Federal Register / Vol. 65, No. 203 / Thursday, October 19, 2000 / Notices 62773

valuation that would have resulted from

the application of LAQ’s valuation

procedures. After consummation of the

Merger, LAQ will terminate its

registration under the Act. No sales

charge or fee of any kind will be charged

to LAQ shareholders in connection with

their receipt of common stock of LAM

in the Merger.

3. Applicants state that each Fund

seeks long-term capital appreciation as

its objective. LAQ seeks to meet that

objective by investing primarily in Latin

American equity securities, and LAM

seeks to meet the same objective by

investing primarily in Latin American

debt and equity securities. After the

Merger, LAM will adopt LAQ’s

investment objectives and policies.

4. The Board of Directors of each

Fund, including the Disinterested

Directors, determined that the Merger is

in the best interest of each Fund, and

that the interests of the existing

shareholders of each Fund would not be

diluted by the Merger. In assessing the

Merger, each Board considered various

factors, including: (a) The possibility

that LAM would have a lower operating

expense ratio than either Fund prior to

the Merger; (b) the possible benefits in

portfolio management with a larger asset

base; (c) the terms and conditions of the

Merger; (d) the compatibility of each

Fund’s investment objective, policies

and restrictions; (e) the tax-free nature

of the Merger; and (f) the anticipated

expenses of the Merger. The expenses of

the Merger will be allocated equally

between the Funds, as determined by

the Board of Directors of each Fund.

5. The Merger is subject to a number

of conditions, including that: (a) The

shareholders of the Funds approve the

Merger; (b) LAQ declares and distributes

to its shareholders all of its net

investment company taxable income

through dividends and substantially all

of its net capital gain; (c) the

Commission grants the requested

exemptive relief; and (d) the Funds

receive an opinion of counsel that the

Merger will be tax-free. The Plan may be

terminated at any time prior to the

effective date of the Merger by mutual

agreement of each Fund’s Board of

Directors or by either Fund if the other

has violated a condition of the Plan.

Applicants agree not to make any

material changes to the Plan without

prior Commission approval.

6. A registration statement on Form

N–14 containing a combined proxy

statement/prospectus was filed with the

Commission on August 1, 2000, and was

declared effective on September 1, 2000.

Applicants mailed the proxy statement/

prospectus to the shareholders of each

Fund on or about September 7, 2000.

The Plan was approved by the

shareholders of each Fund at a meeting

held on October 10, 2000. The Merger

is expected to take place promptly after

the requested relief is granted.

Applicants’ Legal Analysis

1. Section 17(a) of the Act provides

that it is unlawful for any affiliated

person of a registered investment

company, or an affiliated person of such

a person, acting as principal, knowingly

to sell any security to or knowingly to

purchase any security from that

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; (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.

2. 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, 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 believe that they

may not rely on rule 17a–8 because

Harvard owns more than 5% of the

outstanding voting securities of each

Fund, and therefore the Funds may be

deemed affiliated persons of an

affiliated person for a reason not set

forth in the rule.

3. Section 17(b) of the Act provides

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 exempting them

from section 17(a) to the extent

necessary to effect the Merger.

Applicants submit that the terms of the

Merger satisfy the standards of section

17(b) of the Act. Applicants also state

that the Board of Directors of each Fund,

including the Disinterested Directors,

determined that the participation of

each Fund in the Merger is in the best

interests of each Fund and that the

interests of the existing shareholders of

each Fund will not be diluted as a result

of the Merger. In addition, applicants

state that the Merger will be based on

the Funds’ relative net asset values.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 00–26800 Filed 10–18–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. IC–24688; File No. 812–11834]

American Skandia Life Assurance

Corporation, et al; Notice of

Application

October 13, 2000.

AGENCY: The Securities and Exchange

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

ACTION: Notice of application for an

order pursuant to Section 26(b) of the

Investment Company Act of 1940

(‘‘1940 Act’’) approving certain

substitutions of securities, and pursuant

to Sections 17(b) and 6(c) of the 1940

Act exempting related transactions from

17(a) of the 1940 Act.

