Federal Register / Vol. 61, No. 121 / Friday, June 21, 1996 / Notices 31981

connection with the performance by

ABN AMRO (Moscow) of its

responsibilities under the agreement to

the same extent as if ABN AMRO had

itself been required to provide custody

services under such agreement.

(ii) A three-party subcustody

agreement will be executed by ABN

AMRO, AAGC, and ABN AMRO

(Moscow). Pursuant to this agreement,

ABN AMRO and AAGC will delegate to

ABN AMRO (Moscow) such of ABN

AMRO and AAGC’s duties and

obligations as will be necessary to

permit ABN AMRO (Moscow) to hold

Securities in custody in Russia. The

subcustody agreement will explicitly

provide that: (x) ABN AMRO (Moscow)

is acting as a foreign custodian for

Securities that belong to a U.S.

Investment Company pursuant to the

terms of an exemptive order issued by

the SEC, and (y) the U.S. Investment

Company or its custodian or

subcustodian that has entered into a

custody agreement will be entitled to

enforce the terms of the subcustody

agreement and can seek relief directly

against ABN AMRO (Moscow). Further,

the subcustody agreement will be

governed either by the law of the State

of New York or The Netherlands. If the

subcustody agreement is governed by

the laws of The Netherlands, ABM

AMRO shall obtain an opinion of

counsel in The Netherlands, opining as

to the enforceability of the rights of a

third party beneficiary under the laws of

The Netherlands.

4. Under any of the agreements

described in conditions 2 or 3 of this

Application, neither ABM AMRO

(Moscow), ABM AMRO, nor AAGC

would be liable for any losses that result

from: (i) political risk (e.g., exchange

control restrictions, confiscation,

expropriation, nationalization,

insurrection, civil strife or armed

hostilities, and (ii) other risks of loss

(excluding the bankruptcy or insolvency

of ABM AMRO (Moscow)) for which

ABM AMRO (Moscow) would not be

liable under the rule (e.g., despite the

exercise of reasonable care, loss due to

acts of God, nuclear incident and the

like).

5. ABM AMRO currently satisfies, and

will continue to satisfy, the minimum

shareholders’ equity requirement set

forth in subsection rule 17f–5(c)(2)(i).

6. At all times during which a custody

arrangement described in condition 3

shall be in effect, AAGC shall be the

subject of the Order, which permits any

U.S. Investment Company and any

custodian or subcustodian for a U.S.

Investment Company to maintain

Securities in the custody of AAGC.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 96–15806 Filed 6–20–96; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–22020/812–9248]

FIRST FUNDS and First Tennessee

Bank National Association; Notice of

Application

June 17, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: FIRST FUNDS (the ‘‘Trust’’)

and First Tennessee Bank National

Association (the ‘‘Bank’’).

RELEVANT ACT SECTIONS: Exemption

requested under sections 6(c), 10(f) and

17(b) from sections 10(f) and 17(a) of the

Act.

SUMMARY OF APPLICATION: Applicants

request an order to permit certain

portfolios of the Trust to purchase

Tennessee tax-exempt securities from

the Bond Division of the Bank (the

‘‘Bond Division’’) when such securities

are underwritten solely by the Bond

Division or when the Bond Division is

a member of an underwriting syndicate,

and from a syndicate manager when

such securities are designated as group

sales. The order also would permit the

portfolios to purchase Tennessee taxexempt securities from an underwriting

syndicate of which the Bond Division is

a member in amounts up to the greater

of 10% or $1,000,000, but in no event

more than 15%, of a class of an issue,

and without limiting the consideration

paid by a portfolio in any one offering.

FILING DATES: The application was filed

on September 19, 1994 and amended on

April 5, 1995, July 19, 1995, March 8,

1996, and May 17, 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 July

12, 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

notification by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

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

Applicants, FIRST FUNDS, 370 17th

Street, Suite 2700, Denver, Colorado

80202, and First Tennessee Bank

National Association, 4990 Poplar

Avenue, 3rd Floor, Memphis, Tennessee

38117.

