63642 Federal Register / Vol. 65, No. 206 / Tuesday, October 24, 2000 / Notices

1 15 U.S.C. 78l(d).

2 17 CFR 240.12d2–2(d).

3 15 U.S.C. 78l(g).

4 15 U.S.C. 78m. 5 17 CFR 200.30–3(a)(1).

1All existing Blair Funds that currently intend to

rely on the requested order are named as applicants.

Applicants also request that the order extend to

each applicant’s successor in interest, which is any

entity or entities that result from a reorganization

of the entity into another jurisdiction or a change

in the type of business organization of the entity.

SECURITIES AND EXCHANGE

COMMISSION

Issuer Delisting; Notice of Application

to Withdraw from Listing and

Registration; (The Network

Connection, Inc., Common Stock,

$.001 Par Value, and Attached

Common Stock Purchase Rights) File

No. 1–13760

October 18, 2000.

The Network Connection, Inc.

(‘‘Company’’) has filed an application

with the Securities and Exchange

Commission (‘‘Commission’’), pursuant

to Section 12(d) of the Securities

Exchange Act of 1934 (‘‘Act’’) 1 and Rule

12d2–2(d) 2 thereunder, to withdraw its

Common Stock, $.001 par value, and

attached Common Stock Purchase

Rights (referred to collectively herein as

the ‘‘Securities’’) from listing and

registration on the Boston Stock

Exchange (‘‘BSE’’).

In addition to being listed and

registered on the BSE, the Securities

trade over-the-counter and have been

designated for quotation on the

SmallCap Market of the Nasdaq Stock

Market, Inc. (‘‘Nasdaq’’) since May 1995.

The Company does not see any

particular advantage in its Securities

trading on two markets and so has

applied to withdraw the Securities from

listing and registration on the BSE in

order to avoid possible fragmentation of

the market for such Securities and to

save the expense of maintaining the

secondary listing.

The Company has stated in its

application that it has complied with

the rules of the BSE governing the

withdrawal of its Securities from listing

and that the BSE has in turn indicated

that it will not oppose such withdrawal.

In addition, the Company has stated that

its application relates solely to the

withdrawal of the Securities from listing

and registration on the BSE and shall

have no effect upon either their

continued designation for quotation on

the Nasdaq, their registration under

Section 12(g) of the Act,3 or the

Company’s continued obligation to file

with the Commission the periodic and

other reports required by Section 13 of

the Act.4

Any interested person may, on or

before November 8, 2000, submit by

letter to the Secretary of the Securities

and Exchange Commission, 450 Fifth

Street, NW., Washington, DC 20549–

0609, facts bearing upon whether the

application has been made in

accordance with the rules of the BSE

and what terms, if any, should be

imposed by the Commission for the

protection of investors. The

Commission, based on the information

submitted to it, will issue an order

granting the application after the date

mentioned above, unless the

Commission determines to order a

hearing on the matter.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.5

Jonathan G. Katz,

Secretary.

[FR Doc. 00–27235 Filed 10–23–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Investment Company Act Release No.

24694; 812–11608]

William Blair Funds and William Blair

& Company, L.L.C.; Notice of

Application

October 17, 2000.

AGENCY: Securities and Exchange

Commission (‘‘Commission’’).

ACTION: Notice of application for an

order under section 12(d)(1)(J) of the

Investment Company Act of 1940

(‘‘Act’’) for an exemption from sections

12(d)(1)(A) and (B) of the Act, under

sections 6(c) and 17(b) of the Act for an

exemption from section 17(a) of the Act,

and under section 17(d) of the Act and

rule 17d–1 under the Act to permit

certain joint transactions.

SUMMARY OF APPLICATION: The applicants

request an order that would permit

certain registered management

investment companies and private

accounts to invest uninvested cash and

cash collateral in one or more affiliated

money market funds and engage in

certain transactions with each other.