SUMMARY OF APPLICATION: Applicants

request an order to permit certain

registered unit investment trusts to

substitute shares of certain registered

open-end investment companies for

shares of certain registered investment

companies currently held by those unit

investment trusts, and to permit certain

in-kind redemptions of portfolio

securities in connection with the

substitutions.

Applicants: American Skandia Life

Assurance Corporation (‘‘ASLAC’’ or the

‘‘Company’’), American Skandia Life

Assurance Corporation Variable

Account B (Class 1) (‘‘Account B–1’’),

American Skandia Life Assurance

Corporation Variable Account B (Class

2) (‘‘Account B–2’’), American Skandia

Life Assurance Corporation Variable

Account B (Class 3) (‘‘Account B–3’’,

together with Account B–1 and Account

B–2, ‘‘Account B’’), American Skandia

Variable Account F (‘‘Account F’’ and

together with Account B, the ‘‘Separate

Account’’), and American Skandia

Marketing, Incorporated (‘‘ASM’’)

(collectively, ‘‘Applicants’’).

62774 Federal Register / Vol. 65, No. 203 / Thursday, October 19, 2000 / Notices

Filing Date: The application was filed

on October 27, 1999 and amended and

restated on September 29, 2000.

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 on this application by writing

to the Secretary of the Commission and

serving Applicants with a copy of the

request, in person or by mail. Hearing

requests must be received by the

Commission by 5:30 p.m. on November

3, 2000, and accompanied by proof of

service on the Applicants in the form of

an affidavit or, for lawyers, a certificate

of service. Hearing requests should state

the nature of your interest, the reason

for the request, and the issues you

contest. Persons may request

notification of the date of a hearing by

writing to the Secretary of the

Commission.

ADDRESSES: Secretary, Securities and

Exchange Commission, 450 5th Street,

NW, Washington, DC 20549–0609.

Applicants, in care of Edward P.

MacDonald, Esquire, American Skandia

Life Assurance Corporation, One

Corporate Drive, Shelton, Connecticut

06484.

FOR FURTHER INFORMATION CONTACT:

Ronald A. Holinsky, Senior Counsel or

Lorna MacLeod, Branch Chief, Office of

Insurance Products, Division of

Investment Management, at (202) 942–

0670.

SUPPLEMENTARY INFORMATION: Following

is a summary of the application. The

complete application is available for a

fee from the Public Reference Branch of

the Commission, 450 Fifth Street, NW,

Washington, DC 20549–0102 (tel. (202)

942–8090).

Applicants’ Representations

1. ASLAC is a stock life insurance

company admitted to do business in all

fifty states and in the District of

Columbia. ASLAC offers a variety of

fixed and variable annuity contracts to

individuals and groups, as well as a

modified single premium variable life

insurance policy and a flexible premium

variable life insurance policy to

individuals (the ‘‘Skandia Contracts’’).

2. ASLAC is a wholly owned

subsidiary of American Skandia

Investment Holding Corporation, which

is an indirect wholly-owned subsidiary

of Skandia Insurance Company Ltd., a

corporation organized under the laws of

the Kingdom of Sweden.

3. Account B–1, registered with the

Commission as a unit investment trust,

is a separate account of ASLAC.

4. Account B–2, registered with the

Commission as a unit investment trust,

is a separate account of ASLAC.

5. Account B–3, registered with the

Commission as a unit investment trust,

is a separate account of ASLAC.

6. Account F, registered with the

Commission as a unit investment trust,

is a separate account of ASLAC.

7. ASM is registered with the

Commission as a broker-dealer under

the Securities Exchange Act of 1934

(‘‘Exchange Act’’ ) and is a member in

good standing with the National

Association of Securities Dealers, Inc.

ASM is 100% owned by American

Skandia Investment Holding

Corporation, which is also the direct

parent of ASLAC. ASM’s primary

business is that of principal distributor

of variable annuities and market value

adjusted fixed annuity contracts issued

by ASLAC as well as variable life

insurance policies issued by ASLAC.

ASM is also the distributor of American

Skandia Advisor Funds, Inc. a family of

retail mutual funds.

