27340 Federal Register / Vol. 72, No. 93 / Tuesday, May 15, 2007 / Notices 

1All entities that currently intend to rely on the 

requested order are named as applicants and any 

other entity that relies on the order in the future 

will comply with the terms and conditions of the 

application. Applicants request that the relief also 

apply to any other existing or future registered 

open-end management investment company that is 

part of the same group of investment companies, as 

defined in section 12(d)(1)(G) of the Act, as the 

Investment Companies (included in the term 

‘‘Investment Companies’’). Each series of an 

Investment Company is referred to as ‘‘Fund’’ and 

collectively as ‘‘Funds.’’

4281 apply to valuation dates occurring 

in June 2007. 

FOR FURTHER INFORMATION CONTACT: 

Catherine B. Klion, Manager, Regulatory 

and Policy Division, Legislative and 

Regulatory Department, Pension Benefit 

Guaranty Corporation, 1200 K Street, 

NW., Washington, DC 20005, 202–326–

4024. (TTY/TDD users may call the 

Federal relay service toll-free at 1–800–

877–8339 and ask to be connected to 

202–326–4024.) 

SUPPLEMENTARY INFORMATION:

Variable-Rate Premiums 

Section 4006(a)(3)(E)(iii)(II) of the 

Employee Retirement Income Security 

Act of 1974 (ERISA) and § 4006.4(b)(1) 

of the PBGC’s regulation on Premium 

Rates (29 CFR part 4006) prescribe use 

of an assumed interest rate (the 

‘‘required interest rate’’) in determining 

a single-employer plan’s variable-rate 

premium. Pursuant to the Pension 

Protection Act of 2006, for premium 

payment years beginning in 2006 or 

2007, the required interest rate is the 

‘‘applicable percentage’’ of the annual 

rate of interest determined by the 

Secretary of the Treasury on amounts 

invested conservatively in long-term 

investment grade corporate bonds for 

the month preceding the beginning of 

the plan year for which premiums are 

being paid (the ‘‘premium payment 

year’’). 

On February 2, 2007 (at 72 FR 4955), 

the Internal Revenue Service (IRS) 

published final regulations containing 

updated mortality tables for determining 

current liability under section 412(l)(7) 

of the Code and section 302(d)(7) of 

ERISA for plan years beginning on or 

after January 1, 2007. As a result, in 

accordance with section 

4006(a)(3)(E)(iii)(II) of ERISA, the 

‘‘applicable percentage’’ to be used in 

determining the required interest rate 

for plan years beginning in 2007 is 100 

percent. 

The required interest rate to be used 

in determining variable-rate premiums 

for premium payment years beginning 

in May 2007 is 5.98 percent (i.e., 100 

percent of the 5.98 percent composite 

corporate bond rate for April 2007 as 

determined by the Treasury). 

The following table lists the required 

interest rates to be used in determining 

variable-rate premiums for premium 

payment years beginning between June 

2006 and May 2007. 

For premium payment years 

beginning in: 

The required 

interest rate is: 

June 2006 ............................. 5.35 

July 2006 .............................. 5.36 

August 2006 ......................... 5.36 

For premium payment years 

beginning in: 

The required 

interest rate is: 

September 2006 ................... 5.19 

October 2006 ........................ 5.06 

November 2006 .................... 5.05 

December 2006 .................... 4.90 

January 2007 ........................ 5.75 

February 2007 ...................... 5.89 

March 2007 ........................... 5.85 

April 2007 ............................. 5.84 

May 2007 .............................. 5.98 

Multiemployer Plan Valuations 

Following Mass Withdrawal 

The PBGC’s regulation on Duties of 

Plan Sponsor Following Mass 

Withdrawal (29 CFR part 4281) 

prescribes the use of interest 

assumptions under the PBGC’s 

regulation on Allocation of Assets in 

Single-Employer Plans (29 CFR part 

4044). The interest assumptions 

applicable to valuation dates in June 

2007 under part 4044 are contained in 

an amendment to part 4044 published 

elsewhere in today’s Federal Register. 

Tables showing the assumptions 

applicable to prior periods are codified 

in appendix B to 29 CFR part 4044. 

Issued in Washington, DC, on this 10th day 

of May 2007. 

Vincent K. Snowbarger, 

Interim Director, Pension Benefit Guaranty 

Corporation. 

