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PUBLIC

4VAILABILrrY .?~ -DD

RESPONSE OF THE OFFICE OF CHIEF COUNSEL

DIVISION OF INVESTMENT MANAGEMENT

February 2,2000

1M Ref. No. 99-443

General Motors Investment

Management Corporation

File No. 801-42732

Your letter ofJanuary 28, 2000 requests our concurrence that the collective

investment trust described in your letter will be "maintained by a bank" for purposes of

Section 3(c)(l1) ofthe Investment Company Act of 1940 and Section 3(a)(2) ofthe

Securities Act of 1933.

Facts

You state that the General Motors savings plans master trust holds assets of

employee benefit plans, including assets ofparticipant-directed employee benefit plans

that are qualified under Section 401(k) ofthe Internal Revenue Code ("401(k) plans"), for

employees ofthe General Motors Corporation ("GM") and its affiliates. You state that

the 401 (k) plans provide various investment options, including one option for each ofthe

following four classes of company stock: GM $1-2/3 par value common stock ("OM

Classic Common"), GM Class H common stock, Electronic Data Systems Corporation

("EDS") common stock, and Raytheon Company Class A common stock (collectively

"Company Stock"). I You further state that, prior to May 28, 1999, employees of Delphi

Automotive Systems Corporation ("Delphi"), an affiliate of GM, contributed to these

401(k) plans.

You state that on May 28, 1999, as a consequence ofGM spinning offDelphi, a

savings plans master trust was created to hold assets of401(k) plans sponsored by Delphi

for its employees ("Delphi savings plans master trust"). These 401 (k) plans offer an

investment option for Delphi common stock (also referred to as "Company Stock,,).2 In

addition, these 401(k) plans make available investment options that are clones ofthe

401(k) plans in the GM savings plans master trust, except that Delphi employees cannot

continue to make new contributions in any non-Delphi Company Stock option.

You also state that on May 28, 1999, State Street Bank and Trust Company

("Bank") established a collective investment trust ("Trust") for the purpose of holding

and managing assets of 401 (k) plans participating in the GM savings plans master trust

and the Delphi savings plans master trust. You explain that the Trust consists offive

separate funds, one for each ofthe five classes of Company Stock (each a "Company

I You state, however, that employees of GM and their affiliates may no longer make new contributions or

exchanges with respect to EDS common stock and Raytheon Company common stock.

2 You state that, as a further consequence ofthe merger, GM and GM-affiliated participants (and their

respective plans) that held interests in GM Classic Common received interests in Delphi common stock.

These participants, however, may not obtain any additional interests in this stock.
2

Stock Fund"). The objective of each Company Stock Fund is to seek long-term growth

of capital and current income by investing solely in shares ofits respective class of

Company Stock. You state, however, that each Company Stock Fund also may invest in

short-term investments to provide the Fund with the liquidity necessary to meet its daily

cash requirements.

You state that the Bank is the sole discretionary trustee ofthe Trust, and in that

capacity acts as the sole investment manager of each Company Stock Fund. You explain

that the Bank determines the manner and timing of purchases and sales of Company

Stock for each Fund.3 In addition, you state that the Bank selects, purchases and sells

short-term investments for each Company Stock Fund.4 You state that the Bank manages

each Company Stock Fund in such a manner as to replicate as closely as possible the

performance of the Company Stock held by that Fund while ensuring that the Fund

continues to maintain the liquidity level that the Bank believes is necessary for the Fund

to meet daily cash requirements.

Analysis

Section 3(c)(11) ofthe Investment Company Act, in relevant part, excludes from

the definition ofinvestment company "[a]ny employee's stock bonus, pension, or profitsharing trust which meets the requirements for qualification under section 401 ofthe

Internal Revenue Code of 1986 ... or any collective trust fund maintained by a bank

consisting solely of assets ofsuch trusts ...." We take the position that a collective trust

fund is "maintained by a bank" for purposes of Section 3(c)(11) ifthe bank exercises

"substantial investment responsibility" over the collective trust fund. 5 We also take the

position that a bank which functions in a mere custodial or similar capacity will not

satisfy the "maintained by a bank" requirement.6

You believe that the Trust is "maintained by a bank"7 for purposes of Section

3(c)(11) ofthe Investment Company Act.8 You argue that the "maintained by a bank"

3 You explain, however, that although the Bank. is required to invest each Company Stock Fund in the

requisite class ofCompany Stock to the maximum extent feasible, the Bank, as a part of its fiduciary

obligations under the Employee Retirement Income Security Act of 1974 ("ERISA"), has the ongoing

responsibility to perform all investment management functions required by each Fund, including

determining whether the Fund's continued retention ofthe requisite class of Company Stock is consistent

with the general fiduciary requirements ofERISA.

