an average of 4 responses annually under the rule to address depository compliance with minimum requirements, any indemnification or insurance arrangements, and reviews of risk analyses or notifications.
The staff estimates each response would take 5 hours, requiring a total of approximately 20 hours for each adviser. The total annual burden associated with these requirements of the rule would be approximately 19,600 hours (980 advisers × 20 hours per adviser). The staff further estimates that during each year, each of approximately 15 global custodians would make an average of 4 responses to analyze custody risks and provide notice of any material changes to custody risk under the rule.
The staff estimates that each response would take 500 hours, requiring approximately 2,000 hours annually per custodian. 7 The total annual burden associated with these requirements of the new rule would be approximately 30,000 hours (15 custodians × 2,000 hours). Therefore, the staff estimates that the total annual burden associated with all collection of information requirements of the rule would be 49,600 hours (19,600 + 30,000). The total annual cost of burden hours is estimated to be $2,480,000 (49,600 hours × $50/hour of professional time).
The estimate of average burden hours is made solely for the purposes of the Paperwork Reduction Act. The estimate is not derived from a comprehensive or even a representative survey or study of the costs of Commission rules and forms. Compliance with the collection of information requirements of the rule is necessary to obtain the benefit of relying on the rule's permission for funds to maintain their assets in foreign custodians. 6 At the start of 2005, there were more than 36,800 investment company portfolios that were managed or sponsored by more than 980 mutual fund complexes.
A fund complex is a group of funds, all of which typically have the same adviser. 7 These estimates are based on conversations with representatives of the fund industry and global custodians. *Form N-17D-1.* Section 17(d) [15 U.S.C. 80a-17(d)] of the Investment Company Act authorizes the Commission to adopt rules that protect funds and their security holders from overreaching by affiliated persons when the fund and the affiliated person participate in any joint enterprise or other joint arrangement or profit-sharing plan.
Rule 17d-1 under the Act prohibits funds and their affiliated persons from participating in a joint enterprise, unless an application regarding the transaction has been filed with and approved by the Commission. Subparagraph (d)(3) of the rule provides an exemption from this requirement for any loan or advance of credit to, or acquisition of securities or other property of, a small business concern, or any agreement to do any of the foregoing (“investments”) made by a small business investment company (“SBIC”) and an affiliated bank, provided that reports about the investments are made on forms the Commission may prescribe.
Rule 17d-2 designates Form N-17D-1 (“form”) as the form for reports required by rule 17d-1(3). SBIC's and their affiliated banks use form N-17D-1 to report any contemporaneous investments in a small business concern. The form provides shareholders and persons seeking to make an informed decision about investing in an SBIC an opportunity to learn about transactions of the SBIC that have the potential for self dealing and other forms of overreaching by affiliated persons at the expense of shareholders.
Form N-17D-1 requires SBICs and their affiliated banks to report identifying information about the small business concern and the affiliated bank. The report must include, among other things, the SBIC's and affiliated bank's outstanding investments in the small business concern, the use of the proceeds of the investments made during the reporting period, any changes in the nature and amount of the affiliated bank's investment, the name of any affiliated person of the SBIC or the affiliated bank (or any affiliated person of the affiliated person of the SBIC or the affiliated bank) who has any interest in the transactions, the basis of the affiliation, the nature of the interest, and the consideration the affiliated person has received or will receive.
Up to five SBICs may file the form in any year. 8 The Commission estimates the burden of filling out the form is approximately one hour per response and would likely be completed by an accountant or other professional. Based on past filings, the Commission estimates that no more than one SBIC is likely to use the form each year. The estimated total annual burden of filling out the form is one hour and the total annual cost is $53. 9 The Commission will not keep responses on Form N-17D-1 confidential. 8 As of April 22, 2005, five SBICs were registered with the Commission. 9 Commission staff estimates that the annual burden would be incurred by accounting professionals with an average hourly wage rate of $53.08 per hour.
See Securities Industry Association, *Report on Management and Professional Earnings in the Securities Industry—2003*
(2003)(reporting median salary paid to senior accountants outside New York). *Rule 19b-1.* Rule 19b-1 prohibits funds from distributing long-term capital gains more than once every twelve months unless certain conditions are met. Rule 19b-1(c) permits unit investment trusts (“UITs”) engaged exclusively in the business of investing in certain eligible fixed-income securities to distribute long-term capital gains more than once every twelve months, if:
(i)The capital gains distribution falls within one of several categories specified in the rule, and;
(ii)the distribution is accompanied by a report to the unitholder that clearly describes the distribution as a capital gains distribution. The purpose of this notice requirement is to ensure that unitholders understand that the source of the distribution is long-term capital gains. Rule 19b-1(e) permits a fund to apply for permission to distribute long-term capital gains more than once a year if the fund did not foresee the circumstances that created the need for the distribution. The application must set forth the pertinent facts and explain the circumstances that justify the distribution. An application that meets those requirements is deemed to be granted unless the Commission denies the request within 15 days after the Commission receives the application. The Commission uses the information required by rule 19b-1(e) to facilitate the processing of requests from funds for authorization to make a distribution that would not otherwise be permitted by the rule. The staff understands that funds that file an application generally use outside counsel to prepare the 19b-1(e) application. The staff estimates that, on average, the fund's investment adviser spends approximately four hours to review an application. The staff estimates that, on average, seven funds file an application per year under this rule for an estimated annual collection of information burden of 28 hours. There is a cost burden associated with rule 19b-1(e). As noted above, the staff understands that funds that file for exemption under rule 19b-1(e) generally use outside counsel to prepare the exemptive application. The staff estimates that, on average, 10 hours is required to prepare a rule 19b-1(e) exemptive application by outside counsel, including 8 hours by an associate and 2 hours by a partner. The staff estimates that the average cost of outside counsel preparation of the 19b-(e) exemptive application is $3,500. An average of 7 funds file under 19b-1(e) for an exemptive application each year, therefore the staff estimates that the annual cost burden imposed by rule 19b-1(e) is $24,500. The Commission staff estimates that there is no hour burden associated with paragraph
