65714 Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Notices

1Although purchases and sales between affiliated

persons generally are prohibited by section 17(a) of

the Act, rule 17a–8 provides an exemption for

certain purchases and sales among investment

companies that are affiliated persons of one another

solely by reason of having a common investment

adviser, common directors, and/or common

officers. Applicant and the Trust may be deemed to

be affiliated persons of each other solely by reason

of having common trustees and officers, and

therefore may rely on the rule.

1Chase Manhattan Corporation has announced

that it plans to enter into a reorganization with

Chemical Banking Corporation pursuant to which

Chemical Banking Corporation will be the surviving

corporation. This merger is expected to be

completed on or about April 1, 1996. Subsequent

to this merger it is expected that the Chase

Manhattan Bank will be merged into Chemical

Bank, with Chemical Bank as the surviving bank,

assuming the investment management of the

Investment Companies.

FILING DATE: The application was filed

on November 16, 1995 and amended on

November 24, 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

January 8, 1996, and should be

accompanied by proof of service on

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, NW., Washington, DC 20549.

Applicant, 24 Federal Street, Boston,

Massachusetts 02110.

FOR FURTHER INFORMATION CONTACT:

Deepak T. Pai, Staff Attorney, at (202)

942–0574, or Alison E. Baur, 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 SEC’s

Public Reference Branch.

Applicant’s Representations

1. Applicant is an open-end

management investment company

organized as a Massachusetts business

trust. On February 28, 1986, applicant

registered under the Act as an

investment company. On March 5, 1986,

applicant filed a registration statement

under the Securities Act of 1933

registering an indefinite number of

shares. The registration statement

became effective on August 1, 1986, and

applicant’s initial public offering

commenced soon thereafter. Applicant

consists of two series, EV Classic High

Income Fund (‘‘Classic High Income’’)

and EV Marathon High Income Fund

(‘‘Marathon High Income’’) (collectively

the ‘‘Funds’’). Applicant is a feeder fund

in a master/feeder structure and

therefore has no investment adviser.

2. On June 19, 1995, applicant’s Board

of Trustees, including a majority of

Trustees who were not interested

persons of applicant, approved an

Agreement and Plan of Reorganization

for each Fund whereby applicant would

transfer all of the assets and liabilities

of Classic High Income and Marathon

High Income to a corresponding new

series of Eaton Vance Mutual Funds

Trust (the ‘‘Trust’’). These new series

are EV Classic High Income Fund and

EV Marathon High Income Fund

(together, the ‘‘Successor Funds’’). In

exchange, each Fund would receive

shares of beneficial interest of each

Successor Fund with an aggregate net

asset value equal to the net asset value

of each Fund’s assets and liabilities

transferred. Pursuant to rule 17a–8,

applicant’s Board of Trustees

determined that such reorganization

would be in the best interests of

applicant and that the interests of

existing shareholders of the Funds

would not be diluted as a result of the

reorganization.1 No shareholder

approval was required by the

Declarations of Trust of applicant or the

Trust, or by applicable law.

3. On July 31, 1995, applicant

transferred all of the assets and

liabilities of the Funds to their

corresponding Successor Funds.

Shareholders in the Funds received

shares of beneficial interest of each

Successor Fund equal in value to their

shares in a Fund in complete

liquidation and dissolution of applicant.

No brokerage commissions were paid as

a result of the exchange.

4. Each Fund and each Successor

Fund assumed its own expenses in

connection with the reorganization.

Such expenses included, but were not

limited to, legal fees, registration fees

and printing expenses.

5. At the time of the filing of the

application, applicant had no assets or

liabilities, was not a party to any

litigation or administration proceeding,

and had no shareholders. Applicant is

neither engaged, nor does it propose to

engaged, in any business activities other

than those necessary for the winding-up

of its affairs.

6. On July 31, 1995, applicant

dissolved as a Massachusetts business

trust.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 95–30860 Filed 12–19–95; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–21601; 812–9828]

Mutual Fund Group, et al.; Notice of

Application

December 14, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Mutual Fund Group,

Mutual Fund Trust, Mutual Fund

Variable Annuity Trust, Vista Global

Fixed Income Portfolio, Vista Growth

and Income Portfolio, Vista

International Equity Portfolio, Vista

Capital Growth Portfolio (collectively,

the ‘‘Investment Companies’’), and the

Chase Manhattan Bank, N.A, or its

successor entity subsequent to its

merger into Chemical Bank 1 (the

‘‘Adviser’’).

