Federal Register / Vol. 65, No. 229 / Tuesday, November 28, 2000 / Notices 70849

SECURITIES AND EXCHANGE

COMMISSION

[Investment Company Act Release No.

24745 812–12250]

Neuberger Berman Equity Funds, et

al., Notice of Application

November 21, 2000.

AGENCY: Securities and Exchange

Commission (‘‘Commission’’).

ACTION: Notice of an 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 the series of

certain registered open-end management

investment companies to acquire all of

the assets and stated liabilities of the

series of certain other registered openend management investment

companies. Because of certain

affiliations, applicants may not rely on

rule 17a–8 under the Act.

Applicants: Neuberger Berman Equity

Funds, on behalf of its underlying

series: Neuberger Berman Century,

Focus, Genesis, Guardian, International,

Manhattan, Millennium, Partners,

Regency, Socially Responsive, and

Technology Funds; and Neuberger

Berman Income Funds, on behalf of its

underlying series: Neuberger Berman

Government Money, Municipal Money,

High Yield Bond, and Limited Maturity

Bond Funds, as well as Neuberger

Berman Cash Reserves and Neuberger

Berman Municipal Securities Trust

(each series individually an ‘‘Acquiring

Fund’’ and collectively, the ‘‘Acquiring

Funds’’); Neuberger Berman Equity

Trust, on behalf of its underlying series:

Neuberger Berman Century, Focus,

Genesis, Guardian, International,

Manhattan, Millennium, Partners,

Regency, Socially Responsive and

Technology Trusts; Neuberger Berman

Equity Assets, on behalf of its

underlying series: Neuberger Berman

Focus, Genesis, Guardian, Manhattan,

Millennium, Partners and Socially

Responsive Assets; Neuberger Berman

Equity Series, on behalf of its

underlying series: Neuberger Berman

Genesis Institutional; and Neuberger

Berman Income Trust, on behalf of its

underlying series: Neuberger Berman

Limited Maturity Bond and Institutional

Cash Trusts (each series individually an

‘‘Acquired Fund’’ and collectively, the

‘‘Acquired Funds’’) (the Acquired Funds

and the Acquiring Funds collectively,

the ‘‘Funds’’); Neuberger Berman

Management Inc. (‘‘NBMI’’), and

Neuberger Berman, LLC (‘‘Neuberger

Berman’’) (NBMI and Neuberger Berman

are referred to collectively as the

‘‘Advisers’’).

Filing Dates: The application was

filed on September 13, 2000. 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 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 December 14, 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

Commission’s Secretary.

ADDRESSES: Secretary, Commission, 450

Fifth Street, NW., Washington, DC

20549–0609; Applicants, 605 Third

Avenue, 21st Floor, New York, NY

10158–3698.

FOR FURTHER INFORMATION CONTACT:

Lidian Pereira, Senior Counsel, at (202)

942–0524 or Christine Y. Greenlees,

Branch Chief, at (202) 952–0564

(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 Fifth Street, NW., Washington, DC

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

Applicant’s Representations

1. The Funds are registered under the

Act as open-end management

investment companies. Each of the

Funds is a feeder fund in a masterfeeder structure. Each Acquired Fund

and its corresponding Acquiring Fund

invest in the same master fund (the

‘‘Master Fund’’). Each Master Fund is

registered under the Act as an open-end

management investment company.

2. Both NBMI and Neuberger Berman

are registered as investment advisers

under the Investment Advisers Act of

1940. NBMI serves as the investment

adviser for each Master Fund and as the

administrator for each Fund. Neuberger

Berman serves as sub-adviser to each

master Fund. NBMI and Neuberger

Berman are wholly-owned subsidiaries

of Neuberger Berman, Inc., a publicly

owned holding company owned

primarily by the employees of

Neuberger Berman. One of the Advisers

or individuals or entities that are

affiliated with the Advisers hold

beneficially or of record more than 5%

and in some cases more than 25%, of

the outstanding shares of several of the

Funds. In addition, certain third parties

each owns more than 5% of two of the

Funds. Further, certain Funds each

owns 5% or more of the corresponding

Master Fund.

3. On June 6, 2000, the boards of

trustees of the Acquiring Funds and the

Acquired Funds (the ‘‘Boards’’),

respectively, including all of the

trustees who are not ‘‘interested

persons’’ of the Funds, as defined in

section 2(a)(19) of the Act

(‘‘Independent Trustees’’), approved an

Agreement and Plan of Reorganization

(‘‘the Agreement’’). Under the

Agreement, each Acquiring Fund will

acquire all of the assets and assume the

stated liabilities of its corresponding

Acquired Fund in exchange for shares of

the Trust Class, Advisor Class or

Institutional Class of the Acquiring

Fund (the ‘‘Reorganization’’). Pursuant

to the Agreement, each shareholder of

an Acquired Fund will receive shares of

the Trust Class, Advisor Class or

Institutional Class of the corresponding

Acquiring Fund having an aggregate net

asset value (‘‘NAV’’) equal to the

aggregate NAV of the Acquired Fund’s

shares held by that shareholder,

determined as of the close of regular

trading on New York Stock Exchange on

the closing date (the ‘‘Closing Date’’).

The valuation will be made in

accordance with the procedures set

forth in the then-current prospectus and

statement of additional information for

the Funds. On or as soon as practicable

after the Closing Date, the classes of

shares of the Acquiring Fund received

by the Acquired Fund will be

distributed pro rata to the shareholders

of the Acquired Fund and the Acquired

Fund will be dissolved. The

Reorganization is designed to convert

the master-feeder structure of the Funds

into a multiple class structure.