(c)of rule 19b-1. There is also a cost burden associated with rule 19b-1(c). The staff estimates that there are approximately 6,485 UITs. For purposes of this Paperwork Reduction Act analysis, the staff has assumed that each of these UITs could rely on rule 19b-1(c) to make capital gains distributions. The staff estimates that, on average, UITs rely on rule 19b-1(c) once a year to make a capital gains distribution. 10 The staff estimates that a UIT incurs a cost of $50, which is encompassed within the fee the UIT pays its trustee, to prepare a notice for a capital gains distribution under rule 19b-1(c). These notices require limited preparation, the cost of which accounts for only a small, indiscrete portion of the comprehensive fee charged by the trustee for its services to the UIT. There is no separate cost to mail the notices because they are mailed with the capital gains distribution. Thus, the staff estimates that the notice requirement imposes an annual cost on UITs of approximately $324,250. 10 The number of times a UITs may rely on the rule to make capital gains distributions depends on a wide range of factors and, thus, can vary greatly from one year to another. A number of UITs are organized as grantor trusts, and therefore do not generally make capital gains distributions under rule 19b-1(c), or may not rely on rule 19b-1(c) as they do not meet the rule's requirements. Other UITs may distribute capital gains biannually, annually, quarterly, or at other intervals. Based on these calculations, the total number of respondents for rule 19b-1 is estimated to be 6,492 (6485 UIT portfolios + 7 funds filing an application under rule 19b-1(e)), the total annual hour burden is estimated to be 28 hours, and the total annual cost burden is estimated to be $348,750. These estimates of average annual burden hours and costs are made solely for purposes of the Paperwork Reduction Act. The collections of information required by 19b-1(c) and 19b-1(e) are necessary to obtain the benefits described above. Responses will not be kept confidential. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. General comments regarding the above information relating to rules 17f-5, 17f-7, or 19b-1, or Form N-17D-1 should be directed to the following persons:
(i)Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503 or e-mail to: *David_Rostker@omb.eop.gov;* and
(ii)R. Corey Booth, Director/Chief Information Officer, Office of Information Technology, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. Comments must be submitted to OMB within 30 days of this notice. Dated: August 24, 2005. Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-4773 Filed 8-31-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. IC-27050] Notice of Applications for Deregistration Under Section 8(f) of the Investment Company Act of 1940 August 26, 2005. The following is a notice of applications for deregistration under section 8(f) of the Investment Company Act of 1940 for the month of August 2005. A copy of each application may be obtained for a fee at the SEC's Public Reference Branch (tel. 202-551-5850). An order granting each application will be issued unless the SEC orders a hearing. Interested persons may request a hearing on any application by writing to the SEC's Secretary at the address below and serving the relevant applicant with a copy of the request, personally or by mail. Hearing requests should be received by the SEC by 5:30 p.m. on September 20, 2005, and should be accompanied by proof of service on the 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 Secretary, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. For Further Information Contact: Diane L. Titus at
(202)551-6810, SEC, Division of Investment Management, Office of Investment Company Regulation, 100 F Street, NE., Washington, DC 20549-0504. Columbia Growth Fund, Inc. [File No. 811-1449] Columbia Common Stock Fund, Inc. [File No. 811-6341] *Summary:* Each applicant seeks an order declaring that it has ceased to be an investment company. On March 18, 2005, each applicant transferred its assets to a corresponding series of Columbia Funds Trust XI, based on net asset value. Expenses of approximately $262,500 and $166,500, respectively, incurred in connection with the reorganization were paid by each acquiring fund and Columbia Management Group, Inc., the parent company of applicants' investment adviser. *Filing Dates:* The applications were filed on May 27, 2005, and amended on August 18, 2005. *Applicants' Address:* One Financial Center, Boston, MA 02110. Alyeska Fund, L.L.C. [File No. 811-10397] Sawgrass Fund, L.L.C. [File No. 811-9727] *Summary:* Each applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On July 16, 2004 and March 10, 2005, respectively, each applicant made a liquidating distribution to its shareholders, based on net asset value. Applicants incurred expenses of $22,428 and $176,608, respectively, in connection with the liquidations. *Filing Dates:* The applications were filed on June 24, 2005, and amended on August 5, 2005 and August 8, 2005, respectively. *Applicants' Address:* c/o Oppenheimer & Co., Inc., 200 Park Ave., 24th Floor, New York, NY 10116. The Vantage Funds [File No. 811-21678] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. Applicant is not making a public offering of its securities and does not propose to make a public offering. Applicant currently has 1 beneficial owner and will continue to operate as a private investment company in reliance on section 3(c)(1) of the Act. *Filing Dates:* The application was filed on June 13, 2005, and amended on August 2, 2005. *Applicant's Address:* Newberry Business Center, 600 Main St., Suite 100, Stroudsburg, PA 18360. Scudder Asset Management Portfolio [File No. 811-6699] *Summary:* Applicant, a master fund in a master-feeder structure, seeks an order declaring that it has ceased to be an investment company. On July 8, 2004, applicant's sole feeder fund, Lifecycle Long Range Fund, a series of Scudder Advisor Funds III, withdrew its assets from applicant in a redemption-in-kind, thus converting the Lifecycle Long Range Fund into a stand-alone fund. As a result of the redemption, applicant has no remaining assets or shareholders. Expenses of $2,000 incurred in connection with the liquidation were paid by Lifecycle Long Range Fund. *Filing Dates:* The application was filed on March 31, 2005, and amended on August 9, 2005. *Applicant's Address:* 1 South St., Baltimore, MD 21202. CIGNA Funds Group [File No. 811-1646] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. Between September 30, 2004 and March 30, 2005, eight of applicant's series made a liquidating distribution to their shareholders, based on net asset value. On April 8, 2005 applicant's remaining Small Cap Growth/TimesSquare Fund series transferred its assets to a corresponding series of Managers AMG Funds. Expenses of $276,161 incurred in connection with the liquidation and reorganization were paid by CIGNA Investment Advisors, Inc., applicant's investment adviser, TimesSquare Acquisition, LLC, and Prudential Retirement Brokerage Services, Inc., applicant's underwriter. *Filing Dates:* The application was filed on June 15, 2005, and amended on August 4, 2005. *Applicant's Address:* c/o CIGNA Investment Advisors, Inc., 280 Trumbull St., Hartford, CT 06103. CIGNA Institutional Funds Group [File No. 811-7236] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On September 30, 1999, applicant made a liquidating distribution to affiliates of the sponsor who provided seed money for applicant. Applicant incurred no expenses in connection with the liquidation. *Filing Dates:* The application was filed on June 20, 2005, and amended on August 3, 2005. *Applicant's Address:* c/o CIGNA Investment Advisors, Inc., 280 Trumbull St., Hartford, CT 06103. BDI Investment Corporation [File No. 811-3868] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On April 20, 2005, applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of $17,663 incurred in connection with the liquidation were paid by applicant. Any unclaimed funds will be held by Registrar and Transfer Company for six months, after which they will escheat to the state. *Filing Dates:* The application was filed on May 3, 2005, and amended on August 3, 2005. *Applicant's Address:* 990 Highland