[Federal Register Volume 63, Number 137 (Friday, July 17, 1998)]
[Notices]
[Pages 38681-38682]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19051]


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SECURITIES AND EXCHANGE COMMISSION

[Rel. No. IC-23311; 812-9982]


Morgan Stanley & Co. Incorporated; Notice of Application

July 10, 1998.
AGENCY: Securities and Exchange Commission (``Commission'' or ``SEC'').


[[Page 38682]]


ACTION: Notice of application for an order under section 12(d)(1)(J) of 
the Investment Company Act of 1940 (the ``Act'') for an exemption from 
section 12(d)(1) of the Act.

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SUMMARY OF APPLICATION: Morgan Stanley & Co. Incorporated (``Morgan 
Stanley'') requests an order to amend a prior order that, among other 
things, permits registered investment companies to own a greater 
percentage of the total outstanding voting stock of the AJL PEPS Trusts 
for which Morgan Stanley serves, or will serve, as a principal 
underwriter (collectively, the ``Trusts'') than that permitted by 
section 12(d)(1) of the Act (``Prior Order'').\1\ The requested order 
would permit companies that are excepted from the defintion of 
investment company under section 3(c)(1) or 3(c)(7) of the Act to own a 
greater percentage of the total outstanding voting stock of a Trust 
than that permitted by section 12(d)(1)(A) of the Act.

    \1\ Morgan Stanley & Co. Incorporated, Investment Company Act 
Release Nos. 2235 (Sept. 20, 1996) (notice) and 22284 (Oct. 16, 
1996) (order).
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FILING DATES: The application was filed on May 5, 1998. Applicant has 
agreed to file an amendment, the substance of which is incorporated in 
this notice, during the notice period.

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 August 3, 1998, 
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 of a hearing by writing to the SEC's Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth Street, N.W., Washington, D.C. 
20549. Applicant, 1585 Broadway, New York, New York 10036.

FOR FURTHER INFORMATION CONTACT: Brian T. Hourihan, Senior Counsel, at 
(202) 942-0526, or Mary Kay Frech, 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).

Applicant's Representations

    1. The Trusts are limited-life, grantor trusts registered under the 
Act as nondiversified, closed-end management investment companies. 
Morgan Stanley serves, or will serve, as the principal underwriter for 
each Trust.
    2. On October 16, 1996, the Commission issued the Prior Order. The 
Prior Order, among other things, permits registered investment 
companies to own a greater percentage of the total outstanding voting 
stock of the Trusts than that permitted by section 12(d)(1) of the Act.

Applicant's Legal Analysis

    1. Section 12(d)(1)(A)(i) of the Act prohibits any registered 
investment company from owning more than 3 percent of the total 
outstanding voting stock of any other investment company, and any 
investment company from owning in the aggregate more than 3 percent of 
the total outstanding voting stock of any registered investment 
company. A company that is excepted from the definition of investment 
company under section 3(c)(1) or 3(c)(7) of the Act is deemed to be an 
investment company for purposes of section 12(d)(1)(A)(i) of the Act 
under sections 3(c)(1) and 3(c)(7)(D) of the Act.
    2. Section 12(d)(1)(J) of the Act provides that the Commission may 
exempt persons or transactions from any provision of section 12(d)(1), 
if, and to the extend that, the exemption is consistent with the public 
interest and the protection of investors. Applicant requests that the 
Prior Order be amended to permit companies excepted from the definition 
of investment company under section 3(c)(1) and 3(c)(7) of the Act to 
rely on the exemption from section 12(d)(1)(A) of the Act provided by 
the Prior Order.
    3. Applicant asserts that investment in the Trusts by companies 
relying on section 3(c)(1) or 3(c)(7) of the Act will not raise 
concerns under section 12(d)(1) of the Act for the same reasons as 
those given in the application for the Prior Order with respect to 
registered fund's investment in the Trusts. Applicant agrees that any 
company relying on section 3(c)(1) or 3(c)(7) of the Act that invests 
in the Trusts may not rely on this order unless it complies with the 
terms and conditions of the Prior Order. For these reasons, applicant 
believes that the requested relief meets the standards of section 
12(d)(1)(J).

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-19051 Filed 7-16-98; 8:45 am]
BILLING CODE 8010-01-M