[FR Doc. E7–9342 Filed 5–14–07; 8:45 am] 

BILLING CODE 7709–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

27820; 812–13304] 

Van Eck Worldwide Insurance Trust, et 

al.; Notice of Application 

May 9, 2007. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of application for an 

order under sections 6(c) and 17(b) of 

the Act for an exemption from section 

17(a) of the Investment Company Act of 

1940 (‘‘Act’’) and under section 

12(d)(1)(J) of the Act for an exemption 

from sections 12(d)(1)(A) and (B). 

Summary of the Application: The 

order would permit certain registered 

open-end management investment 

companies to acquire shares of other 

registered open-end management 

investment companies and unit 

investment trusts (‘‘UITs’’) that are 

within and outside the same group of 

investment companies. 

Applicants: Van Eck Worldwide 

Insurance Trust (‘‘WWIT’’), Van Eck 

Funds (‘‘Van Eck Funds’’) and Van Eck 

Funds, Inc. (‘‘Van Eck Funds II’’) 

(together, the ‘‘Investment Companies’’) 

and Van Eck Associates Corporation 

(‘‘Adviser’’).1

DATES: Filing Dates: The application was 

filed on June 16, 2006, and amended on 

May 3, 2007. 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 May 

31, 2007, 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, 100 

F Street, NE., Washington, DC 20549–

9303. Applicants: Joseph McBrien, Esq., 

Van Eck Associates Corporation, 99 Park 

Avenue, New York, New York 10016. 

FOR FURTHER INFORMATION CONTACT: 

Emerson S. Davis, Sr., Senior Counsel, 

at (202) 551–6868, or Nadya B. Roytblat, 

Assistant Director, at (202) 551–6821 

(Office of Investment Company 

Regulation, Division of Investment 

Management). 

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 Desk, 

100 F Street, NE., Washington, DC 

20549–0102 (telephone (202) 551–5850). 

Applicants’ Representations 

1. WWIT is a Massachusetts business 

trust and is registered under the Act as 

an open-end management investment 

company. WWIT currently consists of 

five Funds, each with its own 

investment objective and policies. 

Shares of each WWIT Fund are 

currently offered and sold through 


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registered separate accounts of 

insurance companies that are not 

affiliates of the Adviser (‘‘Registered 

Separate Accounts’’) and unregistered 

separate accounts that are not affiliates 

of the Adviser (‘‘Unregistered Separate 

Accounts,’’ and together with the 

Registered Separate Accounts, the 

‘‘Separate Accounts’’). 

2. Van Eck Funds is a Massachusetts 

business trust and is registered under 

the Act as an open-end management 

investment company. Van Eck Funds 

currently consists of three Funds, each 

with its own investment objective and 

policies. The shares of these Funds are 

offered and sold to retail and 

institutional investors and are not 

offered through Separate Accounts. Van 

Eck Funds II is a Maryland corporation 

and is registered under the Act as an 

open-end management investment 

company. It currently consists of one 

Fund, the shares of which are offered 

and sold to retail and institutional 

investors and are not offered through 

Separate Accounts. The Adviser is a 

Delaware corporation and is registered 

as an investment adviser under the 

Investment Advisers Act of 1940. Each 

investment adviser to a Fund of Funds 

that meets the definition of section 

2(a)(20)(A) of the Act is referred to as a 

‘‘Fund of Funds Adviser.’’ Any 

investment adviser to a Fund of Funds 

that meets the definition of section 

2(a)(20)(B) of the Act is referred to as a 

‘‘Fund of Funds Sub-Adviser.’’

3. Applicants request relief to permit 

certain Funds (each such Fund, a ‘‘Fund 

of Funds’’) to invest in: (a) other Funds 

(‘‘Affiliated Underlying Funds’’), and (b) 

registered open-end management 

investment companies and UITs that are 

not part of the same ‘‘group of 

investment companies’’ (as defined in 

section 12(d)(1)(G)(ii) of the Act) as the 

Investment Companies (‘‘Unaffiliated 

Underlying Funds,’’ and together with 

the Affiliated Underlying Funds, the 

‘‘Underlying Funds’’). The Unaffiliated 

Underlying Funds may include UITs 

(‘‘Unaffiliated Trusts’’) and open-end 

management investment companies 

registered under the Act (‘‘Unaffiliated 

Funds’’). Certain of the Unaffiliated 

Underlying Funds may have received 

exemptive relief to sell their shares on 

a national securities exchange at 

negotiated prices (‘‘ETFs’’). Each Fund 

of Funds may also make direct 

investments in other securities. 

