[Federal Register Volume 61, Number 20 (Tuesday, January 30, 1996)]
[Notices]
[Pages 3067-3069]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-1673]



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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-21700; 812-9928]


Van Kampen American Capital Global Managed Assets Fund, et al.; 
Notice of Application

January 24, 1996.
AGENCY: Securities and Exchange Commission (``SEC'').

ACTION: Notice of application for exemption under the Investment 
Company Act of 1940 (the ``Act'').

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APPLICANTS: Van Kampen American Capital Global Managed Assets Fund, Van 
Kampen American Capital Life Investment Trust, Van Kampen American 
Capital World Portfolio Series Trust (collectively, the ``Funds''), Van 
Kampen American Capital Asset Management, Inc. (the ``Adviser''), John 
Govett & Co. Limited (``Govett''), and John Govett Holdings Limited 
(``Govett Holdings'').

RELEVANT ACT SECTIONS: Order requested under section 6(c) of the Act 
for an exemption from sections 15 (a) and (c) of the Act.

SUMMARY OF APPLICATION: Applicants request an order that would permit 
the implementation, without shareholder approval, of new sub-advisory 
agreements (each a ``New Sub-Advisory Agreement'') for a period of up 
to 120 days following the termination of the former sub-advisory 
contracts on December 29, 1995 (each a ``Former Sub-Advisory 
Contract'') (the ``Interim Period''). The order also would permit the 
sub-adviser to receive from the Funds fees earned during the Interim 
Period after shareholders have approved the New Sub-Advisory 
Agreements. The order further would allow the implementation, without 
board of trustee approval, of the New Sub-Advisory Agreements, for a 
limited period of time.

FILING DATES: The application was filed on December 28, 1995, and 
amended on January 23, 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 February 19, 
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 NW., Washington, DC 20549. 
Applicants, Transco Tower, 2800 Post Oak Boulevard, Houston, TX 77056.

FOR FURTHER INFORMATION CONTACT:
Elaine M. Boggs, Staff Attorney, at (202) 942-0572, or Alison E. Baur, 
Branch Chief, at (202) 942-0564 (Division of Investment Management, 
Office of Investment Company Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee at the 
SEC's Public Reference Branch.

Applicant's Representations

    1. Each Fund is an open-end management investment company 
registered under the Act. The Adviser serves as investment adviser to 
each Fund and has engaged Govett to serve as subadviser in connection 
with non-U.S. securities held by the Funds pursuant to the Former Sub-
Advisory Contracts. Govett is a United Kingdom corporation that is 
registered under the Investment Advisers Act of 1940 as an investment 
adviser.
    2. On December 7, 1995, the former ultimate parent of Govett, 
London 

[[Page 3068]]
Pacific Group Limited, entered into a sale and purchase agreement (the 
``Sale Agreement'') with Govett Holdings. Under the Sale Agreement, 
Govett Holdings, an indirect newly-formed majority owned subsidiary of 
Allied Irish Banks p.l.c., acquired all of the outstanding capital 
shares of Govett. Govett Holdings has represented to the Adviser and 
the Funds' board of trustees that it does not intend to make any 
significant changes in the way Govett conducts its business.
    3. The Sale Agreement was consummated on December 29, 1995, 
immediately after which the Former Sub-Advisory Contracts terminated. 
It is anticipated that proxy materials soliciting shareholder votes 
approving the New Sub-Advisory Agreements will be mailed to 
shareholders on or about February 5, 1996. Shareholder meetings are 
scheduled to take place on or about March 14, 1996. The terms and 
conditions of each New Sub-Advisory Agreement are identical in all 
respects to those of the Former Sub-Advisory Contracts, except for the 
effective and termination dates and a fee escrow provision. The New 
Sub-Advisory Agreements do not contemplate any changes in the nature of 
the service provided by Govett or the compensation to be paid by the 
Adviser to Govett.
    4. On December 19, 1995, the board of trustees of each Fund 
approved the New Sub-Advisory Agreements between Govett and the 
Adviser. However, due to weather conditions, one of the non-interested 
trustees was unable to be present at the meeting and could only 
participate by telephone. Because a sufficient number of non-interested 
trustees was not present at this meeting, the New Sub-Advisory 
Agreements remain subject to approval by the non-interested trustees at 
in-person meetings. These meetings have been scheduled for January 25, 
1996. At these meetings, it is anticipated that the trustees will 
confirm their approvals of the New Sub-Advisory Agreements on the basis 
that they are in the best interests of the Funds' shareholders and the 
interests of the Funds and their shareholders will not be diminished as 
a result of the transactions. Thus, the New Sub-Advisory Agreements 
should be recommended for approval by the Funds' shareholders.
    5. The portion of the advisory fees received by the Adviser from 
each Fund and payable to Govett for services rendered during the 
Interim Period will be maintained in an interest-bearing escrow 
account. Amounts in the account will be paid to Govett only after 
approval by the non-interested trustees at the January meetings and by 
the shareholders of the New Sub-Advisory Agreements and receipt of the 
requested exemptive relief. The escrow agent would release the monies 
in each account as provided above, only upon receipt of a certificate 
of an officer of the Fund (none of who is an affiliate of Govett) 
stating, in the case where the monies are to be delivered to Govett, 
that the New Sub-Advisory Agreements have received the requisite non-
interested trustee and shareholder votes or, in the case where the 
monies are to be returned to the Funds, that the Interim Period has 
ended. Before any such certificates were sent, the board of trustees of 
the relevant Fund would be notified.