Applicants: William Blair Funds on

behalf of its series William Blair Growth

Fund, William Blair Tax-Managed

Growth Fund, William Blair Large Cap

Growth Fund, William Blair Small Cap

Growth Fund, William Blair

International Growth Fund, William

Blair Emerging Markets Growth Fund,

William Blair Disciplined Large Cap

Fund, William Blair Value Discovery

Fund, William Blair, Millennium Fund,

William Blair Income Fund, William

Blair Ready Reserves Fund, each

subsequently created series, and any

registered management investment

company and its series that are

currently or in the future advised by

William Blair Advisers (defined below)

(‘‘Blair Funds’’), and William Blair &

Company, L.L.C. and any entity

controlling, controlled by, or under

common control with William Blair &

Company, L.L.C. (‘‘William Blair

Advisers’’).

FILING DATES: The application was filed

on May 14, 1999. Applicants have

agreed to file an amendment during the

notice period, the substance of which is

reflected in this notice.

Hearing or Notification of Hearing: An

order granting the requested relief will

be issued unless the Commission orders

a hearing. Interested persons may

request a hearing by writing to the

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 November 13, 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 request should state the

nature of the writer’s interest, the reason

for the request, and the issues contested.

Persons may request notification of a

hearing by writing to the Commission’s

Secretary.

ADDRESSES: Secretary, Commission, 450

5th Street, NW., Washington, DC 20549–

0609. Applicants, 227 West Monroe

Street, Chicago, IL 60606.

FOR FURTHER INFORMATION CONTACT: Anu

Dubey, Senior Counsel, at (202) 942–

0687, or Michael Mundt, Branch Chief,

at (202) 942–0564 (Division of

Investment Management, Office of

Investment Company Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee at the

Commission’s Public Reference Branch,

450 5th Street, NW, Washington, DC

20549–0102 (tel. 202–942–8090).

Applicants’ Representations

1. William Blair Funds is organized as

a Delaware business trust and is an

open-end management investment

company registered under the Act. One

of the series of the William Blair Funds

is a money market fund subject to the

requirements of rule 2a–7 under the Act

(together with future Blair Funds that

are money market funds, the ‘‘Money

Market Funds’’).1 William Blair &

Federal Register / Vol. 65, No. 206 / Tuesday, October 24, 2000 / Notices 63643

Any other existing or future entity will rely on the

order only in accordance with the terms and

conditions of the application.

Company, L.L.C. is the investment

adviser to each series of the William

Blair Funds. Each of the William Blair

Advisers is or will be registered as an

investment adviser under the

Investment Advisers Act of 1940. A

William Blair Adviser may serve as

investment adviser to institutional and

individual managed accounts

(‘‘Managed Accounts’’). The

accountholders of the Managed

Accounts are individual institutions and

natural persons. The Managed Accounts

are not pooled investment vehicles.

2. Applicants state that the Blair

Funds that are not Money Market Funds

(‘‘Investing William Blair Funds’’) and

Managed Accounts have, or may be

expected to have, uninvested cash. Such

cash may result from a variety of

sources, including dividends or interest

received on portfolio securities,

unsettled securities transactions,

reserves held for investment strategy

purposes, scheduled maturity of

investments, liquidation of investment

securities to meet anticipated

redemptions, dividend payments or new

monies received from investors

(‘‘Uninvested Cash’’). Certain of the

Blair Funds also may participate in a

securities lending program under which

they loan their portfolio securities to

registered broker-dealers or other

institutional investors (‘‘Securities

Lending Program’’). The loans are

secured by collateral, including cash

collateral (‘‘Cash Collateral’’), equal at

all times to at least the market value of

the securities loaned. The Managed

Accounts also may have Cash Collateral.

Applicants request an order to permit

the Investing William Blair Funds and

Managed Accounts (together, the

‘‘Investing Funds’’) to use their

Uninvested Cash and Cash Collateral to

purchase shares of one or more of the

Money Market Funds, and the Money

Market Funds to sell their shares to, and

redeem their shares from, the Investing

Funds.

3. Applicants also state that the Blair

Funds and Managed Accounts currently

engage in purchase and sale transactions

with other Blair Funds involving shortterm money market instruments in

reliance on rule 17a–7 under the Act.

