32864 Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Notices

4Rule 17f–4 was amended in 1984 (after the

adoption of rule 17f–5) to permit the use of certain

foreign securities depositories in accordance with

rule 17f–5. Investment Company Act Release No.

14132 (Sept. 7, 1984).

the use of securities depositories outside

the U.S.4 Because of the limitations

imposed by section 17(f) and rule 17f–

4, Chase was required to obtain

exemptive relief in order to utilize

foreign banks and foreign securities

depositories as subcustodians for the

assets of U.S. Investment Companies.

3. Section 6(c) of the Act provides, in

relevant part, that the SEC may 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.

4. Applicants believe that the

requested amendment is necessary and

appropriate in the public interest to

permit U.S. Investment Companies for

which Chase serves as custodian or

subcustodian to continue relying on the

Prior Order after the Merger. Applicants

state that the Merger, a transaction

undertaken for reasons unrelated to the

terms of Chase’s foreign custody

arrangements, should not have the

unintended effect of terminating the

ability of New Chase and its U.S.

Investment Company customers to rely

on the Prior Order. Chase has numerous

longstanding contractual relationships

with its U.S. Investment Company

customers, and with numerous foreign

subcustodians, predicated on the Prior

Order. Applicants believe that, while

the terms of these contracts do not differ

materially from the requirements of rule

17f–5 (except in ways that are more

favorable to U.S. Investment

Companies), it would be

administratively burdensome and

expensive to amend these contracts to

delete references to the Prior Order and

to conform the contracts to rule 17f–5.

5. Applicants believe that the assets to

which the Prior Order relates will be as

effectively protected by New Chase as

they have been by Chase. Following the

Merger, New Chase will be required to

indemnify U.S. Investment Companies

for losses to the same extent that Chase

is currently required to do so under the

Prior Order. Applicants believe that, in

certain respects, the Prior Order

imposes more stringent requirements,

and therefore provides a higher level of

protection for U.S. Investment Company

assets, than does rule 17f–5. Applicants

state that this application does not seek

to change in any manner the terms and

protections applicable to U.S.

Investment Company assets held in

custody under the Prior Order.

6. Applicants state that the Prior

Order is consistent with the purposes of

section 17(f) and of rule 17f–5. The

purpose of the section is to ensure that

U.S. Investment Companies hold

securities in a safe manner that protects

the interests of their shareholders. The

purpose of the rule is to relieve U.S.

Investment Companies of the expense

and inconvenience of transferring assets

to the custody of a U.S. bank or other

qualified custodian outside the

jurisdiction in which the primary

trading market for those assets is located

and to reduce the risks inherent in

maintaining assets outside the U.S.

Applicants state that the requested

amendment would permit New Chase

and the U.S. Investment Companies for

which it acts as custodian or

subcustodian to continue relying on the

Prior Order under the same terms and

conditions of the Prior Order and is

therefore consistent with these

purposes.

7. Applicants state that in granting the

Prior Order, the SEC determined that

the arrangements which that order

permits satisfy the standards of section

6(c). Applicants believe that the

substitution of New Chase for Chase as

the party to which the terms and

conditions of the Prior Order applies in

no way detracts from the continuing

validity of the SEC’s determination.

Therefore, applicants believe the

requested order satisfies these

standards.

Condition

Applicants agree that the order

granting the requested relief shall be

subject to the condition that, following

the merger of Chase and Chemical, New

Chase will comply with all of the terms

and conditions of the Prior Order as if

such order had been granted to New

Chase.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–16169 Filed 6–24–96; 8:45 am]

BILLING CODE 8010–01–M

[Investment Company Act Release No.

22032; International Series Release No. 997;

812–10172]

Commonwealth Bank of Australia;

Notice of Application

June 19, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANT: Commonwealth Bank of

Australia (‘‘CBA’’).

RELEVANT ACT SECTIONS: Order under

section 6(c) of the Act for an exemption

from section 17(f) of the Act.

SUMMARY OF APPLICATION: CBA requests

an order that would permit registered

investment companies other than

investment companies registered under

section 7(d) (a ‘‘U.S. Investment

Company’’), for which CBA serves as

custodian or subcustodian, to maintain

foreign securities and other assets in

Australia with CBA Nominees Limited

(‘‘CBA Nominees Ltd.’’), a whollyowned subsidiary of CBA.