FOR FURTHER INFORMATION CONTACT:

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

942–0574, or Elizabeth G. Osterman,

Assistant Director, at (202) 942–0654

(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. The Trust is a Massachusetts

business trust registered as an open-end,

diversified, management investment

company that currently offers shares in

seven series, one of which is the

Tennessee Tax-Free Portfolio (the

‘‘Portfolio’’). The Portfolio invests in

Tennessee tax-exempt securities, which

are debt securities of the State of

Tennessee, its political sub-divisions,

authorities, agencies, instrumentalities,

and corporations the interest on which

is exempt from federal and Tennessee

personal income tax. 2. The Bank is a national banking

association wholy owned by First

Tennessee National Corporation. The

Trust Division of the Bank acts as an

investment adviser (‘‘Investment

Adviser’’) to the existing portfolios of

the Trust and expects to serve as

investment adviser to future portfolios

(together with the Portfolio, the

‘‘Portfolios’’) established by the Trust. 3. The Bond Division participates in

a substantial number of public offerings

of Tennessee tax-exempt securities and

is the leading underwriter of most types

of Tennessee tax-exempt securities

based on both dollar volume and

number of new issues. From 1991

through 1995, the Bond Division served

as underwriter of approximately 29% of

the total dollar amount, and

approximately 30% of the total number,

of new issues of Tennessee tax-exempt

securities during those years.

Applicants state that, over the past five

years, the Bond Division has

underwritten as senior manager more

than 3.3 times the number of issues

underwritten by its nearest competitor.

Applicants contend that because the

Bond Division participates in new

issues of Tennessee tax-exempt
31982 Federal Register / Vol. 61, No. 121 / Friday, June 21, 1996 / Notices

1Exemption for the Acquisition of Securities

During the Existence of an Underwriting Syndicate,

Investment Company Act Release No. 21838 (Mar.

21, 1996).

securities more consistently than its

competitors, the Bond Division ranked

first, over a five-year period, among

senior underwriters for Tennessee taxexempt securities by a wide margin.

Applicants also state that the Bond

Division is the largest competitive retail

dealer in the secondary market for

Tennessee tax-exempt securities.

4. Applicants request relief from: (a)

section 17(a) to permit the Portfolios to

purchase Tennessee tax-exempt

securities from the Bond Division when

such securities are underwritten solely

by the Bond Division; (b) sections 10(f)

and 17(a) to permit the Portfolios to

purchase Tennessee tax-exempt

securities from the Bond Division when

the Bond Division is a member of an

underwriting syndicate; (c) sections

10(f) and 17(a) to permit the Portfolios

to purchase Tennessee tax-exempt

securities from a syndicate manager of

an underwriting syndicate of which the

Bond Division is a member when such

sales are designated as ‘‘group sales;’’

(d) section 10(f) to permit the Portfolios

to purchase Tennessee tax-exempt

securities in reliance on rule 10f–3 in

amounts up to the greater of 10% or

$1,000,000, but in no event more than

15%, of a class of an issue (or such other

amounts as may be set forth in rule 10f–

3(d), as it may be amended and/or

redesignated in accordance with the

proposed amendments to rule 10f–3

released for public comment by the SEC

on March 21, 1996 (the ‘‘Proposed

Amendments’’));1 and (e) section 10(f) to

permit the Portfolios to purchase

Tennessee tax-exempt securities from an

underwriting syndicate of which the

Bond Division is a member without

limiting the consideration paid by a

Portfolio in any one offering to 3% of

the Portfolio’s total assets, provided that

if the SEC determines to retain

paragraph 10f–3(e) when the Proposed

Amendments are adopted, applicants

will comply with the requirements of

rule 10f–3(e) as it may be retained,

amended and/or redesignated.

5. Applicants request that the

proposed relief apply to all current and

future portfolios of the Trust or any

other investment company or series

thereof organized in the future that are

advised by the Bank or a person

controlling, controlled by, or under

common control with the Bank and that

invest or will invest in Tennessee taxexempt securities. The requested order

would not permit principal transactions

between the Bond Division and the

Portfolios in other securities or for

Tennessee tax-exempt securities sold in

the secondary market.