RELEVANT ACT SECTIONS: Order requested

under section 6(c) of the Act for an

exemption from sections 13(a)(2),

13(a)(3), 18(f)(1), 22(f), and 22(g) and

rule 2a–7 thereunder, under sections

6(c) and 17(b) of the Act for an

exemption from section 17(a)(1), and

under section 17(d) of the Act and rule

17d–1 thereunder to permit certain joint

arrangements.

SUMMARY OF APPLICATION: Applicants

request an order that would permit each

applicant investment company to enter

into deferred compensation

arrangements with its trustees who are

not employees of its affiliated persons.

FILING DATES: The application was filed

on October 23, 1995, and amended on

December 7, 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 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

January 8, 1996, 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.
Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Notices 65715

2 ‘‘Successors in interest’’ is herein limited to

entities that result from a reorganization into

another jurisdiction or a change in the type of

business organization.

3See, e.g., American Balanced Fund, Inc. (pub.

avail. Feb. 13, 1984) (no-action assurances given for

deferred compensation plan in which the value of

the deferred amounts did not depend upon the

investment company’s performance).

Persons who wish to be notified of a

hearing may request notification by

writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

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

Applicants, the Investment Companies,

Vista Service Center, P.O. Box 419392,

Kansas City, Missouri 64141–6392, and

the Adviser, One Chase Manhattan

Plaza, New York, New York 10081.

FOR FURTHER INFORMATION CONTACT:

Elaine M. Boggs, Staff Attorney, at (202)

942–0572, 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 at the SEC’s

Public Reference Branch.

Applicants’ Representations

1. Mutual Fund Group, Mutual Fund

Trust, Mutual Fund Variable Annuity

Trust, Vista Global Fixed Income

Portfolio, Vista Growth and Income

Portfolio, Vista International Equity

Portfolio and Vista Capital Growth

Portfolio are diversified open-end

management investment companies that

currently consist of 32 separate

portfolios. The Adviser serves as the

investment adviser for the Investment

Companies and Vista Broker-Dealer

Services, Inc. services as their

distributor.

2. Applicants request that relief be

extended to any other registered openend investment company established or

acquired in the future, or series thereof,

(including any successors in interest 2)

advised by the Adviser (together with

the Investment Companies, the

‘‘Funds’’).

3. Each Investment Company has a

board of trustees, a majority of the

members of which are not ‘‘interested

persons’’ of such Investment Company

within the meaning of section 2(a)(19) of

the Act. Each of the trustees who is not

as employee of the Adviser, the

Investment Companies’ administrator or

distributor, or any of their affiliates

(‘‘Eligible Trustees’’) receives annual

fees which collectively are, and are

expected to continue to be, insignificant

in comparison to the total net assets of

the Investment Companies. Applicants

request an order to permit the Eligible

Trustees to elect to defer receipt of all

or a portion of their fees pursuant to a

deferred compensation plan (the

‘‘Plan’’) and related election agreement

entered into between each Eligible

Trustee and the appropriate Fund.

Under the Plan, the Eligible Trustees

could defer payment of trustees’ fees

(the ‘‘Deferred Fees’’) in order to defer

payment of income taxes or for other

reasons.

4. Under the Plan, the deferred fees

payable by a Fund to a participating

Eligible Trustee will be credited to a

book reserve account established by the

Fund (a ‘‘Deferral Account’’), as of the

first business day following the date

such fees would have been paid to the

Eligible Trustee. The trustee may select

one or more investment portfolios from

a list of available Investment Companies

that will be used to measure the

hypothetical investment performance of

the trustee’s Deferral Account. The

value of a Deferral Account will be

equal to the value such account would

have had if the amount credited to it

had been invested and reinvested in

shares of the investment portfolios

designated by the trustee (the

‘‘Designated Shares’’).

5. Each Investment Company intends

generally to purchase and maintain

Designated Shares in an amount equal

to the deemed investments of the

Deferred Accounts of its trustees. Any

participating money market series of a

Fund that values its assets by the

amortized cost method will buy and

hold the Designated Shares that

determine the performance of the

Deferral Accounts in order to achieve an

exact match between such series’

liability to pay deferred fees and the

assets that offset such liability. The

accrued liability of each Investment

Company for the compensation deferrals

will fluctuate with changes in the value

of the Designated Shares. The

Investment Company will not, however,

experience any economic effect from the

fluctuating liability because it will own

Designated Shares purchased with

money that otherwise would have been

paid to the Eligible Trustee. Changes in

the amount of the liability will be

exactly matched by changes in the value

of the Designated Shares.

