Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Notices 6343

Rel. No. 7932; Exchange Act Rel. No. 43786; 

Investment Company Act Rel. No. 24816 (Jan. 2, 

2001) [66 FR 3734 (Jan. 16, 2001)].

2Management investment companies are defined 

in section 4(3) of the Investment Company Act as 

any investment company other than a face-amount 

certificate company or a unit investment trust, as 

those terms are defined in sections 4(1) and 4(2) of 

the Investment Company Act. See 15 U.S.C. 80a–

4.

CFR 270.30e-2] require registered unit 

investment trusts (‘‘UITs’’) that invest 

substantially all of their assets in 

securities of a management investment 

company 2 (‘‘fund’’) to send to 

shareholders at least semi-annually a 

report containing certain financial 

statements and other information. 

Specifically, rule 30e–2 requires that the 

report contain the financial statements 

and other information that rule 30e–1 

under the Act [17 CFR 270.30e–1] 

requires to be included in the report of 

the underlying fund for the same fiscal 

period. Rule 30e–1 requires that the 

underlying fund’s report contain, among 

other things, the financial statements 

and other information that is required to 

be included in such report by the fund’s 

registration form. Preparing and sending 

the above-described reports under rule 

30e–2 are collections of information 

under the Paperwork Reduction Act.

Rule 30e–2, however, permits, under 

certain conditions, delivery of a single 

shareholder report to investors who 

share an address (‘‘householding’’). The 

purpose of the householding provisions 

of the rule is to reduce the amount of 

duplicative reports delivered to 

investors sharing the same address. 

Specifically, rule 30e–2 permits 

householding of annual and semiannual reports by UITs to satisfy the 

delivery requirements of rule 30e–2 if, 

in addition to the other conditions set 

forth in the rule, the UIT has obtained 

from each applicable investor written or 

implied consent to the householding of 

shareholder reports at such address. The 

rule requires UITs that wish to 

household shareholder reports with 

implied consent to send a notice to each 

applicable investor stating that the 

investors in the household will receive 

one report in the future unless the 

investors provide contrary instructions. 

In addition, at least once a year, UITs 

relying on the rule for householding 

must explain to investors who have 

provided written or implied consent 

how they can revoke their consent. 

Preparing and sending the initial notice 

and the annual explanation of the right 

to revoke consent are collections of 

information under the Paperwork 

Reduction Act. 

The purpose of the requirement that 

UITs that invest substantially all of their 

assets in securities of a fund transmit to 

shareholders at least semi-annually 

reports containing financial statements 

and certain other information is to 

apprise current shareholders of the 

operational and financial condition of 

the UIT. Absent the requirement to 

disclose all material information in 

reports, investors would be unable to 

obtain accurate information upon which 

to base investment decisions and 

consumer confidence in the securities 

industry might be adversely affected. 

Requiring the submission of these 

reports to the Commission permits us to 

verify compliance with securities law 

requirements. 

The purpose of the notice and annual 

explanation requirements associated 

with the householding provisions of the 

rule is to ensure that investors who wish 

to receive individual copies of 

shareholder reports are able to do so. 

The Commission estimates that as of 

April 2003, approximately 733 UITs 

were subject to the provisions of rule 

30e–2. The Commission further 

estimates that the annual burden 

associated with rule 30e–2 is 121 hours 

for each UIT, including an estimated 20 

hours associated with the notice 

requirement for householding and an 

estimated 1 hour associated with the 

explanation of the right to revoke 

consent to householding, for a total of 

88,693 burden hours. 

The estimate of average burden hours 

is made solely for the purposes of the 

Paperwork Reduction Act, and is not 

derived from a comprehensive or even 

a representative survey or study of the 

costs of Commission rules and forms. 

In addition to the burden hours, the 

Commission estimates that the cost of 

contracting for outside services 

associated with complying with rule 

30e–2 is $12,000 per respondent (80 

hours times $150 per hour for 

independent auditor services), for a total 

of $8,796,000 ($12,000 per respondent 

times 733 respondents). 

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. 

