47076 Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices

and any person directly or indirectly

controlling, controlled by, or under

common control with such other

person, and if such other person is an

investment company, any investment

adviser thereof.

3. Rule 17a–8 under the Act exempts

from the prohibitions of section 17(a)

mergers consolidations, or purchases or

sales of substantially all of the assets of

registered investment companies that

are affiliated persons solely by reason of

having a common investment adviser,

common directors/trustees, and/or

common officers, provided that certain

conditions are satisfied.

4. Applicants believe that they may

not rely upon rule 17a–8 because the

Funds may be affiliated for reasons

other than those set forth in the rule. GE

indirectly owns 100% of the

outstanding voting securities of GNA

Capital, the adviser to the Acquired

Funds. GE also owns, with power to

vote, shares of certain of the Funds as

described in the application, which

constitute between 7% and 83% of the

outstanding shares of each such Fund.

Because of this ownership, the

Acquiring Funds may be deemed an

affiliated person of the Acquired Funds,

and vice versa, for reasons not based

solely on their common adviser.

Consequently, applicants are requesting

an order pursuant to section 17(b) of the

Act exempting them from section 17(a)

to the extent necessary to consummate

the Reorganization.

5. Section 17(b) of the Act provides

that the SEC may exempt a transaction

from the provisions of section 17(a) if

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; the proposed

transaction is consistent with the policy

of each registered investment company

concerned; and the proposed

transaction is consistent with the

general purposes of the Act.

6. Applicants submit that the terms of

the proposed Reorganization satisfy the

standards set forth in section 17(b), in

that the terms are fair and reasonable

and do not involve overreaching on the

part of any person concerned. The

boards of trustees of the Company and

the Trust, including their non-interested

trustees, have reviewed the terms of the

Reorganization as set forth in the

Agreement, including the consideration

to be paid or received, and have found

that participation in the Reorganization

is in the best interests of the Company,

the Trust, and each Fund, and that the

interests of the existing shareholders of

each Fund will not be diluted as a result

of the Reorganization. Applicants also

note that the exchange of each Acquired

Fund’s assets and liabilities for the

shares of the corresponding Acquiring

Fund will be based on the Funds’

relative net asset values.

For the SEC, by the Division of Investment

Management, under delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–23599 Filed 9–4–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Investment Company Act Release No.

22803; 812–10758]

Robertson Stephens Investment Trust,

et al.; Notice of Application

August 29, 1997.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

exemption under section 6(c) of the

Investment Company Act of 1940 (the

‘‘Act’’) from section 15(a) of the Act.

SUMMARY OF APPLICATION: Robertson,

Stephens & Company Group, L.L.C. and

Robertson, Stephens & Company, Inc.,

parent companies (‘‘Parents’’) of

Robertson, Stephens & Company

Investment Management, L.P. (‘‘RSIM,

L.P.’’), and Robertson Stephens

Investment Management, Inc. (‘‘RSIM,

Inc.’’) (each of RSIM, L.P. and RSIM,

Inc., an ‘‘Adviser,’’ and together, the

‘‘Advisers’’), have entered into an

agreement and plan of merger with

BankAmerica Corporation

(‘‘BankAmerica’’) to merge with a

wholly-owned subsidiary of

BankAmerica. The indirect change in

control of the Advisers will result in the

assignment, and thus the termination, of

the existing advisory contracts between

Robertson Stephens Investment Trust

(the ‘‘Trust’’) and the Advisers. The

order would permit the implementation,

without shareholder approval, of a new

investment advisory agreement for a

period of up to 60 days following the

date of the change in control of the

Advisers. The order also would permit

the Advisers to receive all fees earned

under the new advisory agreement

following shareholder approval.

APPLICANTS: Trust, RSIM, L.P. and

RSIM, Inc.

FILING DATES: The application was filed

on August 15, 1997.

HEARING OR NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the SEC orders a hearing.

Interested persons may request a

hearing by writing to the SEC’s

Secretary and serving applicants with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

September 24, 1997, 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 SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street NW., Washington, DC 20549.

Applicants, 555 California Street, San

Francisco, CA 94104.

FOR FURTHER INFORMATION CONTACT:

Joseph B. McDonald, Jr., Senior

Counsel, at (202) 942–0533, or Mary Kay

Frech, Branch Chief, at (202) 942–0564

(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 SEC’s

Public Reference Branch, 450 Fifth

Street NW., Washington, DC 20549 (tel.

