29260 Federal Register / Vol. 63, No. 102 /Thursday, May 28, 1998 / Notices

consideration to be paid or received, are

reasonable and fair and do not involve

overreaching on the part of any person

concerned, the proposed transaction is

consistent with the policy of each

investment company concerned, and the

proposed transaction is consistent with

the general purposes of the Act.

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

SEC 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.

8. Applicants submit that their

request for relief satisfies the standards

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

state that the Investing Funds will retain

their ability to invest Cash Balances

directly in money market instruments as

authorized by their respective

investment objectives and policies, if

they believe they can obtain a higher

rate of return, or for any other reason.

Similarly, each of the Money Market

Funds has the right to discontinue

selling shares to any of the Investing

Funds if the Board of the Money Market

Fund 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 shareholder.

9. Section 17(d) and rule 17d–1

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. Applicants

believe that the Funds, by participating

in the proposed transactions, and the

Investment Advisers, by managing the

proposed transactions, could be deemed

to be participating in a joint

arrangement within the meaning of

section 17(d) and rule 17d–1 under the

Act.

10. In considering whether to grant an

exemption under rule 17d–1, the SEC

considers whether the investment

company’s participation in such joint

enterprise is consistent with the

provisions, policies, and purposes of the

Act, and the extent to which such

participation is on a basis different from

or less advantageous than that of other

participants. Applicants submit that the

Funds will participate in the proposed

transactions on a basis not different

from or less advantageous than that of

any other participant and that the

transactions will be consistent with the

Act.

Applicants’ Conditions

Applicants agree that the order

granting the requested relief will be

subject to the following conditions:

1. Shares of the Money Market Funds

sold to and redeemed by the Investing

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 2380(b)(9) of the NASD’s

Conduct Rules).

2. 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 Investment Adviser to

the Investing Fund will provide the

Board with specific information

regarding the approximate cost to the

Investment Adviser of, or portion of the

advisory fee under the existing advisory

contract attributable to, managing the

Uninvested Cash of the Investing Fund

that can be expected to be invested in

the Money Market Funds. In connection

with approving any advisory contract

for an Investing Fund, the Board,

including a majority of the Disinterested

Trustees, shall consider to what extent,

if any, the advisory fees charged to the

Investing Fund by the Investment

Adviser should be reduced to account

for reduced services provided to the

Investing Fund by the Investment

Adviser as a result of Uninvested Cash

being invested in the Money Market

Funds. The minute book of the Investing

Fund Will record fully the Board’s

consideration in approving the advisory

contract, including the considerations

referred to above.

3. Each Investing Fund will invest

Uninvested Cash in, and hold shares of,

the Money Market Funds only to the

extent that the Investing Fund’s

aggregate investment in the Money

Market Funds does not exceed 25% of

the Investing Fund’s total assets. For

purposes of this limitation, each

Investing Fund or series thereof will be

treated as a separate investment

company.

4. Investment of Cash Balances in

shares of the Money Market Funds will

be in accordance with each Investing

Fund’s investment restrictions and will

be consistent with each Investing

Fund’s policies as set forth in its

prospectus and statement of additional

information.

5. Each Investing Fund, each Money

Market Fund, and any future registered

open-end management investment

company that may rely on the order

shall be part of the same ‘‘group of

investment companies,’’ as defined in

section 12(d)(1)(G)(ii) of the Act, that

includes the Trust.

6. No Money Market Fund shall

acquire securities of any other

investment company in excess of the

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

of the Act.

7. Before a Fund may participate in

the Securities Lending Program, a

majority of the Board, including a

majority of the Disinterested Trustees,

will approve the 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 Fund.

For the SEC, by the Division of Investment

Management, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–14018 Filed 5–27–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–23202; 813–174]

Chase Global Co-Invest Partners 1997,

L.P., et al.; Notice of Application

May 21, 1998.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for an

order under sections 6(b) and 6(e) of the

Investment Company Act of 1940 (the

‘‘Act’’) granting an exemption from all

provisions of the Act, except section 9,

certain provisions of sections 17 and 30,

sections 36 through 53, and the rules

and regulations under those sections.

Summary of Application: Applicants

request an order to exempt certain

investment funds formed for the benefit

of key employees of the The Chase

Manhattan Corporation (‘‘Chase’’) and

its affiliates from certain provisions of

the Act, and to permit the funds to

engage in certain joint transactions.