4 You state that, where necessary, the Bank. also may enhance a Fund's liquidity by, among other things,

obtaining loans or lines of credit on behalf ofthe Fund.

5 See, e.g., Employee Benefit Plans, Securities Act Release No. 6188 (Feb. 19, 1980) ("Employee Benefit

Plans Release"); Bank of America (pub. avail. Jan. 9, 1972).

7 You represent that the Bank. meets the definition of "bank" in Section 2(a)(5) of the Investment

Company Act and Section 3(a)(2) ofthe Securities Act.
3

requirement is met with respect to a collective investment trust that is comprised of

separate single stock funds, when the bank exercises substantial investment responsibility

with respect to each ofthose funds. You believe that a bank exercises "substantial

investment responsibility" with respect to the management ofthis type oftrust ifthe bank

exercises all or substantially all ofthe investment responsibility required in managing the

trust, even though the scope ofinvestment responsibility exercised in managing this type

oftrust is limited. You further believe that the Bank exercises "substantial investment

responsibility" with respect to its management ofthe Trust, and that its activities extend

beyond mere custodial functions.

We agree that a collective investment trust with respect to unrelated employers

comprised ofseparate single stock funds are "maintained-by a bank" for purposes of

Section 3(c)(11) ofthe Investment Company Act ifthe bank exercises substantial

investment responsibility with respect to each ofthose funds. We also agree that a bank

is exercising substantial investment responsibility ifthe bank exercises all or substantially

all ofthe investment responsibility required in managing the trust.

Based on the facts and representations set forth in your letter, we agree that the

Bank exercises substantial investment responsibility with respect to its management of

the Trust. We therefore agree that the Trust is "maintained by a bank" for purposes of

Section 3(c)(11) ofthe Investment Company Act. You should note that any different

facts or representations might lead to a different conclusion.9

The staff ofthe Division ofCorporation Finance has asked us to tell you that,

based on the facts presented and representations made in your letter, the Division concurs

in your interpretive view that the Trust appropriately may be deemed "maintained by a

bank" for purposes ofthe requirements applicable to collective trusts under Section

3(a)(2) ofthe Securities Act. You have not sought the Division's views on, and it

therefore does not address, the Securities Act status ofthe plan interests described in your

letter. Because this position is based on the facts outlined, and the representations made,

irr-your letter, as well as your interpretive view, any different facts or conditions might

compel a different conclusion.

~O~~""?~ Rochelle Kauffman Plesset

Senior Counsel

& You believe that both the OM savings plans master trust and the Delphi savings plans master trust may

rely on the exclusion in Section 3(c)(l1) ofthe Investment Company Act because each trust would be

comprised solely of assets of employee benefit plans that are sponsored by one employer and certain ofits

affiliates and that are qualified under Section 401 ofthe Internal Revenue Code. You do not ask for our

position, and we take no position, regarding this issue.

9 We previously informed you ofthis position in a telephone conversation on May 26, 1999.
....

"

,. ,

KIRKLAND &.. ELLIS PARTNERSHIPS INCLUDING PROFESSIONAL CORPORATIONS

Maureen A. Donley-Hoopes

To Call Writer Directly:

(202) 879-5039

655 Fifteenth Street, N.W.

Washington, D.C. 20005

202 879-5000 Facsimile:

202 879-5200

Douglas Scheidt

ChiefCounsel, Division ofInvestment

Management

Securities and Exchange Commission

450 5th Street, N.W.

Washington, D.C. 20549

Section 3(c)(11) ofthe Investment Company Act of 1940;

Section 3(a)(2) ofthe Securities Act of 1933

January 28, 2000

Catherine Dixon

ChiefCounsel, Division ofCorporation

Finance

Securities and Exchange Commission

450 5th Street, N.W.

