Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices 24955

1All existing investment companies that

presently intend to rely on the requested order are

named as applicants.

ranging up to 3.5% on annuity policies

issued by insurance companies. In

addition, other government units within

a state may levy such taxes.

15. Companion Life imposes a $10

transfer fee to any transfer in excess of

12 per Policy year. Companion Life

deducts the transfer fee from the amount

transferred. No charge will be imposed

on transfers from the fixed account and

transfers made in connection with the

dollar cost averaging program do not

count toward the 12 free transfers per

year limit. Applicants represent that this

charge will be deducted in reliance on

Rule 26a–1 and represents

reimbursement only for administrative

costs expected to be incurred in

processing transfers over the life of the

Policies. Companion Life does not

anticipate any profit from this charge.

Applicant’s Legal Analysis

1.Section 6(c) of the Act authorizes

the Commission to grant an exemption

from any provision, rule or regulation of

the Act to the extent that it is necessary

or appropriate in the public interest and

consist with the protection of investors

and the purposes fairly intended by the

Policy and provisions of the Act.

Sections 26(a)(2)(C) and 27(c)(2) of the

Act, in relevant part, prohibit a

registered unit investment trust, its

depositor or principal underwriter, from

selling periodic payment plan

certificates unless the proceeds of all

payments, other than sales loads, are

deposited with a qualified bank and

held under arrangements which prohibit

any payment to the depositor or

principal underwriter except a

reasonable fee, as the Commission may

prescribe, for performing bookkeeping

and other administrative duties

normally performed by the bank itself.

2. Applicants request exemptions

from Sections 25(a)(2)(C) and 27(c)(2) of

the Act to the extent necessary to permit

the deduction of a charge of 1.25% from

the assets of the Separate Account to

compensate Companion Life for the

assumption of mortality and expense

risks. Applicants assert that the

requested exemptions are necessary and

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.

3. Applicants request that the relief

sought herein also apply to a class

consisting of broker-dealers who may, in

the future, act as principal underwriters

of the Policies. Applicants believe that

the terms of the relief requested with

respect to future underwriters issuing

the Policies are consistent with the

standards enumerated in Section 6(c) of

the Act. The requested relief would

promote competitiveness in the variable

annuity market by eliminating the need

for Companion Life to file redundant

exemptive applications for each new

principal underwriter that distributes

the Policies it issues, thereby reducing

its administrative expenses and

maximizing the efficient use of its

resources. The delay and expense

involved in having to repeatedly seek

exemptive relief would impair

Companion Life’s ability to effectively

take advantage of business opportunities

as they arise and investors would not

receive any benefit or additional

protection thereby. Indeed, they might

be disadvantaged as a result of

Companion Life’s increased overhead

expenses. Thus, Applicants believe that

the requested exemption is 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 submit that Companion

Life is entitled to reasonable

compensation for its assumption of

mortality and expense risks. Applicants

represent that the charge of 1.25% on an

annual basis under the Policies made for

mortality and expense risks is consistent

with the protection of investors because

it is a reasonable and proper insurance

charge. Companion Life represents that

the charge of 1.25% for mortality and

expense risks is within the range of

industry practice with respect to

comparable annuity products. This

representation is based upon an analysis

of publicly available information about

similar industry products, taking into

consideration such factors as current

charge levels, the existence of charge

level guarantees, guaranteed annuity

rates. Companion Life will maintain at

its administrative office, available to the

Commission, a memorandum setting

forth in detail the products analyzed in

the course of, and the methodology and

results of, the comparative survey.

5. Applicants acknowledge that the

proceeds of the withdrawal charges may

be insufficient to cover all costs relating

to the distribution of the Policies.

Applicants also acknowledge that, if a

profit is realized from the mortality and

expense risk charge, all or a portion of

such profit may be viewed by the

Commission as being offset by

distribution expenses not reimbursed by

the sales charge. Companion Life has

concluded that there is a reasonable

likelihood that the proposed

distribution financing arrangements will

benefit the Separate Account and the

Policy owners. The basis for such

conclusion is set forth in a

memorandum which will be maintained

by Companion Life at its administrative

offices and will be available to the

Commission. Companion Life also

represents that the Separate Account

will only invest in management

investment companies which undertake,

in the event any such company adopts

a plan under Rule 12b–1 to finance

distribution expenses, to have a board of

directors (or trustees), a majority of

whom are not interested persons of the

company as defined in the Act,

formulate and approve any such plan

under Rule 12b–1.