Applicants state that each Fund of 

Funds will enable investors to create a 

comprehensive asset allocation program 

with just one investment and provide a 

simple, convenient and cost-efficient 

program for investors who are able to 

identify their investment goals and risk 

tolerances but may not be comfortable 

deciding how to invest their assets to 

achieve those goals. 

Applicants’ Legal Analysis 

A. Section 12(d)(1) 

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

prohibits a registered investment 

company from acquiring shares of an 

investment company if the securities 

represent more than 3% of the total 

outstanding voting stock of the acquired 

company, more than 5% of the total 

assets of the acquiring company, or, 

together with the securities of any other 

investment companies, more than 10% 

of the total assets of the acquiring 

company. Section 12(d)(1)(B) of the Act 

prohibits a registered open-end 

investment company, its principal 

underwriter and any broker or dealer 

from selling the shares of the investment 

company 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 if the sale will cause more than 

10% of the acquired company’s voting 

stock to be owned by investment 

companies generally. 

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

provides that the Commission may 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities or transactions, from 

any provision of section 12(d)(1) if the 

exemption is consistent with the public 

interest and the protection of investors. 

Applicants seek an exemption under 

section 12(d)(1)(J) to permit the Funds 

of Funds to acquire shares of 

Underlying Funds and to permit the 

Underlying Funds, their principal 

underwriters and any broker or dealer to 

sell shares to the Funds of Funds 

beyond the limits set forth in sections 

12(d)(1)(A) and (B) of the Act. 

3. Applicants state that the proposed 

arrangement will not give rise to the 

policy concerns underlying sections 

12(d)(1)(A) and (B), which include 

concerns about undue influence by a 

fund of funds over underlying funds, 

excessive layering of fees, and overly 

complex fund structures. Accordingly, 

applicants believe that the requested 

exemption is consistent with the public 

interest and the protection of investors. 

4. Applicants state that the proposed 

arrangement will not result in undue 

influence by a Fund of Funds or its 

affiliated persons over the Underlying 

Funds. To limit the control that a Fund 

of Funds, and its affiliates, may have 

over an Unaffiliated Underlying Fund, 

applicants submit that: (a)(i) Each Fund 

of Funds Adviser, (ii) any person 

controlling, controlled by or under 

common control with the Fund of 

Funds Adviser, (iii) any investment 

company and any issuer that would be 

an investment company but for section 

3(c)(1) or section 3(c)(7) of the Act 

advised or sponsored by the Fund of 

Funds Adviser or any person 

controlling, controlled by or under 

common control with the Fund of 

Funds Adviser (collectively, the 

‘‘Group’’), and (b)(i) any Fund of Funds 

Subadviser, (ii) any person controlling, 

controlled by or under common control 

with the Fund of Funds Sub-Adviser, 

and (iii) any investment company or 

issuer that would be an investment 

company but for section 3(c)(1) or 

3(c)(7) of the Act (or portion of such 

investment company or issuer) advised 

or sponsored by the Fund of Funds SubAdviser or any person controlling, 

controlled by or under common control 

with the Fund of Funds Sub-Adviser 

(collectively, the ‘‘Sub-Adviser Group’’) 

will not control (individually or in the 

aggregate) an Unaffiliated Underlying 

Fund within the meaning of section 

2(a)(9) of the Act. 

5. Applicants also propose to prevent 

a Fund of Funds and its affiliated 

entities from taking advantage of an 

Unaffiliated Underlying Fund with 

respect to transactions between the 

entities by precluding a Fund of Funds 

and its Fund of Fund Adviser, Fund of 

Funds Sub-Adviser, promoter, principal 

underwriter and any person controlling, 

controlled by or under common control 

with any of these entities (each, a ‘‘Fund 

of Funds Affiliate’’) from causing any 

existing or potential investment by the 

Fund of Funds in an Unaffiliated 

Underlying Fund to influence the terms 

of any services or transactions between 

the Fund of Funds or a Fund of Funds 

Affiliate and the Unaffiliated 

Underlying Fund or its investment 

adviser(s), sponsor, promoter, principal 

underwriter and any person controlling, 

controlled by or under common control 

with any of these entities (each, an 

‘‘Unaffiliated Fund Affiliate’’). 

