816 Federal Register / Vol. 66, No. 3 / Thursday, January 4, 2001 / Notices

1Any registered closed-end investment company

relying on this relief in the future will do so in a

manner consistent with the terms and conditions of

the application. Applicants represent that each

investment company presently intending to rely on

the requested relief is listed as an applicant.

MATTERS TO BE CONSIDERED: Dr. Marick

Masters, University of Pittsburgh, will

present the findings of the NPC

Research Project.

CONTACT PERSON FOR MORE INFORMATION:

Jeff Sumberg, Director, Office of Labor

and Employee Relations, Office of

Personnel Management, Theodore

Roosevelt Building, 1900 E Street, NW.,

Room 7H28, Washington, DC 20415–

2000, (202) 606–2930.

Office of Personnel Management.

Janice R. Lachance,

Director.

[FR Doc. 01–174 Filed 1–3–01; 8:45 am]

BILLING CODE 6325–01–P

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 24805; 812–12310]

Scudder Weisel Capital Entrepreneurs

Fund and Scudder Weisel Capital LLC;

Notice of Application

December 27, 2000.

AGENCY: Securities and Exchange

Commission (‘‘Commission’’).

ACTION: Notice of application for an

order under section 6(c) of the

Investment Company Act of 1940

(‘‘Act’’) for an exemption from sections

18(c) and 18(i) of the Act, under

sections 6(c) and 23(c)(3) of the Act for

an exemption from rule 23c–3 under the

Act, and pursuant to section 17(d) of the

Act and rule 17d–1 under the Act.

SUMMARY OF APPLICATION: Applicants

request an order to permit certain

registered closed-end management

investment companies to issue multiple

classes of shares and to impose assetbased distribution fees and early

withdrawal charges.

APPLICANTS: Scudder Weisel Capital

Entrepreneurs Fund (the ‘‘Fund’’) and

Scudder Weisel Capital LLC (‘‘Scudder

Weisel’’).

FILING DATES: The application was filed

on October 24, 2000 and amended on

December 26, 2000.

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 January 18, 2001, 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, 88 Kearny

Street, San Francisco, California, 94108.

FOR FURTHER INFORMATION CONTACT: Sara

P. Crovitz, Senior Counsel, at (202) 942–

0667, or Michael W. Mundt, 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 at the

Commission’s Public Reference Branch,

450 Fifth Street, NW., Washington, DC

20549–0101, (202) 942–8090.

Applicants’ Representations

1. The Fund is a closed-end

management investment company

registered under the Act and organized

as a Delaware business trust. Scudder

Weisel is registered as an investment

adviser under the Investment Advisers

Act of 1940 and will serve as investment

adviser to the Fund. Scudder Weisel

also is registered as a broker-dealer

under the Securities Exchange Act of

1934 and will distribute the Fund’s

shares. Applicants request that the order

also apply to any other registered

closed-end management investment

company established in the future for

which Scudder Weisel, or any entity

controlling, controlled by, or under

common control with Scudder Weisel

acts as principal underwriter or

investment adviser.1

2. The Fund’s investment objective is

to provide investors with long-term

capital appreciation. The Fund seeks its

objective by investing primarily in

public and private equity securities of

U.S. and non-U.S. companies.

3. The Fund intends to continuously

offer its shares to the public at net asset

value, plus any applicable sales charges.

The Fund’s shares will not be offered or

traded in the secondary market and will

not be listed on any exchange or quoted

on any quotation medium. The Fund

intends to operate as an ‘‘interval fund’’

pursuant to rule 23c–3 under the Act

and to make quarterly repurchase offers

to its shareholders.

4. The Fund currently intends to offer

one class of shares, Class A shares, that

will be sold with a front-end sales

charge and will be subject to a

shareholder services fee. Class A shares

will not be subject to an early

withdrawal charge (‘‘EWC’’). The Fund

seeks the flexibility to be structured as

a multiple-class fund and may in the

future offer other classes of shares with

different distribution structures,

including shares with no front-end sales

charge but with an EWC. Future classes

of shares of the Fund may also be

subject to an asset-based distribution

fee. Applicants represent that

shareholder services fees and assetbased distribution fees will comply with

the provisions of rule 2830(d) of the

Conduct Rules of the National

Association of Securities Dealers, Inc.

(‘‘NASD Sales Charge Rule’’).

Applicants also represent that the Fund

will disclose in its prospectus, the fees,

expenses and other characteristics of

each class of shares offered for sale by

the prospectus, as is required for openend multi-class funds under Form N–

1A.

5. All expenses incurred by the Fund

will be allocated among the various

classes of shares based on the net assets

of the Fund attributable to each class,

except that the net asset value and

expenses of each class will reflect

distribution fees, service fees, and any

other incremental expenses of that class.

Expenses of the Fund allocated to a

particular class of shares will be borne

on a pro rata basis by each outstanding

share of that class. The Fund may create

additional classes of shares in the future

that may have different terms from Class

A shares. Applicants state that the Fund

will comply with the provisions of rule

18f–3 under the Act as if it were an

open-end investment company.

6. The Fund may waive the EWC for

certain categories of shareholders or

transactions to be established from time

to time. With respect to any waiver of,

scheduled variation in, or elimination of

the EWC, the Fund will comply with

rule 22d–1 under the Act as if the Fund

were an open-end investment company.