Applicants also seek relief so that

Investing Funds may engage in these

interfund transactions in the event that

the Investing Funds become affiliated

persons of Blair Funds by virtue of

owning more than 5% of a Money

Market Fund (‘‘Interfund

Transactions’’).

Applicant’s Legal Analysis

I. Investment of Uninvested Cash and

Cash Collateral

A. Section 12(d)(1)

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

provides that no registered investment

company may acquire securities of

another investment company if such

securities represent more than 3% of the

acquired company’s outstanding voting

stock, more than 5% of the acquiring

company’s total assets, or if such

securities, together with the securities of

other acquired investment companies,

represent more than 10% of the

acquiring company’s outstanding total

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

provides that no registered open-end

investment company may sell its

securities to another investment

company if the sale will cause the

acquiring company to own more than

3% of the acquired company’s voting

stock, of if the sale will cause more than

10% of the acquired company’s voting

stock to be owned by investment

companies.

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

provides that the Commission may

exempt any person, security, or

transaction from any provision of

section 12(d)(1) if and to the extent that

such exemption is consistent with the

public interest and the protection of

investors.

3. Applicants request relief under

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

Investing William Blair Funds to use

their Uninvested Cash and Cash

Collateral to acquire shares of the

Money Market Funds in excess of the

percentage limitations in section

12(d)(1)(A), provided however, that in

all cases an Investing William Blair

Fund’s aggregate investment of

Uninvested Cash in shares of the Money

Market Funds will not exceed 25% of

the Investing William Blair Fund’s total

assets at any time. Applicants also

request relief to permit the Money

Market Funds to sell their securities to

the Investing William Blair Funds in

excess of the percentage limitations in

section 12(d)(1)(B).

4. Applicants state that the proposed

arrangement will not result in the

abuses that sections 12(d)(1)(A) and (B)

were intended to prevent. Applicants

state that there is no threat of

redemption to gain undue influence

over the Money Market Funds due to

the highly liquid nature of each Money

Market Fund’s portfolio. Applicants also

note that the William Blair Advisers

will serve as investment advisers to all

of the Blair Funds. Applicants state that

the proposed arrangement will not

result in inappropriate layering of either

sales charges or investment advisory

fees. Shares of the Money Market Funds

sold to the Investing William Blair

Funds will not be subject to a sales load,

redemption fee, asset-based distribution

fee or service fee. In connection with

approving any advisory contract for an

Investing William Blair Fund, the board

of trustees of each Investing William

Blair Fund (‘‘Board’’), including a

majority who are not ‘‘interested

persons,’’ as defined in section 2(a)(19)

of the Act (‘‘Independent Trustees’’),

shall consider to what extent, if any, the

advisory fees charged to the Investing

William Blair Fund by the William Blair

Adviser should be reduced to account

for reduced services provided to the

Investing William Blair Fund by the

William Blair Adviser as a result of

Uninvested Cash being invested in the

Money Market Funds. Applicants

represent that no Money Market Funds

will acquire securities of any other

investment company in excess of the

limitations contained in section

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

B. Section 17(a)

5. Section 17(a) of the Act makes it

unlawful for any affiliated person of a

registered investment company, acting

as principal, to sell or purchase any

security to or from the investment

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

defines an affiliated person of an

investment company to include 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,

any person 5% or more of whose

outstanding securities are directly or

indirectly owned, controlled, or held

with power to vote by the other person,

any person directly or indirectly

controlling, controlled by, or under

common control with the other person,

and any investment adviser to the

investment company. Because the Blair

Funds and the Managed Accounts share

a common investment adviser, they may

be deemed to be under common control

and thus affiliated persons of each of the

other Blair Funds and Managed

Accounts. In addition, if an Investing

Fund purchases more than 5% of the

voting securities of a Money Market

Fund, the Investing Fund and Money

Market Fund would be affiliated

persons of each other. As a result of

these affiliations, section 17(a) would

prohibit the sale of the shares of Money

Market Funds to the Investing William

Blair Funds, and the redemption of the

shares by Money Market Funds.