Condition 5 precludes a Fund of Funds 

and Fund of Funds Affiliate (except to 

the extent it is acting in its capacity as 

an investment adviser to an Unaffiliated 

Fund or sponsor to an Unaffiliated 

Trust) from causing an Unaffiliated 

Underlying Fund to purchase a security 

in an offering of securities during the 

existence of any underwriting or selling 

syndicate of which a principal 

underwriter is an officer, director, 

member of an advisory board, Adviser, 

Sub-Adviser, or employee of the Fund 

of Funds, or a person of which any such 

officer, director, member of an advisory 

board, Adviser, Sub-Adviser, or 


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27342 Federal Register / Vol. 72, No. 93 / Tuesday, May 15, 2007 / Notices 

2An Unaffiliated Fund, including an ETF, would 

retain its right to reject any initial investment by a 

Fund of Funds in excess of the limit in section 

12(d)(1)(A)(i) of the Act by declining to execute the 

Participation Agreement. 

3Applicants acknowledge that receipt of any 

compensation by (a) an affiliated person of a Fund 

of Funds, or an affiliated person of such person, for 

the purchase by the Fund of Funds of shares of an 

Underlying Fund or (b) an affiliated person of an 

Underlying Fund, or an affiliated person of such 

person, for the sale by the Underlying Fund of its 

shares to a Fund of Funds is subject to section 17(e) 

of the Act. The Participation Agreement also will 

include this acknowledgement. 

4Applicants note that a Fund of Funds generally 

would purchase and sell shares of an Underlying 

Fund that operates as an ETF through secondary 

market transactions at market prices rather than 

through principal transactions with the Underlying 

Fund at net asset value. Applicants would not rely 

on the requested relief from section 17(a) for such 

secondary market transactions. A Fund of Funds 

that owns more than 5% of the outstanding voting 

securities of an ETF could seek to transact in 

‘‘Creation Units’’ directly with the ETF pursuant to 

the requested Section 17(a) relief. 

employee is an affiliated person (each, 

an ‘‘Underwriting Affiliate,’’ except any 

person whose relationship to the 

Unaffiliated Underlying Fund is covered 

by section 10(f) of the Act is not an 

Underwriting Affiliate). An offering of 

securities during the existence of any 

underwriting or selling syndicate of 

which a principal underwriter is an 

Underwriting Affiliate is an ‘‘Affiliated 

Underwriting.’’

6. As an additional assurance that an 

Unaffiliated Fund understands the 

implications of an investment by a Fund 

of Funds under the requested order, 

prior to a Fund of Funds’ investment in 

an Unaffiliated Fund in excess of the 

limit in section 12(d)(1)(A)(i), condition 

8 requires that the Fund of Funds and 

the Unaffiliated Fund execute an 

agreement stating, without limitation, 

that their boards of directors or trustees 

and their investment advisers 

understand the terms and conditions of 

the order and agree to fulfill their 

responsibilities under the order 

(‘‘Participation Agreement’’). Applicants 

note that an Unaffiliated Underlying 

Fund (other than an ETF whose shares 

are purchased by a Fund of Funds in the 

secondary market) will retain the right 

to reject an investment by a Fund of 

Funds.2

7. Applicants do not believe that the 

proposed arrangement will involve 

excessive layering of fees. With respect 

to investment advisory fees, applicants 

state that, prior to approval of any 

investment advisory contract under 

section 15 of the Act, the board of 

directors or trustees of each Fund of 

Funds (‘‘Board’’), including a majority 

of the directors or trustees who are not 

‘‘interested persons,’’ as defined in 

section 2(a)(19) of the Act 

(‘‘Disinterested Trustees’’), will find that 

the investment advisory fees charged 

under the contract are based on services 

provided that are in addition to, rather 

than duplicative of, services provided 

pursuant to any Affiliated Underlying 

Fund’s or 

Unaffiliated Fund’s advisory 

contract(s). Applicants further state that 

each Fund of Funds Adviser will waive 

fees otherwise payable to it by the Fund 

of Funds in an amount at least equal to 

any compensation (including fees 

received pursuant to any plan adopted 

by an Unaffiliated Fund under rule 12b–

1 under the Act) received by the Fund 

of Funds Adviser or an affiliated person 

of the Fund of Funds Adviser from an 

Unaffiliated Underlying Fund, other 

than any advisory fees paid to the Fund 

of Funds Adviser or its affiliated person 

by an Unaffiliated Fund, in connection 

with the investment by the Fund of 

Funds in the Unaffiliated Underlying 

Fund. 