6. Applicants assert that while the

national demand for tax-exempt

securities has experienced substantial

growth, the supply of tax-exempt

securities has decreased, and Tennessee

has experienced an even greater decline

in supply of tax-exempt securities than

the nation as a whole. Moreover, the

quantity and quality of Tennessee taxexempt securities offered for sale in the

secondary market tends to fluctuate

daily. Applicants assert that, as the

Portfolios increase in size the combined

effect of the lack of access to the Bond

Division and the lack of securities in the

secondary market may prevent the

Portfolios reliably from meeting their

investment needs by making purchases

in the secondary market. Applicants

contend that, in that case, the inability

to effect transactions with the Bond

Division also may increase to the

Portfolios the cost of securities in the

secondary market both because dealers

other than the Bond Division may not be

in a position to offer competitive prices

generally, and because those dealers do

not have to compete with the Bond

Division in effecting transactions

involving the Portfolios. Consequently,

applicants have an increased need to

acquire Tennessee tax-exempt securities

in underwritten offerings.

7. Applicants assert that due to the

shortage of Tennessee tax-exempt

securities, a significant number of new

issues are oversubscribed. In the event

that an issue is oversubscribed, orders

designated as ‘‘group orders’’ are filled

before ‘‘member orders.’’ Consequently,

obtaining Tennessee tax-exempt

securities in an oversubscribed offering

often requires that a purchaser have the

ability to place group orders, since there

are not sufficient securities to fill all

member orders.

8. A group sale results from a ‘‘group

order.’’ A group order is an order

submitted to an underwriting syndicate

which benefits all members of the

syndicate according to their percentage

participation in the syndicate. A group

order may be distinguished from a

‘‘designated order,’’ in which the

investor designates two or more

members of the syndicate to retain that

portion of the commission not retained

by the syndicate managers, and from a

‘‘member order,’’ in which an investor

places an order directly with a member

of the syndicate who retains that portion

of the commission not retained by the

syndicate managers.

9. Applicants believe that the current

restrictions of rule 10f–3(d)

unnecessarily impair the Portfolio’s

access to the new issue market. Most

offerings of Tennessee tax-exempt

securities are not sufficiently large to

permit the Portfolios to purchase blocks

of securities in reliance on rule 10f–3 in

amounts exceeding $500,000.

Applicants believe that the Proposed

Amendments recognize that the

percentage limitations in rule 10f–3(d)

may be outdated as a result of the

increase in the size of investment

companies and concentration in the

underwriting industry. Applicants

assert that over the last fifteen years,

inflation similarly has rendered the

$500,000 limit under paragraph (d)

obsolete. Applicants assert that the

market for odd lots is significantly less

liquid than the market for round lots,

and the dealer spread for purchasing

odd lots is significantly higher.

Applicants’ proposal would lower the

size of a class of an offering necessary

to allow the Portfolios to purchase

blocks large enough to resell as round

lots.

10. All of the transactions conducted

under the requested order will comply

with the provisions of rule 10f–3, other

than paragraphs (d), (e), and (f). The

Portfolios, together with all other

entities for which the Bank and persons

controlling, controlled by, or under

common control with the Bank have

investment discretion (‘‘Related

Purchasers’’) will not in the aggregate

purchase a majority of any class of an

issue of Tennessee tax-exempt securities

when the Portfolios purchase such

securities directly from the Bond

Division or when the Portfolios

purchase securities designated as

‘‘group sales’’ from a syndicate manager

of an underlying syndicate of which the

Bond Division is a member. This

ensures that a majority of the securities

of an underwriting may not be

purchased by entities controlled by the

Bank. Applicants assert that the

existence of an independent market for

securities purchased by the Portfolios in

reliance on the requested order will

eliminate any possible incentive to the

Bank to misprice securities intentionally

in hoped of selling to a captive market.

Applicants also state that, unlike other

types of debt instruments and equity

securities, municipal bonds are

primarily sold on the basis of yield. The

yield on a particular municipal bond is

determined by reference to a number of

relatively objective factors, including

the credit of the issuer, the maturity of

the issue, the general level of interest

rates, and the value of any taxexemption to investors. Because issuers,

underwriters, and purchasers can look

to these objective factors in determining
Federal Register / Vol. 61, No. 121 / Friday, June 21, 1996 / Notices 31983

an appropriate price for an issue of

municipal securities, applicants believe

that the likelihood that an issue of high

quality municipal securities would be

unmarketable is minimal.

