28912 Federal Register / Vol. 61, No. 110 / Thursday, June 6, 1996 / Notices

1 Interests in the AMR Trust are offered to the

Advantage Trust and the Mileage Trust pursuant to

an exemption from registration under the private

offering exemption contained in section 4(2) of the

Securities Act of 1933.

Rule 24 requires the filing with the

Commission of certain information

indicating that an authorized

transaction has been carried out in

accordance with the terms and

conditions of the Commission order

relating thereto. The rule imposes a

burden of about 358 hours annually on

approximately 253 respondents.

General comments regarding the

estimated burden hours should be

directed to the Desk Officer for the

Securities and Exchange Commission at

the address below. Any comments

concerning the accuracy of the

estimated average burden hours for

compliance with Commission rules and

forms should be directed to Michael E.

Bartell, Associate Executive Director,

Office of Information Technology,

Securities and Exchange Commission,

450 Fifth Street, NW., Washington, DC

20549 and Desk Officer for the

Securities and Exchange Commission,

Office of Information and Regulatory

Affairs, Office of Management and

Budget, Room 3208, New Executive

Office Building, Washington, DC 20503.

Dated: May 30, 1996.

Jonathan G. Katz,

Secretary.

[FR Doc. 96–14176 Filed 6–5–96; 8:45 am]

BILLING CODE 8010–01–M

[Investment Company Act Rel. No. 21995;

812–9974]

American AAdvantage Funds, et al.;

Notice of Application

May 30, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (‘‘Act’’).

APPLICANTS: Amrican AAdvantage

Funds (the ‘‘AAdvantage Trust’’),

American AAdvantage Mileage Funds

(the ‘‘Mileage Trust’’), AMR Investment

Services Trust (the ‘‘AMR Trust,’’

collectively with the AAdvantge Trust

and the Mileage Trust, the ‘‘Trusts’’),

and AMR Investment Services, Inc.

(‘‘Manager’’), on behalf of themselves

and all future investment companies or

series funds of the Trusts that employ

the ‘‘multi-manager’’ structure described

in the application and are advised by

the Manager or an entity controlling,

controlled by, or under common control

(within the meaning of section 2(a)(9) of

the Act) with the Manager.

RELEVANT ACT SECTIONS: Exemption

requested under section 6(c) of the Act

from the provisions of section 15(a) and

rule 18f–2.

SUMMARY OF APPLICATION: Applicants

seek a conditional order permitting the

Manager, as investment adviser to the

Trusts, to enter into sub-advisory

contracts on behalf of one or more series

funds of the Trusts without obtaining

prior shareholder approval.

FILING DATES: The application was filed

on January 29, 1996, and amended on

May 6, 1996.

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

June 24, 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.

Persons who wish to be notified of a

hearing may request such notification

by writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, NW., Washington, DC 20549.

Applicants, 4333 Amon Carter

Boulevard, MD 5645, Forth Worth,

Texas 76155.

FOR FURTHER INFORMATION CONTACT:

Courtney S. Thornton, Senior Counsel,

at (202) 942–0583, or David M.

Goldenberg, 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.

Applicants’ Representations

1. The AAdvantage Trust, which

currently has eight series funds (the

‘‘AAdvantage Funds’’), and the Mileage

Trust, which currently has seven series

funds (the ‘‘Mileage Funds,’’

collectively with the AAdvantage

Funds, the ‘‘Funds’’), are Massachusetts

business trusts registered under the Act

as open-end management investment

companies. Each Fund is a separate

investment series of the AAdvantage

Trust or the Mileage Trust and has

distinct investment objectives and

policies. Because applicants believe that

returns can be enhanced by careful

selection and blending of styles of

several investment managers within a

single asset class, three of the Funds

have operated as ‘‘multi-manager’’ funds

(the ‘‘Multi-Manager Funds’’) since their

organization in 1987. Each of the MultiManager Funds has relied upon at least

two sub-advisers with different

investment styles (the ‘‘Money

Managers’’) for the provision of

investment advisory services.