Washington, D.C. 20549

Re: Request for Interpretation of Section 3(c){l1) ofthe Investment Company

Act of 1940 and Section 3(a)(2) ofthe Securities Act of 1933

Dear Mr. Scheidt and Ms. Dixon:

On behalfofour client, General Motors Investment Management Corporation

("GMIMCo"), we respectfully request that the staff("Staff') ofthe Securities and Exchange

Commission ("Commission") confirm our interpretation that a collective investment trust with

respect to unrelated employers comprised ofseparate single stock funds that are managed by a

bank, as described below, will be "maintained by a bank" for purposes of Section 3(c)(11) ofthe

Investment Company Act of 1940 ("ICA") and Section 3(a)(2) ofthe Securities Act of 1933

("Securities Act"). This letter is an amended and restated version of a letter submitted on May

21, 1999 requesting such an interpretation. The changes in this letter addresscertain'issues raised

during discussions with the Staffsubsequent to the filing ofthe May 21, 1999 letter.

I. Background

There presently exists a General Motors savings plans master trust. This trust is

comprised of plans for salaried and hourly employees ofGeneral Motors Corporation ("GM") and

GM affiliates qualified under Internal Revenue Code ("IRC") Sections 401(a), some ofwhich are

also participant-directed plans qualified under Section 401(k) ("401(k) plans"). Prior to May 28,

1999, (a) Delphi Automotive Systems Corporation ("Delphi") was a GM affiliate, (b) salaried and

Chicago London Los Angeles New York
Douglas Scheidt

Catherine Dixon

January 28,2000

Page 2

hourly employees ofDelphi contributed to the plans in this trust, and (c) this trust relied on the

exemption in lCA Section 3(c)(II) for trusts with respect to related employers. 1 The 401(k)

plans in this trust currently provide various investment options, including four separate company

stock accounts, one each for GM $1-2/3 par value common stock ("GM Classic Common"), GM

Class H common stock ("GMH"), Electronic Data Systems Corporation common stock, and

Raytheon Company Class A common stock (collectively "Company Stock"). See Attachment A.

Also, as discussed below, a limited investment option for holding Delphi common stock was

created on May 28, 1999.

On May 28, 1999, Delphi was spun off and is no longer a related employer of GM.

A new Delphi savings plans master trust was created that is comprised solely of assets of cloned

plans sponsored by Delphi for its salaried and hourly employees. The Delphi savings plans master

trust relies on the exemption in lCA Section 3(c)(II) and Securities Act Section 3(a)(2) for trusts

with respect to related employers since it is comprised solely of assets of plans sponsored by

Delphi and its affiliates that are qualified under IRC Section 401.

On May 28, 1999, all Delphi employee plan assets in the GM savings plans master

trust were moved to the Delphi savings plans master trust except that 401(k) plan assets of certain

Delphi hourly employees contributed prior to May 28, 1999 remain under the GM-sponsored

401(k) plan and in the GM savings plans master trust but are treated in the same manner as 401(k)

plan assets of any other former employees ofGM or a GM-affiliate (e.g., there may be no further

contributions made to the GM-sponsored 401(k) plans by those former employeesV AccordinglY,-the GM savings plans master trust continues to be comprised solely of assets of plans

1 A similar analysis applied with respect to the exemption available under Section 3(a)(2) ofthe

Securities Act. In both contexts, the exemption has been interpreted to mean a trust holding .

assets of plans maintained by a group ofrelated employers.

2 As ofMay 28, 1999, contributions to 401(k) plans in the GM savings plans master trust by or

on behalfofthese Delphi hourly employees were no longer permitted. However, such employees

are permitted to transfer assets in the GM Classic Common and GMH 401(k) plan accounts to

and from other 401(k) plan investment accounts. Such employees are also permitted to participate in one ofthe 401(k) plans established under the Delphi savings plans master trust with

respect to the post-May 28, 1999 period.
Douglas Scheidt

Catherine Dixon

January 28, 2000

Page 3

sponsored by related employers and continues to rely on the exemption in ICA Section 3(c)(11)

and Securities Act Section 3(a)(2) for trusts with respect to related employers.