Dr., Suite 100, Solana Beach, CA 92075. SouthTrust Funds [File No. 811-6580] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On March 21, 2005, applicant's six series transferred their assets to corresponding series of Evergreen Select Equity Trust, Evergreen Select Fixed Income Trust, Evergreen Money Market Trust, Evergreen Municipal Trust and Evergreen Equity Trust, based on net asset value. Expenses of $501,785 incurred in connection with the reorganization were paid by Wachovia Corporation, the parent of applicant's investment advisor. *Filing Dates:* The application was filed on April 29, 2005, and amended on August 3, 2005. *Applicant's Address:* Federated Investors Tower, 5800 Corporate Dr., Pittsburgh, PA 15237-7010. Redwood Microcap Fund, Inc. [File No. 811-3986] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. Applicant has 1 shareholder and presently is not making a public offering and does not propose to make a public offering of its securities. Applicant will continue to operate as a private investment fund in reliance on section 3(c)(1) of the Act. *Filing Dates:* The application was filed on October 1, 1993, and amended on February 1, 1994, July 28, 1995, January 2, 2002, July 12, 2005 and August 3, 2005. *Applicant's Address:* 6180 Lehman Dr. #103, Colorado Springs, CO 80918. Wynstone Fund, L.L.C. [File No. 811-8959] Stratigos Fund, L.L.C. [File No. 811-9939] *Summary:* Each applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On July 28, 2005, each applicant made a final liquidating distribution to its shareholders, based on net asset value. Expenses of $138,497 and $129,696, respectively, incurred in connection with the liquidations were paid by each applicant. *Filing Dates:* The applications were filed on July 29, 2005, and amended on August 5, 2005. *Applicant's Address:* c/o Oppenheimer & Co., Inc., 200 Park Ave., 24th Floor, New York, NY 10116. Washington Investors Plans Inc. [File No. 811-828] *Summary:* Applicant, a unit investment trust, seeks an order declaring that it has ceased to be an investment company. Between November 1, 2004 and April 29, 2005, applicant made final liquidating distributions to its plan holders, based on net asset value. Applicant incurred no expenses in connection with the liquidation. *Filing Date:* The application was filed on July 20, 2005. *Applicant's Address:* 1101 Vermont Ave., NW., Suite 600, Washington, DC 20005. ASA Debt Arbitrage Fund LLC [File No. 811-21389] ASA Managed Futures Fund LLC [File No. 811-21390] ASA Market Neutral Equity Fund LLC [File No. 811-21391] ASA Hedged Equity Fund LLC [File No. 811-21392] *Summary:* Each applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On April 30, 2005, each applicant made a final liquidating distribution to its shareholders, based on net asset value. Applicants incurred no expenses in connection with the liquidations. *Filing Date:* The applications were filed on August 9, 2005. *Applicants' Address:* 817 West Peachtree St., NW., Suite 400, Atlanta, GA 30308-1144. AIM International Funds, Inc. II (Formerly INVESCO International Funds, Inc.) [File No. 811-7758] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On October 24, 2003 and October 31, 2003, applicant transferred its assets to corresponding series of AIM International Mutual Funds and AIM International Funds, Inc., based on net asset value. Expenses of $141,283 incurred in connection with the reorganization were paid by INVESCO Funds Group, Inc., applicant's investment adviser. *Filing Dates:* The application was filed on April 26, 2005, and amended on August 9, 2005. *Applicant's Address:* 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173. AIM Manager Series Funds, Inc. (Formerly INVESCO Manager Series Funds, Inc.) [File No. 811-21103] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On October 31, 2003, applicant transferred its assets to AIM Counselor Series Trust, based on net asset value. Expenses of $69,538 incurred in connection with the reorganization were paid by applicant and INVESCO Funds Group, Inc., applicant's investment adviser. *Filing Dates:* The application was filed on April 25, 2005, and amended on August 9, 2005. *Applicant's Address:* 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173. Short-Term Investments Co. [File No. 811-7892] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On November 4, 2003, applicant transferred its assets to Short-Term Investments Trust, based on net asset value. Expenses of $128,880 incurred in connection with the reorganization were paid by AIM Advisors, Inc., applicant's investment adviser. *Filing Dates:* The application was filed on April 25, 2005, and amended on August 9, 2005. *Applicant's Address:* 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173. AIM Series Trust [File No. 811-7787] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On November 4, 2003, applicant transferred its assets to AIM Growth Series, based on net asset value. Expenses of $33,416 incurred in connection with the reorganization were paid by AIM Advisors, Inc., applicant's investment adviser. *Filing Dates:* The application was filed on April 25, 2005, and amended on August 9, 2005. *Applicant's Address:* 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173. AIM Money Market Funds, Inc. (Formerly INVESCO Money Market Funds, Inc.) [File No. 811-2606] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On November 3, 2003 and November 4, 2003, applicant transferred its assets to corresponding series of AIM Treasurer's Series Trust, AIM Investment Securities Funds and AIM Tax-Exempt Funds, based on net asset value. Expenses of $264,024 incurred in connection with the reorganization were paid by INVESCO Funds Group, Inc., applicant's investment adviser. *Filing Dates:* The application was filed on April 25, 2005, and amended on August 9, 2005. *Applicant's Address:* 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173. AIM Advisor Funds [File No. 811-3886] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On October 27, 2003 and October 29, 2003, applicant transferred its assets to AIM Investment Securities Funds and INVESCO International Funds, Inc., based on net asset value. Expenses of $69,489 incurred in connection with the reorganization were paid by applicant and AIM Advisors, Inc., applicant's investment adviser. *Filing Date:* The application was filed on April 25, 2005, and amended on August 9, 2005. *Applicant's Address:* 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173. AIM Bond Funds, Inc. [File No. 811-2674] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On October 27, 2003 and November 3, 2003, applicant transferred its assets to AIM Investment Securities Funds, based on net asset value. Expenses of $338,074 incurred in connection with the reorganization were paid by applicant and AIM Advisors, Inc., applicant's investment adviser. *Filing Dates:* The application was filed on April 25, 2005, and amended on August 9, 2005. *Applicant's Address:* 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173. AllianceBernstein Global Small Cap Fund, Inc. [File No. 811-1415] AllianceBernstein Select Investor Series, Inc. [File No. 811-9176] *Summary:* Each applicant seeks an order declaring that it has ceased to be an investment company. By March 1, 2005, each applicant had made a liquidating distribution to its shareholders, based on net asset value. Expenses of $26,140 and $57,543, respectively, incurred in connection with the liquidations were paid by Alliance Capital Management L.P., applicants' investment adviser. *Filing Date:* The applications were filed on August 4, 2005. *Applicants' Address:* 1345 Avenue of the Americas, New York, NY 10105. Lincoln New York Separate Account T for Variable Annuities [File No. 811-21041] *Summary:* Applicant, a separate account for variable annuities, seeks an order declaring that it has ceased to be an investment company. Applicant has never made a public offering of its securities, does not propose to make a public offering, and has never had any contractowners