6. The Funds’ respective obligations

to make payments of amounts accrued

under the Plan will be general

unsecured obligations, payable solely

from their respective general assets and

property. The Plan provides that the

Funds will be under no obligation to

purchase, hold or dispose of any

investments under the Plan, but, if one

or more of the Funds choose to purchase

investments to cover their obligations

under the Plan, then any and all such

investments will continue to be a part

of the respective general assets and

property of such Funds.

7. Payment to Eligible Trustees will be

made in a lump sum or in generally

equal annual installments over a period

of no more than 10 years as selected by

the Eligible Trustee at the time of

deferral. In the event of death, amounts

payable to the Eligible Trustee under the

Plan will become payable to a

beneficiary designated by the Eligible

Trustee. In all other events, the Eligible

Trustee’s right to receive payments is

non-transferable.

8. The Plan was adopted prior to

receipt of the requested relief. Pending

receipt of SEC approval, the Plan

provides that the compensation deferred

by an Eligible Trustee will be credited

to a Deferral Account in the form of cash

and credited with an amount equal to

the yield on 90 day U.S. Treasury Bills.3

Applicants’ Legal Analysis

1. Applicants request an order which

would exempt the Funds: (a) under

section 6(c) of the Act from sections

13(a)(2), 13(a)(3), 18(f)(1), 22(f), and

22(g) and rule 2a–7 thereunder, to the

extent necessary to permit the Funds to

adopt and implement the Plan; (b)

under sections 6(c) and 17(b) of the Act

from section 17(a)(1) to permit the

Funds to sell securities for which they

are the issuer to participating Funds in

connection with the Plan; and (c) under

section 17(d) of the Act and rule 17d–

1 thereunder to permit the Funds to

effect certain joint transactions incident

to the Plan.

2. Section 18(f)(1) generally prohibits

a registered open-end investment

company from issuing senior securities.

Section 13(a)(2) requires that a

registered investment company obtain

shareholder authorization before issuing

any senior security not contemplated by

the recitals of policy in its registration

statement. Applicants state that the Plan

possesses none of the characteristics of

senior securities that led Congress to

enact section 18(f)(1). The Plan would

not: (a) Induce speculative investments

or provide opportunities for

manipulative allocation of any Fund’s

expenses or profits; (b) affect control of

any Fund; or (c) confuse investors or

convey a false impression as to the

safety of their investments. All

liabilities created under the Plan would

be offset by equal amounts of assets that

would not otherwise exist if the fees

were paid on a current basis.

3. Section 22(f) prohibits undisclosed

restrictions on transferability or

negotiability of redeemable securities
65716 Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Notices

4Section 2(a)(3)(C) of the Act defines the term

‘‘affiliated person’’ of another person to include any

person directly or indirectly controlling, controlled

by, or under common control with such other

person.

5Section 17(b) may permit only a single

transaction, rather than a series of on-going

transactions, to be exempted from section 17(a). See

Keystone Custodian Funds, Inc., 21 S.E.C. 295

(1945).

issued by open-end investment

companies. Applicants state that such

restrictions are set forth in the Plan,

which would be included primarily to

benefit the Eligible Trustees and would

not adversely affect the interests of the

trustees or of any shareholder.

4. Section 22(g) prohibits registered

open-end investment companies from

issuing any of their securities for

services or for property other than cash

or securities. This provision prevents

the dilution of equity and voting power

that may result when securities are

issued for consideration that is not

readily valued. Applicants believe that

the Plan would merely provide for

deferral of payment of such fees and

thus should be viewed as being issued

not in return for services but in return

for a Fund not being required to pay

such fees on a current basis.

5. Section 13(a)(3) provides that no

registered investment company shall,

unless authorized by the vote of a

majority of its outstanding voting

securities, deviate from any investment

policy that is changeable only if

authorized by shareholder vote. The

relief requested from section 13(a)(3)

would extend only to existing

Investment Companies. Applicants

believe that relief from section 13(a)(3)

is appropriate to enable the affected

Investment Companies to invest in

Designated Shares without a

shareholder vote. Applicants will

provide notice to shareholders in the

prospectus of each affected Investment

Company of the Deferred Fees under the

Plan. The value of the Designated

Shares will be de minimis in relation to

the total net assets of the respective

Investment Company, and will at all

times equal the value of the Investment

Company’s obligations to pay deferred

fees.

