Federal Register / Vol. 61, No. 87 / Friday, May 3, 1996 / Notices 19965

RAILROAD RETIREMENT BOARD

Agency Forms Submitted for OMB

Review

SUMMARY: In accordance with the

Paperwork Reduction Act of 1995 (44

U.S.C. Chapter 35), the Railroad

Retirement Board has submitted the

following proposal(s) for the collection

of information to the Office of

Management and Budget for review and

approval.

Summary of Proposal(s)

(1) Collection title: Financial

Disclosure Statement.

(2) Form(s) submitted: G–423.

(3) OMB Number: 3220–0127.

(4) Expiration date of current OMB

clearance: June 30, 1996.

(5) Type of request: Revision of a

currently approved collection.

(6) Respondents: Individuals or

households.

(7) Estimated annual number of

respondents: 2,100.

(8) Total annual responses: 2,100.

(9) Total annual reporting hours:

2,975.

(10) Collection description: Under the

Railroad Retirement and the Railroad

Unemployment Insurance Acts, the

Railroad Retirement Board has authority

to secure from an overpaid beneficiary

a statement of the individual’s assets

and liabilities if waiver of the

overpayment is requested.

ADDITIONAL INFORMATION OR COMMENTS:

Copies of the form and supporting

documents can be obtained from Chuck

Mierzwa, the agency clearance officer

(312–751–3363). Comments regarding

the information collection should be

addressed to Ronald J. Hodapp, Railroad

Retirement Board, 844 North Rush

Street, Chicago, Illinois 60611–2092 and

the OMB reviewer, Laura Oliven (202–

395–7316), Office of Management and

Budget, Room 10230, New Executive

Office Building, Washington, D.C.

20503.

Chuck Mierzwa,

Clearance Officer.

[FR Doc. 96–10982 Filed 5–2–96; 8:45 am]

BILLING CODE 7905–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–21922; 812–9776]

The Brinson Funds, et al.; Notice of

Application

April 29, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: The Brinson Funds (the

‘‘Fund’’) on behalf of its series (the

‘‘Public Funds’’); Brinson Relationship

Funds (the ‘‘Trust’’) on behalf of its

series (the ‘‘Series’’), and Brinson

Partners, Inc. (the ‘‘Adviser’’).

Applicants request that any relief

granted pursuant to this application also

apply to any subsequently created

Public Fund or Series for which the

Adviser, any entity resulting from the

Adviser changing its jurisdiction or

form of organization, or any entity

controlling, controlled by, or under

common control with the Adviser serves

as investment advisers.

RELEVANT ACT SECTIONS: Order requested

under section 6(c) granting an

exemption from sections 12(d)(1) (A)

and (B), and under sections 6(c) and

17(b) granting an exemption from

section 17(a).

SUMMARY OF APPLICATION: The requested

order would permit each Public Fund to

invest a portion of its assets in the

Series.

FILING DATES: The application was filed

on September 21, 1995, and was

amended on December 4, 1995, March

15, 1996, April 10, 1996, and April 18,

1996.

HEARING OR NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the SEC orders a hearing.

Interested persons may request 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 May 24, 1996, and

should be accompanied by proof of

service on the 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 SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, NW., Washington, DC 20549.

Applicants, 209 South LaSalle Street,

Chicago, Illinois 60604–1295.

FOR FURTHER INFORMATION CONTACT:

Sarah A. Wagman, Staff Attorney, at

(202) 942–0654, or Alison E. Baur,

Branch Chief, 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 fee at the SEC’s

Public Reference Branch.

Applicants’ Representations

1. The Fund is a Delaware business

trust registered under the act as an

open-end management investment

company. The Funds currently consists

of ten Public Funds: one equity and

income fund (Global Fund), three equity

funds (Global Equity Fund, U.S. Equity

Fund, and Non-U.S. Equity Fund), four

fixed income funds (Global Bond Fund,

Short-Term Global Income Fund, U.S.

Bond Fund, and Non-U.S. Bond Fund),

one balanced fund (U.S. Balanced

Fund), and one money market fund

(U.S. Cash Management Fund). Each

Public Fund offers two classes of shares:

the Brinson Fund class shares, which

have no sales charge and are not subject

to a distribution fee imposed in

accordance with rule 12b–1 under the

Act (a ‘‘12b–1 Fee’’), and the SwissKey

Fund class shares, which have not sales

charge but are subject to a 12b–1 Fee.