8. Applicants state that the proposed 

arrangement will not create an overly 

complex fund structure. Applicants note 

that an Underlying Fund will be 

prohibited from acquiring securities of 

any investment company or company 

relying on section 3(c)(1) or 3(c)(7) of 

the Act in excess of the limits contained 

in section 12(d)(1)(A), except to the 

extent that such Underlying Fund: (a) 

Receives securities of another 

investment company as a dividend or as 

a result of a plan of reorganization of a 

company (other than a plan devised for 

the purpose of evading section 12(d)(1) 

of the Act); or (b) acquires (or is deemed 

to have acquired) securities of another 

investment company pursuant to 

exemptive relief from the Commission 

permitting such Underlying Fund to: (i) 

Acquire securities of one or more 

affiliated investment companies for 

short-term cash management purposes, 

or (ii) engage in interfund borrowing 

and lending transactions. Applicants 

also represent that a Fund of Funds’

prospectus and sales literature will 

contain concise, ‘‘plain English’’

disclosure designed to inform investors 

of the unique characteristics of the 

proposed Fund of Funds structure, 

including, but not limited to, its 

expense structure and the additional 

expenses of investing in Underlying 

Funds. Each Fund of Fund will comply 

with the disclosure requirements 

concerning the cost of investing in 

Underlying Funds as set forth in 

Investment Company Act Release No. 

27399. 

B. Section 17(a) 

1. Section 17(a) of the Act generally 

prohibits sales or purchases of securities 

between a registered investment 

company and any affiliated person of 

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 outstanding voting securities of 

the other person; (b) any person 5% or 

more of whose outstanding voting 

securities are directly or indirectly 

owned, controlled, or held with power 

to vote by the other person; and (c) any 

person directly or indirectly controlling, 

controlled by, or under common control 

with the other person. 

2. Applicants state that the Funds of 

Funds and the Affiliated Underlying 

Funds might be deemed to be under 

common control of the Adviser and 

therefore affiliated persons of one 

another. Applicants also state that the 

Funds of Funds and the Underlying 

Funds might be deemed to be affiliated 

persons of one another if a Fund of 

Funds acquires 5% or more of an 

Underlying Fund’s outstanding voting 

securities. In light of these possible 

affiliations, section 17(a) could prevent 

an Underlying Fund from selling shares 

to and redeeming shares from a Fund of 

Funds. 

3. Section 17(b) of the Act authorizes 

the Commission to grant an order 

permitting a transaction otherwise 

prohibited by section 17(a) if it finds 

that (a) the terms of the proposed 

transaction are fair and reasonable and 

do not involve overreaching on the part 

of any person concerned; (b) the 

proposed transaction is consistent with 

the policies of each registered 

investment company involved; and (c) 

the proposed transaction is consistent 

with the general purposes of the Act. 

Section 6(c) of the Act permits the 

Commission to exempt any person, 

security or transactions or any class or 

classes of persons, securities or 

transactions, from any provision of the 

Act if such exemption is necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

the Act. 

4. Applicants submit that the 

proposed structure satisfies the 

standards for relief under sections 17(b) 

and 6(c) of the Act.3 Applicants state 

that the terms upon which an 

Underlying Fund will sell its shares to 

or purchase its shares from a Fund of 

Funds will be based on the net asset 

value of each Underlying Fund.4

Applicants state that the proposed 

investment will be consistent with the 

policies of each Fund of Funds and 


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Underlying Fund, and with the general 

purposes of the Act. 

Applicants’ Conditions 

Applicants agree that any order 

granting the requested relief shall be 

subject to the following conditions: 

1. The members of the Group will not 

control (individually or in the aggregate) 

an Unaffiliated Underlying Fund within 

the meaning of section 2(a)(9) of the Act. 