Applicants’ Legal Analysis

1. Section 2(a)(3) 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, ’’ and ‘‘if such other person is

an investment company, any investment

adviser thereof.’’ Under that definition,

the Bank is an affiliated person of the

Portfolios because the Bank serves

(through the Trust Division) as the

Portfolios’ investment adviser.

2. Section 10(f) generally prohibits an

investment company from purchasing

securities from an underwriting

syndicate in which the investment

company’s investment adviser or an

affiliate thereof is a member. Section

10(f) therefore prohibits the Portfolios

from purchasing any securities from an

underwriting syndicate of which the

Bond Division is a member. Section

10(f) also authorizes the SEC to exempt

any transaction or class of transactions

from the prohibitions of section 10(f) if

the exemption is consistent with the

protection of investors.

3. Rule 10f–3 permits purchases

otherwise prohibited by section 10(f)

upon compliance with certain

conditions, including: paragraph (d),

which provides that an investment

company, or two or more investment

companies with the same investment

adviser, relying on rule 10f–3 cannot

purchase more than the greater of 4% or

$500,000, but in no event more than

10%, of any class of an issue; paragraph

(e), which prohibits an investment

company from paying consideration

greater than 3% of the investment

company’s assets for the securities being

offered; and paragraph (f), which

provides that the investment company

cannot purchase the securities being

offered directly from its affiliated

persons, and that it cannot purchase

municipal securities from a syndicate

manager if the purchase is designated as

a group sale or otherwise allocated to

the account of an affiliated person.

4. Section 17(a) provides, in relevant

part, that it is unlawful for any affiliated

person of a registered investment

company, or any affiliated person of

such person, acting as principal,

knowingly to sell any security or other

property to such registered investment

company. As a result, the Bond Division

is prohibited from selling securities to

the Portfolios.

5. Under section 17(b), the SEC may,

upon application, exempt a transaction

from the prohibition of section 17(a) if

evidence establishes that the terms of

the proposed transaction, including the

consideration to be paid, are reasonable

and fair and do not involve

overreaching on the part of any person

concerned, and that the proposed

transaction is consistent with the policy

of the registered investment company

and with the general purposes of the

Act. Because section 17(b) exempts only

a specific transaction, applicants request

relief under sections 6(c) and 17(b) to

engage in a series of future transactions.

6. Section 6(c) authorizes the SEC to

exempt any person or transaction from

any provisions of the Act or any rule or

regulation thereunder if 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.

7. The SEC has proposed amendments

to rule 10f–3 that would, among other

things, raise the percentage limitation in

rule 10f–3(d) to the greater of 10% of an

offering or $1,000,000 (subject to a

maximum limitation of 15% of the

offering), eliminate the limitation on the

amount of an investment company’s

assets that may be used to make

purchases under the rule, and permit

investment companies to purchase

municipal securities in group sales.

Applicants contend that the Proposed

Amendments recognize the fact that (a)

rule 10f–3(d) may be too restrictive

given the increased size of investment

companies relative to the size of

underwritten offerings since the rule

was last amended, (b) the limitation on

the amount of an investment company’s

assets used to make purchases in a

specific offering may be unnecessary in

light of the other provisions of rule 10f–

3 and the diversification provisions of

the Investment Company Act, and (c)

permitting group sales may be necessary

to ensure that investment companies

that purchase municipal bonds are able

to purchase securities in oversubscribed

offerings in which group orders receive

priority. Thus, applicants believe that

the Proposed Amendments generally

support their request for relief.

8. Given the role of the Bond Division

in the new issue market for Tennessee

tax-exempt securities, applicants believe

that as the Portfolios increase in size

they will be disadvantaged in their

attempt to obtain a sufficient quantity of

Tennessee tax-exempt securities

suitable for investment by the Portfolios.