invested in the separate account. *Filing Dates:* The application was filed on May 11, 2005, and amended on July 27, 2005. *Applicant's Address:* 100 Madison Street, Suite 1860, Syracuse, New York 13202. Cigna Variable Products Group [File No. 811-5480] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. Applicant's board of directors approved the merger of Applicant's Core Plus Bond series into the PIMCO Total Return Portfolio and Applicant's Money Market series into the PIMCO Money Market Portfolio on December 20, 2004 and Applicant's S&P 500 Index series into the Dreyfus Stock Index Fund, Inc. on February 24, 2005. Shareholders of the Money Market and Core Plus Bond series approved the mergers on April 21, 2005. Shareholders of the S&P Index series approved the merger on April 27, 2005. The mergers took place on April 22, 2005 for the Money Market and Core Plus Bond series and on April 29, 2005 for the S&P 500 series. All of the expenses of the mergers were paid by CIGNA Investment Advisors, Inc., The Dreyfus Corporation (relative to the S&P 500 Index series) and Pacific Investment Management LLC (relative to the Money Market and Core Plus Bond series). Applicant has no remaining assets and no outstanding debts or liabilities. *Filing Dates:* The application was filed on June 15, 2005, and amended on July 27, 2005. *Applicant's Address:* c/o CIGNA Investment Advisors, Inc., 280 Trumbull Street, Hartford, CT 06103. GALIC of New York Separate Account I. [File No. 811-9341] *Summary:* Applicant, a separate account of Great American Life Insurance Company of New York, seeks an order declaring that it has ceased to be an investment company. Applicant has not made any public offering of its securities and is not now engaged, or intending to engage, in any business activities other than those necessary for winding up its affairs. *Filing Date:* The application was filed on July 21, 2005. *Applicant's Address:* 14th Floor, 125 Park Avenue, New York, NY 10017. JNL Variable Fund III LLC [File No. 811-9369] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On February 9, 2005 and in reliance on Rule 17a-8 under the Act, applicant's Board of Managers approved merging applicant into the JNL/Mellon Capital Management JNL 5 Fund, a portfolio of the JNL Variable Fund LLC. On April 29, 2005, applicant distributed all of its assets to its shareholders based on net asset value. Aggregate expenses of approximately $8,733 incurred in connection with the merger were paid by applicant's adviser, Jackson National Asset Management, LLC. *Filing Date:* The application was filed on May 24, 2005. *Applicant's Address:* 1 Corporate Way, Lansing, Michigan 48951. JNL Variable Fund V LLC [File No. 811-9367] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On February 9, 2005 and in reliance on Rule 17a-8 under the Act, applicant's Board of Managers approved merging applicant into the JNL/Mellon Capital Management JNL 5 Fund, a portfolio of the JNL Variable Fund LLC. On April 29, 2005, applicant distributed all of its assets to its shareholders based on net asset value. Aggregate expenses of approximately $8,733 incurred in connection with the merger were paid by applicant's adviser, Jackson National Asset Management, LLC. *Filing Date:* The application was filed on May 24, 2005. *Applicant's Address:* 1 Corporate Way, Lansing, Michigan 48951. JNLNY Variable Fund II LLC [File No. 811-9947] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. Applicant requests deregistration based on abandonment of registration. Applicant did not commence operations and is not now engaged, or intending to engage, in any business activities other than those necessary for winding up its affairs. *Filing Date:* The application was filed on May 24, 2005. *Applicant's Address:* 1 Corporate Way, Lansing, Michigan 48951. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-4789 Filed 8-31-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 27049; 812-13140] Harris Insight Funds Trust, et al., Notice of Application August 25, 2005. AGENCY: Securities and Exchange Commission (“Commission”). ACTION: Notice of 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. *Summary of Application:* The applicants request an order that would permit certain registered management investment companies to invest uninvested cash and cash collateral in affiliated money market funds. *Applicants:* Harris Insight Funds Trust (the “Trust”) and Harris Investment Management, Inc. (the “Adviser”). *Filing Dates:* The application was filed on December 3, 2004, and amended on June 27, 2005, and August 16, 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 19, 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 & Exchange Commission, 100 F Street NE., Washington, DC 20549-9303; Applicants, c/o Timothy R. Kain, Vice President and Counsel, Harris Trust and Savings Bank, 111 W. Monroe Street, Chicago, IL 60603. FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at
(202)551-6817 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 (telephone
(202)551-5850). Applicants' Representations 1. The Trust, a Massachusetts business trust, is registered under the Act as an open-end management investment company and consists of multiple series (each, a “Fund”). The Adviser, a Delaware corporation, is an investment adviser registered under the Investment Advisers Act of 1940 and serves as investment adviser to each of the Funds. 1 1 Applicants request that any relief granted also apply to any existing or future registered open-end management investment company or series thereof that is currently or in the future advised by the Adviser, or any person controlling, controlled by, or under common control with the Adviser (included in the term “Funds”). All registered investment companies that currently intend to rely on the requested order are named as applicants. Any existing or future registered investment company or series thereof that relies on the requested order in the future will do so only in accordance with the terms and conditions of the application. 2. Certain Funds, including money market Funds that comply with rule 2a-7 under the Act (each, an “Investing Fund”), have, 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, strategic reserves, matured investments, proceeds from liquidation of investment securities, dividend payments or money from investors. Certain Investing 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. 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 an order to permit:
(a)The Investing Funds to use their Cash Balances to purchase shares of one or more of the 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”);
(b)the Money Market Funds to sell their shares to and redeem such shares from the Investing Funds; and
(c)the Adviser to effect the above transactions. 4. The investment by each Investing Fund in shares of the Money Market Funds will be in accordance with that Investing Fund's investment policies and restrictions 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 A. Section 12(d)(1) 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, its principal underwriter, or any broker or dealer, may sell securities 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. 