The 401(k) plans in the Delphi savings plans master trust offer an investment

option for Delphi common stock (also referred to herein as "Company Stock"). The 401(k) plans

in the Delphi savings plans master trust also make available on a cloned basis all ofthe investment

options under the 401(k) plans in the GM savings plans master trust except that there may be no

new contributions to the non-Delphi Company Stock investment options previously available

through the GM savings plans master trust.

Effective May 28, State Street Bank and Trust Company (the "Bank"), a

Massachusetts chartered trust company and a member ofthe Federal Reserve System, established,

pursuant to a Declaration ofTrust, a collective investment trust, herein referred to as Trust X, for

the purpose ofholding and managing 401(k) plan assets ofthe GM savings plan master trust and

the new Delphi savings plan master trust. The Bank is the sole discretionary trustee ofTrust X.

The Bank has advised that it currently acts as trustee of collective investment trusts with assets in

excess of $400 billion. Under the terms ofthe Declaration ofTrust, the Bank may amend and

modify the terms ofTrust X or terminate Trust X, in either case upon prior written notice to

GMIMCo, acting on behalf ofthe participating master trusts.3 The participating master trusts do

not have the right or authority to amend or modify Trust X or terminate Trust X, although

GMIMCo may determine to discontinue (or reduce) the participation of each ofthe master trusts

participating in Trust X by causing redemption of all or any portion oftheir units in the separate

funds established under Trust X as described below. The assets in Trust X are limited solely to

plans that meet the requirements for qualification under Section 401 ofthe Internal Revenue

Code.

Trust X consists offive separate funds, one for each ofthe five classes of

Company Stock referred to above. All shares of a class ofCompany Stock held by plans

participating in the GM and Delphi savings plans master trusts will be held and managed in the

3 GMIMCo, a direct wholly-owned subsidiary ofGM, is a named fiduciary (as that term is

defined in the Employee Retirement Income Security Act of 1974, as amended ("ERISA"», for

the plans participating in the GM and Delphi master savings plans trusts. In that regard,

GMIMCo has authority to cause assets in those master trusts to be invested in Trust X.
Douglas Scheidt

Catherine Dixon

January 28, 2000

Page 4

separate fund established under Trust X for that class. See Attachment B. Each such fund in

Trust X is referred to herein as a "Company Stock Fund."

II. The Company Stock Funds

Each Company Stock Fund holds one ofthe five classes ofCompany Stock and a

certain amount ofshort-term liquid assets. The objective of each Company Stock Fund is to seek

long-term growth of capital and current income by investing solely in shares ofthe respective

class ofCompany Stock except for short-term liquid assets to the extent deemed necessary in

light ofthe liquidity considerations described below. Commencing on May 28, 1999, participating plans (based on plan participant choices) are permitted to acquire or redeem units of

Company Stock Funds through their respective master trusts, subject to the following:

1. GMClassic Common. This Fund is available for new contributions from

employees ofGM and GM affiliates only. No exchanges are permitted into

the Fund by Delphi salaried plan participants and certain Delphi hourly plan

participants.

2. GMH. This Fund is available for new contributions from employees ofGM

and GM affiliates only. No exchanges are permitted into the Fund by

Delphi salaried plan participants and certain Delphi hourly plan

participants.

3. Electronic Data Systems Corporation Common Stock. This investment

option is not available for any new contributions or exchanges into the

Fund. Accordingly, participants are only permitted to redeem alreadyowned units ofthis Fund. It is anticipated that this Fund will be liquidated

in approximately two years.