2. The Funds implemented a ‘‘masterfeeder’’ structure on November 1, 1995.

Under this structure, each Fund (other

than the American AAdvantage ShortTerm Income Fund, which invests

directly in investment securities) invests

all of its investable assets in a

corresponding series fund (‘‘Portfolio’’)

of the AMR Trust, a New York common

law trust that is registered under the Act

as an open-end management investment

company.1 Each of the seven Portfolios

has investment objectives identical to

those of the corresponding Funds.

3. With the conversion of the majority

of the Funds to a master-feeder

structure, the three Portfolios in which

the Multi-Manager Funds invest were

structured as multi-manager investment

vehicles employing tow or more Money

Managers (the ‘‘Multi-Manager

Portfolios’’). Each Money Manager

provides investment advisory services

for the Multi-Manager Portfolios and

their corresponding Funds pursuant to a

separate investment advisory agreement

(the ‘‘Money Manager Agreement’’) with

the Manager, who pays the fees of the

Money Managers out of the investment

advisory fees it receives from the Trusts.

As long as a Fund invests all of its

investable assets in a corresponding

Multi-Manager Portfolio, however, a

Money Manager will receive an advisory

fee only on behalf of the Multi-Manager

Portfolio and not on behalf of the

corresponding Fund(s). The Manager

currently serves as the sole investment

adviser to the non-Multi-Manager

Portfolios, to which the requested relief

will not apply unless they elect to

employ two or more Money Managers.

4. The Manager, a wholly-owned

subsidiary of AMR Corporation, the

parent corporation of American

Airlines, Inc., is registered as an

investment adviser under the

Investment Advisers Act of 1940. The

Manager provides the Trusts with

administrative and asset management

services, including the oversight of all

investment advisory and portfolio

management services for the Funds and

the Portfolios pursuant to investment

advisory contracts (the ‘‘Management

Agreements’’). However, as a result of

the master-feeder structure, all

investment management for the Multi-
Federal Register / Vol. 61, No. 110 / Thursday, June 6, 1996 / Notices 28913

2The requested relief would not apply to any of

the Funds unless they decide to invest their assets

directly and employ two or more Money Managers

to provide investment advisory services as

described in the application.

Manager Funds takes place at the

Portfolio level, rather than at the Fund

level. As part of its responsibilities, the

Manager recommends and supervisors

the Money Managers, subject to the

oversight and approval of the board of

trustees (the ‘‘Board’’) of the applicable

Trusts. To discharge its duties, the

Manager from time to time recommends

the replacement or addition of Money

Managers and/or changes in the Money

Manager Agreements.

5. At a recent shareholders meeting,

shareholders of the Funds and the

Portfolios approved the adoption of a

policy that would permit the Manager to

hire Money Managers and modify

Money Manager Agreements solely with

Board approval, without prior

shareholder approval. Accordingly,

applicants request an exemption from

section 15(a) and rule 18f–2 to permit

the Money Managers to act as

investment advisers to one or more

Portfolios or Funds pursuant to a

written contract that has not been

approved by the shareholders of the

applicable Portfolios or Funds.2

Applicants’ Legal Analysis

1. Section 15(a) of the Act makes it

unlawful for any person to act as

investment adviser to a registered

investment company except pursuant to

a written contract that has been

approved by a majority of the

investment company’s outstanding

voting securities. Rule 18f–2 provides

that each series or class of stock in a

series company affected by a matter

must approve such matter if the Act

requires shareholder approval.

2. Applicants assert that by choosing

the invest in a Fund that invests its

assets in a Multi-Manager Portfolio,

investors have indicated their reliance

upon the Manager to select and monitor

the Portfolio’s sub-advisers. Applicants

believe that unless the Multi-Manager

Portfolios have the ability to act

promptly upon the Manager’s

recommendations with respect to the

Money Managers, investors’

expectations are frustrated and the

Funds and their shareholders could be

seriously disadvantaged in certain

circumstances.

3. Applicants contend that the

structure of the Multi-Manager

Portfolios is unlike that of a

conventional mutual fund in that it

divides responsibility for general

management and investment advisory

services between the Manager and the

Money Managers. Applicants argue that

because shareholders rely upon the

Manager to manage the Portfolios’ subadvisers, the selection or change of a

Money Manager is not an event that

significantly alters the nature of

shareholders’ investment, nor does it

implicate the policy concerns regarding

shareholder approval. Applicants assert

that investors will continue to exercise

control over their relationship with the

Manager, the party they have chosen to

hold accountable for investment results

and related services, by voting on

matters relating to the Management

Agreement.