202–942–8090).

Applicant’s Representations

1. The Trust is a Massachusetts

business trust registered under the Act

as an open-end management investment

company. The Trust currently offers

twelve separate series (the ‘‘Funds’’) to

the public. The Advisers are registered

investment advisers under the

Investment Advisers Act of 1940. RSIM,

L.P. serves as investment adviser to

eleven of the Funds and RSIM, Inc.

serves as investment adviser to the

Twelfth Fund.

2. On June 8, 1997, BankAmerica

entered into an agreement and plan of

merger with the Parents and their

affiliates, under which each of the

Parents would be merged into a

subsidiary of BankAmerica (the

‘‘Merger’’). As a result of the Merger,

BankAmerica will become the owner of

the entire beneficial interest in RSIM,

L.P. and RSIM, Inc. Applicants expect

consummation of the Merger on

September 30, 1997.

3. Applicants request an exemption to

permit implementation, prior to

obtaining shareholder approval, of new

investment advisory agreements (‘‘New

Advisory Agreements’’) with the

Advisers. The requested exemption will

cover an interim period of not more

than 60 days beginning on the date the

Merger is consummated and continuing,

in respect of each Fund, through the
Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices 47077

date on which a New Advisory

Agreement is approved or disapproved

by the Fund’s shareholders (the

‘‘Interim Period’’). The New Advisory

Agreements will contain terms and

conditions identical to those of the

existing advisory agreements (‘‘Existing

Advisory Agreements’’), except for their

effective dates, termination dates, and

escrow provisions. The aggregate

contractual rate chargeable for the

advisory services under each New

Advisory Agreement will remain the

same as under the Existing Advisory

Agreements.

4. On July 22, 1997, the board of

trustees of the Trust (the ‘‘Board’’) held

a meeting to discuss the Merger and its

implications for the Funds. At the

meeting, a majority of the members of

the Board, including a majority of the

Board members who are not ‘‘interested

persons’’ of the Funds, as that term is

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

(the ‘‘Independent Trustees’’), voted in

accordance with section 15(c) of the Act

to approve the New Advisory

Agreements and to submit the New

Advisory Agreements to the

shareholders of each of the Funds at a

meeting to be held on September 30,

1997 (the ‘‘Meeting’’). The Board will

meet in person prior to the start of the

Interim Period to approve the escrow

provisions of each of the New Advisory

Agreements in accordance with section

15(c) of the Act.

5. Applicants state that proxy

materials for the Meeting were mailed

on August 20, 1997. Applicants believe

that it is possible that shareholders of

each of the Funds will approve the New

Advisory Agreements at the Meeting.

However, it is also possible that an

insufficient number of votes will have

been received by that date to act upon

the New Advisory Agreements in

respect of one or more Funds, and that

if may be necessary to adjourn the

meeting for a period not to exceed 60

days following the Merger to permit

additional shareholders to vote their

shares by proxy. Applicants believe that

the requested relief is necessary to

permit continuity of investment

management of the Funds during the

period following the Merger so that the

investment program and the delivery of

related services for each Fund will not

be disrupted if the Meeting for that

Fund is adjourned.

6. Applicants also request an

exemption to permit the Advisers to

receive from each Fund, upon approval

of that Fund’s shareholders, any and all

fees earned (plus interest) under the

related New Advisory Agreement in

effect during the Interim Period.

Applicants state that the fees paid

during the Interim Period will be

unchanged from the fees paid under the

Existing Advisory Agreements.

7. Applicants propose to enter into an

escrow arrangement with an unaffiliated

financial institution. The fees payable to

an Adviser during the Interim Period

under a New Advisory Agreement will

be paid by the Fund into an interestbearing escrow account maintained by

the escrow agent. The escrow agent will

release the monies held in the escrow

account (including any interest earned):

(a) To the Adviser only upon approval

of the New Advisory Agreement by the

Fund’s shareholders in accordance with

section 15 of the Act; or (b) to the Fund

if the Interim Period has ended and the

New Advisory Agreement has not

received the requisite shareholder

approval. Before any such release is

made, the Board will be notified.

