58558 Federal Register / Vol. 69, No. 189 / Thursday, September 30, 2004 / Notices 

1Applicants request that any relief granted 

pursuant to the application also apply to any other 

company of which DBSI is or hereafter becomes an 

affiliated person (included in the term Applicants).

documents related to their participation 

in the Lost and Stolen Securities 

Program (‘‘Program’’) under Rule 17f–1. 

The following documents must be kept 

in an easily accessible place for three 

years, according to paragraph (g): (1) 

Copies or all reports of theft or loss 

(Form X–17F–1A) filed with the 

Commission’s designee: (2) all 

agreements between reporting 

institutions regarding registration in the 

Program or other aspects of Rule 17f–1; 

and (3) all confirmations or other 

information received from the 

Commission or its designee as a result 

of inquiry. 

Reporting institutions utilize these 

records and reports (a) to report missing, 

lost, stolen or counterfeit securities to 

the database, (b) to confirm inquiry of 

the database, and (c) to demonstrate 

compliance with Rule 17f–1. The 

Commission and the reporting 

institutions’ examining authorities 

utilize these records to monitor the 

incidence of thefts and losses incurred 

by reporting institutions and to 

determine compliance with Rule 17f–1. 

If such records were not retained by 

reporting institutions, compliance with 

Rule 17f–1 could not be monitored 

effectively. 

The Commission estimates that there 

are 25,714 reporting institutions 

(respondents) and, on average, each 

respondent would need to retain 33 

records annually, with each retention 

requiring approximately 1 minute (33 

minutes or .55 hours). The total 

estimated annual burden is 14,142.7 

hours (25,714 × .55 hours = 14,142.7). 

Assuming an average hourly cost for 

clerical work of $20.00, the average total 

yearly record retention cost for each 

respondent would be $11.00. Based on 

these estimates, the total annual cost for 

the estimated 25,714 reporting 

institutions would be approximately 

$282,854. 

Written comments are invited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information shall have practical utility; 

(b) the accuracy of the agency’s 

estimates of the burden of the proposed 

collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information to be collected; and 

(d) ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days of this 

publication. 

Please direct your written comments 

to R. Corey Booth, Director/Chief 

Information Officer, Office of 

Information Technology, Securities and 

Exchange Commission, 450 5th Street, 

NW., Washington, DC 20549.

Dated: September 23, 2004. 

Margaret H. McFarland, 

Deputy Secretary.

[FR Doc. E4–2415 Filed 9–29–04; 8:45 am] 

BILLING CODE 8010–01–P

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. IC–26620; 812–13124] 

Deutsche Investment Management 

Americas, Inc., et al.; Notice of 

Application and Temporary Order 

September 24, 2004.

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’).

ACTION: Temporary order and notice of 

application for a permanent order under 

section 9(c) of the Investment Company 

Act of 1940 (‘‘Act’’). 

SUMMARY OF APPLICATION: Applicants 

have received a temporary order 

exempting them from section 9(a) of the 

Act, with respect to an injunction 

entered against Deutsche Bank 

Securities, Inc. (‘‘DBSI’’) on September 

24, 2004 by the U.S. District Court for 

the Southern District of New York (the 

‘‘Federal Injunction’’), until the earlier 

of the date the Commission takes action 

on an application for a permanent order, 

or two years from the date of the Federal 

Injunction. Applicants have requested a 

permanent order.

APPLICANTS: DBSI, Deutsche Investment 

Management Americas, Inc., Deutsche 

Asset Management, Inc., Deutsche Asset 

Management International GMBH, 

Deutsche Asset Management Investment 

Services, Ltd., Investment Company 

Capital Corp., DB Investment Managers, 

Inc., Deutsche Investments Australia 

Limited, RREEF America, L.L.C., 

Deutsche Asset Management (Japan) 

Limited, Deutsche Asset Management 

(Asia) Limited, Deutsche Investment 

Trust Management Company Limited 

(collectively, the ‘‘Advisers’’), and 

Scudder Distributors, Inc. (‘‘Scudder’’) 

(together with the Advisers, the 

‘‘Applicants’’).1

FILING DATES: The application was filed 

on September 3, 2004. Applicants have 

agreed to file an amendment to the 

application during the notice period, the 

substance of which is reflected in this 

notice. Applicants also have agreed to 

file additional amendments to the 

application reflecting the issuance of 

each State Injunction (as defined 

below).

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 October 19, 2004, and 

should be accompanied by proof of 

service on 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, Commission, 450 

Fifth Street, NW., Washington, DC 

20549–0609. Applicants: c/o Daniel O. 

Hirsch, Esq., Deutsche Asset 

Management/Scudder Investments, 1 

South Street, Baltimore, MD 21202.

