Federal Register / Vol. 65, No. 110 / Wednesday, June 7, 2000 / Notices 36177

1Each of the Acquired Funds ceased offering

shares to new investors and terminated its .25%

12b–1 plan on October 4, 1999.

SECURITIES AND EXCHANGE

COMMISSION

[Investment Company Act Release No.

24487; 812–12024]

Strategist Growth Fund, Inc., et al.;

Notice of Application

June 1, 2000.

AGENCY: Securities and Exchange

Commission (‘‘Commission’’).

ACTION: Notice of an application under

section 17(b) of the Investment

Company Act of 1940 (the ‘‘Act’’) for an

exemption from section 17(a) of the Act.

SUMMARY OF APPLICATION: Applicants

request an order to permit certain series

of a registered open-end management

investment company to acquire all of

the assets and stated liabilities of certain

series of another registered open-end

management investment company.

Because of certain affiliations,

applicants may not rely on rule 17a–8

under the Act.

Applicants: Strategist Growth Fund,

Inc. on behalf of its underlying series:

Strategist Growth Fund, Strategist

Growth Trends Fund and Strategist

Special Growth Fund; Strategist Growth

and Income Fund, Inc. on behalf of its

underlying series: Strategist Balanced

Fund, Strategist Equity Fund, Strategist

Equity Income Fund and Strategist Total

Return Fund; Strategist Income Fund,

Inc. on behalf of its underlying series:

Strategist Government Income Fund,

Strategist High Yield Fund and

Strategist Quality Income Fund;

Strategist Tax-Fee Income Fund, Inc. on

behalf of its underlying series, Strategist

Tax-Free High Yield Fund; Strategist

World Fund, Inc. on behalf of its

underlying series; Strategist Emerging

Markets Fund, Strategist World Growth

Fund, Strategist World Income Fund,

and Strategist World Technologies Fund

(Each series individually an ‘‘Acquired

Fund’’ and collectively, the ‘‘Acquired

Funds’’); AXP Extra Income Fund, Inc.;

AXP Federal Income Fund, Inc.; AXP

Global Series, Inc. on behalf of its

underlying series: AXP Emerging

Markets Fund, AXP Global Bond Fund,

AXP Global Growth Fund, and AXP

Innovations Fund; AXP Growth Series,

Inc. on behalf of its underlying series;

AXP Growth Fund and AXP Research

Opportunities Fund; AXP High Yield

Tax-Exempt Fund, Inc.; AXP Investment

Series, Inc. on behalf of its underlying

series; AXP Diversified Equity Income

Fund and AXP Mutual; AXP Managed

Series, Inc. on behalf of its underlying

series, AXP Managed Allocation Fund;

AXP New Dimensions Fund, Inc.; AXP

Stock Fund, Inc.; AXP Selective Fund,

Inc. (each series individually an

‘‘Acquiring Fund’’ and collectively, the

‘‘Acquiring Funds’’) (the Acquired

Funds and the Acquiring Funds

collectively, the ‘‘Funds’’); and

American Express Financial

Corporation (‘‘AEFC’’).

Filing Dates: The application was

filed on March 14, 2000 and amended

on May 5, 2000. Applicants have agreed

to file an amendment during the notice

period, the substance of which is

reflected in this notice.

Hearing or Notification of Hearing: An

order granting the requested relief will

be issued unless the Commission orders

a hearing. Interested persons may

request a hearing by writing to the

Commissions’s Secretary and serving

applicants with a copy of the request,

personally or by mail. Hearing request

should be received by the Commission

by 5:30 p.m. on June 26, 2000 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 may request

notification of a hearing by writing to

the Commission’s Secretary.

ADDRESSES:

Secretary, Commission, 450 5th Street

NW, Washington, DC 20549–0609

Acquired Funds and AEFC, c/o Eileen J.

Newhouse, American Express

Financial Corporation, IDS Tower 10,

T27/52, Minneapolis, MN 55440–

0010

Acquiring Funds, c/o Leslie L. Ogg,

American Express Funds, 901

Marquette Avenue South, Suite 2810,

Minneapolis, MN 55402–3268.

FOR FURTHER INFORMATION CONTACT:

Deepak T. Pai, Senior Counsel, at (202)

942–0574; or Nadya B. Roytblat,

Assistant Director, 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 (tel. 202–942–8090).