Applicants’ Legal Analysis

1. Section 15(a) of the Act provides,

in pertinent part, that it shall be

unlawful for any person to serve or act

as an investment adviser of a registered

investment company, except pursuant

to a written contract that has been

approved by the vote of a majority of the

outstanding voting securities of such

registered investment company. Section

15(a) further requires that such written

contract provide for automatic

termination in the event of its

‘‘assignment.’’ Section 2(a)(4) of the Act

defines ‘‘assignment’’ to include any

direct or indirect transfer of a contract

by the assignor, or of a controlling block

of the assignor’s outstanding voting

securities by a security holder of the

assignor. Section 2(a)(9) of the Act

defines ‘‘control’’ as the power of

exercise a controlling influence over the

management or policies of a company,

and beneficial ownership of more than

25% of the voting securities of a

company is presumed under section

2(a)(9) to reflect control.

2. Applicants state that, following the

completion of the Merger, BankAmerica

will own 100% of the voting securities

of the Parents. Applicants believe,

therefore, that the Merger will result in

an ‘‘assignment’’ of the Existing

Advisory Agreements and that the

Existing Advisory Agreements will

terminate by their terms upon

consummation of the Merger.

3. Rule 15a–4 provides, in pertinent

part, that if an investment advisory

contract with an investment company is

terminated by an assignment in which

the adviser does not directly or

indirectly receive a benefit, the adviser

may continue to act as such for the

company for 120 days under a written

contract that has not been approved by

the company’s shareholders, provided

that: (a) The new contract is approved

by that company’s board of director

(including a majority of the noninterested directors); (b) the

compensation to be paid under the new

contract does not exceed the

compensation that would have been

paid under the contract most recently

approved by the company’s

shareholders; and (c) neither the adviser

nor any controlling person of the

adviser ‘‘directly or indirectly receives

money or other benefit’’ in connection

with the assignment. Applicants state

that because of the Advisers and their

affiliates may be deemed to receive a

benefit in connection with the Merger,

applicants may not rely on rule 15a–4.

4. Section 6(c) provides that the SEC

may exempt any person, security, or

transaction from any provision of the

Act, if and to the extent that 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. Applicants

believe that the requested relief meets

this standard.

5. Applicants note that the terms and

timing of the Merger were determined

by the Parents and BankAmerica in

response to a number of factors beyond

the scope of the Act and unrelated to the

Funds and the Advisers. Applicants

submit that it is in the best interests of

shareholders to have sufficient time to

consider and return proxies and to hold

a shareholder meeting. Applicants

believe that the Interim Period would

facilitate the orderly and reasonable

consideration of the New Advisory

Agreements with respect to those Funds

whose shareholders have not voted in

sufficient numbers by the date of the

Meeting.

6. Applicants submit that the scope

and quality of services provided to the

Portfolios during the Interim Period will

not be diminished. During the Interim

Period, the Advisers would operate

under the New Advisory Agreements,

which are substantively the same as the

Existing Advisory Agreements. The

Advisers have advised the Board that

they are not aware of any material

changes in the personnel who will

provide investment management

services during the Interim Period.

Accordingly, the Funds should receive,

during the Interim Period, the same

advisory services, provided in the same

manner and at the same fee levels, by

substantially the same personnel as they

received before the Merger.

7. Applicants contend that the

relationship between each of the Funds

and the Advisers has been a beneficial
47078 Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices

1 15 U.S.C. § 78s(b)(1).

one to the shareholders of the Funds,

and that it would be in no one’s

interests for the relationship to be

impaired because the Advisers cannot

receive fees for the services they provide

during the Interim Period. In addition,

the fees to be paid during the Interim

Period will be unchanged from the fees

paid under the Existing Advisory

Agreements.

Applicants’ Conditions

Applicants agree as conditions to the

issuance of the exemptive order

requested by the application that:

1. Each New Advisory Agreement will

have the same terms and conditions as

the respective Existing Advisory

Agreements, except for the effective

date, termination date, and escrow

provisions.

2. Advisory fees payable by a Fund to

an Adviser during the Interim Period

will be maintained in an interestbearing escrow account, and amounts in

the account (including interest earned

on such amounts) will be paid: (a) to the

Adviser in accordance with the relevant

New Advisory Agreement, after the

requisite approval is obtained; or (b) to

the Fund, in the absence of such

approval.

3. The Trust will hold a meeting of

shareholders to vote on approval of the

New Advisory Agreements for the

Funds on September 30, 1997, or within

the 60-day period thereafter.

4. None of the Funds will bear the

costs of preparing and filing the

application, or any costs relating to the

solicitation of the shareholder approval

of the Funds’ shareholders necessitated

by the consummation of the Merger.