8. ASLAC is the depositor of the

separate accounts and offers owners of

the Skandia Contracts (‘‘Contract

Owners’’) a number of investment

options, each of which is a division of

sub-account of the separate accounts

and which correspond to an underlying

registered open-end management

investment company. The Skandia

Contracts are designed to be sold to

individuals and to groups for use with

retirement plans that qualify for special

income tax treatment under the Internal

Revenue Code of 1986, as amended (the

‘‘Code’’), and sued with retirement

plans that do not qualify for such

special income tax treatment.

9. The Alger American Fund is a

diversified, open-end series

management investment company

registered under the 1940 Act. Currently

it offers six portfolios, two of which are

available through one or more of the

Skandia Contracts offered through the

separate accounts. The two portfolios

offered as investments to the separate

accounts are: Alger American Growth

Portfolio and Alger American MidCap

Growth Portfolio. Fred Alger

Management, Inc. (‘‘Fred Alger’’) is the

investment manager of each of the

portfolios.

10. American Skandia Trust (‘‘AST’’)

is a diversified, open-end series

management investment company

registered under the Act. AST currently

is comprised of 35 portfolios. American

Skandia Investment Services, Inc.

(‘‘ASISI’’) is the investment manager for

each of the portfolios.

11. Pursuant to ASLAC’s manager-ofmanagers strategy, ASISI currently

engages the following subadvisers to

manage the accompanying AST

portfolios: Janus Capital Corporation—

AST JanCap Growth, AST Janus

Overseas Growth, AST Janus Small-Cap

Growth, and AST Janus Mid-Cap

Growth; Lord Abbett & Co.—AST Lord

Abbett Small Cap Value; Federated

Investment Counseling—AST Federated

High Yield; J.P. Morgan Investment

Management, Inc.—AST Money Market;

T. Rowe Price Associates, Inc.—AST T.

Rowe Price Asset Allocation, AST T.

Rowe Price Natural Resources and AST

T. Rowe Price Small Company Value;

Rowe Price-Fleming International,

Inc.—AST T. Rowe Price Global Bond;

Founders Asset Management, LLC—

AST Founders Passport; INVESCO

Funds Group, Inc.—AST INVESCO

Equity Income; Pacific Investment

Management Company—AST PIMCO

Total Return Bond and AST PIMCO

Limited Maturity Bond; Oppenheimer

Funds, Inc.—AST Oppenheimer LargeCap Growth; American Century

Investment Management, Inc.—AST

American Century Income & Growth,

AST American Century Strategic

Balanced, AST American Century

International Growth, and AST

American Century International Growth

II; Cohen & Steers Capital Management,

Inc.—AST Cohen & Steers Realty; AIM

Capital Management, Inc.—AST AIM

International Equity and AST AIM

Balanced; Sanford C. Bernstein & Co.,

Inc.—AST Sanford Bernstein Managed

Index 500; Marsico Capital

Management, LLC—AST Marsico

Capital Growth; Neuberger Berman

Management Inc.—AST Neuberger

Berman Mid-Cap Value and AST

Neuberger Berman Mid-Cap Growth;

Massachusetts Financial Services

Company (‘‘MFS’’)—AST MFS Growth

with Income, AST MFS Growth and

AST MFS Global Equity; Scudder

Kemper Investments, Inc.—AST Kemper

Small-Cap Growth; and Fed Alger

Management, Inc.—AST Alger All—Cap

Growth.

12. ASLAC has expressly reserved the

right on its own behalf and on behalf of

each of the separate accounts and in the

Skandia Contracts to eliminate subaccounts, combine two or more subaccounts, or substitute one or more new

underlying funds or portfolios for others

in which one or more sub-accounts are

invested. The prospectus for each

contract discloses this reservation.

13. ASLAC, on its own behalf and on

behalf of the separate accounts,

proposes to exercise its contractual right

to replace shares of the Alger American

Growth Portfolio with shares of the AST

Alger Growth Portfolio and shares of the

Alger American Mid-Cap Growth

Federal Register / Vol. 65, No. 203 / Thursday, October 19, 2000 / Notices 62775

Portfolio with shares of the AST Alger

Mid-Cap Growth Portfolio. The Alger

American Growth and Alger Mid-Cap

Growth portfolios are referred to as the

‘‘Old Portfolios’’. The AST Alger

Growth and AST Alger Mid-Cap Growth

portfolios are referred to as the ‘‘New

Portfolios’’. The New Portfolios will be

subadvised by Fred Alger.