Each fund will be an ‘‘employees’

securities company’’ as defined in

section 2(a)(13) of the Act.

Applicants: Chase Global Co-Invest

Partners 1997, L.P. (the ‘‘1997

Partnership’’) and Chase.

Filing Dates: The application was

filed on August 12, 1997 and amended

on February 9, 1998. Applicants have

agreed to file an additional amendment,

the substance of which is incorporated

this notice, during the notice period.
Federal Register / Vol. 63, No. 102 /Thursday, May 28, 1998 / Notices 29261

Hearing or Notification of Hearing: An

order granting the application will be

issued unless the SEC orders a hearing.

Interested persons may request a

hearing by writing to the SEC’s

Secretary and serving applicants with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

June 15, 1998 and should be

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 the writer’s interest, the reason for the

request, and the issues contested.

Persons may request notification of a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, N.W., Washington, D.C. 20549.

Applicants: 1997 Partnership, 380

Madison Avenue, New York, NY 10017;

and Chase, 270 Park Avenue, New York,

NY 10017.

FOR FURTHER INFORMATION CONTACT:

Mary T. Geffroy, Senior Counsel, at

(202) 942–0553, or Christine Y.

Greenlees, 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 from the SEC’s

Public Reference Branch, 450 Fifth

Street, N.W., Washington, D.C. 20549

(tel. (202) 942–8090).

Applicants’ Representations

1. Chase is a bank holding company.

Chase and its affiliates, as defined in

rule 12b-2 under the Securities

Exchange Act of 1934 (the ‘‘Exchange

Act’’) (collectively, the ‘‘Chase Group’’),

provide diversified financial services

internationally through various bank

and non-bank subsidiaries.

2. The 1997 Partnership is a Delaware

limited partnership. The 1997

Partnership was the first of several

anticipated investment programs (each

an ‘‘Investment Program’’) that was

established to enable certain key

employees of the Chase Group to

participate in a variety of investment

opportunities that would not be offered

to them as individual investors.

Applicants propose to establish one or

more partnerships or investment

vehicles for the same purpose (the

‘‘Subsequent Partnerships’’ and

collectively with the 1997 Partnership,

the ‘‘Partnerships’’). Each Partnership

will be an ‘‘employees’ securities

company’’ within the meaning of

section 2(a)(13) of the Act, and will

operate as a closed-end non-diversified

management investment company.

3. The goal of the Partnerships is to

reward and retain certain key employees

and to attract qualified employees to the

Chase Group. Chase believes that the

Partnerships will meet the desire of

these employees for an in-house

investment program similar to those

offered by other financial institutions to

their employees.

4. Each Partnership will have a

general partner or a similar entity (the

‘‘General Partner’’), that will be (i)

registered as an investment adviser

under the Investment Advisers Act of

1940 (the ‘‘Advisers Act’’), (ii) exempt

from registration by virtue of section

203(b)(3) of the advisers Act, or (iii)

excluded from the registration

requirements because it is a bank or

bank holding company. The General

Partner will be an entity within the

Chase Group, and will manage, control,

and make investment decisions for the

Partnerships.

5. Interests in the Partnerships

(‘‘Interests’’) will be offered without

registration in reliance on section 4(2) of

the Securities Act of 1933 (the

‘‘Securities Act’’), and will be sold

without a sales load or any similar fee.

Interests will be offered and sold only

to (i) current or former key employees,

officers, directors, partners or persons

on retainer of an entity within the Chase

Group (‘‘Eligible Employees’’), (ii)

spouses, parents, children, spouses of

children, brothers, sisters and

grandchildren of Eligible Employees

(‘‘Qualified Family Members’’ and

collectively with Eligible Employees,

the ‘‘Limited Partners’’), or (iii) trusts or

other investment vehicles established

for the benefit of Limited Partners

(‘‘Qualified Investment Vehicles’’ and

collectively with Qualified Family

Members, ‘‘Qualified Participants’’).

Prior to offering Interests to Limited

Partners, the General Partner must

reasonably believe that the Limited

Partners will be capable of

understanding and evaluating the merits

and risks of participation in the

Partnership. Eligible Employees will be

professionals engaged in various aspects

of the banking or financial services

business, or in related administrative,

financial, accounting or operational

activities.

