41304 Federal Register / Vol. 63, No. 148 / Monday, August 3, 1998 / Notices

1 Initially, the Great Plains Equity Fund will be

the only Portfolio investing in an Underlying

Portfolio, which will be the Great Plains

International Equity Fund.

2Applicants also request relief for each registered

open-end management investment company that

currently, or in the future, is part of the same

‘‘group of investment companies’’ as the Trust as

defined in section 12(d)(1)(G)(ii) of the Act. All

registered open-end management investment

companies which currently intend to rely on the

order are named as applicants. Any registered openOUTLAY CHANGES UNDER RESCISSION OF SECTION 503(A)(1)

Effect on outlays (in thousands of dollars)

FY 1998 FY 1999 FY 2000 FY 2001 FY 2003 Total

¥1,300 ¥1,300 ¥1,300 ¥1,300 ................................... ¥5,200

OUTLAY CHANGES UNDER RESCISSION OF SECTION 503(A)(2)

Effect on outlays (in thousands of dollars)

FY 1998 FY 1999 FY 2000 FY 2001 FY 2003 Total

.................................... ................................... ................................... ................................... ¥1,352 ¥1,352

The negotiations requirement in

section 503(b), and the legislative

history of section 503, make clear that

the intent of the section was that the

Secretary of the Interior would convey

$10 million in Federal mineral rights in

the State of Montana under section

503(a)(1), rather than all Federal mineral

rights in Otter Creek Tracts 1, 2, and 3

under section 503(a)(2), and it is most

likely that this is what the Secretary

would have done.

The discretionary budget authority in

both section 503(a)(1) and section

503(a)(2) is proposed to be rescinded,

but because the Secretary could not

have made both conveyances, and the

dollar amount of discretionary budget

authority for the intended and most

likely conveyance under section

503(a)(1) exceeds the dollar amount of

discretionary budget authority for the

alternative conveyance under section

503(a)(2) through FY 2003, the dollar

amount of discretionary budget

authority proposed for rescission above

of $5,200,000 is based upon the most

likely conveyance under section

503(a)(1).

[FR Doc. 98–20571 Filed 7–31–98; 8:45 am]

BILLING CODE 3110–01–P

SECURITIES AND EXCHANGE

COMMISSION

[Investment Company Act Release No.

23332; 812–10754]

Great Plains Funds, et al.; Notice of

Application

July 27, 1998.

AGENCY: Securities and Exchange

Commission (‘‘Commission’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

RELEVANT ACT SECTIONS: Order requested

under section 12(d)(1)(J) of the Act for

an exemption from section 12(d)(1) of

the Act, and under sections 6(c) and

17(b) of the Act for an exemption from

section 17(a) of the Act.

SUMMARY OF APPLICATION: Applicants

request an order that would permit them

to implement a ‘‘fund of funds’’

arrangement. The fund of funds would

invest in funds in the same group of

investment companies and in other

funds within the limits of section

12(d)(1)(F) of the Act. Applicants also

seek an exemption from the sales load

limitation in section 12(d)(1)(F) of the

Act.

APPLICANTS: Great Plains Fund (the

‘‘Trust’’) and First Commerce Investors,

Inc. (the ‘‘Adviser’’).

FILING DATES: The application was filed

on August 13, 1997, and amended on

May 15, 1998 and July 14, 1998.

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 August 21, 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 who wish to be

notified of a hearing may request

notification by writing to the

Commission’s Secretary.

ADDRESSES: Secretary, Securities and

Exchange Commission, 450 Fifth Street,

NW., Washington, DC 20549. Great

Plains Funds, 5800 Corporate Drive,

Pittsburgh, PA 15237–7010. First

Commerce Investors, Inc., 610 NBC

Center, Lincoln, NB 68508.

FOR FURTHER INFORMATION CONTACT:

Kathleen L. Knisely, Staff Attorney, at

(202) 942–0517, or Nadya B. Roytblat,

Assistant Director, at (202) 942–0564

(Office of Investment Company

Regulation, Division of Investment

Management).

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

(tel. 202–942–8090).

