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 lnt';'.1-v- Our Ref. No. 95-168-CC
 

Fiduciary Trust
 

RESPONSE OF THE OFFICE OF CHIEF COUNSEL Global Fund
 

DIVISION OF INVESTMENT MANAGEMENT File No. 132-3
 

By letter dated July 31, 1995, you request assurance that
 

the staff would not recommend enforcement action to the
 

Commission under Section 7 (d) of the Investment Company Act of
 

1940 (the "Investment Company Act") if Fiduciary Trust Global
 

Fund (the "Fund") offers and sells its shares ("Units") in
 

compliance with the requirements of Regulation S under the
 

Securities Act of 1933 (the "Securities Act") to certain accounts
 

that are excluded from the definition of "U.S. person" by section


902 (0) (2) of Regulation S, without counting such accounts towards the 100 U.S. securityholder limit of section 3(c) (1) of the 

Investment Company Act.
 

The Fund is an open-end investment fund organized as a unit
 

trust under the laws of Ireland. You state that the only persons
 

recognized by the Fund as having any title or ownership interest
 

in units are those whose ownership is ref lected on the Unit
 

register of the Fund. No units are issued in bearer form or are
 

convertible into Units in bearer form. You represent that each
 

purchaser of a Unit must represent that it is not aU. S. person
 

(as defined in Regulation S) and is not holding and will not hold


Units on behalf of aU. S. person. For as long as a purchaser
 

holds any Units, it must notify the Fund immediately if it
 

becomes aU. S. person or holds on behalf of aU. S. person. The
 

Fund's governing documents prohibit the registration of any
 

transfer of units to, the redemption of any units held by, or the
 

payment of any dividends or distributions to, any U. S. person at


any time. 

section 7 (d) prohibits a foreign investment company from
 

publicly offering its shares in the United States unless the
 

Commission issues an order permitting the company to register


under the Investment Company Act. Under Section 3 (c) (1), any 

issuer that has no more than 100 beneficial owners, and which is
 

not making and does not propose to make a public offering of its
 

securities, is excluded from the definition of investment company
 

and, therefore, from registration and regulation under the Act.
 The staff has interpreted section 7 (d) with reference to section 3 (c) (1), and therefore has not objected if an unregistered

foreign investment company makes a private offer ing in the U. S. , 

provided that after the private offering the investment company
 

has no more than 100 beneficial owners resident in the united
 

States. 1./ 

1./ Touche Remnant & Co. (pub. avail. Aug. 27, 1984). See also


Securities Act Release No. 6862 (Apr. 23, 1990) (adopting
 

Rule 144A under the Securities Act of 1933).
 
Regulation S generally provides that offers and sales of
 

securities that occur outside the u.s. are not subject to the
 

registration requirements under the Securities Act. Under
 

Section 902(0) (2), certain discretionary accounts or similar
 

accounts held for the benefit or account of non-U. S. persons by
 

dealers or other professional fiduciaries organized, incorporated
 

or, if individuals, resident in the U.s. ("Accounts") are
 

excluded from the definition of U. S. person under Regulation S.
 

Sales to the Accounts, therefore, are considered to be sales
 

outside of the U. S. for purposes of the registration requirement
 

under the Securities Act.
 

You are concerned that, because the Accounts may be
 considered to be located in the U. S., the Fund's offer and sale 

of Units to the Accounts, while in compliance with the
 

requirements of Regulation S, might be prohibited under Section
 

7 (d). ~/ You believe, however, that the same considerations for
 

determining whether the Accounts should be subj ect to the
 

Securities Act apply to whether they should be subject to the
 

Investment Company Act.
 

When it adopted Regulation S, the Commission determined that
 

subj ecting U. S. discretionary accounts held for non-U. S. persons
 

to the registration requirements of the Securities Act might
 

result in a competitive disadvantage for U.S. fiduciaries, and
 

therefore excepted these accounts from the Regulation's
 defini tion of U. S. person. ~/ You believe that the same type of 

competitive harm to U.S. fiduciaries would result if these
 

accounts are considered to be U. S. residents for purposes of the
 

Investment Company Act. You therefore maintain that the Fund's
 

offer and sale of units to the Accounts does not present a
 

significant regulatory interest under the Investment Company Act,


and should not implicate section 7 (d) . 