Applicants’ Representations

1. The Funds are registered under the

Act as open-end management

investment companies. Each of the

Funds is a feeder fund in a master/

feeder structure. Each Acquired Fund

and its corresponding Acquiring Fund

invest in the same master fund (the

‘‘Master Funds’’). Each Master Fund is

registered under the Act as an open-end

management investment company.

2. AEFC, a Delaware corporation, is

registered under the Investment

Advisers Act of 1940 and serves as the

investment for each Master Fund and as

the administrator for each Fund. AEFC

is a wholly-owned subsidiary of the

American Express Company. Currently,

AEFC or American Express Company

owns, for its own account, more than

25% of the outstanding shares of each

Acquired Fund and one of the

Acquiring Funds.

3. On March 8, and 9, 2000 and March

10, 2000, the boards of directors of the

Acquiring Funds and the Acquired

Funds (the ‘‘Boards’’), respectively,

including all of the directors who are

not interested persons of the Funds, as

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

(‘‘Independent Directors’’) approved an

Agreement and Plan or Reorganization

(the ‘‘Agreement’’). Under the

Agreement, each Acquiring Fund will

acquire all of the assets and assume the

stated liabilities of its corresponding

Acquired Fund in exchange for class A

shares of the Acquiring Fund (the

‘‘Reorganiation’’). Pursuant to the

Agreement, each shareholder of an

Acquired Fund will receive class A

Shares of the corresponding Acquiring

Fund having an aggregate net asset

value equal to the aggregate net asset

value of the Acquired Fund shares held

by that shareholder, determined as of

the close of regular trading on the New

York Stock Exchange on the day of the

closing, which is expected to be on or

about July 14, 2000 (‘‘Closing Date’’).

The valuation will be made in

accordance with the procedure set forth

in the then-current prospectus and

statement of additional information for

the Funds. Or or as soon as practicable

after the Closing Date, the class A shares

of the Acquiring Fund received by the

Acquired Fund will be distributed pro

rata to the shareholders of the Acquired

Fund and the Acquired Fund will be

liquidated.

4. Each of the Acquired Funds has

investment objectives, policies, and

restrictions that are identical to those of

its corresponding Acquiring Fund and

to those of its Master Fund. The

Acquired Funds have only one class of

shares and are sold without a sales

charge.1 Class A shares of the Acquiring

Funds are sold with a 5% front-end

sales charge and a .25% 12b–1 fee. No

sales charge will be assessed in

connection with the Reorganization.

36178 Federal Register / Vol. 65, No. 110 / Wednesday, June 7, 2000 / Notices

AEFC will pay the expenses of the

Reorganization.

5. The Boards, including a majority of

the Independent Directors, determined

that participation in the Reorganization

is in the best interests of each Fund, and

that the interests of existing

shareholders of each Fund will not be

diluted as a result of the Reorganization.

In assessing the Reorganization, the

Boards considered a number of factors,

including: (a) The terms and conditions

of the Reorganization; (b) the tax-free

nature of the Reorganization; (c) the

identical investment objectives,

policies, and restrictions of the

Acquired Funds and the Acquiring

Funds; (d) that the shareholders of the

Acquired Funds will be able to make

future purchases of shares of the

Acquiring Funds on a no-load basis; (e)

that the expense ratio for each

Acquiring Fund will be lower than the

expense ratio of each Acquired Fund;

and (f) the costs of the Reorganization

will be borne by AEFC.

6. The Reorganization is subject to a

number of conditions precedent,

including that: (a) The shareholders of

the Acquired Funds will have approved

the Agreement; (b) the Funds will have

received an opinion of tax counsel that

the proposed Reorganization will be taxfree for the Funds and their

shareholders; (c) applicants will have

received from the Commission any

exemption necessary to carry out the

Reorganization; and (d) a registration

statement on Form N–14 will have been

filed with the Commission and declared

effective for each of the Acquired

Funds. The Agreement and the

Reorganization may be terminated and

abandoned by resolutions of the Boards

at any time prior to the Closing Date.

The Agreement may be terminated in

the event that a material condition is not

fulfilled, a material covenant is not

fulfilled, or there is a material breach of

the Agreement. Applicants agree not to

make any material changes to the

Agreement without prior Commission

approval.

7. A prospectus/proxy statement was

filed with the Commission on March 13,

2000 and was mailed to the Acquired

Funds shareholders the week of April

17, 2000. The shareholders of the

Acquired Funds considered and

approved the Agreement on May 9,

2000.