4. Raytheon Company Class A Common Stock. This investment option is not

available for any new contributions or exchanges into the Fund. Accordingly, participants are permitted to redeem already-owned units ofthis

Fund. It is anticipated that this ~und will be liquidated in approximately

three and one-halfyears.
-,

\

Douglas Scheidt

Catherine Dixon

January 28,2000

PageS

S. Delphi Common Stock. This Fund is available for new contributions from

Delphi employees only except that each participant under any plan having

an interest in GM Classic Common held under the plan on May 25, 1999

also was given an interest in the Delphi .company Stock Fund to reflect the

shares distributed to GM Classic Common shareholders by reason ofthe

Delphi spinoff After May 28, 1999, GM and GM-affiliate participants

(and their respective plans) are only permitted to redeem already-owned

units ofthis Fund.

ill. Management ofTrust X

As noted above, the Bank serves as the sole discretionary trustee ofTrust X,4 and

in that capacity acts as the sole investment manager of all ofthe assets held in each ofthe

Company Stock Funds. The Bank is a "bank" as defined in ICA Section 2(a)(5) and Securities

Act Section 3(a)(2). While the investment guidelines with respect to a Company Stock Fund call

for it to invest to the maximum extent feasible in a class ofCompany Stock, as a fiduciary under

ERISA, the Bank has the ongoing responsibility to perform all investment management functions

needed by each ofthe Company Stock Funds, including determining whether continued retention

of a particular class ofCompany Stock is consistent with the general fiduciary requirements of

ERISA. 5

The Bank's specific duties with respect to each Company Stock Fund involve the

same type oftrust and investment management functions associated with bank-maintained

collective investment trusts which it has customarily operated,6 which include seeking to:

4 The Bank also serves as the sole directed trustee of both the General Motors savings plans

master trust and the Delphi savings plans master trust. .

5 As noted below, voting and tender decisions are exercisable at the direction ofthe plan

participants (subject to certain arrangements with unions with respect to voting decisions) subject

to the Bank's overriding fiduciary obligations under ERISA.

6 These, as is readily apparent, extend beyond mere custodial functions.
Douglas Scheidt

Catherine Dixon

January 28, 2000

Page 6

1. assure that the Fund has an appropriate level ofliquidity to meet its

ongoing daily cash requirements and implement alternative methods for

raising liquidity and making related investments when judged necessary by

the Bank (see III. A below);

2. achieve best execution with minimal transaction costs when the Bank

determines that it is necessary to buy or sell Company Stock (see III. B

below);

3. maximize the investment in Company Stock so that Fund performance

tracks to the extent practicable actual stock performance consistent with

liquidity requirements (see m. C below).

A. The Bank makes all investment deciSions affecting liquidity and exercises

discretion with respect to the purchase and sale ofmoney market investments,

including investments in affiliated short-term investmentfundsfor which the Bank

acts as discretionary trustee.

The Bank has exclusive authority to. determine liquidity targets for each Company

Stock Fund based on all relevant facts and circumstances, including plan-related information

provided by GMIMCo. The Bank monitors liquidity levels and adjusts liquidity target levels on a

periodic basis based on experience and other relevant information that becomes available (e.g.,

plan changes, demographic changes, etc.). Participant balance, volume and trading patterns result

in actual liquidity levels varying materially around the target.

The Bank is responsible for making the day-to-day adjustments to bring actual

liquidity levels closer to the targets. For example, when liquidity begins to deplete, the Bank

typically conducts a cash flow analysis that includes an examination ofthe amount and timing of

the next scheduled contribution(s)/loan repayments, estimated future redemptions, and any trades

previously placed but not settled, and determines whether to sell Company Stock. Wh~n liquidity

is increased due to cash inflows, the Bank analyzes expected cash outflows and determines

whether Company Stock should be purchased. In making liquidity decisions, the Bank also

considers other issues, such as avoiding frequent trades for relatively small amounts offunds and

avoiding buys and sells on successive days.
Douglas Scheidt

Catherine Dixon

January 28, 2000

Page?

The Bank has discretion to purchase and sell investments intended to provide

sufficient liquidity, including short-term liquid securities, money-market fund shares, short-term

investment funds organized as bank-maintained collective funds, and/or cash. The Bank has

advised that it expects typically to maintain such liquidity by imresting in units ofthe Bank's own

in-house short-term investment fund because the earnings on that fund are attractive in comparison to alternative short-term investments. This in-house investment fund is also a bankmaintained collective investment trust fund.

The Bank has discretion to use alternative sources to enhance liquidity. Ifthe

Bank determines that open market or off-market transactions in the Company Stock are not

appropriate under the facts and circumstances to meet cash flow requirements, it may choose to

enhance liquidity through various approaches. These include, but would not be limited to, obtaining an interest-free loan (not to exceed three days) from one or both ofthe plan sponsors or a

loan from one or more other investment accounts under the 401(k) plans, or a drawdown on a

committed or uncommitted line of credit from a third party should one be established.