Please direct general comments 

regarding the above information 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; and (ii) R. Corey 

Booth, Director/Chief Information 

Officer, Office of Information 

Technology, Securities and Exchange 

Commission, 450 Fifth Street, NW., 

Washington, DC 20549. Comments must 

be submitted to OMB within 30 days 

after this notice.

Dated: February 2, 2004. 

Margaret H. McFarland, 

Deputy Secretary.

[FR Doc. 04–2761 Filed 2–9–04; 8:45 am] 

BILLING CODE 8010–01–P

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

26346; 812–12610] 

FFTW Funds, Inc. et al.; Notice of 

Application 

February 4, 2004.

AGECNCY: Securities and Exchange 

Commission (‘‘Commission’’).

ACTION: Notice of an application under 

section 12(d)(1)(J) of the Investment 

Company Act of 1940 (‘‘Act’’) for an 

exemption from section 12(d)(1)(G)(i)(II) 

of the Act. 

SUMMARY OF APPLICATION: Applicants 

request an order to permit funds of 

funds relying on section 12(d)(1)(G) of 

the Act to invest in securities and other 

financial instruments.

APPLICANTS: FFTW Funds, Inc. (the 

‘‘Fund’’) and Fischer Francis Trees & 

Watts, Inc. (the ‘‘Manager’’).

FILING DATES: The application was filed 

on August 15, 2001, and amended on 

February 3, 2004.

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 March 1, 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 

5th Street, NW., Washington, DC 20549–

0609; Applicants, c/o Robin Meister, 

Chief Risk and Legal Officer, Fischer 

Francis Trees & Watts, Inc., 200 Park 

Ave., New York, NY 10166.

FOR FURTHER INFORMATION CONTACT:

Marilyn Mann, Senior Counsel, at (202) 

942–0582, or Mary Kay Frech, Branch 

6344 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Notices 

1These investments will not include shares of 

any registered investment companies that are not in 

the same group of investment companies as the 

Acquiring Portfolios.

2Applicants state that in the event an Underlying 

Fund is organized in a master-feeder structure, the 

Acquiring Portfolio would not invest in shares of 

the feeder fund, but in shares of the master 

portfolio. In all such cases, the master portfolio 

would be part of the same group of investment 

companies as the Acquiring Portfolio. Such master 

portfolio is included in the term Underlying Fund. 

All existing entities that currently intend to rely on 

the order are named as applicants. Any Acquiring 

Portfolio and any Underlying Fund that may rely 

on the order in the future will do so only in 

accordance with the terms and conditions of the 

application.

Chief, at (202) 942–0564 (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, 

450 5th Street, NW., Washington, DC 

20549–0102 (telephone (202) 942–8090). 

Applicants’ Representations 

1. The Fund is registered under the 

Act as an open-end management 

investment company and is organized as 

a Maryland corporation. The Fund 

consists of the following nine active 

portfolios (‘‘Portfolios’’): U.S. ShortTerm Portfolio, Limited Duration 

Portfolio, Mortgage-Backed Portfolio, 

Worldwide Portfolio, Worldwide Core 

Portfolio, International Portfolio, 

Emerging Markets Portfolio, U.S. 

Inflation-Indexed Portfolio, and Global 

Inflation-Indexed Hedged Portfolio. It is 

expected that Worldwide Portfolio, 

Worldwide Core Portfolio, International 

Portfolio and Limited Duration Portfolio 

(the ‘‘Acquiring Portfolios’’) would each 

acquire shares of one or more of the 

following Portfolios: U.S. Short-Term 

Portfolio, Emerging Markets Portfolio, 

Mortgage-Backed Portfolio, U.S. 

Inflation-Indexed Portfolio and Global 

Inflation-Indexed Hedged Portfolio (the 

‘‘Underlying Funds’’). The Acquiring 

Portfolios would also invest in certain 

debt and equity securities or other 

financial instruments (‘‘Other 

Securities’’).1

2. The Manager is registered as an 

investment adviser under the 

Investment Advisers Act of 1940, and is 

a wholly-owned subsidiary of Charter 

Atlantic Corporation. The Manager 

serves as investment adviser for each 

Portfolio. Applicants request that each 

registered open-end management 

investment company, or series thereof, 

that, currently or in the future, is part 

of the same ‘‘group of investment 

companies’’ as the Fund, as defined in 

section 12(d)(1)(G)(ii) of the Act, and is 

advised by the Manager or any entity 

controlling, controlled by or under 

common control with the Manager, be 

permitted to rely on the order (included 

in the terms ‘‘Acquiring Portfolios’’ and 

‘‘Underlying Funds’’). 

