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

63646 Federal Register / Vol. 65, No. 206 / Tuesday, October 24, 2000 / Notices

both entities are under the control of

FleetBoston.

2. Section 10(f) further provides that

the Commission, by rule or order, may

exempt any transaction or class of

transactions from section 10(f) to the

extent that the exemption is consistent

with the protection of investors. Rule

10f–3 under the Act permits a registered

investment company to make purchases

otherwise prohibited by section 10(f)

under certain conditions, including that

the company may not purchase the

securities being offered directly or

indirectly from its affiliated underwriter

and that purchases of municipal

securities may not be designated as

group sales or otherwise allocated to the

account of the affiliated underwriter.

Among other conditions, rule 10f–3

limits to 25% the amount of an

underwriting that may be purchased by

an investment company, together with

all other investment companies advised

by the same investment adviser.

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

relevant part, prohibits an affiliated

person of a registered investment

company, or an affiliated person of such

person, acting as principal, from selling

securities to the investment company.

Under section 17(b) of the Act, the

Commission will exempt a transaction

from the provisions of section 17(a) if it

finds that the terms of the proposed

transaction are fair and reasonable and

do not involve overreaching on the part

of any person concerned, and that the

proposed transaction is consistent with

the policy of the registered investment

company and the general purposes of

the Act. Section 6(c) of the Act, in

relevant part, permits the Commission

to exempt any transaction or class of

transactions from any provision of the

Act if, and to the extent that, 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.

4. Applicants request relief under

section 10(f) from section 10(f) and

under sections 6(c) and 17(b) from

section 17(a)(1) to permit the Portfolio

to purchase Rhode Island Tax-Exempt

Securities pursuant to the terms of the

Existing Order provided that the

Portfolio, together with the other

Related Purchasers, purchase no more

than 25% of the principal amount of an

offering of such securities. Applicants

state that Fleet Securities has a

dominant presence in the market for

Rhode Island Tax-Exempt Securities.

Applicants also assert that Rhode Island

has a relatively short supply of newlyissued bonds and historically has had a

limited secondary market for Rhode

Island Tax-Exempt Securities. The

Adviser has concluded that, absent the

requested amended order, it may be

unable to obtain sufficient Rhode Island

Tax-Exempt Securities to meet the

Portfolio’s requirements on days when

the supply is relatively low in the

secondary market. In addition, even on

a day when the amount available in the

secondary market is relatively high, the

Adviser has concluded that it may not

be able reliably to meet the Portfolio’s

requirements from that market because

the issues available may be unsuitable

for purchase due to their credit quality

or other characteristics. Applicants

assert that these secondary market

characteristics increase the Portfolio’s

need to acquire a greater percentage of

Rhode Island Tax-Exempt Securities in

underwritten offerings instead of the

secondary market.

5. Applicants state that increasing the

Existing Limit to 25% would benefit the

shareholders of the Portfolio by

providing the Portfolio with adequate

access to the new issue market for

Rhode Island Tax-Exempt Securities.

Applicants assert that the new limit

would provide adequate investor

protection because a significant portion

of an offering in which Fleet Securities

participates would be purchased by

investors other than the Portfolio and

other Related Purchasers. Applicants

further state that the requested order

meets the standards for relief set forth

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

Act.

Applicants’ Conditions

Applicants agree that the amended

order will be subject to the following

conditions:

1. Transactions effected pursuant to

the amended order will be effected in

accordance with all of the provisions of

rule 10f–3 as amended, other than

paragraph (b)(8) thereof. Related

Purchasers will not, in the aggregate,

purchase more than 25% of any class of

an issue of Rhode Island Tax-Exempt

Securities purchased pursuant to the

amended order. If the aggregate number

of securities the Related Purchasers

wish to acquire exceeds this limit, the

securities acquired will be allocated to

each Related Purchaser in the

proportion that the number of securities

that such Related Purchaser wishes to

acquire bears to the total number of

securities that all Related Purchasers

wish to acquire.