Applicants’ Representations

1. The Trust is registered as an openend management investment company

under the Act and currently consists of

five portfolios: Great Plains Equity

Fund, Great Plains Premier Fund, Great

Plains International Equity Fund, Great

Plains Intermediate Bond Fund, and

Great Plains Tax-Free Bond Fund. The

portfolios are advised by the Adviser,

which is registered under the

Investment Advisers Act of 1940.

2. Applicants request relief to permit

certain portfolios of the Trust (the

‘‘Portfolios’’) to invest in certain other

portfolios of the Trust (the ‘‘Underlying

Portfolios’’) that are in the same group

of investment companies as the

Portfolios.1 Applicants also request

relief to permit the Portfolios to invest

in other registered open-end

management investment companies that

are not part of the same group of

investment companies as the Portfolios

(the ‘‘Other portfolios’’) in accordance

with section 12(d)(1)(F) of the Act

discussed below.2 The Portfolios also
Federal Register / Vol. 63, No. 148 / Monday, August 3, 1998 / Notices 41305

end management investment company that relies on

the order in the future will do so only in accordance

with the terms and conditions of the application.

will invest a portion of their assets

directly in securities (‘‘Direct

Investments’’). With respect to

Portfolio’s investment in Other

Portfolios, applicants also seek an

exemption from the sales load limitation

in section 12(d)(1)(F) of the Act.

Applicants believe that the proposed

structure of the Portfolios will provide

a consolidated and efficient means

through which investors can have

access to a comprehensive investment

vehicle.

Applicants’ Legal Analysis

Section 12(d)(1) of the Act

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

any other acquired investment

companies, represent more than 10% of

the acquiring company’s 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, or 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)(G) of the Act

provides that section 12(d)(1) shall not

apply to the securities of an acquired

company purchased by an acquiring

company if: (i) the acquiring company

and the acquired company are part of

the same group of investment

companies; (ii) the acquiring company

holds only securities of acquired

companies that are part of the same

group of investment companies,

government securities, and short-term

paper; (ii) the aggregate sales loads and

distribution-related fees of the acquiring

company and the acquired company are

not excessive under rules adopted

pursuant to section 22(b) or section

22(c) by a securities association

registered under section 15A of the

Securities Exchange Act of 1934, or the

Commission; and (iv) the acquired

company has a policy that prohibits it

from acquiring securities of registered

open-end investment companies or

registered unit investment trusts in

reliance on section 12(d)(1)(F) or (G).

Section 12(d)(1)(G)(ii) defines the term

‘‘group of investment companies’’ to

mean any two or more registered

investment companies that hold

themselves out to investors as related

companies for purposes of investment

and investor services. Because the

Portfolios will invest in shares of the

Other Portfolios and make Direct

Investments, they cannot relay on the

exemption from section 12(d)(1)(A) and

(B) afforded by section 12(d)(1)(G).

3. Section 12(d)(1)(F) of the Act

provides that section 12(d)(1) shall not

apply to an acquiring company if the

company and its affiliates own no more

than 3% of an acquired company’s

securities, provided that the acquiring

company does not impose a sales load

of more than 1.5% on its shares. In

addition, the section provides that no

acquired company is obligated to honor

any acquiring company redemption

request in excess of 1% of the acquired

company’s securities during any period

of less than 30 days, and the acquiring

company must vote its acquired

company shares either in accordance

with instructions from its shareholders

or in the same proportion as all other

shareholders of the acquired company.

The Portfolios will invest in Other

Portfolios in reliance on section

12(d)(1)(F). if the requested relief is

granted, shares of the Portfolios will be

sold with a sales load that exceeds

1.5%.

4. Section 12(d)(1)(J) provides that the

Commission may exempt persons or

transactions from any provision of

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

exemption is consistent with the public

interest and the protection of investors.

5. Applicants request relief under

section 12(d)(1)(J) of the Act from the

limitations of sections 12(d)(1)(A) and

(B) to permit the Portfolios to invest in

the Underlying Portfolios and the

Portfolios to sell shares to the public

with a sales load that exceeds 1.5%.