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 a Money Market Fund 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. Applicants also request relief to permit the Money Market Funds, their principal underwriter and any broker or dealer to sell securities of the Money Market Funds 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 because each Money Market Fund will maintain a highly liquid portfolio, an Investing Fund will not be in a position to gain undue influence over a Money Market Fund. Applicants represent that the proposed arrangement will not result in an inappropriate layering of fees because shares of the Money Market Funds sold to the Investing Funds will not be subject to a sales load, redemption fee, asset-based distribution fee 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, 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. Applicants state that if a Money Market Fund offers more than one class of shares, an Investing Fund will invest its Cash Balances only in the class with the lowest expense ratio (taking into account the expected impact of the Investing Fund's investment) at the time of the investment. In connection with approving any advisory contract, the board of trustees of an Investing Fund (“Board”), including a majority of the 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 the Adviser should be reduced to account for reduced services provided to the Investing Fund by the Adviser as a result of Uninvested Cash being invested in the Money Market Funds. Applicants represent that no Money Market 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 limits contained in section 12(d)(1)(A) of the Act. B. Section 17(a) of the Act 1. 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. Applicants state that the Investing Funds and the Money Market Funds may be deemed to be under common control and affiliated persons of each other because each Fund is advised by the Adviser. In addition, if an Investing Fund acquires more than 5% of the voting securities of a Money Market Fund, the Investing Fund may be an affiliated person of the Money Market Fund. As a result, section 17(a) would prohibit the sale of the shares of the Money Market Funds to the Investing Funds, and the redemption of the shares by the Investing Funds. 2. 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 any person, security or transaction, or any class or classes or persons, securities 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. 3. Applicants submit that their request for relief satisfies the standards in sections 6(c) and 17(b) of the Act. Applicants state that the Investing Funds will purchase and sell shares on the same terms and on the same basis as shares are purchased and sold by all other shareholders of the Money Market Funds. In addition, under the proposed transactions, the Investing Funds will retain their ability to invest their Cash Balances directly in money market instruments as permitted by each Investing Fund's investment objectives and policies. Applicants state that each Money Market Fund reserves the right to discontinue selling shares to any of the Investing Funds if the Money Market Fund's Board determines that such sales would adversely affect its portfolio management and operations. C. Section 17(d) of the Act and Rule 17d-1 Under the Act 1. 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 issued an order authorizing the arrangement. Applicants state that the Investing Funds (by purchasing shares of the Money Market Funds), the Money Market Funds (by selling shares to and redeeming them from the Investing Funds), and the Adviser (by managing the assets of the Investing Funds invested in the Money Market Funds) could be deemed to be participants in a joint enterprise or other joint arrangement within the meaning of section 17(d) of the Act and rule 17d-1 thereunder. 2. In considering whether to approve a joint transaction under rule 17d-1, the Commission considers whether the registered 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 submit that the proposed transactions meet these standards because the investments by the Investing Funds in shares of the Money Market Funds would be indistinguishable from any other shareholder account maintained by the Money Market Funds and the transactions will be consistent with the Act. 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 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 Rules of Conduct of the NASD), or if such shares are subject to any such fee, the Adviser will waive its advisory fee for the Investing Fund in an amount that offsets the amount of such fees incurred by the Investing Fund. 2. Before the next meeting of the Board of an Investing Fund is held for the purpose of voting on an advisory contract under section 15 of the Act, the Adviser to the Investing Fund will provide the Board with specific information regarding the approximate cost to the Adviser 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. Before approving any advisory contract for the Investing Fund, the Board of the Investing Fund, including a majority of the Independent Trustees, shall consider to what extent, if any, the advisory fee charged to the Investing Fund by the Adviser should be reduced to account for reduced services provided to the Investing Fund by the Adviser as a result of Uninvested Cash being invested in the Money Market Funds. The minute books of the Investing Fund will record fully the Board's consideration in approving the advisory contact, including the considerations relating to fees referred to above. 3. The Investing Funds will invest Uninvested Cash in, and hold shares of, the Money Market Funds only to the extent that each Investing Fund's aggregate investment of Uninvested Cash in the Money Market Funds does not exceed 25% of the Investing Fund's total assets. 4. Investment of an Investing Fund's Cash Balances in shares of the Money Market Funds will be in accordance with the Investing Fund's investment restrictions and will be consistent with the Investing Fund's investment objectives and policies as set forth in its prospectus and statement of additional information. 5. So long as its shares are held by an Investing Fund, a Money Market Fund will not 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. Each Investing Fund and each Money Market 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. 7. Before the Investing Funds may participate in a Securities Lending Program, a majority of the Board, including a majority of the Independent Trustees, will have approved 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 Money Market Funds is in the best interests of the Investing Fund. 8. The Board of each 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, pursuant to delegated authority. Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-4788 Filed 8-31-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52334; File No. SR-Amex-2005-068] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of a Proposed Rule Change and Amendment Nos. 1 and 2 Thereto Relating to Amendments to Amex Rules 26 and 27 August 25, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on June 17, 2005, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II and III below, which Items have been prepared by Amex. On June 30, 2005, Amex filed Amendment No. 1 to the proposed rule change. 3 On August 19, 2005, Amex filed Amendment No. 2 to the proposed rule change. 4 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 1, the Exchange made a non-substantive correction to the proposed rule text of Amex Rule 26 and made a correction to the proposed rule text of Amex Rule 27 to reflect that, in the case of an equity security, the list of qualified specialists shall consist of five specialists. 4 In Amendment No. 2, the Exchange made corrections to the proposed rule text of Amex Rule 27 to clarify that:
(1)The Allocations Committee may consist of, among others, four brokers for equities and all other securities admitted for trading on the Exchange except Exchange Traded Funds and options; and
(2)the Allocations Committee may be chaired by the Chief Executive Officer's designee. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Amex Rules 26 and 27 for the purpose of:
(i)Combining the Equities, Options and Special Allocations Committees;
(ii)changing the composition of the new Allocations Committee; and
(iii)providing the Performance Committee with the authority to reallocate securities in connection with specialist transfers. The text of the proposed rule change is available on the Amex's Web site ( *http://www.amex.com* ), at the principal office of the Amex, and at the Commission's Public Reference Room. The text of the proposed rule change also appears below. Proposed new language is *italicized* ; proposed deletions are in [brackets]. Rule 26. Performance Committee
(a)No Change.