FOR FURTHER INFORMATION, CONTACT:

Courtney S. Thornton, Senior Counsel, 

at (202) 942–0699, or Annette M. 

Capretta, Branch Chief, at 202–942–

0564 (Division of Investment 

Management, Office of Investment 

Company Regulation).

SUPPLEMENTARY INFORMATION: The 

following is a temporary order and a 

summary of the application. The 

complete application may be obtained 

for a fee at the Commission’s Public 

Reference Branch, 450 Fifth Street, NW., 

Washington, DC 20549–0102 (telephone 

202–942–8090). 

Applicants’ Representations 

1. Each of the Applicants is an 

indirect, wholly owned subsidiary of 

Deutsche Bank AG, a global financial 

services company that provides 

investment management, mutual fund, 

retail, private and commercial banking, 

investment banking, and insurance 

services. Collectively, the Advisers 

serve as investment advisers or 

subadvisers to approximately 200 

registered investment companies or 

series thereof (‘‘Funds’’). Scudder acts 

as the principal underwriter for all of 

the Funds. 

2. On September 24, 2004, the U.S. 

District Court for the Southern District 

of New York entered the Federal 

Injunction against DBSI in a matter 

Federal Register / Vol. 69, No. 189 / Thursday, September 30, 2004 / Notices 58559

2Securities and Exchange Commission v. 

Deutsche Bank Securities, Inc., 04 CV 06909 (WHP) 

(S.D.N.Y., filed Aug. 26, 2004).

3The Complaint also refers to general practices 

regarding the relationship between the Investment 

Banking Department and Research Division of 

DBSI. It is possible that one or more current or 

former personnel of the Applicants who is or was 

involved in providing advisory, subadvisory or 

underwriting services to the Funds was at some 

time involved in investment banking or research 

activities.

4Applicants state that they will advise the Boards 

of any State Injunctions that are issued.

brought by the Commission.2 The 

Commission alleged in the complaint 

(‘‘Complaint’’) that DBSI violated 

section 17(b) of the Securities Act of 

1933 (‘‘Securities Act’’) and certain 

Conduct Rules of the National 

Association of Securities Dealers 

(‘‘NASD’’) and Rules of the New York 

Stock Exchange (‘‘NYSE’’) (the NASD 

Conduct Rules and NYSE Rules 

together, the ‘‘Exchange Rules’’) by 

engaging in acts and practices that 

created or maintained inappropriate 

influence by DBSI’s investment banking 

business (the ‘‘Investment Banking 

Department’’) over the research analysts 

in DBSI’s research department (the 

‘‘Research Division’’). The Commission 

also alleged in the Complaint that DBSI 

violated section 17(b) of the Securities 

Exchange Act of 1934 (‘‘Exchange Act’’) 

by failing to timely produce e-mail that 

the Commission had sought to examine 

during its investigation of DBSI’s 

research and investment banking 

practices. The Federal Injunction 

enjoined DBSI directly or through its 

officers, directors, agents and 

employees, from violating section 17(b) 

of the Securities Act, the Exchange 

Rules cited in the Complaint, and 

section 17(b) of the Exchange Act. 

Without admitting or denying the 

allegations in the Complaint, DBSI 

consented to the entry of the Federal 

Injunction as well as the payment of 

disgorgement and penalties and other 

equitable relief, including undertakings 

by DBSI to adopt and implement 

policies and procedures relating to 

certain research activities. Applicants 

state that DBSI expects to enter into 

settlement agreements relating to the 

activities referred to in the Complaint 

with certain state and territorial 

agencies, which may result in an 

injunction by a court of competent 

jurisdiction that is based on the same 

conduct and the same facts as the 

Complaint (each, a ‘‘State Injunction,’’

and, together with the Federal 

Injunction, the ‘‘Injunctions’’). 

Applicants request that this application 

cover any disqualifications of the 

Applicants under Section 9(a) of the Act 

resulting from the Injunctions.

Applicants’ Legal Analysis 

1. Section 9(a)(2) of the Act, in 

relevant part, prohibits a person who 

has been enjoined from engaging in or 

continuing any conduct or practice in 

connection with the purchase or sale of 

a security from acting, among other 

things, as an investment adviser or 

depositor of any registered investment 

company or a principal underwriter for 

any registered open-end investment 

company, registered UIT or registered 

face-amount certificate company. 

Section 9(a)(3) of the Act makes the 

prohibition in section 9(a)(2) applicable 

to a company, any affiliated person of 

which has been disqualified under the 

provisions of section 9(a)(2). Section 

2(a)(3) of the Act defines ‘‘affiliated 

person’’ to include any person directly 

or indirectly controlling, controlled by, 

or under common control with, the 

other person. Applicants state that DBSI 

is an affiliated person of each of the 

other Applicants within the meaning of 

section 2(a)(3) of the Act. Applicants 

further state that the entry of the 

Injunctions would result in Applicants 

being subject to the disqualification 

provisions of section 9(a) of the Act. 