2. Transactions may be effected only

in Rhode Island Tax-Exempt Securities

that, at the time of purchase, have one

of the following investment grade

ratings from at least one nationally

recognized rating agency: (i) one of the

two highest investment grade ratings in

the case of securities with remaining

maturities of one year or less, and (ii)

one of the three highest investment

grade ratings in the case of securities

with remaining maturities greater than

one year.

3. Transactions effected pursuant to

the amended order will be limited so

that no such transactions will be

effected if, as a result, the value of

Rhode Island Tax-Exempt Securities

held by the Portfolio and acquired

pursuant to the amended order would

exceed 50% of the total net assets of the

Portfolio.

4. Transactions will be effected

pursuant to the amended order only

when the Rhode Island Tax-Exempt

Securities to be acquired are otherwise

unavailable for purchase. If Fleet

Securities is the sole underwriter of the

securities, this condition is

automatically fulfilled because there is

not other potential seller. When Fleet

Securities is a member of an

underwriting syndicate, the Adviser

will observe the following procedures to

determine when the securities are

unavailable from other members of the

syndicate. Initially, the Adviser will

determine the aggregate number of

securities that the Related Purchasers

wish to acquire. Next, the Adviser will

attempt to purchase as much of this

number as possible from members of the

syndicate other than Fleet Securities.

After acquiring as many securities as

possible from such other members, the

Adviser will attempt to purchase from

Fleet Securities the number of securities

that the Related Purchasers wish to

acquire and have been unable to obtain

from such other members. The

securities acquired from such other

members will be allocated first to the

Portfolio to the extent of the number of

securities it wishes to acquire, or the

number of securities it is entitled to

acquire based upon the relative needs of

the Related Purchasers and the total

number of securities purchased from

such other members and from Fleet

Securities, whichever is less.

5. When the Portfolio purchases

Rhode Island Tax-Exempt Securities

from a syndicate manager of an

underwriting syndicate of which Fleet

Securities is a member, the Portfolio

will not: (i) Submit designated order to

a syndicate manager which are allocated

to Fleet Securities, (ii) submit group

orders to a syndicate manager that

designate Fleet Securities to receive any

portion of the commission, or (iii)

otherwise allocate orders to Fleet

Securities.

6. FleetBoston will not have any

involvement with respect to proposed

Federal Register / Vol. 65, No. 206 / Tuesday, October 24, 2000 / Notices 63647

transactions between the Portfolio and

Fleet Securities and will not attempt to

influence or control in any way the

Adviser’s placement of orders with Fleet

Securities.

7. The exemption will be valid only

so long as the Adviser and Fleet

Securities operate as separate entities

and independent profit centers within

the holding company framework of

FleetBoston, with their own separate

officers and employees, separate

capitalizations, and separate books and

records.

8. The legal departments of Fleet

Securities and the Adviser will prepare

amended guidelines for personnel of

Fleet Securities and the Adviser to make

certain that transactions conducted

pursuant to the amended order comply

with the conditions set forth in the

application and that the parties

maintain arm’s length relationships. The

legal departments will periodically

monitor the activities of Fleet Securities

and the Adviser to make certain that

such guidelines and the conditions set

forth in the application are adhered to.

9. The board of trustees of the Trust,

including a majority of the trustees who

are not interested persons under section

2(a)(19) of the Act and have no direct or

indirect financial interest in the

transaction, will review, no less

frequently than quarterly, each

transaction conducted pursuant to the

amended order since the last review and

will determine that the terms of such

transaction were reasonable and fair to

the shareholders of the Portfolio and did

not involve overreaching of the Portfolio

or its shareholders on the part of any

person concerned. In considering

whether the price paid for the security

was reasonable and fair, the price of the

security will be analyzed with respect to

comparable transactions involving

similar securities being purchased or

sold during a comparable period of

time.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–27216 Filed 10–23–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Investment Company Act Rel. No. IC 24691;

File No. 812–12218]

Mutual of America Investment

Corporation, et al.