We would not recommend enforcement action to the Commission
 

under Section 7 (d) of the Investment Company Act if the Fund
 

offers and sells Units to the Accounts as described in your
 

letter without counting such Accounts towards the 100 U. S.
 

securityholder limit. Because this position is based on the
 

facts and representations made in your letter, you should note
 

~/ You state that for some of the Accounts, U. S. investment


advisers will have discretionary authority but will not have
 

possession of the certificates representing the securities
 

held in the account, which instead will be held in the name
 

of a bank or other professional custodian organized or
 

incorporated in the U. S.
 

~/ Securities Act Release No. 6863 (Apr. 24, 1990) (adopting
 Regulation S). 

- 2 ­
that any different facts or circumstances might require a
 

different conclusion.


~2~ '---...~,

Alison E. Baur . 

Senior Counsel 

- 3 ­
BRYAN CAVE LLP
 

ST. LOUIS, MISSOURI LONDON, ENGLAND NEW YORK, NEW YORK 700 THIRTEENTH STREET, N.W. FRANKFURT AM MAIN, GERMANY ~NSAS ClìY, MISSOURI WASHINGTON, D.C. 20005 -3960 RIYADH, SAUDI ARABIA 'RLAND PARK, KANSA KUWAIT CITY, KUWAIT 'HOENIX, ARIZONA (202) 508-6000 DUBAI, UNITED ARAB EMIRATES ANGELES, CALIFORNIA
 HONG KONG
 SANTA MONICA, CALIFORNIA FACSIMILE: (202) 508-6200 AFFILIATED OFFICE IN BEIJING IRVINE, CALIFORNIA 

WILLIAM F. BAVINGER ILL (202) 508-6037 PARTNER 

ACT 

8JOlV 

July 31, 1995
 lLtrLE 

P'ULIC 

A.VA1'LA13ILITY f!1d-qs'


VIA HAN DELIVRY ~ 

John V. O'Hanon
 

Special Counsl
 

Division of Investment Management
 

Securities and Exchange Commission 

Washington, D. C. 20549 

Re: Fiduciary Trust Global Fund 

Dear John: 

Enclosed is an original and seven copies of the no action letter request, revised 

in accordance with our discussion. 

Very truly yours, 

Wiliam F. Bavinger 

WFB:lmc 

Enclosures (8) 

11500 
BRYAN CAVE LLP
 

ST. LOUIS, MISSOURI 

""EW YORK, NEW YORK 700 THIRTEENTH STREET, N.W. LONDON, ENGLAND 

FRANKFURT AM MAIN, GERMANY 

NSAS CITY, MISSOURI 

,LAND PARK, KASAS WASHINGTON, D.C. 20005-3960 RIYADH. SAUDI ARABIA 

KUWAIT ClìY. KUWAIT 

'HOENIX, ARIZONA 

____6 ANGELES. CALIFORNIA (202) 508-600 DUBAI, UNITED ARAB EMIRATES 

HONG KONG SANTA MONICA, CALIFORNIA FACSIMILE: (202) 508-6200 AFFILIATED OFFICE IN BEIJING 

IRVINE, CALIFORNIA 

WILLIAM F. BAVINGER III 

PARTNER (202) 508-6037 

Investment Company Act of 1940 

Sections 7(d), 3(c)(1)
 

July 31, 1995
 

VIA HAN DELIVRY 

Office of Associate Director (Chief Counsel)
 

Division of Investment Management 

Securities and Exchange Commission 

Washington, D. C. 20549 

Re: Fiduciary Trust Global Fund 

Dear Madam or Sir: 

On behalf of our client, Fiduciary Trust Global Fund (the "Fund"), we request 

your assurance that the staff (the "Staff") of the Securities and Exchange Commission (the 

"ColIission") wil not recommend any enforcement action to the Commission under Section 

7(d) of the Investment Company Act of 1940, as amended (the" 1940 Act"), under the 

circumstances described below. 