FILING DATE: The application was filed

on May 30, 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 July

15, 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 Fifth

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

Applicant: 48 Martin Place, Sydney,

New South Wales, 2000, Australia; cc:

Thomas J. Rice, Esq., Coudert Brothers,

1114 Avenue of the Americas, New

York, NY 10036–7703.

FOR FURTHER INFORMATION CONTACT:

Marianne H. Khawly, Staff Attorney, at

(202) 942–0562, 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 from the SEC’s

Public Reference Branch.

Applicant’s Representations

1. CBA is a bank organized and

existing under the laws of Australia.

CBA is authorized and regulated in

Australia by the Reserve Bank of

Australia, an agency of the

Commonwealth Government, under the

Banking Act of 1959. CBA carries out a
Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Notices 32865

wide range of banking, financial, and

related activities in Australia and

internationally. CBA offers trustee and

custodial services in Australia through

CBA Nominees Ltd. because the Reserve

Bank of Australia’s prudential

guidelines provide that such activities

be kept separate from CBA in its

capacity as a bank. CBA is the second

largest bank in Australia in terms of

total domestic assets. At June 30, 1995,

CBA had consolidated shareholders’

equity in excess of $5 billion.

2. CBA Nominees Ltd., a whollyowned subsidiary of CBA, was

organized in 1965 and exists under the

laws of New South Wales, Australia.

CBA Nominees Ltd. does not have any

employees, rather, its work is carried

out by CBA employees.

3. CBA requests an order to permit

CBA, CBA Nominees Ltd., any U.S.

Investment Company, and any

custodian for a U.S. Investment

Company to maintain foreign securities,

cash, and cash equivalents (collectively,

‘‘Assets’’) in the custody of CBA

Nominees Ltd. as delegate for CBA. For

the purposes of this application,

‘‘foreign securities’’ includes: (a)

securities issued and sold primarily

outside the United States by a foreign

government, a national of any foreign

country, or a corporation or other

organization incorporated or organized

under the laws of any foreign country;

and (b) securities issued or guaranteed

by the Government of the United States

or by any state or any political

subdivision thereof or by any agency

thereof or by any entity organized under

the laws of the United States or of any

state thereof which have been issued

and sold primarily outside the United

States.

Applicant’s Legal Analysis

1. Section 17(f) of the Act requires

every registered management

investment company to place and

maintain its securities and similar

investments in the custody of certain

enumerated entities, including a bank

having at all times aggregate capital,

surplus, and undivided profits of at

least $500,000. A ‘‘bank’’, as that term

is defined in section 2(a)(5) of the Act,

includes: (a) a banking institution

organized under the laws of the United

States; (b) a member bank of the Federal

Reserve System; and (c) any other

banking institution or trust company,

whether incorporated or not, doing

business under the laws of any state or

of the United States, a substantial

portion of which consists of receiving

deposits or exercising fiduciary powers

similar to those permitted to national

banks, which is supervised or examined

by state or federal authority having

supervision over banks, and which is

not operated for the purposes of evading

the Act.

2. The only entities located outside

the United States that section 17(f)

authorizes to serve as custodians for

registered management investment

companies are the overseas branches of

qualified U.S. banks. Rule 17f–5,

however, expands the group of entities

that are permitted to serve as foreign

custodians. The rule defines the term

‘‘Eligible Foreign Custodian’’ to include

a banking institution or trust company,

incorporated or organized under the

laws of a country other than the United

States, that is regulated as such by that

country’s government or an agency

thereof and that has shareholders’

equity in excess of $200,000,000 or its

equivalent. CBA is an Eligible Foreign

Custodian under the rule.

3. CBA Nominees Ltd. is not an

Eligible Foreign Custodian under rule

17f–5 because it is not a banking

institution or trust company

incorporated or organized under the

laws of a country other than the United

States and does not have shareholders’

equity in excess of $200,000,000. Absent

exemptive relief, therefore, it could not

serve as a custodian for U.S. Investment

Company Assets.