Conclusion

For the reasons set forth above,

Applicants represent that the

exemptions requested are necessary and

appropriate in the public interest and

consistent with the protection of

investors and purposes fairly intended

by the Policy and provisions of the Act.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret M. McFarland,

Deputy Secretary.

[FR Doc. 95–11444 Filed 5–9–95; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–21042; 812–9564]

Janus Investment Fund, et al.; Notice

of Application

May 4, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Janus Investment Fund and

Janus Aspen Series (collectively, the

‘‘Trusts’’), all existing and future series

of the foregoing investment companies,

Janus Capital Corporation (‘‘Janus

Capital’’), and any other registered

investment companies that now or in

the future are advised by Janus Capital

or an entity controlling, controlled by,

or under common control with Janus

Capital.1

RELEVANT ACT SECTIONS: Order requested

under section 6(c) for an exemption

from section 12(d)(1)(A)(ii), under

sections 6(c) and 17(b) for an exemption

from section 17(a), and under rule 17d–

1 to permit certain transactions in

accordance with section 17(d) and rule

17d–1.

SUMMARY OF APPLICATION: Applicants

seek an order that would permit certain
24956 Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices

money market funds to sell their shares

to affiliated investment companies and

the money market funds subsequently to

redeem such shares.

FILING DATES: The application was filed

on April 5, 1995 and amended on April

27, 1995.

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 applicant with a

copy of the request, personally or by

mail. Hearing requests should be

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

May 30, 1995 and should be

accompanied by proof of service on the

applicant, 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 5th

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

Applicant, Janus Capital Corporation,

100 Fillmore Street, Suite 300, Denver,

Colorado 80206–4923.

FOR FURTHER INFORMATION CONTACT:

Marianne H. Khawly, Staff Attorney, at

(202) 942–0562, or C. David Messman,

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.

Applicant’s Representations

1. The Trusts are open-end

management investment companies that

currently offer twenty-four series (each

a ‘‘Fund’’). Four of the Funds are money

market funds subject to the

requirements of rule 2a–7 under the Act

(together with any future money market

funds, the ‘‘Money Market Funds’’). The

other twenty Funds are non-money

market funds (together with any future

non-money market funds, the ‘‘NonMoney Market Funds’’).

2. Janus Capital serves as investment

adviser and administrator for each of the

Funds. Janus Distributors, Inc. serves as

distributor for Janus Investment Fund.

Shares of Janus Aspen Series are selfdistributed. United Missouri Bank, N.A.

serves as custodian for each Money

Market Fund. Investors Fiduciary Trust

Company serves as custodian and

transfer agent for each Non-Money

Market Fund. Janus Service Corporation

is the transfer agent for each Money

Market Fund.

3. The Money Market Funds seek

current income, liquidity, and capital

preservation by investing exclusively in

short-term money market instruments,

such as United States government

securities, bank obligations, commercial

paper, municipal obligations, or

repurchase agreements secured by

government securities. These short-term

debt securities are valued at their

amortized cost pursuant to rule 2a–7.

4. The Non-Money Market Funds

invest in a variety of debt and/or equity

securities in accordance with their

respective investment objectives and

policies. Each of the Funds has, or may

be expected to have, uninvested cash in

an account with the custodian. This

cash either may be invested directly in

individual short-term money market

instruments or may not be invested in

any portfolio securities.

5. Applicants seek an order that

would permit (a) each of the Funds to

utilize cash reserves that have not been

invested in portfolio securities to

purchase shares of one or more of the

Money Market Funds (each such Fund,

including Money Market Funds,

purchasing shares of a Money Market

Fund, is an ‘‘Investing Fund’’) and (b)

each Money Market Fund to sell shares

to, and redeem such shares from, an

Investing Fund. By investing cash

balances in the Money Market Funds as

proposed, applicants believe that the

Investing Funds will be able to combine

their cash balances and thereby reduce

their transaction costs, create more

liquidity, enjoy greater returns, and

further diversify their holdings. The

policies of the Funds permit the Funds

to purchase money market instruments,

including shares of a money market

fund.