Applicants believe that the requested

order will benefit the shareholders of

the Portfolios by providing the

Portfolios access to the new issue

market for Tennessee Tax-exempt

securities needed to insure the

availability of suitable portfolio

securities. Applicants’ request is based

upon the requirements of the Portfolios

with respect to portfolio transactions;

anticipated shortages of Tennessee taxexempt securities; the significant role

the Bond Division plays in the market

for Tennessee tax-exempt securities; and

the advantages to the Portfolios in being

able to purchase slightly larger blocks of

an underwritten issue than currently is

permitting by the limitations of rule

10f–3(d), effect transactions with the

Bond Division as principal in the new

issue market, and purchase securities in

group sales from the manager of

underwriting syndicates of which the

Bond Division is a member.

9. Applicants believes that the

procedures to be followed with respect

to the proposed transactions are

structured in such a way as to insure

that such transactions will be reasonable

and fair and will not involve

overreaching on the part of any person

concerned and that the requested relief

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.

Applicants’ Conditions

Applicants agree that the following

conditions may be imposed in any order

of the SEC granting the requested relief:

1. Transactions effected pursuant to

the order will be effected in accordance

with all of the provisions of rule 10f–3

(other than paragraphs (d), (e), and (f)).

A Portfolio, or two or more Portfolios

and/or other investment companies

with the same investment adviser as the

Portfolios, will not in the aggregate

purchase more than the greater of 10%

or $1,000,000, but in no event more than

15% of any class of an issue of

Tennessee tax-exempt securities when

the Portfolios purchase such securities

directly from the Bond Division, when

the Portfolios purchase such securities

in ‘‘group sales’’ from a syndicate

manager of an underwriting syndicate of

which the Bond Division is a member,

or when the Portfolios and/or the other

investment companies purchase such

securities otherwise in reliance on rule

10f–3. Notwithstanding the foregoing,

the aggregate amount of securities that

may be purchased and the amount of

the Portfolio’s assets that may be used

will be limited to the percentage

restrictions set forth in rule 10f–3, as it

may be amended if the Proposed

Amendments are adopted, to the extent

such percentage restrictions vary from
31984 Federal Register / Vol. 61, No. 121 / Friday, June 21, 1996 / Notices

those provided in this condition. In no

event will the Portfolios purchase any

such securities from the Bond Division

or from the syndicate manager of an

underwriting syndicate of which the

Bond Division is a member in ‘‘group

sales’’ in an underwriting where the

Related Purchasers in the aggregate

purchase a majority or more of any class

of an issue of such securities.

2. Purchases of Tennessee tax-exempt

securities directly from the Bond

Division or from a syndicate manager of

an underwriting syndicate of which the

Bond Division is a member when the

purchases are designated as ‘‘group

sales’’ be effected only in Tennessee taxexempt securities which at the time of

purchase have one of the following

investment grade ratings from at least

one nationally recognized rating agency:

(a) one of the two highest investment

grade ratings in the case of securities

with remaining maturities of one year or

less; and (b) one of the top three

investment grade ratings in the case of

securities with remaining maturities

greater than one year.

3. Purchases of Tennessee tax-exempt

securities directly from the Bond

Division or from a syndicate manager of

an underwriting syndicate of which the

Bond Division is a member when the

purchases are designated as ‘‘group

sales’’ will be limited so that no such

transaction will be effected if, as a

result, the aggregate value of securities

held by a Portfolio acquired pursuant to

such transactions would exceed 50% of

the total net assets of the Portfolio.

4. Purchases of Tennessee tax-exempt

securities directly from the Bond

Division or from a syndicate manager of

an underwriting syndicate of which the

Bond Division is a member when the

purchases are designated as ‘‘group

sales’’ will be effected only when the

Tennessee tax-exempt securities

acquired are otherwise unavailable for

purchase. If the Bond Division is the

sole underwriter of the securities, this

condition is automatically fulfilled

because there is no other potential

seller. When the Bond Division is a

member of an underwriting syndicate,

the Investment Adviser will observe the

following procedures to determine

when the securities are unavailable from

other members of the syndicate.