October 17, 2000.

AGENCY: Securities and Exchange

Commission (the ‘‘Commission’’ or

‘‘SEC’’).

ACTION: Notice of application for an

order pursuant to Section 6(c) of the

Investment Company Act of 1940 (the

‘‘1940 Act’’) granting exemptions from

the provisions of Sections 9(a), 13(a),

15(a) and 15(b) thereof and Rules 6e–

2(b)(15) and 6e–3(T)(b)(15) thereunder.

APPLICANTS: Mutual of America

Investment Corporation (the

‘‘Investment Company’’) and Mutual of

America Capital Management

Corporation (‘‘Capital Management’’).

SUMMARY OF APPLICATION: Applicants

seek exemptive relief to the extent

necessary to permit shares of the

Investment Company and shares of any

other investment company or portfolio

that is designed to fund variable life

insurance policies and/or variable

annuity contracts (collectively,

‘‘Variable Contracts’’) and for which

Capital Management or its affiliates may

serve in the future as investment

adviser, manager, principal underwriter,

sponsor, or administrator (‘‘Future

Investment Companies’’) (collectively

with the Investment Company, the

‘‘Investment Companies’’) to be sold to

and held by (i) separate accounts

funding Variable Contracts issued by

both affiliated and unaffiliated life

insurance companies and (ii) qualified

pension and retirement plans

(‘‘Qualified Plans’’ or ‘‘Plans’’) outside

the separate account context.

FILING DATE: The application was filed

on August 11, 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 Secretary of

the Commission 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 7, 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 interests, the reason for

the request, and the issues contested.

Persons may request notification of a

hearing by writing to the Secretary of

the Commission.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, NW., Washington, DC 20549–

0609. Applicants, c/o Dolores J.

Morrissey, President and Chief

Executive Officer, Mutual of America

Investment Corporation, 320 Park

Avenue, New York, New York 10022;

copy to J. Sumner Jones, Esq., Jones &

Blouch L.L.P., 1025 Thomas Jefferson

St., NW., Suite 410 East, Washington,

DC 20007–0805.

FOR FURTHER INFORMATION CONTACT:

Keith Carpenter, Branch Chief, or

Rebecca A. Marquigny, Senior Counsel,

Office of Insurance Products, Division of

Investment Management, at (202) 942–

0670.

SUPPLEMENTARY INFORMATION: The

following is a summary of the

Application. The complete Application

is available for a fee from the SEC’s

Public Reference Branch, 450 Fifth St.,

NW., Washington, DC 20549 (tel. (202)

942–8090).

Applicants’ Representations

1. The Investment Company is a

Maryland corporation that is registered

under the 1940 Act as an open-end

management investment company. It

currently has nine investment portfolios

(each a ‘‘Fund’’): the Equity Index Fund,

All America Fund, Mid-Cap Equity

Index Fund, Aggressive Equity Fund,

Composite Fund, Bond Fund, Mid-Term

Bond Fund, Short-Term Bond Fund and

Money Market Fund. Currently, the

Investment Company sells shares of the

Funds to the respective separate

accounts of Mutual America Life

Insurance Company (‘‘Mutual of

America’’) and The American Life

Insurance Company of New York

(‘‘American Life’’), an indirect whollyowned subsidiary of Mutual of America,

as investment vehicles for Variable

Contracts issued by such companies.

The Investment Company may offer

additional investment portfolios in the

future (each a ‘‘Future Fund’’) (the

current Funds and the Future Funds are

collectively referred to as the ‘‘Funds’’).

2. Capital Management is registered as

an investment adviser under the

Investment Advisers Act of 1940 and

serves as the investment adviser to the

Investment Company. Capital

Management is an indirect whollyowned subsidiary of Mutual of America.

3. Mutual of America has entered into

an agreement to sell American Life to an

unaffiliated third party. As of the date

of such sale, American Life will no

longer be an affiliate of Mutual of

America and the Investment Company,

and the provisions of Rules 6e–2 and