B. The Bank makes all discretionary investment decisions regarding all Company

Stock in the Company Stock Fund.

The Bank has the exclusive authority to determine the manner and timing of

purchases and sales ofCompany Stock, including whether to buy or sell in the open market or

through off-market transactions. The Bank may use any purchase or sale option it deems

appropriate, including: 7

1. Open market transactions. The Bank has authority to consider all available

sources for placing trades, including but not limited to the New York Stock

Exchange, the "block trading" market, and the Crossing Network (which

includes POSIT and Iostinet).

2. Transactions with the Issuer. The Bank has authority to solicit .the interest

ofthe issuer to act as a counterparty to a Company Stock transaction.

7 All investment decisions are made consistent with ERISA and, where necessary, under

exemptions from applicable ERISA prohibited transaction provisions.
Douglas Scheidt

Catherine Dixon

January 28,2000

Page 8

3. Plan-to-Plan Transactions. The Bank has authority to contact appropriate

independent discretionary plan fiduciaries to ascertain if another plan

(whether affiliated or not with GM or Delphi) is interested in acting as a

counterparty.

The Bank has exclusive authority to select the broker/dealer for each trade.

Among other things, the Bank has the discretion to negotiate and direct the timing and other

terms of any purchase or sale, the means and timing ofsettlement and the amount of any commissions. The Bank also has discretion to use soft dollar arrangements consistent with applicable

regulatory requirements and the Bank's soft dollar policy, although the Bank has advised that it

does not currently intend to utilize this authority.

Plan participants with assets in Company Stock Funds will have in effect the same

proxy voting rights as other Company Stock holders by reason oftheir right to direct the Bank to

vote their shares. To the extent participants do not exercise voting rights, the Bank has the

independent responsibility and authority (subject to rights of certain unions representing hourly

employees) to vote such shares. Participants in all cases retain the authority to accept or reject

tender offers.

C. The Bank has exclusive responsibility to cause each Fund to take action intended

to achieve close tracking ofthe relevant Company Stock.

As noted above, investment decisions are made by the Bank with the objective of

causing each Company Stock Fund to replicate as closely as possible the performance ofthe

Company Stock in that Fund. The Bank conducts its daily liquidity and Company Stock management functions with a view toward diminishing the variations in performance of a Company Stock

Fund as compared to the underlying Company Stock. The aggregate daily decisions of plan

participants to establish or liquidate interests in each Company Stock Fund, among other things,

may cause wide interim variations in the liquidity of a Company Stock Fund. The Bank makes

daily investment management decisions regarding liquidity and Company Stock that re.sult in each

Company Stock Fund tracking the performance more closely than would otherwise occur in the

absence ofsuch professional investment management.
Douglas Scheidt

Catherine Dixon

January 28, 2000

Page 9

IV. Requested Interpretation

ICA Section 3(c){l1) and Securities Act Section 3(a)(2), 8 as here relevant, provide

exceptions with respect to any collective trust fund maintained..by a bank consisting solely of

assets oftrusts and plans qualified under Internal Revenue Code Section 401. The Staffhas

interpreted the term "maintained" to mean that the bank must exercise substantial investment

responsibility over the trust fund, and may not perform merely custodial or similar functions for

the trust fund. See, e.g., Employee Benefit Plans, 1933 Act Release No. 6188 (Feb. 19, 1980).

The requirements ofSections 3(c)(11) and 3(a)(2) that collective trust funds be

"maintained" by a bank should be interpreted to include management of a collective investment

trust which invests in a single stock where, as described above, the bank exercises substantial

investment responsibility. We believe that a bank exercises substantial investment responsibility

with respect to the management ofsuch a trust ifthe bank exercises all or substantially all ofthe

investment responsibility required in managing the trust, even though the scope ofinvestment

responsibility required is limited. Neither the fact that the extent ofinvestment decisions needed

to maintain the Trust X Company Stock Funds is limited to investing in short-term investments

and Company Stock and managing the liquidity ofthe Fund, nor the fact that certain voting and

tender offer decisions are retained by plan participants, makes these Funds any less "maintained by

a bank" than other analogous bank-maintained funds.