6. Rule 2a–7 imposes certain

restrictions on the investments of

‘‘money market funds,’’ as defined

under the rule, that would prohibit a

Fund that is a money market Fund from

investing in the shares of any other

Fund. Applicants believe that the

requested exemption would permit the

Funds to achieve an exact matching of

Designated Shares with the deemed

investments of the Deferral Accounts,

thereby ensuring that the deferred fees

would not affect net asset value.

7. Section 6(c) provides, in relevant

part, that the SEC may, conditionally or

unconditionally, by order, exempt any

person or class of persons from any

provision of the Act or from any rule

thereunder, if such exemption is

necessary or appropriate in the public

interest, consistent with the protection

of investors, and consistent with the

purposes fairly intended by the policy

and provisions of the Act. Applicants

submit that the relief requested from the

above provisions satisfies this standard.

8. Section 17(a)(1) generally prohibits

an affiliated person, or an affiliated

person of an affiliated person, of a

registered investment company from

selling any security to such registered

investment company. The Adviser is an

affiliated person of each of the Fund’s

portfolios pursuant to section 2(a)(3)(E)

of the Act. Each portfolio may be treated

as an affiliated person of each other

portfolio by reason of being under the

common control of the Adviser.4 The

sale by a portfolio of any security to any

other portfolio of any Fund would

therefore be subject to the prohibitions

of section 17(a)(1). Applicants assert

that section 17(a)(1) was designed to

prevent, among other things, sponsors of

investment companies from using

investment company assets as capital

for enterprises with which they were

associated or to acquire controlling

interest in such enterprises. Applicants

submit that the sale of securities issued

by the Funds pursuant to the Plan does

not implicate the concerns of Congress

in enacting this section, but merely

would facilitate the matching of each

Fund’s liability for deferred trustees’

fees with the Designated Shares that

would determine the amount of such

Fund’s liability.

9. Section 17(b) authorizes the SEC to

exempt a proposed transaction from

section 217(a) if evidence establishes

that the terms of the 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 transaction

is consistent with the policies of the

registered investment company, and the

general purposes of the Act. Applicants

assert that the proposed transaction

satisfies the criteria of section 17(b). The

finding that the terms of the transaction

are consistent with the policies of the

registered investment company is

predicated on the assumption that relief

is granted from section 13(a)(3).

Applicants also request relief from

section 17(a)(1) under section 6(c) to the

extent necessary to implement the

Deferred Fees under the Plan on an

ongoing basis.5

10. Section 17(d) and rule 17d–1

generally prohibit a registered

investment company’s joint or joint and

several participation with an affiliated

person in a transaction in connection

with any joint enterprise or other joint

arrangement or profit-sharing plan ‘‘on

a basis different from or less

advantageous than that of’’ the affiliated

person. Eligible Trustees will not

receive a benefit, directly or indirectly,

that would otherwise inure to a Fund or

its shareholders. Eligible Trustees will

receive tax deferral but the Plan

otherwise will maintain the parties,

viewed both separately and in their

relationship to one another, in the same

position as if the deferred fees were paid

on a current basis. When all payments

have been made to a Eligible Trustee,

the Eligible Trustee will be no better off,

relative to the Funds, than if he or she

had received trustee fees on a current

basis and invested them in Designated

Shares.

Applicants’ Conditions

Applicants agree that the order

granting the requested relief shall be

subject to the following conditions:

1. With respect to the relief requested

from rule 2a–7, any money market Fund

that values its assets by the amortized

cost method will buy and hold

Designated Shares that determine the

value of Deferral Accounts to achieve an

exact match between the liability of any

such Fund to pay compensation

deferrals and the assets that offset that

liability.

2. If a Fund purchases Designated

Shares issued by an affiliated Fund, the

Fund will vote such shares in

proportion to the votes of all other

shareholders of such affiliated Fund.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–30908 Filed 12–19–95; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–21598; 812–9762]

The One Hundred Fund, Inc., et al.;

Notice of Application

December 13, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: The One Hundred Fund,

Inc., dba Berger 100 Fund (the ‘‘100

Fund’’), Berger One Hundred and One