4. 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. CBA believes

that its request satisfies this standard.

Applicant’s Conditions

Applicant agrees that any SEC order

granting the requested relief shall be

subject to the following conditions:

1. The foreign custody arrangements

proposed with respect to CBA Nominees

Ltd. will satisfy the requirements of rule

17f–5 in all respects, except insofar as

CBA Nominees Ltd.: (a) is not a banking

institution or trust company

incorporated or organized under the

laws of a country other than the United

States; and (b) does not have

shareholders’ equity in excess of

$200,000,000.

2. CBA, when providing custody

services to a U.S. Investment Company,

will deposit Assets with CBA Nominees

Ltd. only in accordance with one of the

two contractual arrangements described

below, which arrangement will remain

in effect at all times during which CBA

Nominees Ltd. fails to satisfy the criteria

of an Eligible Foreign Custodian in rule

17f–5.

a. The Three-Party Agreement

Arrangement. Under this arrangement,

the agreement will be a three-party

agreement (the ‘‘Agreement’’) among (i)

CBA, (ii) CBA Nominees Ltd., and (iii)

the U.S. Investment Company, or the

custodian for a U.S. Investment

Company pursuant to which CBA will

undertake to provide specified custody

or subcustody services, and will

delegate to CBA Nominees Ltd. such of

the duties and obligations of CBA as

will be necessary to permit CBA

Nominees Ltd. to hold in custody the

U.S. Investment Company’s Assets. The

Agreement further will provide that

CBA will be liable for any loss, damage,

cost, expense, liability, or claim arising

out of or in connection with the

performance by CBA Nominees Ltd. of

it responsibilities under the Agreement

to the same extent as if CBA had itself

been required to provide custody

services under the Agreement, except

for such loss, damage, cost, expense,

liability, or claim as may result from

political risk and those as may result

from other risks of loss (excluding

bankruptcy or insolvency of CBA

Nominees Ltd.) for which neither CBA

nor CBA Nominees Ltd. would be liable

under rule 17f–5.

b. The Custody Agreement/

Subcustody Agreement Arrangement.

Under this arrangement, Assets will be

deposited with CBA Nominees Ltd. in

accordance with the Custody Agreement

and Subcustody Agreement defined

below.

i. The Custody Agreement will be

between CBA and the U.S. Investment

Company or any custodian for a U.S.

Investment Company. In that agreement,

CBA will undertake to provide specified

custody or subcustody services, and the

U.S. Investment Company (or its

custodian) will authorize CBA to

delegate to CBA Nominees Ltd. such of

CBA’s duties and obligations as will be

necessary to permit CBA Nominees Ltd.

to hold in custody the U.S. Investment

Company’s Assets. The Custody

Agreement further will provide that

CBA will be liable for any loss, damage,

cost, expense, liability, or claim arising

out of or in connection with the

performance by CBA Nominees Ltd. of

its responsibilities to the same extent as

if CBA had itself been required to

provide custody services under the

Custody Agreement, except for such

loss, damage, cost, expense, liability, or

claim as may result from political risk

and those as may result from other risks

of loss (excluding bankruptcy or

insolvency of CBA Nominees Ltd.) for
32866 Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Notices

1Rule 17a–8 provides an exemption from section

17(a) of the Act for certain reorganizations among

registered investment companies that may be

affiliated persons, or affiliated persons of an

affiliated person, solely by reason of having a

common investment adviser, common directors,

and/or common officers.

which neither CBA nor CBA Nominees

Ltd. would be liable under rule 17f–5.

ii. A Subcustody Agreement will be

executed by CBA and CBA Nominees

Ltd. Pursuant to this agreement, CBA

will delegate to CBA Nominees Ltd.

such of CBA’s duties and obligations as

will be necessary to permit CBA

Nominees Ltd. to hold Assets in custody

in Australia. The Subcustody

Agreement will explicitly provide that

(i) CBA Nominees Ltd. is acting as a

foreign custodian for Assets that belong

to a U.S. Investment Company pursuant

to the terms of an exemptive order

issued by the SEC and (ii) the U.S.