4. Applicants believe that requiring

shareholder approval of a new or

amended Money Manager Agreement

prior to its effective date is not

necessary to effect the policies and

purposes of the act, particularly as

doing so will increase expenses and

delay prompt implementation of action

the Manager has determined is most

beneficial to the shareholders of the

Multi-Manager Portfolios and the

corresponding Funds. Applicants also

assert that even though shareholders

will not vote on Money Manager

changes, they will receive an

information statement that includes all

the information about a new Money

Manager or Money Manager Agreement

that would be included in a proxy

statement. In addition, applicants state

that all fees payable by the Manager to

the Money Manager will be disclosed in

the prospectus of the applicable Fund.

5. Finally, applicants argue that,

unlike the normal fund/adviser

relationship, the relationship between

the Manager and a Money Manager is

entirely arm’s length. Applicants assert

that the terms of the requested order

will ensure that there can be no

significant financial interest between

the directors, officers, and trustees of

the Trusts and the Manager and the

Money Managers themselves (other than

through a pooled investment vehicle

that is not controlled by any such

director, officer, or trustee).

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

the SEC 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 policies and purposes

fairly intended by the policies and

provisions of the Act. Applicants

believe that the requested relief meets

this standard.

Applicants’ Conditions

Applicants agree that the requested

exemption will be subject to the

following conditions:

1. Before a Fund or a Portfolio may

rely on the order requested in the

application, the operation of the Fund

or the Portfolio in the manner described

in the application will be approved by

a majority of the outstanding voting

securities, as defined in the Act, of the

Fund and the Portfolio or, in the case of

a new Fund whose public shareholders

purchased shares on the basis of a

prospectus containing the disclosure

contemplated by condition 2 below, by

the sole initial shareholder(s) before

offering shares of such Fund to the

public.

2. Any Fund relying on the requested

relief will disclose in its prospectuses

the existence, substance, and effect of

any order granted pursuant to the

application.

3. The Manager will provide

management and administrative

services to the Funds and the Portfolios,

and, subject to the review and approval

of their respective Boards, will: set the

overall investment strategies of the

Funds and the Portfolios; recommend

Money Managers; allocate, and when

appropriate, reallocate the assets of the

Funds and the Portfolios among Money

Managers; monitor and evaluate the

investment performance of the Money

Mangers, including their compliance

with the investment objectives, policies,

and restrictions of the Funds and the

Portfolios; and manage short-term

investments of the Funds and the

Portfolios.

4. A majority of each Board will be

persons each of whom is not an

‘‘interested person’’ of the Trust (as

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

(the ‘‘Independent Trustees’’), and the

nomination of new or additional

Independent Trustees will be placed

within the discretion of the then

existing Independent Trustees.

5. The Trusts will not enter into

Money Manager Agreements with any

Money Manager that is an ‘‘affiliated

person,’’ as defined in section 2(a)(3) of

the Act, of the Funds, the Portfolios, or

the Manger other than by reason of

serving as a Money Manager to one or

more of the Funds or the Portfolios (an

‘‘Affiliated Money Manager’’) without

such agreement, including the

compensation to be paid thereunder,

being approved by the shareholders of

the applicable Fund and Portfolio.

6. When a change of Money Manager

is proposed for a Fund or a Portfolio

with an Affiliated Money Manager, the

Board of the applicable Trust, including
28914 Federal Register / Vol. 61, No. 110 / Thursday, June 6, 1996 / Notices

a majority of the Independent Trustees,

will make a separate finding, reflected

in the Board minutes of the Trust, that

any such change of Money Manager is

in the best interest of the Trust and its

shareholders and does not involve a

conflict of interest from which the

Manager or Affiliated Money Manager

derives an inappropriate advantage.