6. Limited Partners must meet the

standards for an ‘‘accredited investor’’

under rule 501(a) (5) or (6) of Regulation

D of the Securities Act, except that a

maximum of 35 persons who are

sophisticated investors but who do not

meet the definition of an accredited

investor may become Limited Partners if

approved by the General Partner after

taking into consideration such factors as

income level, investment experience,

risk tolerance, professional background

and length of employment with the

Chase Group. Eligible Employees who

satisfy the net worth requirements of

rule 501(a)(5) of Regulation D will

typically be senior Chase employees

who have accumulated significant

individual net worth. Generally, those

Eligible Employees who satisfy the

requirements of rule 501(a)(5) also

would be expected to satisfy the

requirements of rule 501(a)(6).

7. At the time an Eligible Employee is

offered the right to subscribe for

Interests in a Partnership, the Eligible

Employee will be given a copy of the

limited partnership agreement or other

organizational documents (the

‘‘Partnership Agreement’’) and any

investment agreement relating to the

Partnership’s co-investment with the

entities described below (the ‘‘CoInvestment Agreement’’). The

Partnership Agreement and the CoInvestment Agreement will set forth

fully the terms applicable to the Limited

Partners.

8. The General Partner of the 1997

Partnership will not receive any fees or

other compensation for serving as the

General Partner.. A General Partner of a

Subsequent Partnership may be paid an

annual management fee, which may be

determined as a percentage of assets

under management, invested capital or

aggregate commitments. In addition, a

General Partner may be entitled to a

performance-based fee (‘‘carried

interest’’), based on the Partnership’s

gains and losses.

9. General Partner will be required to

make capital contributions to the

Partnership that generally will be equal

to at least 1% of the Partnership’s

aggregate capital commitments. The

General Partner of the 1998 Partnership

may contribute capital to the 1997

Partnership in a multiple of the

aggregate amount of capital contributed

by the Limited Partners.

10. The 1997 Partnership will make

distributions to the Limited Partners

and the General Partner annually with

respect to tax liabilities and at other

times and in other amounts as

determined by the General Partner in its

discretion. After distributions with

respect to taxes, distributions from the

1997 Partnership will be made, first,

100% to the General Partner in respect

of a portion of its capital contribution

(the ‘‘Preferred Capital Contribution’’)

until 90% of the amounts received by

the General Partner equals three times

the aggregate capital contributions of the

Limited Partners plus an 8% annum

return on the Preferred Capital
29262 Federal Register / Vol. 63, No. 102 /Thursday, May 28, 1998 / Notices

1Chase Capital Partners is the general partner of

a separate limited partnership, the CCP Limited

Partnership, into which certain partners and

principals of Chase Capital Partners, and certain

employees of the Chase Group, invest. The CCP

Limited Partnership is not included as a

Partnership for purposes of this application.

2A Third Party Investor is a partner or other

investor of a Third Party Fund that is not an entity

within the Chase Group, or any affiliate of that

partner or investor.

Contribution and, thereafter, 90% to the

Limited Partners and 10% to the

General Partner. Subsequent

Partnerships will make distributions to

the General Partners and the Limited

Partners in a similar manner, provided

that the priorities, amounts and

percentages may differ. A more

complete description of the method and

timing of distributions will be contained

in each Partnership’s private placement

memorandum.

11. The General Partner or another

entity of the Chase Group may lend

money to a Partnership at an interest

rate no less favorable than the rate

obtainable on an arm’s-length basis.

12. Partnerships generally will coinvest alongside a wholly-owned

subsidiary of Chase in various affiliated

limited partnerships through which

underlying portfolio investments are

made. Except for variations in

management fees or carried interests, a

Partnership will co-invest on a least as

favorable terms as an entity of the Chase

Group. It also is possible that Chase and

a Partnership may co-invest in a

portfolio company alongside an

investment fund or account organized

for the benefit of investors who are not

affiliated with the Chase Group, over

which an entity within the Chevy Chase

Group (other than Chase Capital

Partners 1) exercises investment

discretion (a ‘‘Third Party Fund’’).