First, managing a Company Stock Fund to track the performance of a class of

Company Stock while at the same time dealing with maintaining liquidity is a significant investment management undertaking. Any amount ofliquidity which is maintained in the Fund

necessarily causes a deviation between the tracked benchmark and the Fund's performance.

Inappropriate liquidity management (e.g., deciding to hold too much ofthe Fund in cash and

short-term investments) may result in unacceptably wide variations in tracking results. Close

tracking ofan underlying stock in a Company Stock Fund that has wide interim variations in

liquidity can be achieved only with knowledge and diligent exercise ofinvestment discretion, all of

which will be performed by the Bank with respect to each Fund. This strongly evidenc.es a fund

"maintained by a bank."

8 Interpretive advice is not being sought with respect to the status under Securities Act Section

3(a)(2) ofthe interests in the plans described in this letter.
Douglas Scheidt

Catherine Dixon

January 28, 2000

Page 10

Second, the Bank's responsibilities in managing the Trust X Company Stock

Funds are analogous to the responsibilities for managing passive index funds which replicate the

S&P 500 by proportionately investing in each stock in that index. In this regard, the Staffhas

implicitly recognized that an index fund is "maintained" by the-bank that manages the fund for

purposes ofICA Section 3(c)(II) and Securities Act Section 3(a)(2). See Wells Fargo Bank

N.A., 1988 WL 234910 (S.E.C.) (Sept. 7, 1988) and Wells Fargo Bank N.A., 1975 WL 11203

(S.E.C.) (Nov. 14, 1975). The analogous responsibilities ofthe Bank in managing the Trust X

Company Stock Funds should be viewed as giving the Bank the "substantial investment responsibility" over Trust X Company Stock Funds necessary to rely on ICA Section 3(c)(II) and

Securities Act Section 3(a)(2).

Since the Bank here is the ultimate decision maker on all Company Stock Fund

investment decisions as described above, interpreting the ICA Section 3(c)(II) and Securities Act

Section 3(a)(2) "maintained by a bank" requirements as being satisfied in the case ofsuch a fund

is consistent with both Staff precedent and the public interest.

In light ofthe foregoing, we respectfully request that the Staffissue an interpretive

letter for the benefit of our client and the Bank confirming our interpretation that a collective

investment trust with respect to unrelated employers comprised ofseparate single stock funds that

are managed by a bank as described above is "maintained by a bank" for the purposes ofICA

Section 3(c)(II) and Securities Act Section 3(a)(2).

Sincerely yours,

1J1~.~~~ Maureen A. Donley-Hoopes .
Attac~~'ment A

Pre· May 28, 1999 Delphi Spinoff

GM 401 K Plans

Company Stock Investment Options:

1 - GM Classic

2-GMH

3 - EDS - Sell orders only

4 - Raytheon - Sell orders only

GM Affiliate (Including Delphi) 401 K Plans

Company Stock Investment Options:

1 - GM Classic

2-GMH

3 - EDS - Sell orders only

4 - Raytheon - Sell orders only

GM Savings Plan Master Trust

Company Stock Accounts

1 - GM Classic

2-GMH

3-EDS

4 - Raytheon
Attacl~..~"ent B

After May 28, 1999 Delphi Spinoff

GM Savings Master Trust

GM 401 K Plans

Company Stock Investment Options:

1 - GM Classic

2-GMH

3 - EDS - Sell orders only

4 - Raytheon - Sell orders only

5 - Delphi common - Sell orders only

GM Affiliate 401 K Plans

Company Stock Investment Options:

1 - GM Classic

2-GMH

3 - EDS - Sell orders only

4 - Raytheon - Sell orders only

5 - Delphi common - Sell orders only

Delphi 401 K Plans

Company Stock Investment Options:

1 - GM Classic - Sell orders

only

2 - GMH - Sell orders only

- 3 - EDS - Sell orders only

4 - Raytheon - Sell orders only

5 - Delphi common

Delphi Savings Master Trust

Trust X

Company Stock Funds

1 - GM Classic

2-GMH

3-EDS

4 - Raytheon

5 - Delphi common