Fund/Plan Broker Services, Inc.

(‘‘FPBS’’) acts as distributor of the Fund.

FPBS does not receive any payment

from the Public Funds for its services as

distributor. Rather, the Adviser pays

FPBS a fixed annual fee for the

distribution services it provides to the

Public Funds.

2. The Trust is a Delaware business

trust registered under the Act as an

open-end management investment

company. The Trust currently consists

of six Series: Brinson Global Securities

Fund, Brinson Short-Term Fund,

Brinson Post-Venture Fun, Brinson High

Yield Fund, Brinson Emerging Markets

Equity Fund, and Brinson Emerging

Markets Debt Fund. Investment in the

Series is limited to ‘‘accredited

investors’’ within the meaning of

Regulation D under the Securities act of

1933. The Series impose no sales

charge, advisory fee, or 12b–1 Fee.

Because shares of the Series are issued

solely in private placement transactions,

the Trust does not have a distributor.

3. The Adviser is registered as an

investment adviser under the

Investment Advisers Act of 1940. The

Adviser provides investment advisory

services to each Public Fund and

receives a fee for such services under

the Adviser’s investment advisory

agreement with the Fund. The Adviser

provides investment advisory services

to each Series of the Trust, but it does

not receive any compensation for these

services under its investment advisory

agreement with the Trust. Fund/Plan

Services, Inc. (‘‘Fund/Plan’’) provides

administrative and transfer agency

services to both the Fund and the Trust.
19966 Federal Register / Vol. 61, No. 87 / Friday, May 3, 1996 / Notices

1 It is presently anticipated that the Public Funds

will invest in the following Series: the Brinson

Emerging Markets Equity Fund, the Brinson

Emerging Markets Debt Fund, the Brinson PostVenture Fund, and the Brinson High Yield Fund.

2While the Public Funds request relief to invest

in the Series in order to obtain exposure to these

three asset classes, it is likely that the Fund will

create new Public Funds in the future that may seek

to obtain exposure to different and additional asset

classes through investment in the Series.

4. Applicants propose that, subject to

the conditions to the requested order,

the Public Funds be permitted to

purchase and redeem shares of the

Series, and that each Series be permitted

to sell shares to, and redeem shares

from, each of the Public Funds. The

Public Funds would invest a portion of

their assets in Series that primarily

invest in certain securities (each Series

in which a Public Fund invests in

reliance on the requested order is

referred to herein as a ‘‘Target Series’’).1

5. Each Public Fund may invest

directly in debt and equity securities of

emerging market issuers (‘‘Emerging

Market Securities’’), equity securities of

small capitalization issuers (‘‘Small Cap

Securities’’), and/or high yield

securities, as consistent with the Public

Fund’s investment objectives and

policies. Applicants believe that

investors in the Public Funds may

obtain substantial benefits if the Public

Funds invest that portion of their assets

they currently invest directly in

Emerging Market Securities, Small Cap

Securities, and high yield securities in

the Series that primarily invest in such

securities.2

6. Solely in instances where a Public

Fund holds portfolio securities that

would be appropriate investments for a

Series, the Public Fund may invest in

the Series by transferring securities and

cash in the Public Fund’s portfolio to

the corresponding Series in exchange

for shares of the Series. In addition, the

Series may pay redeeming shareholders,

including the Public Funds, in-kind

with a pro rata distribution of the

Series’ portfolio securities rather than

cash. These in-kind purchases or

redemptions will comply with the

provisions of rule 17a–7 (a) through (f)

under the Act, except for the

requirement under subparagraph (a) that

the transaction be for no consideration

other than cash payment.

7. The Public Funds will retain the

ability to invest their assets directly in

securities as authorized by their

respective investment objectives and

policies. Thus, if the Adviser believes

that it can more economically invest a

Public Fund’s assets directly in a

particular type of security, then such

direct investment will be made. In

addition, each Series reserves the right

to discontinue selling shares to any

Public Fund if the Trust’s board of

trustees determines that sales of Series

shares to the Public Funds would

adversely affect the Series’ portfolio

management and operations.

Applicants’ Legal Analysis

A. Section 12(d)(1)

1. Section 12(d)(1)(A) 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) 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 6(c) provides that the SEC

may exempt persons or transaction 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 order under section 6(c)

exempting them from section 12(d)(1)

(A) and (B) to permit the Public Funds

to invest in shares of the Series.