7. No director, trustee, or officer of a

Trust or the Manager will own directly

or indirectly (other than through a

pooled investment vehicle that is not

controlled by any such director, trustee,

or officer) any interest in a Money

Manager except for ownership of

interests in the Manager or any entity

that controls, is controlled by, or under

common control with the Manager, or

ownership of less than 1% of the

outstanding securities of any class of

equity or debt securities of any publicly

traded company that is either a Money

Manager or controls, is controlled by, or

is under common control with a Money

Manager.

8. Within 90 days of the hiring of any

new Money Manager or the

implementation of any proposed

material change in a Money Manager

Agreement, the affected Fund and

Portfolio will furnish their shareholders

with all information about the new

Money Manager or Money Manager

Agreement that would be included in a

proxy statement. Such information will

include any change in such disclosure

caused by the addition of a new Money

Manager or any proposed material

change in the Money Manager

Agreement of a Fund or a Portfolio. The

Fund and the Portfolio will meet this

condition by providing shareholders,

within 90 days of the hiring of a Money

Manager or the implementation of any

material change to the terms of a Money

Manager Agreement, with an

information statement meeting the

requirements of Regulation 14C and

Schedule 14C under the Securities

Exchange Act of 1934 (the ‘‘Exchange

Act’’). The information statement also

will meet the requirements of Item 22 of

Schedule 14A under the Exchange Act.

For the SEC, by the Division of Investment

Management, under delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 96–14178 Filed 6–05–96; 8:45 am]

BILLING CODE 8010–01–M

[Investment Company Act Release No.

21996; 811–5591]

The Dreyfus/Laurel Investment Series

May 30, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Deregistration under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANT: The Dreyfus/Laurel

Investment Series.

RELEVANT ACT SECTION: Section 8(f).

SUMMARY OF APPLICATION: Applicant

requests an order declaring that it has

ceased to be an investment company.

FILING DATES: The application was filed

on April 9, 1996 and amended on May

20, 1996.

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

June 24, 1996 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, NW., Washington, DC 20549.

Applicant, 200 Park Avenue, New York,

New York 10166.

FOR FURTHER INFORMATION CONTACT:

Sarah A. Buescher, Staff Attorney, at

(202) 942–0573, or David M.

Goldenberg, 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. Applicant is an open-end

management investment company

organized as a Massachusetts business

trust. On May 31, 1988, applicant filed

a Notification of Registration on Form

N–8A pursuant to section 8(a) of the

Act, and a registration statement on

Form N–1A pursuant to section 8(b) of

the Act and the Securities Act of 1933.

The registration statement became

effective on October 11, 1988, and the

initial public offering of applicant’s

shares commenced on October 12, 1988.

Applicant’s board of trustees had

authorized both Investor and Class R

shares of the Fund, but only Investor

shares of the Fund were issued.

2. On July 26, 1995, applicant’s board

of trustees approved the liquidation of

the last remaining series of applicant

(the ‘‘Fund’’) and the subsequent

dissolution of applicant. Applicant’s

board approved the liquidation based on

the less than expected growth and

performance of the Fund. The board

also approved the retention by

applicant’s transfer agent of one Investor

share of the Fund following the Fund’s

liquidation so that the transfer agent

could act as shareholder to approve

applicant’s dissolution.

3. On September 15, 1995, applicant

made a liquidating distribution of

$351,113 to shareholders of record at

$11.86 per share. The distribution to

shareholders was based on net asset

value. On September 18, 1995,

applicant’s transfer agent, as the sole

remaining shareholder of the Fund,

approved the dissolution of applicant in

accordance with applicant’s trust

agreement.

4. In connection with its liquidation,

applicant is expected to incur

approximately $7,500 of aggregate

expenses, consisting primarily of legal

expenses, all of which have been or will

be paid by The Dreyfus Corporation,

applicant’s investment adviser.

Applicant’s portfolio securities were

sold at market prices and no brokerage

commissions were incurred.

5. As of the date of the application,

applicant had no assets, no liabilities,

and no shareholders. Applicant is not a

party to any litigation or administrative

proceeding. Applicant is not engaged,

nor proposes to engage, in any business

activities other than those necessary for

the winding-up of its affairs.

6. Applicant intends to file a notice of

termination with the appropriate

Massachusetts authorities.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 96–14181 Filed 6–5–96; 8:45 am]

BILLING CODE 8010–01–M