Investment Company or its custodian

(as the case may be) that has entered

into a Custody Agreement will be

entitled to enforce the terms of the

Subcustody Agreement and can seek

relief directly against CBA Nominees

Ltd. The Subcustody Agreement will be

governed by the law of Australia and

CBA shall obtain an opinion of counsel

in Australia opining as to the

enforceability of the rights of a third

party beneficiary under the laws of that

country.

3. CBA currently satisfies and will

continue to satisfy the requirements set

forth in rule 17f–5(c)(2).

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–16164 Filed 6–24–96; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–22027; 811–5491]

Nuveen California Municipal Income

Fund, Inc.; Notice of Application

June 19, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

deregistration under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANT: Nuveen California Municipal

Income Fund, Inc.

RELEVANT ACT SECTIONS: Order requested

under section 8(f).

FILING DATES: The application was filed

on May 17, 1996.

SUMMARY OF APPLICATION: Applicant

requests an order declaring that it has

ceased to be an investment company.

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

15, 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 may

request notification of a hearing by

writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 5th

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

Applicant, 333 West Wacker Drive,

Chicago, Illinois 60606.

FOR FURTHER INFORMATION CONTACT:

David W. Grim, Staff Attorney, at (202)

942–0571, or Robert A. Robertson,

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 a registered closed-end

management investment company

organized as a Minnesota corporation.

On March 4, 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 under section 8(b) of the Act and

under the Securities Act of 1933. The

registration statement became effective

on April 19, 1988, and the initial public

offering commenced soon thereafter.

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

of directors unanimously approved the

Agreement and Plan of Reorganization

and Liquidation (the ‘‘Agreement’’),

under which substantially all of the

assets of applicant would be transferred

to Nuveen California Municipal Value

Fund, Inc. (the ‘‘Acquiring Fund’’), a

Minnesota corporation registered under

the Act as a closed-end management

investment company, in exchange for

shares of the Acquiring Fund. Following

receipt of the shares of the Acquiring

Fund, applicant would distribute those

shares to its shareholders in complete

liquidation of applicant. In accordance

with rule 17a–8 under the Act,1

applicant’s board of directors

determined that the proposed

reorganization was in the best interest of

applicant and that the interests of the

existing shareholders of applicant

would not be diluted as a result of the

proposed reorganization.

3. The proposed reorganization was

approved by applicant’s shareholders at

the annual shareholder meeting on

November 16, 1995.

4. Pursuant to the Agreement, on

January 8, 1996, applicant transferred

substantially all of its assets to the

Acquiring Fund. In exchange for

applicant’s assets, the Acquiring Fund

transferred the number of Acquiring

Fund shares having an aggregate net

asset value equal to the value of

applicant’s net assets to applicant and

assumed substantially all of applicant’s

liabilities. Following this exchange,

applicant distributed the shares of the

Acquiring Fund received in connection

with the reorganization to its

shareholders on a pro rata basis (the

‘‘Reorganization’’). On the date of

Reorganization, applicant had 5,209,911

shares of beneficial interest outstanding,

having an aggregate net asset value of

$61,944,963.96 and a net asset value per

share of $11.89.

5. Applicant and the Acquiring fund

together have incurred, in the aggregate,

expenses of $161,604 in connection

with the Reorganization. The aggregate

expenses include legal fees, audit fees

and expenses, printing expenses,

mailing expenses, proxy solicitation

expenses, and filing fees. The expenses

resulting from the Reorganization were

allocated between applicant and the

Acquiring Fund based upon estimated

savings to each as a result of expected

reduced operating expenses following

the Reorganization. Estimated expenses

relating to the Reorganization were

accrued prior to the effective time of the

Reorganization, with applicant paying a

total of $95,661 and the Acquiring Fund

paying a total of $65,943.

6. Applicant has retained cash to pay

certain liabilities accrued in connection

with the Reorganization. As of May 1,

1996, the amount of such cash was

$39,660.56.

7. As of the date of the application,

applicant had no shareholders.

Applicant is not a party to any litigation

or administrative proceeding. Applicant

is neither engaged nor proposes to

engage in any business activities other

than those necessary for the winding-up

of its affairs.

8. Applicant intends to file a

certificate of dissolution in accordance

with the law of the State of Minnesota.