6. Applicants state that the Portfolios’

investments in the Underlying

Portfolios do not raise the concerns

about undue influence that sections

12(d)(1)(A) and (B) were designed to

address. Applicants further state that

the proposed conditions would

appropriately address any concerns

about the layering of sales charges or

other fees. The Portfolios will invest in

Other Portfolios only within the limits

of section 12(d)(1)(F). Applicants

believe that an exemption from the sales

load limitation in that section is

consistent with the protection of

investors because applicants’ proposed

sales load limit would cap the aggregate

sales charges of both the Portfolio and

the Other Portfolio in which it invests.

Applicants have agreed, as a condition

to the relief, that any sales charges,

asset-based distribution and service fees

relating to the Portfolios’ shares, when

aggregated with any sales charges, assetbased distribution and service fees paid

by the Portfolios relating to its

acquisition, holding, or disposition of

shares of the Underlying Portfolios and

Other Portfolios, will not exceed the

limits set forth in Rule 2830 of the

NASD Conduct Rules.

Section 17(a) of the Act

7. Section 17(a) of the Act generally

prohibits an affiliated person of a

registered investment company from

selling securities to, or purchasing

securities from, the company. Section

2(a)(3) of the Act defines an ‘‘affiliated

person’’ of another person to include: (a)

any person that directly or indirectly

owns, controls, or holds with power to

vote 5% or more of the outstanding

voting securities of the other person; (b)

any person 5% or more of whose

outstanding voting 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; (d) if the other person is an

investment company, any investment

adviser of that company. Applicants

submit that the Portfolios and

Underlying Portfolios may be deemed to

be affiliated persons of one another by

virtue of being under common control of

the Adviser, or because the Portfolios

own 5% or more of the shares of an

Underlying Portfolio. Applicants state

that purchases and redemptions of

shares of the Underlying Portfolios by

the Portfolios could be deemed to be

principal transactions between affiliated

persons under section 17(a).

8. Section 17(b) provides that the

Commission shall exempt a proposed

transaction from section 17(a) if

evidence establishes that (a) the terms of

the proposed transaction, including the

consideration to be paid or received, are

reasonable and fair and do not involve

overreaching; (b) the proposed

transaction is consistent with the

policies of the registered investment

company involved; and (c) the proposed

transaction is consistent with the

general purposes of the Act.

9. Section 6(c) of the Act provides that

the Commission may exempt persons or

transactions from any provision of the

Act if such 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. Applicants request an

exemption under sections 6(c) and 17(b)
41306 Federal Register / Vol. 63, No. 148 / Monday, August 3, 1998 / Notices

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3Amendment No. 1 corrected an error in the

original filing regarding the trade match fee

reduction for a threshold volume of 925,000

contracts and above, and made other clarifying

changes. See letter from Stephanie C. Mullins,

Attorney, CBOE to S. Kevin An, Special Counsel,

Division of Market Regulation, Commission (July

14, 1998).

to permit the Portfolios to purchase and

redeem shares of the Underlying

Portfolios.

10. Applicants believe that the terms

of the proposed transactions will be

reasonable and fair and will not involve

overreaching because shares of

Underlying Portfolios will be sold and

redeemed at their net asset values.

Applicants also state that the

investment by the Portfolios in the

Underlying Portfolios will be effected in

accordance with the investment

restrictions of the Portfolios and will be

consistent with the policies as set forth

in the registration statement of the

Portfolios.

Applicants’ Conditions

Applicants agree that the order

granting the requested relief shall be

subject to the following conditions:

1. Each Portfolio and each Underlying

Portfolio will be part of the same ‘‘group

of investment companies,’’ as defined in

section 12(d)(G)(ii) of the Act.

2. No Underlying Portfolio or Other

Portfolio will acquire securities of any

other investment company in excess of

the limits contained in section

12(d)(1)(A) of the Act, except to the

extent that such Underlying Portfolio or

Other Portfolio (a) receives securities of

another investment company as a

dividend or as a result of a plan of

reorganization of a company (other than

a plan devised for the purpose of

evading section 12(d)(1) of the Act); or

(b) acquires (or is deemed to have

acquired) securities of another

investment company pursuant to

exemptive relief from the Commission

permitting such Underlying Portfolio or

Other Portfolio to (i) acquire securities

of one or more affiliated investment

companies for short-term cash

management purposes; or (ii) engage in

interfund borrowing and lending

transactions.

