60488 Federal Register / Vol. 65, No. 197 / Wednesday, October 11, 2000 / Notices

participation in an Existing Fund or

Future Fund. Each Participating

Insurance Company will vote shares for

which it has not received timely voting

instructions as well as shares

attributable to it in the same proportion

as it votes those shares for which it has

received voting instructions. Each

Qualified Plan will vote as required by

applicable law and governing Plan

documents.

7. As long as the Commission

continues to interpret the Act as

requiring pass-through voting privileges

to be provided to variable

contractowners, HL Advisors or any of

its affiliates will vote its shares of any

Existing Fund or Future Fund in the

same proportion of all variable contract

owners having voting rights with

respect to the relevant Fund.

8. Each Existing Fund and Future

Fund will comply with all provisions of

the Act requiring voting by shareholders

(including persons who have a voting

interest in the shares of the Existing

Funds and any Future Fund), and, in

particular, each such Fund will either

provide for annual meetings (except to

the extent that the Commission may

interpret section 16 of the Act not to

require such meetings) or comply with

section 16(c) of the Act (although the

Existing Funds and Future Funds are

not, or will not be, the type of trust

described in section 16(c) of the Act), as

well as with section 16(a) of the Act

and, if and when applicable, section

16(b) of the Act. Further, each such

Fund will act in accordance with the

Commission’s interpretation of the

requirements of section 16(a) with

respect to periodic elections of directors

and with whatever rules the

Commission may promulgate with

respect thereto.

9. Each Existing Fund and Future

Fund will notify all Participants that

separate account prospectus disclosure

regarding potential risks of mixed and

shared funding may be appropriate.

Each such Fund will disclose in its

prospectus that: (a) Shares of such Fund

may be offered to insurance company

separate accounts of both variable

annuity and variable life insurance

contracts and to Qualified Plans; (b) due

to differences in tax treatment and other

considerations, the interests of various

contractowners participating in such

Fund and the interests of Qualified

Plans investing in such Funds may

conflict; and (c) such Funds’ Board will

monitor events in order to identify the

existence of any material irreconciliable

conflicts and determine what action, if

any, should be taken in response to any

such conflict.

10. If and to the extent that Rule 6e–

2 or Rule 6e–3(T) under the Act are

amended, or proposed Rule 6e–3 under

the Act is adopted, to provide

exemptive relief from any provision of

the Act, or the rules promulgated

thereunder, with respect to mixed or

shared funding, on terms and conditions

materially different from any

exemptions granted in the Order

requested in this Application, then each

Existing Fund and each Future Fund

and/or the Participants, as appropriate,

shall take such steps as may be

necessary to comply with Rules 6e–2 or

6e–3(T), as amended, or Rule 6e–3, as

adopted, as such rules are applicable.

11. The Participants, at least annually,

will submit to the Board of each

Existing Fund and any Future Fund

such reports, materials, or data as a

Board may reasonably request so that

the directors of the Board may fully

carry out the obligations imposed upon

a Board by the conditions contained in

this Application, and said reports,

materials and data will be submitted

more frequently if deemed appropriate

by a Board. The obligations of the

Participants to provide these reports,

materials and data to a Board, when it

so reasonably requests, will be a

contractual obligation of all Participants

under their agreements governing

participation in the Existing Funds and

Future Funds.

12. All reports of potential or existing

conflicts received by a Board, and all

Board action with regard to (a)

determining the existence of a conflict,

(b) notifying Participants of the

existence of a conflict and (c)

determining whether any proposed

action adequately remedies a conflict,

will be properly recorded in the minutes

of the meetings of the relevant Board or

other appropriate records, and such

minutes or other records shall be made

available to the Commission upon

request.

13. An Existing Fund and any Future

Fund will not accept a purchase order

from a Qualified Plan if such purchase

would make the Plan shareholder an

owner of 10 percent or more of the

assets of such Fund unless such Plan

executes an agreement with the relevant

Fund governing participation in such

Fund that includes the conditions set

forth herein to the extent applicable. A

Qualified Plan will execute an

application containing an

acknowledgement of this condition at

the time of its initial purchase of shares

of any such Fund.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Maragaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–26032 Filed 10–10–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel No. IC–24674; 812–11878]

GE Asset Management Incorporated, et

al.; Notice of Application

October 3, 2000.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application under

section 17(b) of the Investment

Company Act of 1940 (‘‘Act’’) for an

exemption from section 17(a) of the Act.

Summary of Application: Applicants

request an order to permit certain series

of GE Institutional Funds (the ‘‘Fund’’)

to accept an investment in-kind from

certain affiliated investors in exchange

for shares of the series.

Applicants: GE Asset Management

Incorporated (GEAM) and the Fund.

Filing Dates: The application was

filed on December 10, 1999, and

amended on May 3, 2000 and October

3, 2000.

Hearing or Notification of Hearing: An

order granting the requested relief 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

October 27, 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 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–

0609. Applicants, GE Asset Management

Incorporated, 777 Long Ridge Road,

Stamford, Connecticut 06927.

FOR FURTHER INFORMATION CONTACT: Julia

Kim Gilmer, Senior Counsel, at (202)

942–0528, or Mary Kay Frech, Branch

Chief, at (202) 942–0564 (Division of

Investment Management, Office of

Investment Company Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

Federal Register / Vol. 65, No. 197 / Wednesday, October 11, 2000 / Notices 60489

1As of June 30, 2000, the Affiliated Investors

owned 11.27% of the GE Funds International

Equity Fund, 7.25% of the GE Funds U.S. Equity

Fund, 8.87% of the GE Funds Strategic Investment

Fund, and 5.02% of the GE Funds Fixed Income

Fund.