13. Interests in a Partnership will be

non-transferable except with the prior

written consent of the General Partner

in its sole discretion. No person or

entity will be admitted into a

Partnership unless the person or entity

is (i) an Eligible Employee, (ii) a

Qualified Participant, or (iii) an entity

within the Chase Group (as a General

Partner or through the reallocation of a

Limited Partner’s Interest as described

below). A portion of a Limited Partner’s

Interest in profits and losses may be

reallocated to the General Partner upon

the Limited Partner’s termination of

employment with the Chase Group.

After a reallocation, the Interest retained

by the Limited Partner will be at least

equal in value to the lesser of (i) the

amount invested by the Limited Partner,

or (ii) the fair market value of the

Interest prior to the reallocation.

14. Limited Partners’ Interests

initially will be partially vested and will

vest in greater proportion over time as

specified percentages and at specified

intervals, as set forth in the applicable

Partnership Agreement. The vesting

terms will be disclosed to the Limited

Partner at the time the Limited Partner

is offered the right to purchase Interest

in the Partnership.

15. The term of each Partnership

generally is expected to be fixed for a

period less than 30 years from the date

of its creation, but may be subject to

earlier termination by the General

Partner. In addition, each Partnership

may be dissolved upon (i) the

resignation, withdrawal, dissolution or

bankruptcy of the General Partner, (ii)

the insolvency or bankruptcy of the

Partnership, (iii) the sale of all or

substantially all of the Partnership’s

assets, or (iv) the conversion of the

Partnership to corporate form pursuant

to the terms of the applicable

Partnership Agreement. Upon

dissolution of the Partnership, the

Partnership’s assets will be distributed

in accordance with the applicable

Partnership Agreement.

16. A Partnership will not acquire any

security issued by a registered

investment company if, immediately

after the acquisition, the Partnership

will own more than 3% of the

outstanding voting stock of the

registered investment company.

17. As soon as practicable after the

end of each fiscal year of each

Partnership, the General Partner will

mail or otherwise furnish a copy of a

certified public accountant’s report,

which will include the Partnership’s

financial statements, to each Limited

Partner of the Partnership. In addition,

each Partnership will supply the

Limited Partners with all information

reasonably necessary to enable the

Limited Partners to prepared their

federal and state income tax returns.

Applicants’ Legal Analysis

1. Section 6(b) of the Act provides

that the SEC will exempt employees’

securities companies from the

provisions of the Act to the extent that

the exemption is consistent with the

protection of investors. Section 6(b)

provides that the SEC will consider, in

determining the provisions of the Act

from which the company should be

exempt, the company’s form of

organization and capital structure, the

persons owning and controlling its

securities, the price of the company’s

securities and the amount of any sales

load, how the company’s funds are

invested, and the relationship between

the company and the issuers of the

securities in which it invests. Section

2(a)(13) defines an employees’ securities

company, in relevant part, as any

investment company all of whose

securities are beneficially owned by (i)

current or former employees, or persons

on retainer, of one or more affiliated

employers, (ii) immediate family

members of those persons, or (iii) the

employer or employers together with

any of the persons in (i) or (ii).

2. Section 7 of the Act generally

prohibits investment companies that are

not registered under section 8 of the Act

from selling or redeeming their

securities. Section 6(e) provides that, in

connection with any order exempting an

investment company from any provision

of section 7, certain provisions of the

Act, as specified by the SEC, will be

applicable to the company and other

persons dealing with the company as

though that company was registered

under the Act.

3. Applicants request an order under

sections 6(b) and 6(e) of the Act

exempting the Partnerships from all

provisions of the Act, except section 9,

certain provisions of sections 17 and 30,

sections 36 through 53, and the rules

and regulations under those sections.

4. Section 17(a) generally prohibits

any affiliated person of a registered

investment company, or any affiliated

person of that person, acting is

principal, from knowingly selling or

purchasing any security or other

property to or from that company.

Applicants request an exemption from

section 17(a) to permit (i) an entity

within the Chase Group (including a

Third Party Fund) to engage in any

transaction with a Partnership, or a

company controlled by the Partnership

(‘‘Controlled Company’’), (ii) a

Partnership to invest in or engage in any

transaction with any entity in which a

Partnership, a Controlled Company, or

an entity within the Chase Group (a) has

invested or will invest, or (b) is or will

become otherwise affiliated, and (iii) a

Third Party Investor 2 to engage in any

transaction with a Partnership or

Controlled Company.