3. Any sales charges, distributionrelated fees, and service fees relating to

the shares of the Portfolios, when

aggregated with any sales charges,

distribution-related fees, and service

fees paid by the Portfolios relating to its

acquisition, holding, or disposition of

shares of the Underlying Portfolios and

Other Portfolios, will not exceed the

limits set froth in rule 2830 of the NASD

Conduct Rules.

4. Before approving any advisory

contract under section 15 of the Act, the

board of trustees of a Portfolio,

including a majority of the trustees who

are not ‘‘interested persons,’’ as defined

in section 2(a)(19) of the Act, will find

that the advisory fees charged under the

contract are based on services provided

that are in addition to, rather than

duplicative of, services provided under

any Underlying Portfolio or Other

Portfolio advisory contract. This

finding, and the basis upon which the

finding was made, will be recorded fully

in the minute books of the Portfolio.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–20560 Filed 7–31–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40264; File No. SR–CBOE–

98–31]

Self-Regulatory Organization; Notice of

Filing and Immediate Effectiveness of

Proposed Rule Change by the Chicago

Board Options Exchange, Inc. Relating

to Exchange Fees.

July 24, 1998.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’) 1 and Rule 19b–4 2 thereunder

notice is hereby given that on June 30,

1998, the Chicago Board Options

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

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I, II, and III below, which Items

have been prepared by the CBOE. On

July 15, 1998, the Exchange filed a letter

amendment to the proposed rule change

(‘‘Amendment No. 1’’).3 The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange is proposing to amend

and add certain fees, as well as renew

and amend (i) its Prospective Fee

Reduction Program; and (ii) its

Customer ‘‘Large’’ Trade Discount

Program. The text of the proposed rule

change is available at the Office of the

Secretary, CBOE and at the Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

CBOE included statements concerning

the purpose of and basis for the

proposed rule change and discussed any

comments its received on the proposed

rule change. The text of these statements

may be examined at the places specified

in Item IV below. The CBOE has

prepared summaries, set forth in

sections (A), (B), and (C) below, of the

most significant aspects of such

statements.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

The purpose of this proposed rule

change its to make certain fee changes

and additions, and to renew and amend

(i) the Exchange’s Prospective Fee

Reduction Program; and (ii) its

Customer ‘‘Large’’ Trade Discount

Program. The foregoing fee changes are

being implemented by the Exchange

pursuant to CBOE Rule 2.22 and will

take effect on July 1, 1998.

The Exchange is amending the

following fees: (1) Trade Match Fee will

be increased to $.05 from $.04 per

contract side; (2) Trade Match Report

Fees will be changed to $.0025 per

contract side for all matched and

unmatched information. Previously the

fee was $.0008 for paper reports per

contract side, per copy, for matched and

unmatched information; $.0003 for data

transmission per contract side, per pass;

and $.0003 for unmatched report

transmission per contract, per pass; (3)

CBOE Market-Maker Handheld

Terminals Fee will be increased to $.08

per record from $.05 per record; (4)

DPM Regulatory Fee will be changed to

$.40 per $1,000 of gross revenue from a

flat fee of $150 per quarter; (5) Dow

Jones Booth Fee will be changed to a flat

$300 per month, which previously was

$300 per month for OCC firms and $625

per month for Non-OCC firms (the fee

also formerly included a variable fee for

insufficient fee credits for both OCC and

Non-OCC firms). The Exchange is

proposing to add the following fees: (1)

Technology Fee of $200 per month; and

(2) Book Manual Entry Fee of $1 per

order.

The Exchange’s Fee Reduction

Program for Market-Maker Transaction

Fees, Floor Broker Fees, and Member

Dues currently provides that if at the

end of any quarter of the Exchange’s

fiscal year, the Exchange’s average

contract volume per day on a fiscal year-