5. The Advisers will take all

appropriate actions to ensure that the

scope and quality of advisory and other

services provided to the Funds during

the Interim Period will be at least

equivalent, in the judgment of the

Board, including a majority of the

Independent Trustees, to the scope and

quality of services previously provided.

In the event of any material change in

personnel providing services pursuant

to the New Advisory Agreements caused

by the Merger, the Advisers will apprise

and consult with the Board to assure

that the Board, including a majority of

the Independent Trustees, is satisfied

that the services provided will not be

diminished in scope or quality.

6. The Board, including a majority of

the Independent Trustees, will have

approved the escrow provisions of the

New Advisory Agreements in

accordance with the requirements of

section 15(c) of the Act prior to the

termination of the Existing Advisory

Agreements.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–23600 Filed 9–4–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–38989; File No. SR–CHX–

97–3]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change,

Amendments Nos. 1, 2 and 3 by The

Chicago Stock Exchange, Inc., and

Order Granting Accelerated Partial

Approval to the Proposed Rule Change

Relating to the Trading of Nasdaq

National Market Securities on the

Chicago Stock Exchange

August 28, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

February 17, 1997, the Chicago Stock

Exchange, Incorporated (‘‘CHX’’ or

‘‘Exchange’’) filed with the Securities

and Exchange Commission

(‘‘Commission’’) a proposed rule change

relating to quotes in the Midwest

Automated Execution System (‘‘Max

system’’) for Nasdaq National Market

(‘‘Nasdaq/NM’’) securities. On May 14,

1997, the Exchange submitted

Amendment No. 1 to the rule filing to

limit the application of the proposed

rule change to 150 Nasdaq/NM

securities. On July 7, 1997, the

Exchange submitted Amendments Nos.

2 and 3 to the rule filing clarifying

which 150 Nasdaq/NM securities would

be subject to a reduced minimum

quotation size. The proposed is

described in Items I, II, and III below,

which Items have been prepared by the

self-regulatory organization. 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

The Exchange proposes to amend

Article XX, Rule 37 relating to the

generation of an autoquote when a

specialist’s quote in a Nasdaq/NM

security is exhausted due to an

automatic execution. Below is the text

of the proposed rule change. Proposed

new text is in italics; deleted text is in

brackets.

Article XX

Rule 37. Guaranteed Execution System

and Midwest Automated Execution

System

(a) Guarantee Executions. The

Exchange’s Guaranteed Execution

System (the BEST System) shall be

available to Exchange member firms

and, where applicable, to members of a

participating exchange who send orders

to the Floor through a linkage pursuant

to Rule 39 of this Article, in all issues

in the specialist system which are

traded in the Dual Trading System and

NASDAQ/NM Securities. System orders

shall be executed pursuant to the

following requirements:

1. Eligible Orders. Specialists must

accept and guarantee execution on all

agency orders in Dual Trading System

Issues from 100 up to and including

2099 shares in accordance with this

rule. Specialists must accept and

execute all agency market orders or

marketable limit orders in NASDAQ/

NM [s]Securities from 100 up to and

including 1000 shares in accordance

with this rule. Specialists must accept

all agency limit orders in NASDAQ/NM

Securities from 100 up to and including

10,000 shares for placement in the limit

order book.

2.–7. No change in text.

(b) Automated Executions. The

Exchange’s Midwest Automated

Execution System (the Max System)

may be used to provide an automated

delivery and execution facility for

orders that are eligible for execution

under the Exchange’s BEST rule (Article

XX, Rule 37(a)) and certain other orders.

In the event that an order that is subject

to the BEST Rule is sent through MAX,

it shall be executed in accordance with

the parameters of the BEST Rule and the

following. In the event that an order that

is not subject to the BEST Rule is sent

through MAX, it shall be executed in

accordance with the parameters of the

following:

(1)–(6). No change in text.

(7) Execution of NASDAQ/NM

[issues] Securities. In NASDAQ/NM

[Issues] Securities, if the specialist is

quoting at the NBBO at the time a MAX

market or marketable limit order is

received, that order shall automatically

be filled at such NBBO (after the same

time delays specified in paragraph 6

above for Dual Trading System issues)

up to the size of the specialist’s bid or

offer (as the case may be). In such case,

the specialist’s bid or offer will be

decremented by the size of the

execution. In the event the specialist’s

bid or offer is exhausted, the system will

generate a quote [1⁄8 point] an increment

away from the NBBO as determined by