3. Section 12(d)(1) was intended to

mitigate or eliminate actual or potential

abuses which might arise when one

investment company acquires shares of

another investment company. These

abuses include the unnecessary

duplication of costs (such as sales

charges, distribution fees, advisory fees,

and administrative costs), undue

influence by the fund holding company

over its underlying funds, and the threat

of large scale redemptions of the

securities of the underlying investment

companies.

4. Applicants believe that none of

these potential or actual abuses are

present in the proposed arrangement.

Applicants assert that the Public Funds’

investment in the Series will not result

in duplicative distribution, portfolio

management, fund administration, or

operating costs. Investors in the Public

Funds will not pay duplicative advisory

fees because the Adviser does not

receive any compensation for the

investment advisory services it provides

to the Series. The administration and

accounting fees (both of which are assetbased) paid by the Public Funds to

Fund/Plan will be reduced by an

amount equal to the administration and

accounting fees attributable to the

Public Funds’ investments in the Series.

While one of the Series (Brinson

Emerging Markets Equity Fund) assesses

a redemption fee, applicants agree that

any investment by the Public Funds in

that Series will not be subject to the

redemption fee. Because Fund/Plan

receives a fixed annual fee from each

Series for providing transfer agency

services, Fund/Plan will not receive

increased transfer agency fees as a result

of the proposed transaction.

5. Applicants assert that the proposed

arrangement will not result in

disruptive or manipulative redemptions

by the Public Funds of shares of the

Series, since the Public Funds and the

Series are part of the same ‘‘group of

investment companies’’ as defined in

rule 11a–3 under the Act. Applicants

also assert that there is no risk that the

Public Funds will exercise

inappropriate control or undue

influence over the management of the

Trust. For these reasons, applicants

submit that the requested order

exempting applicants from section

12(d)(1) meets the standards of section

6(c).

B. Section 17(a)

1. Section 17(a) makes it unlawful for

an affiliated person of a registered

investment company, or an affiliated

person of such person, to sell securities

to, or purchase securities from, the

company. Each Public Fund and Series

may be considered an affiliated person

of the other, within the meaning of

section 2(a)(3) of the Act, because each

is advised by the Adviser, and thus

could be considered under common

control. Accordingly, a Series’ sale of its

shares to a Public Fund, and the

redemption of such shares, may be

considered a purchase and sale

prohibited by section 17(a).

2. Section 17(b) provides that the SEC

shall exempt a proposed transaction

from section 17(a) if evidence

establishes that: (a) The terms of the

proposed transaction are reasonable and

fair and do not involve overreaching; (b)

the proposed transaction is consistent

with the policies of each registered

investment company involved; and (c)

the proposed transaction is consistent

with the general provision of the Act.

Applicants request an exemption under

sections 6(c) and 17(b) to permit the

Series to sell their shares to the Public
Federal Register / Vol. 61, No. 87 / Friday, May 3, 1996 / Notices 19967

3Applicants request relief under section 6(c) as

well as under section 17(b) because they wish to

engage in a series of transactions rather than a

single transaction.

Funds, and to permit the Public Funds

to redeem shares of the Series.3

3. Applicants state that the terms of

the proposed transactions are reasonable

and fair, and do not involve

overreaching. The consideration paid

and received for the sale and

redemption of shares of the Series will

be based on the net asset value of those

Series’ shares. In addition, the Series

will not charge the Public Funds any

sales charge, redemption fee, or 12b–1

Fee, and Brinson does not receive any

advisory fee for serving as adviser to the

Series.

4. Applicants assert that the proposed

transactions will be consistent with the

policies of each Public Fund, as the

Public Funds will amend the Fund’s

investment restrictions and policies to

permit the proposed transactions.

Applicants also assert that the proposed

transactions are consistent with the

general purposes of the Act.

5. Applicants believe that investing in

the Series will permit the Public Funds

more efficiently to obtain exposure to a

broadly diversified portfolio of

securities at lower cost than investing

directly. For example, transaction and

custodial fees associated with Emerging

Markets Securities are relatively high as

compared to securities of U.S. issuers.

Consequently, it is more economical to

invest one portfolio of Emerging

Markets Securities rather than several.

The Public Funds’ investment in the

Series may also result in greater

efficiency in the Public Funds’ portfolio

management. For example, because of

the large number of small company

issuers and the difficulty of obtaining

information about these issuers,

following a large number of such issuers

is extremely time-consuming for

portfolio managers. Where a Public

Fund allocates a fairly small percentage

of its assets to investment in Small Cap

Securities, the Public Fund can achieve

exposure to these securities by investing

in the Brinson Post-Venture Fund,

without the Public Fund’s portfolio

managers spending a disproportionate

amount of time following individual

Small Cap Securities.