2. Section 9(c) of the Act provides that 

the Commission shall grant an 

application for exemption from the 

disqualification provisions of section 

9(a) if it is established that these 

provisions, as applied to Applicants, are 

unduly or disproportionately severe or 

that the Applicants’ conduct has been 

such as not to make it against the public 

interest or the protection of investors to 

grant the application. Applicants have 

filed an application pursuant to section 

9(c) seeking a temporary and permanent 

order exempting them from the 

disqualification provisions of section 

9(a) of the Act. 

3. Applicants believe they meet the 

standard for exemption specified in 

section 9(c). Applicants state that the 

prohibitions of section 9(a) as applied to 

them would be unduly and 

disproportionately severe and that the 

conduct of Applicants has been such as 

not to make it against the public interest 

or the protection of investors to grant 

the exemption from section 9(a). 

4. Applicants state that the conduct 

giving rise to the Injunctions did not 

involve any of the Applicants acting in 

the capacity of investment adviser, 

subadviser, depositor, or principal 

underwriter for a Fund. Applicants state 

that the Complaint did not expressly 

reference the conduct of any current or 

former employee of any of the 

Applicants who is or was involved in 

providing advisory, subadvisory or 

underwriting services to the Funds 

advised or underwritten by Applicants.3

While the Advisers’ portfolio managers 

had access to research reports issued by 

the Research Division, there is no 

indication that the portfolio managers 

relied on these research reports more 

than any other data that would have 

been considered by the portfolio 

managers in making investment 

decisions for the Funds. Although some 

of the Funds held securities in their 

portfolios at the time that DBSI issued 

research reports concerning the issuers 

of such securities, as far as the Advisers 

are aware, none of the officers, portfolio 

managers, or any other investment 

personnel employed by the Advisers 

had any knowledge of any non-public 

information relating to, or had any 

involvement in, the conduct underlying 

the Final Judgment. In addition, each of 

the Applicants that serve as an 

investment adviser or subadviser to 

Funds has adopted policies regarding 

information barriers (the ‘‘Policies’’) 

designed to protect the Funds from 

certain conflicts of interest that may 

arise between portfolio managers and 

other employees of DBSI. The Policies, 

which were in effect at the time of the 

conduct described in the Complaint, 

restrict communications between 

portfolio managers and certain other 

employees of DBSI.

5. The Applicants will distribute 

written materials, including an offer to 

meet in person to discuss the materials, 

to the board of directors or trustees of 

each Fund (each, a ‘‘Board’’), including 

the directors who are not ‘‘interested 

persons,’’ as defined in section 2(a)(19) 

of the Act, of the Fund, and their 

independent legal counsel, if any, 

regarding the Federal Injunction, any 

impact on the Funds, and this 

application.4 The Applicants will 

provide the Boards with all information 

concerning the Injunctions and this 

application that is necessary for the 

Funds to fulfill their disclosure and 

other obligations under the federal 

securities laws.

6. Applicants state that the inability to 

continue providing advisory services to 

the Funds and the inability to continue 

serving as principal underwriter to the 

Funds would result in potentially severe 

hardships for the Funds and their 

shareholders. Applicants also assert 

that, if they were barred from providing 

services to the Funds, the effect on their 

businesses and employees would be 

severe. The Applicants state that they 

have committed substantial resources to 

establish an expertise in advising and 

58560 Federal Register / Vol. 69, No. 189 / Thursday, September 30, 2004 / Notices 

distributing the Funds. Bankers Trust 

Company and its affiliates previously 

received an exemption under section 

9(c) as the result of conduct that 

triggered section 9(a), as described in 

greater detail in the application. 

Applicants’ Condition 

Applicants agree that any order 

granting the requested relief will be 

subject to the following condition:

Any temporary exemption granted 

pursuant to the application shall be without 

prejudice to, and shall not limit the 

Commission’s rights in any manner with 

respect to, any Commission investigation of, 

or administrative proceedings involving or 

against, Applicants, including without 

limitation, the consideration by the 

Commission of a permanent exemption from 

section 9(a) of the Act requested pursuant to 

the application or the revocation or removal 

of any temporary exemptions granted under 

the Act in connection with the application.

Temporary Order 

The Commission has considered the 

matter and finds that Applicants have 

made the necessary showing to justify 

granting a temporary exemption. 

Accordingly, 

It is hereby ordered, pursuant to 

section 9(c) of the Act, that the 

Applicants are granted a temporary 

exemption from the provisions of 

section 9(a), effective forthwith, solely 

with respect to the Injunctions, subject 

to the condition in the application, until 

the date the Commission takes final 

action on their application for a 

permanent order or, if earlier, 

September 24, 2006.