The Fund is an open-end investment fund organied as a unit trust under the 

laws of Ireland, and is not registered under the 1940 Act. Investors in the Fund 'wil 

purchase units in the Fund (the "Units"). 

The offices of the Fund are located in Dublin, Ireland. The trustee of the 

Fund (the "Trustee") is Chemical Ireland Custody and Trustee Services Limited, an Irish 

resident company, as is the manager of the Fund, Chemical Ireland Fund Adminstrators 

Limited (the "Manager"). The Manager has engaged two investment advisors for the Fund 

(the "Advisors"), each of which wil provide investment advisory services to one or more of 
BRYAN CAVE LLP 

Office of Associate Director (Chief Counsel) 

July 31, 1995
 

Page 2 

the sub-funds in the Fund. One of these Advisors is Fiduciary Trust Company International, 

a New York state chartered ban, which wil provide advisory services to thee of the 

sub-funds. The other Advisor is Fiduciary Trust International Limited, an English company, 

which wil provide advisory services to the other ten sub-funds. The assets of the Fund, 

which consist solely of investment securities, wil be held by the Trustee in Ireland. 

Units may be issued in certificated and non-certificated form. The only 

persons recognied by the Fund as having any title or ownership interest in Units are those 

whose ownership is reflected on the Unit register of the Fund. No Units are issued in bearer 

form or are convertible into Units in bearer form. All subscriptions for Units and all 

requests for redemption or transfer of Units on the Unit register are submitted to and 

accepted or rejected by the Manger. 

The Fund wil be offering and selling the Units in varous jurisdictions located 

outside the United States in compliance with the requirements of Regulation S. These 

jurisdictions presently include the United Kigdom, Germany, Sweden and Switzerland. The 

Units wil be sold directly by the Advisors and their affiliates and indirectly though 

independent dealers located in certin European countries selected by the Manager. 

Each purchaser of a Unit must represent that it is not a U.S. Person (as 

defined in Regulation S) and is not holding and wil not hold Units on behalf of a U.S. 

Person. For as long as a purchaser holds any Units, it must notify the Fund imediately if 

it becomes a U.S. Person or holds on behalf of a U.S. Person. The Fund's governg 

documents wil prohibit the registration of any transfer of Units to, the redemption of any 

Units held by, or the payment of any dividends or distributions to, any U.S. Person at any 

time. 

The Fund proposes to offer and sell Units, by use of the mails and other 

jurisdictional means, to certin discretionary accounts or similar accounts (other than estates
 

or trusts) held for the benefit or account of non-U.S. Persons by dealers or other professional 

fiduciaries organied, incorporated or, if individuals, resident in the U.S. Such accounts are 

excluded from the definition of U.S. Person by Section 902(0)(2) of Regulation S, and are 

referred to herein as "discretionary NRA accounts. ill Each such account that purchases 

Units wil be required to represent that it wil not transfer the Units to any U.S. Person, and 

For some of these accounts, U. S. investment advisors wil have discretionary authority but wil 

not have possession of the certificates representing the securities held in the account, which 

instead wil be held in the name of a ban or other professional custodian organized or
 

incorporated in the U. S. 
BRYAN CAVE LLP
 

Office of Associate Director (Chief Counsel) 

July 31, 1995
 

Page 3
 

any certificates representing such Units wil bear a legend stating that the Units may not be 

transferred to any U.S. Person. 

There wil be no advertising, general mailings or other form of general 

solicitation in connection with such offers and sales. The Fund intends to establish direct 

relationships with certin foreign bank that have branches in the U.S. and with certin other 

finncial professionals in the U.S. who act on behalf of non-U.S. Persons. The Fund does 

not presently intend to make any public offerig of its securities other than as outlined above. 

Section 7(d) of the 1940 Act provides, in relevant part: 

No investment company, unless organied or otherwise created under the laws 

of the United States or of a State, and no depositor or trustee of or underwriter 

for such a company not so organied or created, shall make use of the mails or 

any means or instrmentality of interstate commerce, directly or indirectly, to 

offer for sale, sell, or deliver after sale, in connection with a public offerig, 

any security of which such company is the issuer. 