6. The shareholders of the Investing

Funds would not be subject to the

imposition of double management fees.

Janus Capital and its respective

affiliated persons will remit to the

respective Investing Funds, or waive, an

amount equal to the investment

advisory fees Janus Capital and its

affiliated persons earn as a result of the

Investing Funds’ investments in the

Money Market Funds to the extent the

fees are based upon the Investing Funds’

assets invested in shares of the Money

Market Funds (the ‘‘Reduction

Amount’’). Further, no sales charge,

contingent deferred sales charge, 12b–1

fee, or other underwriting or

distribution fee will be charged by the

Money Market Funds with respect to the

purchase or redemption of their shares.

If a Money Market Fund offers more

than one class of shares, each Investing

Fund will invest only in the class with

the lowest expense ratio at the time of

the investment.

7. Several of the Funds have

voluntary expense cap arrangements

with Janus Capital for the purpose of

keeping each Fund’s total expenses

below a certain predetermined

percentage amount (an ‘‘Expense

Waiver’’). To the extent actual expenses

of the Funds exceed these caps, Janus

Capital waives or reimburses a Fund in

the amount of the excess. Any

applicable Expense Waiver will not

limit the advisory and administrative

fee waiver or remittance discussed

above.

8. Applicants also request relief that

would permit the Funds to invest

uninvested cash in a Money Market

Fund in excess of the percentage

limitations set out in section

12(d)(1)(A)(ii) of the Act. Section

12(d)(1)(A)(ii) prohibits a registered

investment company from acquiring the

securities of another investment

company if, immediately thereafter, the

acquiring company would have more

than 5% of its total assets invested in

the securities of the selling company.

Applicants propose that each Fund be

permitted to invest in shares of a Money

Market Fund so long as each Fund’s

aggregate investment in such Money

Market Fund does not exceed the greater

of 5% of such Fund’s total net assets or

$2.5 million. Applicants will comply

with all other provisions of section

12(d)(1).

Applicants’ Legal Analysis

1. Sections 17(a) (1) and (2) make it

unlawful for any affiliated person of a

registered investment company, or an

affiliated person of such affiliated

person, acting as principal, to sell or

purchase any security to or from such

investment company. Because each

fund may be deemed to be under

common control with the other Funds,

it may be an ‘‘affiliated person,’’ as

defined in section 2(a)(3), of the other

Funds. Accordingly, the sale of shares of

the Money Market Funds to the

Investing Funds, and the redemption of

such shares of the Money Market Funds

from the Investing Funds, would be

prohibited under section 17(a).

2. Section 17(b) authorizes the SEC to

exempt a single transaction from section

17(a) if 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, the proposed transaction is

consistent with the policy of each

investment company concerned, and the

proposed transaction is consistent with
Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices 24957

the general purposes of the Act. Under

section 6(c), the SEC may exempt a

series of transactions from any provision

of the Act or any rule or regulation

thereunder if and to the extent that 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. Thus,

applicants request relief under sections

6(c) and 17(b) because they wish to

engage in a series of transactions rather

than a single transaction.

3. The Investing Funds will retain

their ability to invest their cash balances

directly into money market instruments

if they believe they can obtain a higher

return. Each of the Money Market Funds

has the right to discontinue selling

shares to any of the Investing Funds if

its board of trustees determines that

such sales would adversely affect the

portfolio management and operations of

such Money Market Fund. Therefore,

applicants believe that the proposal

satisfies the standards for relief.

4. 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. Each Investing

Fund, Janus Capital, and each of the

Money Market Funds could be

participants in a joint enterprise or other

joint arrangement within the meaning of

section 17(d)(1) and rule 17d–1.

5. Under rule 17d–1, the SEC may

permit a proposed joint transaction if

participation by a registered investment

company is consistent with the

provisions, policies, and purposes of the

Act, and not on a basis different from or

less advantageous than that of the other

participants. Applicants believe that the

proposal satisfies these standards.