3. Applicants believe that the 

proposed structure will provide a more 

efficient way for each Acquiring 

Portfolio to allocate investment risk of 

portions of a particular index by 

investing a portion of its assets in an 

Underlying Fund that focuses on that 

asset class.2

Applicants’ Legal Analysis 

1. Section 12(d)(1)(A) of the Act 

provides that no registered investment 

company (‘‘acquiring company’’) may 

acquire securities of another investment 

company (‘‘acquired company’’) if such 

securities represent more than 3% of the 

acquired company’s outstanding voting 

stock or more than 5% of the acquiring 

company’s total assets, or if such 

securities, together with the securities of 

other 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 may sell its securities 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 cause more 

than 10% of the acquired company’s 

voting stock to be owned by investment 

companies. 

2. Section 12(d)(1)(G) of the Act 

provides that section 12(d)(1) will not 

apply to securities of an acquired 

company purchased by an acquiring 

company if: (i) the acquiring company 

and the acquired company are part of 

the same group of investment 

companies; (ii) the acquiring company 

holds only securities of acquired 

companies that are part of the same 

group of investment companies, 

government securities, and short-term 

paper; (iii) the aggregate sales loads and 

distribution-related fees of the acquiring 

company and the acquired company are 

not excessive under rules adopted 

pursuant to section 22(b) or section 

22(c) of the Act by a securities 

association registered under section 15A 

of the Securities Exchange Act of 1934 

or by the Commission; and (iv) the 

acquired company has a policy that 

prohibits it from acquiring securities of 

registered open-end management 

investment companies or registered unit 

investment trusts in reliance on section 

12(d)(1)(F) or (G). Applicants state that 

the proposed arrangement would 

comply with the provisions of section 

12(d)(1)(G), but for the fact that each 

Acquiring Portfolio may invest a portion 

of its assets directly in securities other 

than those specified in section 

12(d)(1)(G)(i)(II). 

3. Section 12(d)(1)(J) of the Act 

provides that the Commission may 

exempt persons or transactions from any 

provision of section 12(d)(1) if, and to 

the extent that, the exemption is 

consistent with the public interest and 

the protection of investors. Applicants 

request an order under section 

12(d)(1)(J) exempting them from section 

12(d)(1)(G)(i)(II). Applicants assert that 

permitting the Acquiring Portfolios to 

invest in Other Securities as described 

in the application would not raise any 

of the concerns that the requirements of 

section 12(d)(1)(G) were designed to 

address. 

Applicants’ Conditions 

Applicants agree that the order 

granting the requested relief will be 

subject to the following conditions: 

1. Before approving any advisory 

contract under section 15 of the Act, the 

board of directors of the Fund, with 

respect to an Acquiring Portfolio, 

including a majority of the directors 

who are not ‘‘interested persons’’ as 

defined in section 2(a)(19) of the Act, 

will find that advisory fees, if any, 

charged under the contract to the 

Acquiring Portfolio are based on 

services provided that are in addition to, 

rather than duplicative of, services 

provided pursuant to any Underlying 

Fund’s advisory contract. Such finding, 

and the basis upon which it was made, 

will be recorded fully in the minute 

books of the Acquiring Portfolio. 

2. Applicants will comply with all 

provisions of section 12(d)(1)(G), except 

for section 12(d)(1)(G)(i)(II) to the extent 

that it restricts any Acquiring Portfolio 

from investing in Other Securities as 

described in the application.

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Margaret H. McFarland, 

Deputy Secretary.

[FR Doc. 04–2762 Filed 2–9–04; 8:45 am] 

BILLING CODE 8010–01–P