5. Applicants submit that an

exemption from section 17(a) is

consistent with the policy of each

Partnership and the protection of

investors. Applicants believe that an

exemption is necessary to enable the

Partnerships to participate in attractive

investments that may be offered by the

Chase Group. Applicants assert that the

Limited Partners will have been fully

informed of the possible extent of the

Partnership’s investments with affiliates

and will be able to understand and
Federal Register / Vol. 63, No. 102 /Thursday, May 28, 1998 / Notices 29263

evaluate the risks associated with those

investments.

6. Section 17(d) and rule 17d–1

prohibit any affiliated person or

principal underwriter of a registered

investment company, or any affiliated

person of that person or underwriter,

acting as principal, from participating in

any joint arrangement with the company

unless authorized by the SEC.

Applicants request exemptive relief to

permit affiliated persons of each

Partnership, or affiliated persons of any

of these persons, to participate in any

joint arrangement in which the

Partnership or a company controlled by

the Partnership is a participant.

7. Applicants assert that the flexibility

to structure co-investments and joint

investments in the manner described in

the application will not involve abuses

of the type that section 17(d) and rule

17d–1 were designed to prevent.

Applicants state that the concern that

permitting co-investments by Chase and

the Partnership might lead to less

advantageous treatment of the

Partnership, should be mitigated by the

community of interest among the Chase

Group and the personnel who invest in

the Partnership, and the fact that

officers, directors, and partners of

entities within the Chase Group will be

investing in the Partnership. In

addition, applicants assert that strict

compliance with section 17(d) would

prevent the Partnerships from

participating in attractive investments

solely because an affiliate of the

Partnership also may participate in the

investment. Finally, applicants contend

that the ‘‘lock-step’’ procedures

described in condition 3 below, align

the interests of the Eligible Employees

with those of the Chase Group and,

therefore, minimize the possibility that

a Partnership may be disadvantaged by

an affiliate’s participation in a

transaction.

8. Co-investments with Third Party

Funds will not be subject to Condition

3. Applicants believe it is important that

the Third Party Fund not be burdened

or otherwise affected by a Partnership’s

participation in an investment

opportunity. In addition, applicants

believe that the relationship of a

Partnership to a Third Party Fund is

fundamentally different from a

Partnership’s relationship to the Chase

Group. Applicants contend that the

focus of, and the rationale for, the

protections contained in the requested

relief are to protect the Partnerships

from any overreaching by the Chase

Group in the employer/employee

context, whereas the same concerns are

not present with respect to the

Partnerships vis-a-vis the investors of a

Third Party Fund.

9. Section 17(f) of the Act designates

the entities that may act as investment

company custodians, and rule 17f–1

imposes certain requirements when the

custodian is a member of a national

securities exchange. Applicants request

an exemption from section 17(f) and

rule 17f–1 to the extent necessary to

permit an entity within the Chase Group

to act as custodian of Partnership assets

without a written contract, as would be

required by rule 17f–1(a). Applicants

also request an exemption from the rule

17f–1(b)(4) requirement that

independent accountants periodically

verify the assets held by the custodian.

Applicants believe that, because of the

community of interest of all the parties

involved and the existing requirement

for an independent annual audit,

compliance with these requirements

would be unnecessarily burdensome

and expensive. Each Partnership will

comply with all other requirements of

rule 17f–1.

10. Section 17(g) and rule 17g–1

generally require the bonding of officers

and employees of a registered

investment company who have access to

its securities or funds. Rule 17g–1

requires that a majority of directors who

are not interested persons take certain

actions and give certain approvals

relating to fidelity bonding. Applicants

request exemptive relief to permit the

members of a related board of directors

or other committee serving similar

functions (the ‘‘Board’’), who may be

deemed interested persons, to take

actions and make determinations set

forth in the rule. Applicants state that,

because all of the members of a related

Board will be affiliated persons, a

Partnership could not comply with rule

17g–1 without the requested relief.

Specifically, each Partnership will

comply with rule 17g–1 by having a

majority of the members of the related

Board take such actions and make such

approvals as are set forth in rule 17g–

1. Applicants also state that each

Partnership will comply with all other

requirements of rule 17g–1.