14. Applicants represent that the

investment objective of the AST Alger

Growth Portfolio is identical to that of

the Alger American Growth Portfolio.

Both portfolios intend to invest for longterm growth of capital appreciation.

Applicants assert that the proposed

substitution will result in greater

administrative efficiency and enhanced

oversight of the AST Alger Growth

Portfolio by ASLAC while continuing to

provide Contract Owners with a ‘‘bestin-class’’ money manager and

substantially similar investment

objective and investment policies/

restrictions as the Alger Growth

Portfolio. Applicants represent that the

management fee of the AST Alger

Growth Portfolio is identical to that of

the Alger American Growth Portfolio

(0.75%) and that other expenses of the

AST Alger Growth Portfolio will be

capped at the same level of other

expenses for the Alger American

Growth Portfolio (0.04%) for a period of

one year following the substitution.

Total annual expenses for the AST Alger

Growth Portfolio will be the same as

that of the Alger American Growth

Portfolio (0.79%).

15. Applicants represent that the

investment objective of the AST Alger

Mid-Cap Growth Portfolio is identical to

that of the Alger American Mid-Cap

Growth Portfolio. Both portfolios seek

long-term capital appreciation by

investing in the equity securities of

midsize companies with promising

growth potential having a market

capitalization within the range of

companies in the S&P Mid-Cap 400

Index. Applicants assert that the

substitution will result in greater

administrative efficiency and enhanced

oversight of the new portfolio by

ASLAC. Applicants assert that the old

portfolio has experienced significant

‘‘capitalization drift’’ causing its

holdings to diverge from its stated midcap investment objective and that

ASLAC will be better able to monitor

the new portfolio’s direction.

Applicants represent that the

management fee of the AST Alger MidCap Growth Portfolio is identical to that

of the Alger American Mid-Cap Growth

Portfolio (0.80%) and that other

expenses of the AST Alger Mid-Cap

Growth Portfolio will be capped at the

same level of other expenses for the

Alger American Mid-Cap Growth

Portfolio (0.04%) for a period of one

year following the substitution. Total

annual expenses for the AST Alger MidCap Growth Portfolio will be the same

as that of the Alger American Mid-Cap

Growth Portfolio (0.84%).

16. ASLAC represents that it will

distribute a prospectus supplement

(‘‘Supplement’’) to Contract Owners

affected by the proposed Substitution

notifying them of ASLAC’s intention to

substitute the Old Portfolios for the New

Portfolios and describing the

Substitutions including a brief

description of the New Portfolios’

investment objectives. The Supplement

will explain that ASLAC has filed an

application with the Commission to

approve the proposed Substitutions and

that from the date of the Supplement

until the date of the Substitutions

(‘‘Substitution Date’’), Contract Owners

will be permitted to make one transfer

of all amounts under a Skandia Contract

invested in the Old Portfolios free of any

applicable transfer charges. The

Supplement will state that ASLAC will

not exercise any rights reserved under

any Skandia Contract to impose

additional restrictions on transfers until

at least 30 days after the Substitution.

17. Within at least five days after the

Substitution Date, ASLAC will mail a

written notice to all Contract Owners

affected by the Substitutions informing

them that the Substitutions were

completed (‘‘Notice’’). Notices will

include transfer request forms, prepaid

postage return envelopes, a current

prospectus, and a confirmation of the

transaction as required under rule 10b–

10 under the Exchange Act. The Notice

will repeat that ASLAC will not exercise

any rights reserved by it under any of

the Skandia Contracts affected by the

Substitutions to impose additional

restrictions on transfers until at least 30

days after the Substitutions.

18. Applicants state that the proposed

Substitutions between sub-accounts will

be effected to the extent practicable ‘‘inkind’’ at the then current unit values of

the sub-accounts in conformity with

Section 22(c) of the 1940 Act and Rule

22c–1 thereunder. Applicants assert that

the terms under which the in-kind

redemptions and purchases will be

made are reasonable and fair and do not

involve overreaching on the part of any

person concerned and the interests of

Contract Owners will not be diluted.