Applicants’ Legal Analysis

1. Section 17(a) of the Act generally

prohibits an affiliated person of a

registered investment company, or an

affiliated person of such a person, acting

as principal, from selling any security

to, or purchasing any security from, the

company. Section 2(a)(3) of the Act

defines an ‘‘affiliated person’’ of another

person to include: (a) Any person

directly or indirectly owning,

controlling, or holding with power to

vote 5% or more of the other person; (b)

any person 5% or more of whose

securities are directly or indirectly or

indirectly owned, controlled, or held

with power to vote by the other person;

(c) any person directly or indirectly

controlling, controlled by, or under

common control with the other person;

and (d) if the other person is an

investment company, any investment

adviser of that company. Applicants

state that the Funds may be deemed

affiliated persons and thus the

Reorganization may be prohibited by

section 17(a).

2. Rule 17a–8 under the Act exempts

from the prohibitions of section 17(a)

mergers, considations, purchases or

sales of substantially all of the assets of

registered investment companies that

are affiliated persons, or affiliated

persons of an affiliated person, solely by

reason of having a common investment

adviser, common directors, and/or

common officers, provided that certain

conditions set forth in the rule are

satisfied. Applicants state that they may

not rely on rule 17a–8 because the

Funds may be deemed to be affiliated

for reasons other than those set forth in

the rule. Applicants state that AEFC or

American Express Company owns more

than 25% of the outstanding shares of

each of the Acquired Funds and one of

the Acquiring Funds and each of these

Funds is an affiliated person of AEFC.

AEFC is an affiliated person of the

Funds because of its role as investment

adviser to the Master Funds. Thus, each

of the Acquired funds might be deemed

to be an affiliated person of an affiliated

person of an Acquiring Fund, other than

by virtue of a common investment

adviser.

3. Section 17(b) of the Act provides,

in relevant part, that the Commission

may exempt a transaction from the

provisions of section 17(a) if the

evidence establishes that the terms of

the proposed transaction, including the

consideration to be paid or received, are

reasonable and fair and do not involve

overreaching on the part of any person

concerned, and that the proposed

transaction is consistent with the policy

of each registered investment company

concerned and with the general

purposes of the Act.

4. Applicants request an order under

section 17(b) of the Act exemption them

from section 17(a) of the Act to the

extent necessary to permit applicants to

complete the proposed Reorganization.

Applicants submit that the

Reorganization satisfies the standards of

section 17(b) of the Act. Applicants state

that the terms of the proposed

Reorganization are fair and reasonable

and do not involve overreaching and

that the Funds have identical

investment objectives and policies.

Applicants also state that the Boards,

including a majority of the Independent

Directors, have found that participation

in the Reorganization is in the best

interests of each Fund, and that the

interests of the existing shareholders

will not be diluted as a result of the

Reorganization. In addition, applicants

state the Reorganization will be based

on the Funds’ relative net asset values.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–14279 Filed 6–6–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–24485; File 812–11666]

Nationwide Life Insurance Company, et

al.

May 31, 2000.

AGENCY: The Securities and Exchange

Commission (the ‘‘Commission’’).

ACTION: Notice of Application for an

Order of Approval pursuant to Section

26(b) of the Investment Company Act of

1940 (the ‘‘1940 Act’’).

Summary of the Applicant:

Applicants seek an Order approving the

proposed substitution of the American

Century VP Balanced Portfolio (‘‘VP

Balanced’’), a series fund of American

Century Variable Portfolios, Inc.

(‘‘ACVP, Inc.’’), for another fund of

ACVP, Inc., the American Century VP

Advantage Portfolio (‘‘VP Advantage’’),

currently held in the separate accounts.

Applicants: Nationwide Life

Insurance Company (‘‘NWL’’) and

Nationwide Life and Annuity Insurance

Company (‘‘NWLAIC’’) (collectively the

‘‘Companies’’); Nationwide Multi-Flex

Variable Account, Nationwide VA

Separate Account-A, Nationwide

Variable Account-5, Nationwide VL

Separate Account-A, Nationwide VLI

Separate Account-3 (collectively the

‘‘Separate Accounts’’); and Nationwide

Advisory Services, Inc. (NAS) (all

collectively the ‘‘Applicants’’).

Filing Date: The application was filed

on June 18, 1999, and was amended on

March 30, 2000.

Hearing or Notification of Hearing: An

Order granting the Application will be