11. Section 17(j) and paragraph (a) of

rule 17j–1 prohibit certain enumerated

persons from engaging in fraudulent or

deceptive practices in connection with

the purchase and sale of a security held

or to be acquired by a registered

investment company. Rule 17j–1 also

requires that every registered

investment company adopt a written

code of ethics and that every access

person of a registered investment

company report personal securities

transactions. Applicants request an

exemption from the provisions of rule

17j–1 (except rule 17j–1(a)) because they

are unnecessarily burdensome as

applied to the Partnerships.

12. Applicants request an exemption

from the requirements in sections 30(a),

30(b) and 30(e) and the rules under

those sections, that registered

investment companies prepare and file

with the SEC and mail to their

shareholders certain periodic reports

and financial statements. Applicants

believe that the forms prescribed by the

SEC for periodic reports have little

relevance to a Partnership and would

entail administrative and legal costs that

outweigh any benefit to the Limited

Partners in a Partnership. Applicants

request exemptive relief to the extent

necessary to permit each Partnership to

report annually to its Limited Partners.

Applicants also request an exemption

from section 30(h) to the extent

necessary to exempt the General Partner

of each Partnership and any others who

may be deemed to be members of an

advisory board of a Partnership from

filing Forms 3, 4 and 5 under section

16(a) of the Exchange Act with respect

to their ownership of Interests in the

Partnership. Applicants assert that,

because there will be no trading market

and the transfers of Interests will be

severely restricted, these filings are

unnecessary for the protection of

investors and burdensome to those

required to make them.

Applicants’ Conditions

Applicants agree that the order

granting the requested relief will be

subject to the following conditions:

1. Each proposed transaction

otherwise prohibited by section 17(a) or

section 17(d) and rule 17d–1 to which

a Partnership is a party (the ‘‘Section 17

Transactions’’) will be effected only if

the Board determines that: (i) the terms

of the transaction, including the

consideration to be paid or received, are

fair and reasonable to the Limited

Partners and do not involve

overreaching of the Partnership or its

Limited Partners on the part of any

person concerned; and (ii) the

transaction is consistent with the

interests of the Limited Partners, the

Partnership’s organizational documents,

and the Partnership’s reports to its

Limited Partners. In addition, the

General Partner will record and preserve

a description of the affiliated

transactions, the Board’s findings, the

information or materials upon which

the Board’s findings are based, and the

basis for the findings. All records

relating to an Investment Program will

be maintained until the termination of

the Investment Program and at least two
29264 Federal Register / Vol. 63, No. 102 /Thursday, May 28, 1998 / Notices

3Each Partnership will preserve the accounts,

books and other documents required to be

maintained in an easily accessible place for the first

two years.

4Each Partnership will preserve the accounts,

books and other documents required to be

maintained in an easily accessible place for the first

two years.

years thereafter, and will be subject to

examination by the SEC and its staff.3

2. In connection with the Section 17

Transactions, the Board, through the

General Partner, will adopt, and

periodically review and update,

procedures designed to ensure that

reasonable inquiry is made, prior to the

consummation of any transaction, with

respect to the possible involvement in

the transaction of any affiliated person,

promoter of, or principal underwriter

for the Partnerships, or any affiliated

person of that person, promoter, or

principal underwriter.

3. The General Partner will not invest

the funds of any Partnership in any

investment in which a ‘‘Co-Investor’’ (as

defined below) has acquired, or

proposes to acquire, the same class of

securities of the same issuer, where the

investment involves a joint enterprise or

other joint arrangement within the

meaning of rule 17d–1 in which the

Partnership and the Co-Investor are

participants, unless the Co-Investor,

prior to disposing of all or part of its

investment (i) gives the General Partner

sufficient, but not less than one day’s,

notice of its intent to dispose of its

investment, and (ii) refrains from

disposing of its investment unless the

Partnership has the opportunity to

dispose of the Partnership’s investment

prior to, or concurrently with, on the

same terms as, and pro rata with, the

Co-Investor. The term ‘‘Co-Investor’’

means any person who is (i) an

‘‘affiliated person’’ (as that term is

defined in the Act) of the Partnership

(other than a Third Party Fund); (ii)