(b)The Performance Committee shall review, and approve, disapprove or conditionally approve, mergers and acquisitions of specialist units, transfers of one or more specialist registrations, specialist joint accounts, and changes in control or composition of specialist units. The Performance Committee shall approve a proposed transaction involving a specialist unit unless it determines that a countervailing institutional interest indicates that the transaction should be disapproved or conditionally approved. In determining whether there is a countervailing institutional interest, the Performance Committee shall consider the maintenance or enhancement of the quality of the Exchange's market, taking into account the criteria that the Allocations Committee may consider in making an initial allocation determination (Rule 27(b)) and other considerations as may be relevant in the particular circumstances. *The Performance Committee shall be convened to reallocate securities when there is a business transaction that results in the transfer of one or more specialist registrations. The Performance Committee shall allocate the securities in accordance with the agreement of the parties unless the Committee determines that a countervailing institutional interest indicates that there should be some other allocation.* The Performance Committee shall evaluate specialists, individually and/or collectively as units, to determine whether they have fulfilled performance standards relating to, among other things:
(1)Quality of markets,
(2)competition with other markets,
(3)observance of ethical standards, and
(4)administrative factors. The Performance Committee may consider any relevant information, including but not limited to the results of the Specialist Floor Broker Questionnaire, trading data, a member's regulatory history, order flow statistics, and such other factors and data as may be pertinent in the circumstances. The Performance Committee also may review specialists, individually and/or collectively as units, with respect to capital requirements and the “early warning level” set forth in Commentary .06 to Rule 171. The Performance Committee may take one or more of the following actions if it finds that a specialist or unit has failed to properly perform as a specialist:
(1)Send admonitory letters,
(2)refer matters to the Exchange's Enforcement Department for investigation and possible disciplinary proceedings,
(3)counsel specialists on how to improve their performance,
(4)require specialists to adopt a performance improvement plan,
(5)reorganize specialist units,
(6)require the reallocation of securities,
(7)suspend a specialist's or unit's registration as a specialist for a specific period of time, or
(8)prohibit a specialist or unit from receiving allocations in a particular situation or for a specified period of time. In appropriate circumstances, the Performance Committee may confine a prohibition on new allocations to one of the three classes of securities traded on the Exchange ( *i.e.* , equities, Exchange Traded Funds or options), or otherwise target a remedial action to a particular class of security traded by a specialist or unit.
(c)through (h)—No Change. Commentary .01 through .08—No Change. Rule 27. Allocations Committee (a)[(i)] The [Options] Allocations Committee allocates *equity securities of operating companies* , equity options admitted to dealings on the Exchange *and all other securities to be admitted for trading on the Exchange* . [It consists of 11 persons drawn from a roster of approximately 75 persons and is comprised as follows: Eight Floor members (six Floor brokers and two Registered Options Traders) and three representatives of upstairs member firms. The Options Allocations Committee is chaired by a Floor Governor who does not vote except to make or break a tie. In the event that no Floor Governor is able to chair the Committee, a Senior Floor Official may chair the Committee. The minimum quorum for the transaction of business by the Options Allocations Committee shall be six persons including at least one representative of an upstairs member firm. Upstairs member firm representatives may attend meetings by telephone.] *It consists of six persons drawn from a roster of approximately 75 persons and is comprised as follows: the Chief Executive Officer (or his or her designee), a representative of an upstairs member firm and either
(i)four
(4)brokers for equities and other securities admitted to trading on the Exchange except for Exchange Traded Funds and options;
(ii)two
(2)brokers and two
(2)Registered Traders for Exchange Traded Funds; or
(iii)two
(2)brokers and two
(2)Registered Options Traders for options. The Allocations Committee is chaired by the Chief Executive Officer (or his or her designee) who does not vote except to make or break a tie. In the absence of the Chief Executive Officer (or his or her designee), a Floor Governor or a Senior Floor Official may chair the Committee. The minimum quorum for the transaction of business by the Allocations Committee shall be four persons. The upstairs member firm representative may attend meetings by telephone.* [(ii) The Equities Allocations Committee allocates the equity securities of operating companies admitted to dealings on the Exchange. It consists of ten persons drawn from a roster of approximately 70 persons and is comprised as follows: six Floor brokers, one specialist, and three representatives of upstairs member firms. The Equities Allocations Committee is chaired by a Floor Governor who does not vote except to make or break a tie. In the event that no Floor Governor is able to chair the Committee, a Senior Floor Official may chair the Committee. The minimum quorum for the transaction of business by the Equities Allocations Committee shall be six persons. Upstairs member firm representatives may attend meetings by telephone.
(iii)The Special Allocations Committee allocates securities that are not allocated by the Options or Equities Allocations Committees and securities with special characteristics as may be determined by the Chief Executive Officer or his or her designee. It consists of six persons drawn from a roster of approximately 30 persons and is comprised as follows: the Chief Executive Officer (or his or her designee), two brokers, two Registered Options Traders, and a representative of an upstairs member firm. The Special Allocations Committee is chaired by the Chief Executive Officer who does not vote except to make or break a tie. In the Chief Executive Officer's absence, a Floor Governor or a Senior Floor Official may chair the Committee. The minimum quorum for the transaction of business by the Special Allocations Committee shall be four persons. The upstairs member firm representative may attend meetings by telephone. The Options, Special, and Equities Allocations Committees are hereinafter referred to as the Allocations Committee.]
(b)No Change.
(c)No Change.