6. Applicants also state that Public

Funds, by investing in the Series, will

gain exposure to a far greater range of

issuers than would be possible by

investing directly. Applicants anticipate

that greater diversification will result in

lower risk and volatility, and greater

price stability of investments in these

securities. For these reasons and the

reasons discussed above, applicants

believe that the proposed transactions

meet the standards of sections 6(c) and

17(b).

Applicants’ Conditions

Applicants agree that any order of the

SEC granting the requested relief shall

be subject to the following conditions:

1. The Public Funds and the Series

will be part of the same ‘‘group of

investment companies,’’ as defined in

rule 11a–3 under the Act.

2. No Target Series shall acquire

securities of any other investment

company in excess of the limitations

contained in section 12(d)(1)(A) of the

Act.

3. A majority of the trustees of a

Public Fund will not be ‘‘interested

persons’’ of the Public Fund, as defined

in section 2(a)(19) of the Act.

4. Brinson will not charge any

advisory fee for serving as adviser to the

Series.

5. Any sales charges or service fees

charged with respect to securities of a

Public Fund, when aggregated with any

sales charges or service fees paid by the

Public Fund with respect to shares of

the Target Series, shall not exceed the

limitations set forth in Article III,

section 26, of the Rules of Fair Practice

of the National Association of Securities

Dealers, Inc.

6. The applicants agree to provide the

following information, in electronic

format, to the Chief Financial Analyst of

the SEC’s Division of Investment

Management: monthly average total

assets of each Public Fund and each of

its Target Series; monthly purchases and

redemptions (other than by exchange)

for each Public Fund and each of its

Target Series; monthly exchanges into

and out of each Public Fund and each

of its Target Series; month-end

allocations of each Public Fund’s assets

among its Target Series; annual expense

ratios for each Public Fund and each of

its Target Series; and a description of

any vote taken by the shareholders of

any Target Series, including a statement

of the percentage of votes cast for and

against the proposal by the Public Fund

and by the other shareholders of the

Target Series. Such information will be

provided as soon as reasonably

practicable following each fiscal yearend of the Public Fund (unless the Chief

Financial Analyst shall notify the

applicants in writing that such

information need no longer be

submitted).

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–11035 Filed 5–2–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 35–26510]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

April 26, 1996.

Notice is hereby given that the

following filing(s) has/have been made

with the Commission pursuant to

provisions of the Act and rules

promulgated thereunder. All interested

persons are referred to the application(s)

and/or declaration(s) for complete

statements of the proposed

transaction(s) summarized below. The

application(s) and/or declaration(s) and

any amendments thereto is/are available

for public inspection through the

Commission’s Office of Public

Reference.

Interested persons wishing to

comment or request a hearing on the

application(s) and/or declaration(s)

should submit their views in writing by

May 20, 1996, to the Secretary,

Securities and Exchange Commission,

Washington, D.C. 20549, and serve a

copy on the relevant applicant(s) and/or

declarant(s) at the address(es) specified

below. Proof of service (by affidavit or,

in case of an attorney at law, by

certificate) should be filed with the

request. Any request for hearing shall

identify specifically the issues of fact or

law that are disputed. A person who so

requests will be notified of any hearing,

if ordered, and will receive a copy of

any notice or order issued in the matter.

After said date, the application(s) and/

or declaration(s), as filed or as amended,

may be granted and/or permitted to

become effective.

The Southern Company, et al. (70–8733)

The Southern Company (‘‘Southern’’),

270 Peachtree Street, NW., Atlanta,

Georgia 30303, a registered holding

company, and its subsidiaries, SEI

Holdings, Inc. (‘‘Holdings’’), Southern

Electric International, Inc. (‘‘SEI’’),

Mobile Energy Services Holdings, Inc.

(‘‘Mobile Energy’’), Southern Electric

Wholesale Generators, Inc. (‘‘Domestic

Holdings’’), SEI Europe, Inc. (‘‘SEI

Europe’’), and SEI NEWCO 1, Inc.

(‘‘Foreign Holdings’’), all at 900

Ashwood Parkway, Suite 500, Atlanta,

Georgia 30338, have filed a posteffective amendment under sections 3(b)

and 12(c) of the Act and rules 46 and