Chase Capital Partners or another entity

within the Chase Group; (iii) an officer,

director or partner of Chase Capital

Partners or another entity within the

Chase Group; or (iv) a company in

which the General Partner of the

Partnership acts as a general partner or

has a similar capacity to control the sale

or other disposition of the company’s

securities. The restrictions contained in

this condition, however, will not be

deemed to limit or prevent the

disposition of an investment by a CoInvestor (i) to its direct or indirect

wholly-owned subsidiary, to any

company (a ‘‘parent’’) of which the CoInvestor is a direct or indirect whollyowned subsidiary, or to a direct or

indirect wholly-owned subsidiary of its

parent; (ii) to Qualified Family Members

of the Co-Investor or a trust or other

investment vehicle established for a

Qualified Family Member; (iii) when the

investment is comprised of securities

that are listed on any exchange

registered as a national securities

exchange under section 6 of the

Exchange Act; (iv) when the investment

is comprised of securities that are

national market system securities

pursuant to section 11A(a)(2) of the

Exchange Act and rule 11Aa2–1 under

that Act, or (v) when the investment is

comprised of securities that are listed on

or traded on any foreign securities

exchange or board of trade that satisfies

regulatory requirements under the law

of the jurisdiction in which the foreign

securities exchange or board of trade is

organized similar to those that apply to

a national securities exchange or a

national market system for securities.

4. Each Partnership and the General

Partner or the investment manager of

the Partnership will maintain and

preserve, for the life of the Partnership

and at least two years thereafter, those

accounts, books, and other documents

that constitute the record forming the

basis for the audited financial

statements that are to be provided to the

Limited Partners, and each annual

report of the Partnership required to be

sent to the Limited Partners, and agree

that all of those records will be subject

to examination by the SEC and its staff.4

5. The General Partner will send to

each Limited Partner who had an

interest in any capital account of the

Partnership, at any time during the

fiscal year then ended, Partnership

financial statements audited by the

Partnership’s independent accountants.

As of the end of each fiscal year, the

General Partner will make a valuation or

have a valuation made of all of the

assets of the Partnership as of that fiscal

year end in a manner consistent with

customary practice with respect to the

valuation of assets of the kind held by

the Partnership. In addition, as soon as

practicable after the end of each fiscal

year of each Partnership, the General

Partner will send a report to each person

who was a Limited Partner at any time

during the fiscal year then ended,

setting forth tax information as will be

necessary for the preparation by the

Limited Partner of federal and state

income tax returns, and a report of the

investment activities of the Partnership

during that year.

6. In any case where purchases or

sales are made by a Partnership from or

to an entity affiliated with that

Partnership by reason of a 5% or more

investment in that entity by a Chase

Group director, officer or employee, that

individual will not participate in the

Partnership’s determination of whether

or not to effect the purchase or sale.

For the SEC, by the Division of Investment

Management, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–14112 Filed 5–27–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–23199; File No. 812–10978]

U.S. Global Leaders Variable Insurance

Trust, et al.; Notice of Application

May 20, 1998.

AGENCY: Securities and Exchange

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

ACTION: Notice of Application for an

order pursuant to Section 6(c) of the

Investment Company Act of 1940

(‘‘1940 Act’’) granting exemptive relief

from Sections 9(a), 13(a), 15(a), and

15(b) of the 1940 Act and rules 6e–

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

Summary of Application: Applicants

seek an order to permit shares of any

current or future series of U.S. Global

Leaders Variable Insurance Trust (the

‘‘Fund’’) and shares of any other

investment company that is designed to

fund variable insurance products for

which Yeager, Wood & Marshall, Inc.

(the ‘‘Adviser’’) or any of its affiliates,

may now or in the future serve as

manager, investment adviser,

administrator, principal underwriter or

sponsor (the Fund and such other

investment companies, collectively,

‘‘Insurance Products Funds’’) to be sold

to and held by: (1) Separate accounts

funding variable annuity and variable

life insurance contracts issued by both

affiliated and unaffiliated life insurance

companies (‘‘Participating Insurance

Companies’’); (2) qualified pension and

retirement plans outside of the separate

account context (‘‘Qualified Plans’’ or

‘‘Plans’’); and (3) the Adviser or any of

its affiliates (representing seed money

investments in the Insurance Products

Funds).

Applicants: U.S. Global Leaders

Variable Insurance Trust and Yeager,

Wood & Marshall, Inc.

Filing Date: The application was filed

on January 23, 1998, and amended on

March 26, 1998.

Hearing or Notification of Hearing: An

order granting the application will be

issued unless the Commission orders a

hearing. Interested persons may request