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|  |  | Investment Company Act of 1940 - Sections 6(c), 11(a), 11(c), 12(d)(1)(j), and 17(b)Fixed Income Securities, L.P.April 29, 2004
RESPONSE OF THE OFFICE OF	INVESTMENT COMPANY REGULATION	DIVISION OF INVESTMENT MANAGEMENT

Our Ref. No. 2004-1-ICR	Fixed Income Securities, L.P.  

Your letter of April 27, 2004 requests our assurance that we would not recommend that the Commission take any enforcement action under the Investment Company Act of 1940 ("Act") if Fixed Income Securities, L.P. ("Fixed Income Securities") relies on three exemptive orders issued to Matrix Capital Group, Inc. ("Matrix"), Matrix Unit Trust and certain unit investment trusts registered under the Act ("UITs") pending action by the Commission on Fixed Income Securities' application for an exemption under sections 6(c), 11(a), 11(c), 12(d)(1)(J), and 17(b) of the Act.

On April 12, 2004, Matrix entered into an agreement with Fixed Income Securities, pursuant to which Matrix agreed to transfer its unit investment trust business to Fixed Income Securities (the "Transfer").  It is expected that the Transfer will be consummated by April 30, 2004.  As of the date of the Transfer, Fixed Income Securities will commence serving as sponsor and depositor for the UITs.  You state that the personnel administering the UITs will be substantially unchanged.

Matrix and certain UITs received the following exemptive orders from the Commission (collectively, the "Exemptive Orders"):  (1) an order under sections 6(c), 12(d)(1)(J), and 17(b) of the Act permitting a UIT (a) to offer shares of its series to the public with sales loads that exceed the 1.5% limit of section 12(d)(1)(F)(ii), and (b) to invest in affiliated registered investment companies within the limits of section 12(d)(1)(F) of the Act1; (2) an order under sections 6(c), 11(a), and 11(c) of the Act permitting certain UITs to: (a) impose sales charges on a deferred basis and waive the deferred sales charge in certain cases, (b) offer unitholders certain exchange and rollover options, (c) publicly offer units without requiring the depositor to take for its own account or place with others $100,000 worth of units in the UITs, and (d) distribute capital gains resulting from the sale of portfolio securities within a reasonable time after receipt2; and (3) an order under sections 6(c), 12(d)(1)(J) and 17(b) of the Act permitting certain UITs to invest in registered management investment companies and unit investment trusts both within and outside the same group of investment companies.3

The UITs and Fixed Income Securities intend promptly to file an application with the Commission in which they will request exemptive orders that would continue the relief previously granted in the Exemptive Orders ("Requested Orders").

Fixed Income Securities agrees to comply with the terms and conditions of the Exemptive Orders imposed on Matrix as though such terms and conditions were imposed directly on Fixed Income Securities.  The UITs covered by the Exemptive Orders agree that they would rely on the Requested Orders when they are granted, rather than continuing to rely on the Exemptive Orders.

Based on the representations made in your letter, we would not recommend enforcement action if Fixed Income Securities relies on the Exemptive Orders until the earlier of the issuance by the Commission of the Requested Orders, or one year from the date of this letter.

This response expresses the Division's position on enforcement action only, and does not purport to express any legal conclusions on the questions presented.  Facts or conditions different from those presented in your letter might require a different conclusion.  In addition, this letter provides no assurance that the Commission will grant the Requested Orders, or that the Division will not comment upon or seek modification of any application for the Requested Orders.

Emerson S. Davis 	Senior Counsel	Office of Investment Company Regulation	April 29, 2004
Endnotes
1 Matrix Unit Trust et al., Investment Company Act Release Nos. 25668 (July 19, 2002) (notice) and 25700 (Aug. 14, 2002) (order).

2 Matrix Capital Group, Inc. and Matrix Unit Trust, Investment Company Act Release Nos. 25667 (July 19, 2002) (notice) and 25701 (Aug. 14, 2002) (order).

3 Matrix Capital Group, Inc., et al., Investment Company Act Release Nos. 26173 (Sept. 4, 2003) (notice) and 26197 (Sept. 30, 2003) (order).  
Incoming Letter
The Incoming Letter is in Acrobat format.

*http://www.sec.gov/divisions/investment/noaction/fis042904.htm*Home | Previous PageModified: 04/30/2004 |
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