Applicants' Legal Analysis

    1. Applicants seek an exemption pursuant to section 6(c) from 
section 15(a) of the Act to permit the implementation, without 
shareholder approval, of the New Sub-Advisory Agreements during the 
Interim Period. Applicants also request relief so that Govett may 
receive all fees earned under the New Sub-Advisory Agreements during 
the Interim Period if and to the extent they are approved by the 
shareholders of a Fund. Applicants also seek relief from section 15(c) 
of the Act to permit the implementation of the New Sub-Advisory 
Agreements before approval by the board of trustees, which is expected 
to be given on January 25, 1996.
    2. Section 15(a) prohibits an investment adviser from providing 
investment advisory services to a registered investment company except 
under a written contract that has been approved by a majority of the 
voting securities of such investment company.
    Section 15(a) further requires that such written contract provide 
for its automatic termination in the event of an assignment. Section 
2(a)(4) defines ``assignment'' to include any direct or indirect 
transfer of a contract by the assignor. The consummation of the Sale 
Agreement resulted in an ``assignment,'' within the meaning of section 
2(a)(4), of the Former Sub-Advisory Contracts, thereby resulting in the 
termination of each Former Sub-Advisory Contract, according to its 
terms.
    3. Section 15(c) requires that all investment advisory contracts be 
approved by a majority of an investment company's trustees who are not 
interested persons of the investment adviser at an in-person meeting 
called for the purpose of voting on the approval of the advisory 
contract.
    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. 
Applicants submit that the requested relief meets this standard.
    5. Applicants believe that the requested relief is necessary, as it 
would permit continuity of management notwithstanding the sale of 
Govett and the resulting assignment of the Former Sub-Advisory 
Contracts. Applicants state that obtaining shareholder approval prior 
to the consummation of the Sale Agreement was not possible due to the 
short period of time between the execution of the Sale Agreement and 
the anticipated closing date of the transaction. In addition, 
applicants believe that the Funds made a good faith effort to comply 
with section 15(c) by holding board of trustees meetings on December 
19, 1995, which did not have the required number of non-interested 
trustees present due to factors beyond the Funds' control, namely the 
weather. Further, applicants state that the scope and quality of 
services provided by Govett to the Funds during the Interim Period will 
not be diminished, and each Fund will operate under its new Sub-
Advisory Agreement, which is substantially the same as its Former Sub-
Advisory Contract. Applicants believe that depriving Govett of fees for 
the Interim Period would be a harsh result and would serve no useful 
purpose.

Applicants' Conditions

    Applicants expressly consent to the following conditions in 
connection with the request for exemptive relief:
    1. The New Sub-Advisory Agreements will have the same terms and 
conditions as the Former Sub-Advisory Contracts, except for their 
effective and termination dates and fee escrow provisions.
    2. The portion of the Adviser's fee payable by the Adviser to 
Govett under the New Sub-Advisory Agreements will be placed into 
interest-bearing escrow accounts by the Adviser immediately after 
receipt. The escrow arrangements will be established and maintained as 
follows: (a) Fees payable to Govett during the Interim Period under the 
New Sub-Advisory Agreements would be paid into interest-bearing escrow 
accounts maintained by the escrow agent; and (b) the amounts in the 
escrow accounts (including interest earned on fees paid) would be paid 
to Govett on behalf of a Fund only upon approval by 

[[Page 3069]]
the non-interested members of the boards of trustees at in-person 
meetings and the Funds' shareholders of the New Sub-Advisory Agreements 
or, in the absence of such approval, returned to such Fund.
    3. The Funds will hold in-person trustees' meetings in January, 
1996 to confirm their December approval of the New Sub-Advisory 
Agreements. In addition, shareholder meetings will be held in March, 
1996 to vote on the approval of the New Sub-Advisory Agreements, and 
such approvals will be obtained on or before the 120th day following 
the termination of the Former Sub-Advisory Contracts.
    4. Govett Holdings will bear the costs of preparing and filing this 
request for exemptive relief and the costs related to the solicitation 
of shareholder approval of the Funds' shareholders necessitated by 
consummation of the Sales Agreement.
    5. The Adviser will take all appropriate steps to ensure that the 
scope and quality of sub-advisory services provided to the Funds by 
Govett during the Interim Period will be at least equivalent, in the 
judgment of the respective boards of trustees, to the scope and quality 
of services previously provided by Govett. If there is a material 
change in the personnel providing material services to the Funds during 
the Interim Period, Govett and the Adviser will notify the respective 
Boards of Trustees of the affected Funds to ensure that they, including 
a majority of the non-interested trustees, are satisfied that the 
services provided will not be materially diminished in scope and 
quality.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-1673 Filed 1-29-96; 8:45 am]
BILLING CODE 8010-01-M