6. Section 17(b) of the Act authorizes

the Commission to exempt a transaction

63644 Federal Register / Vol. 65, No. 206 / Tuesday, October 24, 2000 / Notices

from section 17(a) of the Act 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, and the proposed

transaction is consistent with the policy

of each investment company concerned

and with the general purposes of the

Act. Section 6(c) of the Act permits the

Commission to exempt persons or

transactions from any provision of the

Act, if the 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.

7. Applicants submit that their

request for relief to permit the purchase

and redemption of shares of the Money

Market Funds by the Investing William

Blair Funds satisfies the standards in

sections 6(c) and 17(b). Applicants state

that the Investing William Blair Funds

will retain their ability to invest

Uninvested Cash and Cash Collateral

directly in money market instruments as

authorized by their respective

investment objectives and policies, if

they believe they can obtain a higher

return or for any other reason. Similarly,

a Money Market Fund has the right to

discontinue selling shares to any of the

Investing William Blair Funds if the

Money Market Fund’s board of trustees

or investment adviser determines that

such sale would adversely affect its

portfolio management and operations.

In addition, applicants note that shares

of the Money Market Funds will be

purchased and redeemed at their net

asset value, the same consideration paid

and received for these shares by any

other shareholders.

C. Section 17(d) and Rule 17d–1

8. Section 17(d) of the Act and rule

17d–1 under the Act prohibit an

affiliated person of an investment

company, acting as principal, from

participating in or effecting any

transaction in connection with any joint

enterprise or joint arrangement in which

the investment company participates,

unless the Commission has approved

the joint arrangement. Applicants state

that the Investing Funds and the Money

Market Funds, by participating in the

proposed transactions, and the William

Blair Advisers, by effecting the

proposed transactions, could be deemed

to be participating in a joint

arrangement within the meaning of

section 17(d) and rule 17d–1.

9. In considering whether to approve

a joint transaction under rule 17d–1, the

Commission considers whether the

investment company’s participation in

the joint enterprise is consistent with

the provisions, policies and purposes of

the Act and the extent to which

participation in the joint enterprise is on

a basis different from or less

advantageous than that of other

participants. Applicants state that, for

the reasons discussed above, the

proposed transactions meet the

standards for an order under rule 17d–

1.

II. Interfund Transactions

10. Rule 17a–7 under the Act excepts

from the prohibitions of section 17(a)

the purchase or sale of certain securities

between registered investment

companies which are affiliated persons,

or affiliated persons of affiliated

persons, of each other, or between a

registered investment company and a

person which is an affiliated person of

such company, or an affiliated person of

an affiliated person, solely by reason of

having a common investment adviser or

affiliated investment advisers, common

officers and/or common directors. In the

event that the Investing Funds could be

deemed to be affiliated persons of each

other, and of the Money Market Funds,

by virtue of an Investing Fund owning

5% or more of the outstanding voting

securities of a Money Market Fund,

applicants state that they would be

unable to rely on rule 17a–7 to effect

Interfund Transactions.

11. Applicants request relief under

sections 6(c) and 17(b) of the Act to

permit the Interfund Transactions.

Applicants submit that the Investing

Funds and the Money Market Funds

will comply with rule 17a–7 under the

Act in all respects, other than the

requirement that the participants be

affiliated solely by reason of having a

common investment adviser or affiliated

investment advisers, common officers

and/or common directors, solely

because the Investing Funds and the

Money Market Funds might become

affiliated persons within the meaning of

sections 2(a)(3)(A) and (B) of the Act.

Applicants state that the Interfund

Transactions will be reasonable and fair,

will not involve overreaching, and will

be consistent with the purposes of the

Act and the policy of each registered

investment company concerned.

Applicants’ Conditions

Applicants agree that the order

granting the requested relief shall be

subject to the following conditions:

1. Shares of the Money Market Funds

sold to and redeemed by the Investing

William Blair Funds will not be subject

to a sales load, redemption fee,

distribution fee under a plan adopted in

accordance with rule 12b–1 under the

Act, or service fee (as defined in rule

2830(b)(9) of the National Association of

Securities Dealers’ Conduct Rules).

2. No Money Market Fund will

acquire securities of any other

investment company in excess of the

limits contained in section 12(d)(1)(A)

of the Act.