(d)At regular intervals, the [Options] Allocations Committee shall prepare a list (the “pre-allocation list”) of the most qualified option specialists on the Exchange based upon criteria enumerated in paragraph
(b)of this Rule and interviews of all interested specialists conducted by the persons on the roster of the [Options] Allocations Committee. In the event that the Exchange determines to list an option following its designation by another exchange, that option shall be allocated to the next specialist on the pre-allocation list unless, in the opinion of a majority of available Floor Governors, a material performance situation or another relevant matter has developed with respect to that specialist since the preparation of the pre-allocation list in which case the specialist shall be bypassed and the [Options] Allocations Committee shall be convened as soon as possible to determine if the specialist should be removed from the pre-allocation list.
(e)If the issuer of a listed equity security chooses to participate in the allocation process, the Allocations Committee shall prepare a list of qualified specialists based on the criteria set forth in paragraph (b). In the case of an equity security, the list shall consist of five specialists. In the case of an Exchange Traded Fund or Structured Product, the list shall consist of five specialists. The issuer may request that one or more specialists be placed on the list of eligible specialists. The Allocations Committee, however, is not obligated to honor such requests. Specialists that are subject to a preclusion on new allocations as a result of a disciplinary proceeding or action by the Performance Committee only are eligible for allocations of “related securities” as described in Commentary .05 of this Rule. The issuer may ask to meet with representatives of the specialists units on the list. The issuer shall select its specialist from the list within five business days of receiving the list by providing the Exchange with a letter signed by person of Secretary rank or higher indicating the issuer's choice of specialist. In the case of an Exchange Traded Fund or Structured Product, the selection may be made by a senior officer of the sponsor or issuer who has been authorized to make such selection. If the issuer does not make its selection in a timely manner, the Allocations Committee may select the specialist as provided in paragraph
(b)of this Rule. The security shall remain with its initial specialist for at least 120 days. After that time, but during the first 12 months after listing, the issuer or sponsor may request that the security be reallocated should it become dissatisfied with its specialist. This is the case whether or not the issuer or sponsor has participated in the selection process. The issuer or sponsor is expected to furnish an explanation for the basis for its dissatisfaction, and if after counseling the issuer or sponsor and the specialist such change is still desired, the Exchange shall reallocate the security within 30 days. In any such reallocation, the Exchange shall follow the allocation procedures described in this paragraph
(e)unless the issuer or sponsor requests the Allocations Committee to select the specialist without any issuer or sponsor input under the procedures described in paragraph
(b)of this Rule.
(f)The Allocations Committee shall be convened to reallocate securities when
(1)the Committee on Floor Member Performance directs reallocation,
(2)a specialist requests to be relieved of a particular security for good cause, or
(3)a specialist's registration in a security is canceled due to disciplinary action. Whenever the Allocations Committee reallocates a security for the reasons stated in
(1)through
(3)of this paragraph, the Allocations Committee shall follow the procedures described in paragraph
(b)of this Rule. The Allocations Committee also shall be convened to reallocate securities when
(4)[there is a business transaction that results in the transfer of one or more specialist registrations, (5)] a specialist dissolves or recombines, [(6)]
(5)a specialist has been determined to be in such financial or operating condition that it cannot be permitted to continue to specialize in one or more of its specialty securities with safety to investors, its creditors or other members, or [(7)] ( *6* ) a specialist has become subject to the pre-borrowing requirement of Rule 203(b)(3) of Regulation SHO under the Securities Exchange Act of 1934 with respect to one of its specialty securities or, in the case of an options specialist, with respect to the underlying security. The Allocations Committee shall follow the procedures described in paragraphs
(g)or
(h)of this Rule, as appropriate, whenever it reallocates securities for the reasons stated in
(4)through [(7)] ( *6* ) of this paragraph.
(g)In the event that the participants in a specialist unit have previously entered into a written agreement as to how the “book” will be divided in the event of a dissolution or recombination, [or there is a transfer of specialist registrations as a result of a business transaction,] the Allocations Committee shall allocate the securities in accordance with the agreement of the parties, unless the Performance Committee determines that a countervailing institutional interest indicates that there should be some other allocation, in which case the Allocation *s* Committee shall reallocate the securities according to instructions received from the Performance Committee or, if there are no instructions, as provided in paragraph
(b)of this Rule. In the event that a specialist unit dissolves and the participants in the unit are unable to enter into a written agreement as to how the “book” will be divided, reallocation shall be deferred until the dispute is resolved through arbitration unless the Performance Committee determines that a countervailing institutional interest suggests that the securities should be reallocated prior to the conclusion of the arbitration in which case the Allocation *s* Committee shall reallocate the securities according to instructions received from the Performance Committee or, if there are no instructions, as provided in paragraph
(b)of this Rule. The Allocations Committee shall reallocate the securities in accordance with the decision of the arbitration panel unless the Performance Committee determines that a countervailing institutional interest indicates that there should be some other allocation, in which case the Allocations Committee shall reallocate the securities as provided in paragraph
(b)of this Rule.