The members of the Sub-Adviser Group 

will not control (individually or in the 

aggregate) an Unaffiliated Underlying 

Fund within the meaning of section 

2(a)(9) of the Act. If, as a result of a 

decrease in the outstanding voting 

securities of an Unaffiliated Underlying 

Fund, the Group or the Sub-Adviser 

Group, each in the aggregate, becomes a 

holder of more than 25% of the 

outstanding voting securities of the 

Unaffiliated Underlying Fund, then the 

Group or the Sub-Advisor Group (except 

for any member of the Group or the SubAdviser Group that is a Separate 

Account) will vote its shares of the 

Unaffiliated Underlying Fund in the 

same proportion as the vote of all other 

holders of the Unaffiliated Underlying 

Fund’s shares. This condition will not 

apply to the Sub-Adviser Group with 

respect to an Unaffiliated Underlying 

Fund for which the Sub-Adviser or a 

person controlling, controlled by, or 

under common control with the SubAdviser acts as the investment adviser 

within the meaning section 2(a)(20)(A) 

of the Act (in the case of an Unaffiliated 

Fund) or as the sponsor (in the case of 

an Unaffiliated Trust). 

A Registered Separate Account will 

seek voting instructions from its 

contract holders and will vote its shares 

of an Unaffiliated Underlying Fund in 

accordance with the instructions 

received and will vote those shares for 

which no instructions were received in 

the same proportion as the shares for 

which instructions were received. An 

Unregistered Separate Account will 

either: (i) vote its shares of the 

Unaffiliated Underlying Fund in the 

same proportion as the vote of all other 

holders of the Unaffiliated Underlying 

Fund’s shares; or (ii) seek voting 

instructions from its contract holders 

and vote its shares in accordance with 

the instructions received and vote those 

shares for which no instructions were 

received in the same proportion as the 

shares for which instructions were 

received. 

2. No Fund of Funds or Fund of 

Funds Affiliate will cause any existing 

or potential investment by the Fund of 

Funds in shares of an Unaffiliated 

Underlying Fund to influence the terms 

of any services or transactions between 

the Fund of Funds or a Fund of Funds 

Affiliate and the Unaffiliated 

Underlying Fund or an Unaffiliated 

Fund Affiliate. 

3. The Board of each Fund of Funds, 

including a majority of the Disinterested 

Trustees, will adopt procedures 

reasonably designed to assure that the 

Adviser and any Fund of Fund SubAdviser are conducting the investment 

program of the Fund of Funds without 

taking into account any consideration 

received by the Fund of Funds or a 

Fund of Funds Affiliate from an 

Unaffiliated Underlying Fund or an 

Unaffiliated Fund Affiliate in 

connection with any services or 

transactions. 

4. Once an investment by a Fund of 

Funds in the securities of an 

Unaffiliated Fund exceeds the limit of 

section 12(d)(1)(A)(i) of the Act, the 

Board of the Unaffiliated Fund, 

including a majority of the Disinterested 

Trustees, will determine that any 

consideration paid by the Unaffiliated 

Fund to a Fund of Funds or a Fund of 

Funds Affiliate in connection with any 

services or transactions: (a) Is fair and 

reasonable in relation to the nature and 

quality of the services and benefits 

received by the Unaffiliated Fund; (b) is 

within the range of consideration that 

the Unaffiliated Fund would be required 

to pay to another unaffiliated entity in 

connection with the same services or 

transactions; and (c) does not involve 

overreaching on the part of any person 

concerned. This condition does not 

apply with respect to any services or 

transactions between an Unaffiliated 

Fund and its investment adviser(s), or 

any person controlling, controlled by, or 

under common control with such 

investment adviser(s). 

5. No Fund of Funds or Fund of 

Funds Affiliate (except to the extent it 

is acting in its capacity as an investment 

adviser to an Unaffiliated Fund or 

sponsor to an Unaffiliated Trust) will 

cause an Unaffiliated Underlying Fund 

to purchase a security in an Affiliated 

Underwriting. 