4. Each of the Acquired Funds has

investment objectives, policies, and

restrictions that are identical to those of

its corresponding Acquiring Fund and

to those of its Master Fund. The

Acquired Funds and the Acquiring

Funds are sold without a front-end or

contingent deferred sales charge. The

Acquired Funds and the Acquiring

Funds impose distribution and service

fees that will remain the same after the

Reorganization. No sales charge,

redemption fee or exchange fee will be

70850 Federal Register / Vol. 65, No. 229 / Tuesday, November 28, 2000 / Notices

1Three of the Acquired Funds did not obtain

sufficient votes to approve their respective

Reorganization. On November 13, 2000, the Boards

of these three Acquired Funds voted to approve the

Reorganizations, pursuant to authority granted in

the Funds’ Declarations of Trust.

1 15 U.S.C. 78k–1.

2 17 CFR 240.11Aa3–2.

3On July 28, 2000, the Commission approved a

national market system plan for the purpose of

creating and operating an intermarket options

market linkage proposed by the American Stock

Exchange LLC (‘‘Amex’’), the Chicago Board

Options Exchange, Inc. (‘‘CBOE’’), and the

International Securities Exchange LLC (‘‘ISE’’). See

Securities Exchange Act Release No. 43086 (July 28,

2000), 65 FR 48023 (August 4, 2000).

imposed in connection with the

Reorganization. 5. The Boards, including a majority of

the Independent Trustees, determined

that participation in the Reorganization

is in the best interests of each Fund, and

that the interests of existing

shareholders of each Fund will not be

diluted as a result of the Reorganization.

In assessing the Reorganization, the

Boards considered a number of factors,

including: (a) The terms and conditions

of the Reorganization; (b) the potential

administrative benefits and savings that

may be achieved from the simplified

structure; (c) the tax-free nature of the

reorganization; (d) the compatibility of

the investment objectives, policies and

restrictions among the Funds; and (e)

the greater likelihood of asset growth

that potentially may result from a more

familiar structure and the greater

economies of scale that can be achieved

from such asset growth, including

without limitation lower management

fees that take effect at certain asset level

breakpoints. The Funds will bear the

expenses associated with the

Reorganization, as determined by the

Board of each Fund.

6. The consummation of the

Reorganization is subject to various

conditions, including: (a) The approval

of the Reorganization by the

shareholders of each Acquired Fund; (b)

completion of all filings with, and

receipt of all necessary approvals from,

the Commission; and (c) delivery of

legal opinions regarding the federal tax

consequences of the Reorganization.

The Reorganization Plan for an

Acquired Fund may be terminated at

any time prior to the Closing Date if the

Board of either that Acquired Fund or

the Acquiring Fund determines in good

faith that the Reorganization is not in

the best interests of the shareholders.

Applicants agree not to make any

changes to the Reorganization Plan that

materially affect the application without

prior approval of the Commission staff. 7. A prospectus/proxy statement was

filed with the Commission on June 26,

2000, and was mailed to the Acquired

Fund shareholders beginning the week

of August 28, 2000. The shareholders of

the Acquired Funds considered and

approved the Reorganization on October

31, 2000.1

Applicants’ Legal Analysis

1. Section 17(a) of the Act generally

prohibits an affiliated person of a

registered investment company, or an

affiliated person of such a person, acting

as principal, from selling any security

to, or purchasing any security from, the

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

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.

Applicants state that the Funds may be

deemed affiliated persons and, thus, the

Reorganization may be prohibited by

section 17(a).

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 state that they may

not rely on rule 17a–8 because the

Funds may be deemed to be affiliated

for reasons other than those set forth in

the rule. Applicants state that more than

5% of the outstanding shares of certain

Funds is held beneficially or of record

by either NBMI, Neuberger Berman, or

individual Neuberger Berman officers

and/or directors of affiliated entities of

such individuals. Applicants also state

that certain third parties are the record

owners of 5% or more of each of two

Funds. Under section 2(a)(3)(A) of the

Act, NBMI, Neuberger Berman and these

individuals/entities could be deemed

‘‘affiliated persons’’ of the Funds whose

shares they own. Applicants further

state that certain Funds may be deemed

affiliated persons of affiliated persons of

one another because each owns 5% or

more of the outstanding voting

securities of the same Master Fund.

Thus, each of the Acquired Funds might

be deemed to be an affiliated person of

an affiliated person of an Acquiring

Fund for reasons other than those set

forth in rule 17a–8.

3. Section 17(b) of the Act provides,

in relevant part, 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) of the Act to the

extent necessary to permit applicants to

complete the proposed Reorganization.

Applicants submit that the

Reorganization satisfies the standards of

section 17(b) of the Act. Applicants state

that the terms of the proposed

Reorganization are fair and reasonable

and do not involve overreaching.

Applicants also state that the Boards,

including all of the Independent

Trustees, found that participation in the

Reorganization is in the best interests of

each Fund and that interests of the

existing shareholders will not be diluted

as a result of the Reorganization.

Applicants further state that the

Reorganization will be based on the

Funds’ relative NAVs.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30245 Filed 11–27–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43574, File No. 4–429]

Joint Industry Plan; Order Approving

an Amendment To the Options

Intermarket Linkage Plan to Add the

Pacific Exchange, Inc. as a Participant

November 16, 2000.

I. Introduction

On September 20, 2000, the Pacific

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

submitted to the Securities and

Exchange Commission (‘‘SEC’’ or

‘‘Commission’’) in accordance with

section 11A of the Securities Exchange

Act of 1934 (‘‘Act’’)1 and Rule 11Aa3–

2 thereunder,2 a proposed amendment

to the Options Intermarket Linkage Plan

(‘‘Linkage Plan’’)3 to become a