3. Each of the Investing William Blair

Funds will invest Uninvested Cash in,

and hold shares of, a Money Market

Fund only to the extent that such

Investing William Blair Fund’s aggregate

investment of Uninvested Cash in all

the Money Market Funds does not

exceed 25% of the Investing William

Blair Fund’s total assets. For purposes of

this limitation, each Investing William

Blair Fund or series thereof will be

treated as a separate investment

company.

4. Each Investing Fund and Money

Market Fund relying on the order will

be advised by a William Blair Adviser.

5. Investment by an Investing William

Blair Fund in shares of the Money

Market Funds will be in accordance

with each Investing William Blair

Fund’s respective investment

restrictions and will be consistent with

each Investing William Blair Fund’s

policies as set forth in its prospectus

and statement of additional information.

6. Before the next meeting of the

Board is held for the purpose of voting

on an advisory contract under section

15 of the Act, the William Blair Adviser

to the Investing William Blair Fund will

provide the Board with specific

information regarding the approximate

cost to the William Blair Adviser of, or

portion of the advisory fee under the

existing advisory contract attributable

to, managing the Uninvested Cash of the

Investing William Blair Fund that can

be expected to be invested in the Money

Market Funds. In connection with

approving any advisory contract for an

Investing William Blair Fund, the

Board, including a majority of the

Independent Trustees, shall consider to

what extent, if any, the advisory fees

charged to the Investing William Blair

Fund by the William Blair Adviser

should be reduced to account for

reduced services provided to the

Investing William Blair Fund by the

William Blair Adviser as a result of

Uninvested Cash being invested in the

Money Market Funds. The minute books

of the Investing William Blair Fund will

record fully the Board’s consideration in

approving the advisory contract,

including the considerations referred to

above.

7. Before a Blair Fund may participate

in the Securities Lending Program, a

majority of the trustees (including a

majority of the trustees who are not

Federal Register / Vol. 65, No. 206 / Tuesday, October 24, 2000 / Notices 63645

1The Galaxy Fund, Investment Company Act Rel.

Nos. 20660 (Oct. 26, 1994) (notice) and 20726 (Nov.

22, 1994) (order). A group order is an order that is

allocated to all members of an underwriting

syndicate in proportion to their relative

participations.

‘‘interested persons,’’ as defined in

section 2(a)(19) of the Act) of the Blair

Fund will approve the Blair Fund’s

participation in the Securities Lending

Program. Such trustees also will

evaluate the securities lending

arrangement and its results no less

frequently than annually and determine

that any investment of Cash Collateral

in the Money Market Funds is in the

best interest of the shareholders of the

Investing William Blair Fund.

8. To engage in Interfund

Transactions, the Investing Funds and

Money Market Funds will comply with

Rule 17a–7 under the Act in all respects

other than the requirement that the

parties to the transactions be affiliated

persons (or affiliated persons of

affiliated persons) of each other solely

by reason of having a common

investment adviser or investment

advisers which are affiliated persons of

each other, common officers and/or

common directors, solely because the

Investing Funds and Money Market

Funds might become affiliated persons

within the meaning of section 2(a)(3)(A)

and (B) of the Act.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–27215 Filed 10–23–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Investment Company Act Release No.

24692; 812–11376]

The Galaxy Fund, et al.; Notice of

Application

October 17, 2000.

AGENCY: Securities and Exchange

Commission (‘‘Commission’’).

ACTION: Notice of an application under

sections 6(c), 10(f), and 17(b) of the

Investment Company Act of 1940

(‘‘Act’’) for an exemption from sections

10(f) and 17(a)(1) of the Act.

SUMMARY OF THE APPLICATION: The

requested order would amend an

existing order that permits an open-end

management investment company to

purchase certain securities: (i) from an

affiliated underwriter, if such securities

are solely underwritten by that

underwriter or are unavailable from

other members of an underwriting

syndicate, and (ii) through group orders

placed with an underwriting syndicate

that includes the affiliated underwriter.

Applicants: The Galaxy Fund

(‘‘Trust’’); Fleet Investment Advisors,

Inc. (‘‘Adviser’’); and Fleet Securities,

Inc. (‘‘Fleet Securities’’).