6. The Board of an Unaffiliated Fund, 

including a majority of the Disinterested 

Trustees, will adopt procedures 

reasonably designed to monitor any 

purchases of securities by the 

Unaffiliated Fund in an Affiliated 

Underwriting, once an investment by a 

Fund of Funds in the securities of the 

Unaffiliated Fund exceeds the limit of 

section 12(d)(1)(A)(i) of the Act, 

including any purchases made directly 

from an Underwriting Affiliate. The 

Board of the Unaffiliated Fund will 

review these purchases periodically, but 

no less frequently than annually, to 

determine whether the purchases were 

influenced by the investment by the 

Fund of Funds in shares of the 

Unaffiliated Fund. The Board of the 

Unaffiliated Fund will consider, among 

other things: (a) Whether the purchases 

were consistent with the investment 

objectives and policies of the 

Unaffiliated Fund; (b) how the 

performance of securities purchased in 

an Affiliated Underwriting compares to 

the performance of comparable 

securities purchased during a 

comparable period of time in 

underwritings other than Affiliated 

Underwritings or to a benchmark such 

as a comparable market index; and (c) 

whether the amount of securities 

purchased by the Unaffiliated Fund in 

Affiliated Underwritings and the 

amount purchased directly from an 

Underwriting Affiliate have changed 

significantly from prior years. The 

Board of the Unaffiliated Fund will take 

any appropriate actions based on its 

review, including, if appropriate, the 

institution of procedures designed to 

assure that purchases of securities in 

Affiliated Underwritings are in the best 

interests of shareholders. 

7. Each Unaffiliated Fund will 

maintain and preserve permanently in 

an easily accessible place a written copy 

of the procedures described in the 

preceding condition, and any 

modifications to such procedures, and 

will maintain and preserve for a period 

of not less than six years from the end 

of the fiscal year in which any purchase 

from an Affiliated Underwriting 

occurred, the first two years in an easily 

accessible place, a written record of 

each purchase of securities in an 

Affiliated Underwriting once an 

investment by a Fund of Funds in the 

securities of an Unaffiliated Fund 

exceeds the limit of section 

12(d)(1)(A)(i) of the Act, setting forth 

from whom the securities were 

acquired, the identity of the 

underwriting syndicate’s members, the 

terms of the purchase, and the 

information or materials upon which 

the determinations of the Board of the 

Unaffiliated Fund were made. 

8. Prior to its investment in shares of 

an Unaffiliated Fund in excess of the 

limit in section 12(d)(1)(A)(i) of the Act, 

the Fund of Funds and the Unaffiliated 

Fund will execute a Participation 

Agreement stating, without limitation, 

that their boards of directors or trustees 

and their investment advisers 

understand the terms and conditions of 

the order and agree to fulfill their 

responsibilities under the order. At the 

time of its investment in shares of an 

Unaffiliated Fund in excess of the limit 

in section 12(d)(1)(A)(i), a Fund of 

Funds will notify the Unaffiliated Fund 


cprice-sewell on PROD1PC62 with NOTICES
27344 Federal Register / Vol. 72, No. 93 / Tuesday, May 15, 2007 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f)(6). 

of the investment. At such time, the 

Fund of Funds will also transmit to the 

Unaffiliated Fund a list of the names of 

each Fund of Funds Affiliate and 

Underwriting Affiliate. The Fund of 

Funds will notify the Unaffiliated Fund 

of any changes to the list as soon as 

reasonably practicable after a change 

occurs. The Unaffiliated Fund and the 

Fund of Funds will maintain and 

preserve a copy of the order, the 

Participation Agreement, and the list 

with any updated information for the 

duration of the investment and for a 

period of not less than six years 

thereafter, the first two years in an 

easily accessible place. 

9. Prior to approving any advisory 

contract under section 15 of the Act, the 

Board of each Fund of Funds, including 

a majority of the Disinterested Trustees, 

will find that the advisory fees charged 

under the advisory contract are based on 

services provided that are in addition to, 

rather than duplicative of, the services 

provided under the advisory contract(s) 

of any Affiliated Underlying Fund or 

Unaffiliated Funds in which the Fund of 

Funds may invest. This finding, and the 

basis upon which the finding was made, 

will be recorded fully in the minute 

books of the appropriate Fund of Funds. 