6. Section 12(d)(1), as noted above,

sets certain limits on an investment

company’s ability to invest in the shares

of another company. The perceived

abuses section 12(d)(1) sought to

address include undue influence by an

acquiring fund over the management of

an acquired fund, layering of fees, and

complex structures. Applicants believe

that none of these concerns are

presented by the proposed transactions

and that the proposed transactions meet

the section 6(c) standards for relief.

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 from the Investing

Funds will not be subject to a sales load,

redemption fee, or distribution fee

under a plan adopted in accordance

with rule 12b–1.

2. Applicants will cause Janus Capital

and its affiliated persons to remit to the

respective Investing Fund, or waive, an

amount equal to the Reduction Amount.

Any of these fees remitted or waived

will not be subject to recoupment by

Janus Capital or its affiliated persons at

a later date.

3. For the purpose of determining any

amount to be waived and/or expenses to

be borne to comply with any Expense

Waiver, the adjusted fees for an

Investing Fund (gross fees minus

Expense Waiver) will be calculated

without reference to the amounts

waived or remitted pursuant to

condition 2. Adjusted fees then will be

reduced by the amount waived pursuant

to condition 2. If the amount waived

pursuant to condition 2 exceeds

adjusted fees, Janus Capital also will

reimburse the Investing Fund in an

amount equal to such excess.

4. Each of the Investing Funds will be

permitted to invest uninvested cash in,

and hold shares of, a Money Market

Fund only to the extent that the

Investing Fund’s aggregate investment

in such Money Market Fund does not

exceed the greater of 5% of the Investing

Fund’s total net assets or $2.5 million.

5. Each Investing Fund will vote its

shares of each Money Market Fund in

the same proportion as the votes of all

other shareholders of such Money

Market Funds entitled to vote on the

matter.

6. As shareholders of a Money Market

Fund, the Investing Funds will receive

dividends and bear their proportionate

share of expenses on the same basis as

other shareholders of such Money

Market Funds. A separate account will

be established in the shareholder

records of each of the Money Market

Funds for each of the Investing Funds.

For the SEC, by the Division of Investment

Management, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–11519 Filed 5–9–95; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–21040; File No. 812–9338]

The Mutual Life Insurance Company of

New York, et al.

May 4, 1995

AGENCY: Securities and Exchange

Commission (the ‘‘SEC’’ or the

‘‘Commission’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (the ‘‘1940 Act’’).

APPLICANTS: The Mutual Life Insurance

Company of New York (‘‘Mutual of New

York’’), MONY Life Insurance Company

of America (‘‘MONY’’, together with

Mutual of New York, the ‘‘Companies’’),

MONY Variable Account L (‘‘Account

L’’), MONY America Variable Account L

(‘‘MONY Account L’’), any other

separate account established by the

Companies in the future to support

flexible premium, single premium, or

scheduled premium variable life

insurance polices (the ‘‘Other

Accounts,’’ collectively, with Account L

and MONY Account L, the ‘‘Accounts’’)

and MONY Securities Corp.

RELEVANT 1940 ACT SECTIONS: Order

requested under Section 6(c) of the 1940

Act for exemptions from Section

27(c)(2) of the 1940 Act and Rules 6e–

2(c)(4)(v), 6e–3(T)(c)(4)(v), 6e–2(a)(2),

and 6e–2(b)(15) thereunder.

SUMMARY OF APPLICATION: Applicants

seek an order to permit them to deduct

from premiums received under certain

variable life insurance policies (the

‘‘Contracts’’) issued by the Accounts

and the Companies a charge that is

reasonable in relation to the Companies’

increased federal income tax burden

resulting from the Companies’ receipt of

such premiums in connection with the

Contracts. Applicants also seek an order

to permit any of the Accounts to derive

its assets from both flexible and

scheduled premium variable life

insurance policies and nevertheless to

qualify as a variable life insurance

separate account, with respect to single

premium or scheduled premium life

insurance policies, for the purposes of

Rule 6e–2.

FILING DATE: The application was filed

on November 23, 1994.

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 on this application by writing

to the Secretary of the SEC and serving

Applicants with a copy of the request,

personally or by mail. Hearing requests

must be received by the Commission by

5:30 p.m. on May 30, 1995 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 interest, the reason for the

request, and the issues contested.

Persons may request notification of a

hearing by writing to the Secretary of

the SEC.