In Touche, Remnant & Co. (U. K.) (publicly available August 27, 1984), the 

Staff recognied that a foreign investment company can make a private offering in the United 

States contemporaneously with a public offerig abroad without violating Section 7(d) of the 

1940 Act, so long its securities are not owned beneficially by more than 100 persons who are 

resident in the U.S. The Staff observed that Section 3(c)(1) of the 1940 Act excepts from
 

the defintion of an investment company any issuer whose outstanding securities are 

beneficially owned by not more than 100 persons resident in the U.S. and who is not 

engaged in a public offering of its securities, and explained that Section 7(d) should be read 

"in the light of . . . the policy expressed in Section 3(c)(1)." The Staff has not yet stated, 

however, whether a discretionary NRA account which holds a foreign investment company's 

securities should be counted as a person resident in the U.S. for ths purpose. 

For the following reasons, we believe that the Staff should take the position 

that discretionary NRA accounts should not be counted as U. S. residents for purposes of 

Section 7(d) of the 1940 Act. The exclusion of such accounts from the definition of U.S. 

Person in Section 902(0)(2) of Regulation S evidenced the Commission's recognition of the 

fact that the registration requirements of the Securities Act of 1933 (the "1933 Act") were 

not intended for the protection of such accounts, and of "the serious competitive disadvantage 

that might be faced by U. S. professional fiduciaries." Securities Act Release No. 6863 

(April 24, 1990). If offers and sales to such accounts would trigger the registration 

requirements of the 1933 Act, U.S. investment advisors would likely be excluded from such 

offerings and have difficulty competing for the advisory business of non-U.S. Persons. 
BRYAN CAVE LLP
 

Office of Associate Director (Chief Counsel)
 

July 31, 1995
 

Page 4 

The same considerations apply with respect to Section 7(d) of the 1940 Act. 

Although U.S. investment advisors exercise discretion with respect to these accounts, the 

accounts are maintained for the benefit of non-resident aliens. No significant regulatory 

interest arises under the 1940 Act with respect to a foreign investment company simply 

because its securities are owned by such accounts, and the same type of competitive harm to 

U.S. investment advisors would result if the accounts are counted as U.S. residents. As a 

practical matter, U.S. investment advisors would have difficulty competing for the advisory 

business of non-U.S. persons if they must be excluded from offerings of securities of foreign 

investment companies in order to avoid registration by such companies under the 1940 Act. 

Significantly, in G. T. Global Fincial Services, Inc. (publicly available August 2, 1988),
 

the Staff recognid that sales by a foreign investment company to apparently
 

non-discretionary accounts maintained by U.S. brokers for the benefit of nonresident aliens 

need not be counted in determinng whether the securities of the foreign investment company 

are beneficially owned by more than 100 persons who are resident in the United States. 

We would appreciate confirmation that the Staff wil not recommend any 

enforcement action to the Commission under Section 7(d) of the 1940 Act if the Fund offers 

and sells Units to more than 100 discretionary NRA accounts in the manner and under the 

circumstances described above. We are satisfied that the Fund's proposed activities do not 

require registration under the 1933 Act and are not requesting any interpretive or no-action 

position from the Staff under Section 5 of the 1933 Act. 

This wil confir that all offering materials and documents used by the Fund
 

(except for press releases) wil include statements that the Units are not registered under the
 

1933 Act and the 1940 Act and may not be offered or sold in the U.S. or to any U.S. 

Person, except for sales in the U.S. to discretionary NRA accounts (as defined in Regulation 

S). 

In the event that you reach a preliminary conclusion that you wil be unable to take 

the no-action position we are requesting, we would appreciate your so advising us so that we 

may discuss the matter with you furter. Please let me know if you have any questions 

regarding the matters referred to in this letter. Thank you for your consideration of this 

request. 

Very truly yours, #~~ 

Wiliam F. Bavinger 

WFB: lmc 

98267.03