10. The Fund of Funds Advisers will 

waive fees otherwise payable to it by a 

Fund of Funds in an amount at least 

equal to any compensation (including 

fees received pursuant to any plan 

adopted by an Unaffiliated Fund under 

rule 12b–1 under the Act) received by 

the Fund of Funds Adviser, or an 

affiliated person of the Fund of Funds 

Adviser, other than any advisory fees 

paid to the Fund of Funds Adviser or its 

affiliated person by the Unaffiliated 

Fund, in connection with the 

investment by the Fund of Funds in the 

Unaffiliated Underlying Fund. Any 

Fund of Funds Sub-Adviser will waive 

fees otherwise payable to the Fund of 

Funds Sub-Adviser, directly or 

indirectly, by the Fund of Funds in an 

amount at least equal to any 

compensation received from an 

Unaffiliated Underlying Fund by the 

Fund of Funds Sub-Adviser, or an 

affiliated person of the Fund of Funds 

Sub-Adviser, other than any advisory 

fees paid to the Fund of Funds SubAdviser or its affiliated person by an 

Unaffiliated Fund, in connection with 

the investment by the Fund of Funds in 

the Unaffiliated Fund made at the 

direction of the Fund of Funds SubAdviser. In the event that the Fund of 

Funds Sub-Adviser waives fees, the 

benefit of the waiver will be passed 

through to the Fund of Funds. 

11. With respect to Registered 

Separate Accounts that invest in a Fund 

of Funds, no sales load will be charged 

at the Fund of Funds level or at the 

Underlying Fund level. Other sales 

charges and service fees, as defined in 

rule 2830 of the Conduct Rules of the 

National Association of Securities 

Dealers (‘‘NASD’’), if any, will only be 

charged at the Fund of Funds level or 

at the Underlying Fund level, not both. 

With respect to other investments in a 

Fund of Funds, any sales charges and/ 

or service fees charged with respect to 

shares of a Fund of Funds will not 

exceed the limits applicable to funds set 

forth in rule 2830 of the NASD Conduct 

Rules. 

12. No Underlying Fund will acquire 

securities of any other investment 

company or company relying on section 

3(c)(1) or 3(c)(7) of the Act in excess of 

the limits contained in section 

12(d)(1)(A) of the Act, except to the 

extent that such Underlying Fund: (a) 

Receives securities of another 

investment company as a dividend or as 

a result of a plan of reorganization of a 

company (other than a plan devised for 

the purpose of evading section 12(d)(1) 

of the Act); or (b) acquires (or is deemed 

to have acquired) securities of another 

investment company pursuant to 

exemptive relief from the Commission 

permitting such Underlying Fund to: (i) 

Acquire securities of one or more 

affiliated investment companies for 

short-term cash management purposes, 

or (ii) engage in interfund borrowing 

and lending transactions. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–9270 Filed 5–14–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55721; File No. SR–

NASDAQ–2007–047] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Establish an 

Opening and Closing Cross for 

Securities Listed on the NYSE, Amex, 

and Regional Exchanges 

May 7, 2007. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on May 1, 

2007, The NASDAQ Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II 

and III below, which Items have been 

prepared by the Exchange. The 

Exchange filed the proposed rule change 

pursuant to Section 19(b)(3)(A) of the 

Act3 and Rule 19b–4(f)(6) thereunder, 

which renders it effective upon filing 

with the Commission.4 The Commission 

is publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Nasdaq proposes a rule change to 

provide an open and close that matches 

orders where possible and provides a 

useful, tradable, robust opening and 

closing price for all securities listed on 

the New York Stock Exchange 

(‘‘NYSE’’), the American Stock 

Exchange (‘‘Amex’’), and regional 

exchanges. The text of the proposed rule 

change is available at the Exchange, the 

Commission’s Public Reference Room, 

and http://www.nasdaq.com. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

Nasdaq included statements concerning 

the purpose of, and basis for, the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. Nasdaq has prepared 

summaries, set forth in Sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Nasdaq’s Opening and Closing 

Crosses are price discovery facilities 

that cross orders at a single price. 

Nasdaq proposes to extend the success 

of Nasdaq’s Opening and Closing Cross 

matching functionality, which has been 

widely accepted in the industry, for all 

of the securities listed on the NYSE, 

Amex, and regional exchanges (the 

‘‘non-Nasdaq securities’’) with 

adjustments, as necessary, to comply 

with National Market System Plans and 

SEC rules specific to those securities, 


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