Applicants assert that using partial inkind redemptions will alleviate some of

the expenses involved in the in-kind

redemptions. Applicants represent that

in-kind redemptions will only be used

to the extent they are consistent with

the investment objectives and

applicable diversification requirements

of the New Portfolios, and all

redemptions and purchases will be

effected in conformity with Section

22(c) of the 1940 Act and Rule 22c–1

thereunder, and on a basis consistent

with the valuation procedures of the

applicable Old and New Portfolios

19. Applicants represent that the

Substitutions will occur at relative unit

values of the Old and New Portfolios,

with no net change in the account value

for any Contract Owner. Contract

Owners will not incur any fees or

charges including legal, accounting,

brokerage-related, and other fees and

expenses directly or indirectly as a

result of the transfer of account value

from any Old Sub-account, nor will

their rights, or ASLAC’s obligations,

under any Skandia Contract be altered

in any way. All contract level fees and

charges and the asset-based fees

(mortality, expense risk and

administration fees) deducted by the

separate accounts will remain the same

after the proposed Substitutions. The

proposed Substitutions will not alter in

any way the annuity benefits, tax

benefits or ASLAC’s contractual

obligations under the Skandia Contracts.

20. Applicants represent that the

significant terms of the Substitutions

described in the application include:

(a) The investment objectives of the

New Portfolios will be the same as the

investment objectives of the Old

Portfolios providing Contract Owners a

means to continue their current

investment goals and risk expectations.

(b) The investment in the New

Portfolios may be temporary

investments for Contract Owners since

Contract Owners always may exercise

their own judgment as to the most

appropriate alternative investment

option available to them. No sales

charge will be made in connection with

any transfers among the sub-accounts.

After the Substitutions, the Skandia

Contracts will continue to offer a broad

array of variable investment options.

Contract Owners who have not

annuitized may at any time, before or

after the Substitutions, transfer their

account value to any other sub-account

offered under their respective Skandia

Contract. ASLAC notes the total number

of portfolios available to the Contract

Owners both in number and investment

style are as extensive and diverse as

nearly all other variable contract issuers.

(c) The Substitutions and related

transactions will be effected at the net

asset value of the respective share, in

conformity with Section 22(c) of the

1940 Act and Rule 22c–1 thereunder.

(d) The use of in-kind redemptions, to

the extent appropriate and possible, will

62776 Federal Register / Vol. 65, No. 203 / Thursday, October 19, 2000 / Notices

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

2 17 CFR 240.19b–4.

3 In Amendment No. 1, CBOE amended the text

of the proposed rule change and included a

discussion of the indicator to be used when a book

order is establishing CBOE’s best bid or offer. See

letter from Angelo Evangelou, Attorney, CBOE, to

Joseph Corcoran, Attorney, Division of Market

Regulation, Commission, dated June 20, 2000

(‘‘Amendment No. 1’’).

reduce the brokerage expenses involved

in the Substitutions.

(e) The Contract Owners will not

incur any directly or indirectly related

fees or charges, including brokeragerelated fees or charges, as a result of the

transfer of account value from any Old

Sub-account.

(f) The Substitutions will not alter or

affect the insurance benefits or rights of

Contract Owners or the terms and

obligations of the Skandia Contracts.

(g) The Substitutions are designed to

avoid any adverse effects upon the tax

benefits available to Contract Owners

and are designed not to give rise to any

current Federal income tax to Contract

Owners.

(h) The Substitutions are expected to

confer economic benefit to Contract

Owners as described in the application.

(i) Contract Owners in the new AST

Alger Growth Sub-account and the AST

Alger Mid-Cap Growth Sub-account will

not be subject to any 12b–1 fee, or be

effected by any change in sub-advisor as

a result of AST’s ‘‘manager-ofmanagers’’ exemptive order, unless: (i)

Contract Owners have had a right as

beneficial owners of the AST Portfolios

after the Substitutions to vote to

approve the adoption of a 12b–1 plan or

to approve the ‘‘manager-of-managers’’

order received from the Commission; or

(ii) any Contract Owner allocates his or

her Skandia Contract’s account value to

an AST investment option that has in

effect a 12b–1 fee or ‘‘manager-ofmanagers’’ order.