FILING DATES: The application was filed

on October 28, 1998, and was amended

on April 22, 1999, and February 18,

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 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 November 9, 2000, and

should be accompanied by proof of

service on applicants in the form of an

affidavit or, for lawyers, a certificate of

service. Hearing requests should state

the nature of the writer’s interest, the

reason for the request, and the issues

contested. Persons may request

notification by writing to the

Commission’s Secretary.

ADDRESSES: Secretary, Securities and

Exchange Commission, 450 Fifth Street,

NW., Washington, DC 20549–0609.

Applicants: Trust, c/o Drinker Biddle &

Reath LLP, Attn: Mary Jo Reilly, Esq. or

Terry Riley, Esq., 1345 Chestnut Street,

Philadelphia, PA 19107; Adviser, 75

State Street, Boston, MA 02109; Fleet

Securities, 14 Wall Street, 27th Floor,

New York, NY 10005.

FOR FURTHER INFORMATION CONTACT:

Bruce R. MacNeil, Senior Counsel, at

(202) 942–0634, or Nadya B. Roytblat,

Assistant Director, at (202) 942–0564

(Division of Investment Management,

Office of Investment Company

Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee from the

Commission’s Public Reference Branch,

450 Fifth Street, NW., Washington, DC

20549–0102 (telephone (202) 942–8090).

Applicants’ Representations

1. The Trust is an open-end

management investment company

registered under the Act. The Trust

offers several investment portfolios,

including the Rhode Island Municipal

Bond Fund (‘‘Portfolio’’). The Adviser,

which is registered under the

Investment Advisers Act of 1940, serves

as investment adviser to the Portfolio.

The Adviser is an indirect whollyowned subsidiary of FleetBoston

Corporation (‘‘FleetBoston’’).

2. The Portfolio’s investment objective

is to seek as high a level of current

interest income exempt from federal

income tax and, to the extent possible,

from Rhode Island personal income tax,

as is consistent with relative stability of

principal. To achieve this objective, at

least 65% of the Portfolio’s assets are

invested in: (i) debt securities of the

State of Rhode Island, its political

subdivisions, authorities, agencies,

instrumentalities and corporations, the

interest on which is exempt from federal

and Rhode Island personal income taxes

(‘‘Rhode Island Tax-Exempt

Securities’’); and (ii) debt securities of

certain other governmental issuers such

as Puerto Rico, the interest on which is

exempt from federal and Rhode Island

personal income taxes.

3. Fleet Securities, a wholly-owned

subsidiary of FleetBoston, is one of the

top three underwriters of most types of

Rhode Island Tax-Exempt Securities

based on both dollar volume and

number of new issues. In 1994,

applicants received an exemptive order

under sections 6(c), 10(f), and 17(b) of

the Act that permits the Portfolio to

purchase Rhode Island Tax-Exempt

Securities: (i) from Fleet Securities,

where Fleet Securities is the sole

underwriter or such securities are

unavailable from other members of an

underwriting syndicate, and (ii) through

group orders placed with an

underwriting syndicate of which Fleet

Securities is a member (‘‘Existing

Order’’).1 Under the Existing Order, the

Portfolio and all other entities for which

investment decisions are made by the

Adviser, Fleet Securities, FleetBoston,

and/or affiliated persons of the Adviser,

Fleet Securities, and FleetBoston

(collectively, ‘‘Related Purchasers’’),

may not, in the aggregate, purchase

more than the greater of 4% or

$500,000, but in no event more than

10%, of any class of an issue of Rhode

Island Tax-Exempt Securities (‘‘Existing

Limit’’). Applicants seek to amend the

Existing Order to increase the Existing

Limit consistent with rule 10f–3 under

the Act currently in effect.

Applicants’ Legal Analysis:

1. Section 10(f) of the Act, in relevant

part, prohibits a registered investment

company from purchasing securities

from an underwriting syndicate in

which an affiliated person of the

company’s investment adviser acts as a

principal underwriter. Under section

2(a)(3) of the Act, Fleet Securities is an

affiliated person of the Adviser because