(h)through (i)—No Change. Commentary .01 through .05—No Change. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Amex included statements concerning the purpose of, and basis for, the proposed rule change, as amended, and discussed any comments it received on the proposed rule change, as amended. The text of these statements may be examined at the places specified in Item IV below. The Amex has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to combine the existing Equity, Options and Special Allocations Committees into a single “Allocations Committee.” In addition, the Exchange proposes to change the composition of the Allocations Committee and to permit the Performance Committee to reallocate securities in connection with specialist transfers without approval from the Allocations Committee. Article II, Section 3 of the Amex Constitution provides the Board of Governors (“Board”) with the authority to allocate and reallocate the equity securities of operating companies (“equities”), options and other securities listed on the Exchange. The Board in connection with the allocation and reallocation of equities and options classes has delegated this authority to the Equities Allocations Committee and the Options Allocations Committee, respectively. 5 The Board, in connection with securities that are not allocated by the Equities Allocations Committee or Options Allocations Committee and securities with special characteristics, has delegated authority to the Special Allocations Committee. 6 In addition, the Performance Committee has limited input in connection with the reallocation of securities resulting from a transfer of specialist units. 5 *See* Current Amex Rule 27(a)(i) and (ii). 6 *See* Current Amex Rule 27(a)(iii). The Exchange states that combining the Equities, Options and Special Allocations Committees into a single “Allocations Committee” and changing the composition of the Allocations Committee would streamline and provide greater efficiency to the process for allocating and reallocating equities and options classes. Current Amex Rule 27 provides that the Equities Allocations Committee consists of six
(6)floor brokers, one
(1)specialist and three
(3)representatives of upstairs member firms. The Committee is chaired by a Floor Governor who does not vote except to make or break a tie. The minimum quorum requirement is six persons. The Options Allocations Committee consists of eight
(8)floor members, which include six
(6)floor brokers and two
(2)Registered Options Traders, and three
(3)representatives of upstairs member firms. The Committee is chaired by a Floor Governor who does not vote except to make or break a tie. The minimum quorum requirement is six persons, including at least one representative of an upstairs member firm. The Special Allocations Committee consists of the Chief Executive Officer (or his or her designee), two
(2)brokers, two
(2)Registered Options Traders and a representative of an upstairs member firm. The Commission notes that the minimum quorum requirement is four persons. The Special Allocations Committee is chaired by the Chief Executive Officer who does not vote except to make or break a tie. The proposed rule change would establish a single Allocations Committee for equities, options and other listed securities. Similar to the current Special Allocations Committee, the Allocations Committee would consist of the Chief Executive Officer (or his or her designee), a representative of an upstairs member firm and either:
(i)Four
(4)brokers for equities and other securities admitted to trading on the Exchange except for Exchange Traded Funds and options;
(ii)two
(2)brokers and two
(2)Registered Traders for Exchange Traded Funds; or
(iii)two
(2)brokers and two
(2)Registered Options Traders for options. The Allocations Committee would be chaired by the Chief Executive Officer who does not vote except to make or break a tie. The minimum quorum requirement would be four persons. 7 7 The Exchange has represented that, for the purposes of determining a quorum, the Chief Executive Officer shall count as one of the six persons, whereby four of the six persons would constitute a quorum. However, the Chief Executive Officer would not vote except to make or break a tie. Telephone conversation of August 10, 2005, between Jeffery Burns, Associate General Counsel, Amex and David Michehl, Attorney, Division of Market Regulation, Commission. The Exchange also seeks to provide the current Performance Committee 8 with sole authority to reallocate securities in connection with specialist unit transfers resulting from business transactions. The current procedure in Amex Rule 27 provides that the Allocations Committee will reallocate the securities resulting from a specialist unit transfer in accordance with the agreement of the parties unless the Performance Committee determines that a countervailing institutional interest dictates that there should be some other allocation. In such a case, the Allocations Committee will reallocate the securities according to instructions received by the Performance Committee or as it deems appropriate if no instructions are received. The proposal would amend Amex Rule 26 by providing the sole authority and power for the reallocation of securities in connection with the transfer of specialist units in the Performance Committee rather than the Allocations Committee. The Exchange believes that this change will establish a better process for reallocations due to specialist unit transfers. 8 The Board pursuant to Article II, Section 3 of the Constitution has delegated to the Performance Committee the authority to evaluate specialist, registered traders and floor broker performance and to take specified action in response to particular performance deficiencies. The Exchange believes that the proposed combination of the Equities, Options and Special Allocations Committees and the change in the composition of the Allocations Committee would better serve the interests of the Exchange and its members by reducing potential inefficiencies in connection with the allocation process. The Exchange's experience to date has shown that the process of allocating and reallocating equities and options classes may be overly and unnecessarily bureaucratic. The Exchange believes that this is largely due to the number of Equities, Options and Special Allocations Committee members and the composition of the Equities, Options and Special Allocations Committees. Accordingly, the Exchange proposes to change the number and composition of the Allocations Committee to implement an improved process for allocating and reallocating equities, options and other securities traded on the Exchange to specialist units. The Exchange further states that providing the Performance Committee with the sole authority to reallocate securities in connection with specialist unit transfers would enhance the process of reallocation in these special circumstances. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act, 9 in general, and with Section 6(b)(5) of the Act, 10 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change, as amended, will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange did not receive any written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the self-regulatory organization consents, the Commission will: A. by order approve such proposed rule change, as amended; or B. institute proceedings to determine whether the proposed rule change, as amended, should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-Amex-2005-068 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE, Washington, DC 20549-9303. All submissions should refer to File Number SR-Amex-2005-068. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2005-068 and should be submitted on or before September 22, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 11 11 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-4772 Filed 8-31-05; 8:45 am] BILLING CODE 8010-01-P DEPARTMENT OF TRANSPORTATION Office of the Secretary Notice of Applications for Certificates of Public Convenience and Necessity and Foreign Air Carrier Permits Filed Under Subpart B (Formerly Subpart Q) During the Week Ending August 19, 2005 The following Applications for Certificates of Public Convenience and Necessity and Foreign Air Carrier Permits were filed under Subpart B (formerly Subpart Q) of the Department of Transportation's Procedural Regulations (See 14 CFR 301.201 *et seq.* ). The due date for Answers, Conforming Applications, or Motions to Modify Scope are set forth below for each application. Following the Answer period DOT may process the application by expedited procedures. Such procedures may consist of the adoption of a show-cause order, a tentative order, or in appropriate cases a final order without further proceedings. *Docket Number:* OST-2005-22152. *Date Filed:* August 16, 2005. *Due Date for Answers, Conforming Applications, or Motion to Modify Scope:* September 6, 2005. *Description:* Joint Application of SkyWest Airlines, Inc. (“SkyWest”) and Atlantic Southeast Airlines, Inc. (“ASA”), requesting a disclaimer of jurisdiction, or, in alternative, approval of the de facto transfer of certain international certificate and other authorities held by ASA to SkyWest. Renee V. Wright, Program Manager, Docket Operations, Federal Register Liaison. [FR Doc. 05-17425 Filed 8-31-05; 8:45 am]
Connectionstraces to 6
Traces to 6 documents
U.S. Code
6 references not yet in our index
- 44 USC 3501-3520
- 15 USC 80a
- 17 CFR 270.17
- 17 CFR 270.19
- 17 CFR 240.19
- 14 CFR 301.201
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Notices
Notice of 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
Cite44 USC 3501-3520
Cite15 USC 80a
Cite17 CFR 270.17
Cite17 CFR 270.19
Cite17 CFR 240.19
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