By the Commission. 

Margaret H. McFarland, 

Deputy Secretary.

[FR Doc. 04–21880 Filed 9–29–04; 8:45 am] 

BILLING CODE 8010–01–P

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. IC–26619] 

Notice of Applications for 

Deregistration Under Section 8(f) of the 

Investment Company Act of 1940 

September 24, 2004. 

The following is a notice of 

applications for deregistration under 

section 8(f) of the Investment Company 

Act of 1940 for the month of September, 

2004. A copy of each application may be 

obtained for a fee at the SEC’s Public 

Reference Branch, 450 Fifth St., NW., 

Washington, DC 20549–0102 (tel. 202–

942–8090). 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 

October 19, 2004, 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, SEC, 450 Fifth 

Street, NW., Washington, DC 20549–

0609. 

For Further Information Contact:

Diane L. Titus at (202) 942–0564, SEC, 

Division of Investment Management, 

Office of Investment Company 

Regulation, 450 Fifth Street, NW., 

Washington, DC 20549–0504. 

AXP Progressive Series, Inc. 

[File No. 811–1714] 

Summary: Applicant seeks an order 

declaring that it has ceased to be an 

investment company. On June 25, 2004, 

applicant transferred its assets to a 

corresponding series of AXP Partners 

Series, Inc., based on net asset value. 

Expenses of $38,308 incurred in 

connection with the reorganization were 

paid by American Express Financial 

Corporation, applicant’s investment 

adviser. 

Filing Date: The application was filed 

on September 2, 2004. 

Applicant’s Address: 901 Marquette 

Ave. S, Suite 2810, Minneapolis, MN 

55402–3268. 

Merrill Lynch International Equity 

Fund 

[File No. 811–6521] 

Summary: Applicant seeks an order 

declaring that it has ceased to be an 

investment company. On August 23, 

2004, applicant transferred its assets to 

Merrill Lynch International Value Fund, 

a series of Mercury Funds II, based on 

net asset value. Expenses of $214,168 

incurred in connection with the 

reorganization were paid by the 

acquiring fund. 

Filing Date: The application was filed 

on September 10, 2004. 

Applicant’s Address: Merrill Lynch 

Investment Managers, L.P., 800 

Scudders Mill Rd., Plainsboro, NJ 

08536. 

Merrill Lynch Dragon Fund, Inc. 

[File No. 811–6581] 

Summary: Applicant seeks an order 

declaring that it has ceased to be an 

investment company. On June 21, 2004, 

applicant transferred its assets to Merrill 

Lynch Developing Capital Markets 

Fund, Inc., based on net asset value. 

Expenses of $208,317 incurred in 

connection with the reorganization were 

paid by the acquiring fund. 

Filing Dates: The application was 

filed on August 2, 2004, and amended 

on September 10, 2004. 

Applicant’s Address: Merrill Lynch 

Investment Managers, L.P., 800 

Scudders Mill Rd., Plainsboro, NJ 

08536. 

Eaton Vance Municipal Income Trust II 

(Formerly Eaton Vance Municipal 

Income Fund) 

[File No. 811–21234] 

Summary: Applicant, a closed-end 

investment company, seeks an order 

declaring that it has ceased to be an 

investment company. Applicant has 

never made a public offering of its 

securities and does not propose to make 

a public offering or engage in business 

of any kind. 

Filing Dates: The application was 

filed on August 10, 2004, and amended 

on September 8, 2004. 

Applicant’s Address: The Eaton 

Vance Building, 255 State St., Boston, 

MA 02109. 

Investors First Fund, Inc. 

[File No. 811–4981] 

Progressive Return Fund, Inc. 

[File No. 811–5891] 

Summary: Each applicant, a closedend investment company, seeks an 

order declaring that it has ceased to be 

an investment company. On June 25, 

2004, each applicant transferred its 

assets to Cornerstone Strategic Value 

Fund, Inc., based on net asset value. 

Expenses of $297,037 and $158,896, 

respectively, incurred in connection 

with the reorganizations were paid by 

each applicant and the acquiring fund. 

Filing Dates: The applications were 

filed on July 27, 2004, and amended on 

September 10, 2004. 

Applicants’ Address: 383 Madison 

Ave., New York, NY 10179. 

Mutual Fund Variable Annuity Trust 

[File No. 811–8630] 

Summary: Applicant seeks an order 

declaring that it has ceased to be an 

investment company. On December 5, 

2003, each portfolio of the Applicant 

transferred its assets to the 

corresponding portfolio of SunAmerica 

Series Trust, based on net asset value. 

Aggregate expenses of approximately 

$356,608 incurred in connection with 

the reorganization and merger will be