(j) Other expenses in the new AST

Alger Growth Sub-account and the AST

Alger Mid-Cap Growth Sub-account will

be capped at 0.04% for one year

following the Substitution Date.

Applicant’s Legal Analysis

1. Section 26(b) of the 1940 Act

provides that it shall be unlawful for

any depositor or trustee of a registered

unit investment trust holding the

security of a single issuer to substitute

another security for such security unless

the Commission shall have approved

such substitution; and the Commission

shall issue an order approving such

substitution if the evidence establishes

that it is consistent with the protection

of investors and the purposes fairly

intended by the policy and provisions of

the 1940 Act.

2. Applicants request an order

pursuant to Section 26(b) of the 1940

Act approving the Substitutions.

Applicants assert that the purposes,

terms, and conditions of the

Substitutions are consistent with the

protection for which Section 26(b) was

designed. Applicants assert that the

Substitutions will benefit investors

because they will result in greater

administrative efficiency and enhanced

oversight of the New Portfolios by

ASLAC. Additionally, Applicants assert

that over time, the efficiencies that come

with being part of a large coordinated

fund affiliated with ASLAC will have

resulting benefits to Contract Owners.

3. Additionally, Applicants assert that

the proposed Substitutions and related

transactions will be in the best interests

of Contract Owners in that they will (a)

increase ASLAC’s control over the

administrative aspects of the New

Portfolios; (b) enhance an Old Portfolio

with significant style drift; (c) provide

Contract Owners with a more diverse

number of portfolios within the AST

family; (d) provide a means to gather

significantly more assets; (e) participate

in the value-added manager of managers

platform; (f) reduce conflicts; and (g)

promote administrative efficiencies.

4. Section 17(a)(1) of the 1940 Act

prohibits any affiliated person of a

registered investment company, or any

affiliated person of an affiliated person,

from selling any security or other

property to such registered investment

company. Section 17(a)(2) of the 1940

Act prohibits any such affiliated persons

from purchasing any security or other

property from such registered

investment company.

5. Section 17(b) of the 1940 Act

provides that the Commission may grant

an order exempting a transaction

prohibited by Section 17(a) of the 1940

Act upon application if evidence

establishes that: (a) 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; (b) the proposed transaction

is consistent with the investment policy

of each registered investment company

concerned, as recited in its registration

statement and reports filed under the

1940 Act; and (c) the proposed

transaction is consistent with the

general purposes of the 1940 Act.

6. Applicants request an order

pursuant to Sections 6(c) and 17(b) of

the 1940 Act exempting the in-kind

redemptions and purchases from the

provisions of Section 17(a) of the 1940

Act.

7. Applicants assert that the terms of

the Substitutions are reasonable and fair

and do not involve overreaching on the

part of any person concerned.

Applicants represent that the

Substitutions will be effected at the net

asset value and the interests of Contract

Owners will not be diluted. Applicants

represent that in-kind redemptions will

only be used to the extent they are

consistent with the investment

objectives and applicable diversification

requirements of the affected portfolios.

8. Applicants assert that the

Substitutions and the in-kind

redemptions are consistent with the

policies of each investment company

involved and the general purposes of

the 1940 Act, and comply with the

requirements of Section 17(b).

Conclusion

Applicants assert that, for the reasons

summarized above, the requested order

approving the Substitutions and

exempting the in-kind redemptions

should be granted.

For the Commission, by the Division of

Investment Management, pursuant to the

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 00–26801 Filed 10–18–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43430; File No. SR–CBOE–

00–21]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Board Options Exchange,

Inc. To Amend its Rule Governing the

Operation of Its Automated Book

Priority System To Permit Split-Price

Executions

October 11, 2000.

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 24,

2000, the Chicago Board Options

Exchange, Inc. (‘‘CBOE’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I, II, and III below, which Items

have been prepared by the Exchange.

On June 22, 2000, CBOE filed

Amendment No. 1 to the proposed rule

change.3 The Commission is publishing

this notice to solicit comments on the

proposed rule change from interested

persons.