Initially, the Investment Adviser will

determine the aggregate number of

securities which the Portfolios wish to

acquire. Next, the Investment Adviser

will attempt to purchase as much of this

number as possible from members of the

syndicate other than the Bond Division.

After acquiring as many securities as

possible from such other members, the

Investment Adviser will attempt to

purchase from the Bond Division the

number of securities which the

Portfolios wish to acquire and have been

unable to obtain from such other

members. The securities acquired from

such other members will be allocated

first to the Portfolios to the extent of the

number of securities it is entitled to

acquire, based upon the relative needs

of the Related Purchasers and the total

number of securities purchased from

such other members and from the Bond

Division, whichever is less.

5. When the Portfolios purchase

Tennessee tax-exempt securities from a

syndicate manager of an underwriting

syndicate of which the Bond Division is

a member, the Portfolios will not: (a)

Submit designated orders to a syndicate

manager which are allocated to the

Bond Division; (b) submit group orders

to a syndicate manager which designate

the Bond Division to receive any portion

of the commission; or (c) otherwise

allocate orders to the Bond Division.

6. The exemption will be valid only

so long as the Investment Adviser and

the Bond Division operate as separate

and independent profit centers within

the framework of First Tennessee Bank

National Association (or become

separate subsidiaries or affiliates

thereof). The Investment Adviser will

maintain offices physically separate

from those of the Bond Division.

Personnel assigned to the Investment

Adviser will be devoted exclusively to

the business and affairs of the

Investment Adviser and will not receive

compensation based on the volume or

nature of transactions effected for the

Portfolios with the Bond Division or an

underwriting syndicate of which the

Bond Division is a member, except to

the extent that such transactions may

affect the profits and losses of the Bank.

The Bond Division will not share with

the Investment Adviser any of its profits

or losses on transactions effected by the

Portfolios with the Bond Division or an

underwriting syndicate of which the

Bond Division is a member, provided

that general compensation to the officers

and employees of the Bank, including

the Investment Adviser and the Bond

Division, will not be affected by this

undertaking. Personnel assigned to the

Bond Division will not participate in or

otherwise seek to influence the

Investment Adviser other than in the

normal course of sales activities of the

same nature that are being carried out

simultaneously with respect to

unaffiliated institutional clients of the

Bond Division. Senior executives of the

Bank and/or First Tennessee National

Corporation with responsibility for

overseeing the operations of various

divisions and subsidiaries are not

precluded from exercising those

functions over the Investment Adviser

because they oversee the Bond Division

as well, provided that such persons

shall not have any involvement with

respect to transactions effected pursuant

to the exemption and will not attempt

to influence or control the purchase of

securities by the Portfolios from the

Bond Division or an underwriting

syndicate of which the Bond Division is

a member.

7. The Bond Division and the

Investment Adviser will adopt a set of

guidelines for their respective personnel

to make certain that transactions

conducted pursuant to the order comply

with the conditions set forth in the

application and that the parties

generally maintain arm’s length

relationships. Compliance officer(s) in

conjunction with the Bank’s audit

division periodically will monitor the

activities of the Bond Division and the

Investment Adviser to make certain that

they adhere to such guidelines and the

conditions set forth in the application.

8. The trustees, including a majority

of the independent trustees of the Trust

who are not ‘‘interested persons’’ of the

Trust and have no direct or indirect

financial interest in the transaction, will

review no less frequently then quarterly

each purchase of Tennessee tax-exempt

securities directly from the Bond

Division or from a syndicate manager of

an underwriting syndicate of which the

Bond Division is a member when the

purchases are designated as ‘‘group

sales’’ since the last review and will

determine that the terms of such

transactions were reasonable and fair to

the shareholders of the Portfolios and

did not involve overreaching of the

Portfolios or their shareholders on the

part of any person concerned. In

considering whether the price paid for

the security was reasonable and fair, the

price of the security will be analyzed

with respect to comparable transactions

involving similar securities being

purchased or sold during a comparable

period of time.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 96–15909 Filed 6–20–96; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–22021; 813–146]

George K. Baum Employee Equity

Fund, L.P.; Notice of Application

June 17, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).