2The Redeeming Series will rely on and adhere

to all of the conditions enumerated in the no-action

letter issued by SEC staff to Signature Financial

Group, Inc. (publicly available Dec. 28, 1999) in

connection with the redemptions in-kind of the

Affiliated Investors’ shares in the Redeeming Series.

3The Affiliated Investors will purchase shares of

the following Fund Series with the proceeds of their

redemptions: GE Institutional International Equity

Fund, GE Institutional U.S. Equity Fund, GE

Institutional Strategic Investment Fund and GE

Institutional Fixed Income Fund.

application. The complete application

may be obtained for a fee at the SEC’s

Public Reference Branch, 450 Fifth

Street, NW., Washington, DC 20549–

0102 (tel: 202–942–8090).

Applicants’ Representations

1. The Fund is an open-end

management investment company

organized under the laws of the State of

Delaware in 1997 and registered under

the Act. The Fund consists of 17 series

and is designed primarily for

institutional investors.

2. GEAM is an investment adviser

registered under the Investment

Advisers Act of 1940 and serves as the

investment adviser to the Fund. GEAM

is a direct wholly-owned subsidiary of

General Electric Company (‘‘GE’’).

3. GE Capital Asset Maintenance Plan

Master Trust and Asset Management

Plan for GE Affiliated Companies (the

‘‘Affiliated Investors’’) are qualified

retirement plans and trusts maintained

by GE and its affiliates. The Affiliated

Investors currently own more than 5%

of certain series of GE Funds

(‘‘Redeeming Series’’), an open-end

management investment company

organized under the laws of the

Commonwealth of Massachusetts in

1992 and registered under the Act.1 GE

Funds offers shares primarily to retail

and smaller institutional investors who

generally do not meet the requirements

for investment in the Fund. The

Affiliated Investors first invested in GE

Funds in 1995.

4. Applicants propose that the

Affiliated Investors redeem in-kind all

of their shares of the Redeeming Series

and immediately invest all the proceeds

of the redemptions in corresponding

series of the Fund (‘‘Fund Series’’) with

substantively the same investment

objectives and strategies as the

Redeeming Series (the ‘‘Purchase’’).2

The Purchase will occur as soon as

practicable after the relief requested in

the application is granted or on

November 1, 2000, whichever is later.3

The securities to be delivered to the

Fund in connection with the Purchase

will be valued in the same manner as

they would be valued for purposes of

computing the net asset value for the

Fund Series. The Affiliated Investors

have determined to redeem their

interests in the Redeeming Funds and

invest in the corresponding Fund Series

to benefit from the lower fund operating

expenses of the Fund Series. Applicants

state that, since the Affiliated Investors

are pension plans, it is expected that

they will be long-term investors in the

Fund.

Applicants’ Legal Analysis

1. Section 17(a)(1) of the Act, in

pertinent part, prohibits an affiliated

person of a registered investment

company, or any affiliated person of

such person, acting as principal, from

selling to or purchasing from such

registered investment company, any

security or other property.

2. Section 2(a)(3)(C) of the Act defines

an ‘‘affiliated person’’ of another person

to include any person directly or

indirectly controlling, controlled by, or

under common control with, such other

person, and if the other person is an

investment company, any investment

adviser of the company. Applicants

state that the Affiliated Investors may be

deemed to be controlled by or under

common control with the Fund’s

investment adviser by virtue of being a

pension plan sponsored by GE or a GEaffiliated entity. The Affiliated

Investors, therefore, are affiliated

persons of the Fund, and the Purchase

may be prohibited by section 17(a) of

the Act.

3. Section 17(b) of the Act provides

that the SEC shall exempt a transaction

from the restrictions of section 17(a) if

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; the proposed transaction is

consistent with the policy of each

registered investment company

concerned, as recited in its registration

statement and reports filed under the

Act; and the proposed transaction is

consistent with the general purposes of

the Act.

4. Applicants submit that the terms of

the Purchase satisfy the standards set

forth in section 17(b). Applicants state

that Fund’s board of trustees (‘‘Board’’),

including all of the non-interested

trustees, has determined that the

Purchase is in the best interests of the

shareholders of the Fund Series.

Applicants also state that the Purchase

will comply with rule 17a–7(c) and (d)

of the Act and the conditions set forth

below.

Applicants’ Conditions

Applicants agree that any order

granting the requested relief will be

subject to the following conditions:

1. The securities to be transferred to

the Fund Series in the Purchase will be

valued in the same manner as they

would be valued for purposes of

computing the Fund Series’ net asset

values.

2. At the next regular meeting

following the Purchase, the Board,

including a majority of the disinterested

trustee, will determine (a) whether the

securities transferred in the Purchase

were valued in accordance with

condition 1; and (b) whether the

acquisition of the securities was

consistent with the policies of the Fund

Series as reflected in their registration

statements and reports filed under the

Act.

3. The Fund will maintain and

preserve for a period of not less than six

years from the end of the fiscal year in

which the Purchase occurs, the first two

years in an easily accessible place, a

written record of the Purchase setting

forth a description of each security

transferred, the terms of the transfer,

and the information or materials upon

which the determinations required by

condition 2 were made.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–26033 Filed 10–10–00; 8:45 am]

BILLING CODE 8010–11–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel No. IC–24675; 812–12176]

Scudder Pathway Series, et al; Notice

of Application

October 3, 2000.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’).

ACTION: Notice of 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 Scudder

Income Fund (‘‘Income’’), a series of

Scudder Portfolio Trust (the ‘‘Trust’’), to

acquire substantially all of the assets

and all of the liabilities of Scudder

Corporate Bond Fund (‘‘Corporate

Bond’’), also a series of the Trust (the

‘‘Reorganization’’). Because of certain