7. The Fund may offer its

shareholders an exchange feature under

which shareholders of the Fund may,

during the Fund’s quarterly repurchase

periods, exchange their shares for shares

of the same class of other registered

open-end investment companies or

registered closed-end investment

companies that comply with rule 23c–

3 under the Act and continuously offer

their shares at net asset value, and that

are in the Scudder Weisel group of

investment companies. Fund shares so

exchanged will be counted as part of the

Federal Register / Vol. 66, No. 3 / Thursday, January 4, 2001 / Notices 817

repurchase offer amount as specified in

rule 23c–3 under the Act. Any exchange

option will comply with rule 11a–3

under the Act as if the Fund were an

open-end investment company subject

to that rule. In complying with rule 11a–

3, the Fund will treat the EWC as if it

were a contingent deferred sales charge

(‘‘CDSC’’).

Applicants’ Legal Analysis

Multiple Classes of Shares

1. Section 18(c) of the Act provides,

in relevant part, that a closed-end

investment company may not issue or

sell any senior security if, immediately

thereafter, the company has outstanding

more than one class of senior security.

Applicants state that the creation of

multiple classes of shares of the Fund

may be prohibited by section 18(c).

2. Section 18(i) of the Act provides

that each share of stock issued by a

registered management investment

company will be a voting stock and

have equal voting rights with every

other outstanding voting stock.

Applicants state that multiple classes of

shares of the Fund may violate section

18(i) of the Act because each class

would be entitled to exclusive voting

rights with respect to matters solely

related to that class.

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

the Commission may exempt any

person, security or transaction from any

provision of the Act, 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. Applicants request an

exemption under section 6(c) from

sections 18(c) and 18(i) to permit the

Fund to issue multiple classes of shares.

4. Applicants submit that the

proposed allocation of expenses and

voting rights among multiple classes is

equitable and will not discriminate

against any group or class of

shareholders. Applicants submit that

the proposed arrangements would

permit the Fund to facilitate the

distribution of its securities and provide

investors with a broader choice of

shareholder services. Applicants assert

that their proposal does not raise the

concerns underlying section 18 of the

Act to any greater degree than open-end

investment companies’ multiple class

structures that are permitted by rule

18f–3 under the Act. Applicants state

that the Fund will comply with the

provisions of rule 18f–3 as if it were an

open-end investment company.

Early Withdrawal Charges

5. Section 23(c) of the Act provides,

in relevant part, that no registered

closed-end investment company will

purchase securities of which it is the

issuer, except: (i) on a securities

exchange or other open market; (ii)

pursuant to tenders, after reasonable

opportunity to submit tenders given to

all holders of securities of the class to

be purchased; or (iii) under other

circumstances as the Commission may

permit by rules and regulations or

orders for the protection of investors.

6. Rule 23c–3 under the Act permits

a registered closed-end investment

company (an ‘‘interval fund’’) to make

repurchase offers of between five and

twenty-five percent of its outstanding

shared at net asset value at periodic

intervals pursuant to a fundamental

policy of the interval fund. Rule 23c–

3(b)(1) under the Act provides that an

interval fund may deduct from

repurchase proceeds only a repurchase

fee, not to exceed two percent of the

proceeds, that is reasonably intended to

compensate the fund for expenses

directly related to the repurchase.

7. Section 23(c)(3) provides that the

Commission may issue an order that

would permit a closed-end investment

company to repurchase its shares in

circumstances in which the repurchase

is made in a manner or on a basis that

does not unfairly discriminate against

any holders of the class or classes of

securities to be purchased. As noted

above, section 6(c) provides that the

Commission may exempt any person,

security or transaction from any

provision of the Act, if and to the extent

that 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. Applicants request relief under

sections 6(c) and 23(c) from rule 23c–3

to permit them to impose EWCs on

shares submitted for repurchase that

have been held for less than a specified

period.

8. Applicants believe that the

requested relief meets the standards of

sections 6(c) and 23(c)(3). Rule 6c–10

under the Act permits open-end

investment companies to impose

CDSCs, subject to certain conditions.

Applicants state that EWCs are

functionally similar to CDSCs imposed

by open-end investment companies

under rule 6c–10. Applicants state that

EWCs may be necessary for Scudder

Weisel to recover distribution costs.

Applicants will comply with rule 6c–10

as if that rule applied to closed-end

investment companies. The Fund also

will disclose EWCs in accordance with

the requirements of Form N–1A

concerning CDSCs. Applicants further

state that the Fund will apply the EWC

(and any waivers or scheduled

variations of the EWC) uniformly to all

shareholders in a given class and

consistent with the requirements of rule

22d–1 under the Act.

Asset-based Distribution Fees

9. Section 17(d) of the Act and rule

17d–1 under the Act prohibit an

affiliated person of a registered

investment company or an affiliated

person of such person, 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 unless the

Commission issues an order permitting

the transaction. In reviewing

applications submitting under section

17(d) and rule 17d–1, the Commission

considers whether the participation of

the investment company in a joint

enterprise or joint arrangement is

consistent with the provisions, policies

and purposes of the Act, and the extent

to which the participation is on a basis

different from or less advantageous than

that of other participants.

10. Rule 17d–3 under the Act

provides an exemption from section

17(d) and rule 17d–1 to permit openend investment companies to enter into

distribution arrangements pursuant to

rule 12b–1 under the Act. Applicants

request an order under section 17(d) and

rule 17d–1 under the Act to permit the

Fund to impose asset-based distribution

fees. Applicants have agreed to comply

with rules 12b–1 and 17d–3 as if those

rules applied to closed-end investment

companies.

Applicants’ Condition

Applicants agree that any order

granting the requested relief will be

subject to the following condition:

Applicants will comply with the

provisions of rules 6c–10, 11a–3, 12b–

1, 17d–3, 18f–3, and 22d–1 under the

Act, as amended from time to time, as

if those rules applied to closed-end

management investment companies,

and will comply with the NASD Sales

Charge Rule, as amended from time to

time.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 01–150 Filed 1–3–01; 8:45 am]

BILLING CODE 8010–01–M