Federal Register / Vol. 61, No. 124 / Wednesday, June 26, 1996 / Notices 33151

Department of Housing and Urban

Development

Deputy Assistant Secretary, Public

Housing Investments to the Assistant

Secretary, Public and Indian Housing.

Effective May 3, 1996.

Special Assistant to the Assistant

Secretary for Public and Indian

Housing. Effective May 17, 1996.

Executive Assistant to the President,

Government National Mortgage

Association. Effective May 29, 1996.

Deputy Assistant Secretary for Long

Range Planning to the Deputy Secretary.

Effective May 29, 1996.

Deputy Assistant Secretary for Public

Affairs to the Deputy Secretary.

Effective May 29, 1996.

Department of Justice

Special Assistant to the Assistant

Attorney General, Environmental and

Natural Resources Division. Effective

May 24, 1996.

Department of Labor

Legislative Assistant to the Assistant

Secretary for Congressional and

Intergovernmental Affairs. Effective May

2, 1996.

Deputy Chief of Staff to the Chief of

Staff. Effective May 3, 1996.

Special Assistant to the Assistant

Secretary for Congressional and

Intergovernmental Affairs. Effective May

9, 1996.

Special Assistant to the Director,

Women’s Bureau. Effective May 17,

1996.

Special Assistant to the Secretary of

Labor. Effective May 22, 1996.

Special Assistant to the Executive

Secretary. Effective May 30, 1996.

Special Assistant to the Director,

Women’s Bureau. Effective May 30,

1996.

Department of Transportation

Special Assistant to the Special

Assistant for Scheduling and Advance.

Effective May 7, 1996.

Department of Veterans Affairs

Special Assistant to the Secretary of

Veterans Affairs. Effective May 22, 1996.

Federal Communications Commission

Chief, Office of Public Affairs to the

Chairman, Federal Communications

Commission. Effective May 9, 1996.

Federal Trade Commission

Director of Public Affairs (Supervisory

Public Affairs Specialist) to the

Chairman. Effective May 22, 1996.

General Services Administration

Deputy Chief of Staff to the Chief of

Staff. Effective May 3, 1996.

National Credit Union Administration

Executive Assistant to the Board

Member. Effective May 1, 1996.

Office of Management and Budget

Confidential Assistant to the

Associate Director, National Resources

Energy and Science. Effective May 3,

1996.

Selective Service System

Confidential Assistant to the Director

of Selective Service. Effective May 7,

1996.

Small Business Administration

Director of Intergovernmental Affairs

to the Associate Administrator for

Communications and Public Liaison.

Effective May 10, 1996.

Social Security Administration

Speech Writer to the Deputy

Commissioner for Communications.

Effective May 30, 1996.

United States Information Agency

Director, Office of Support Services to

the Associate Director of the Bureau of

Information. Effective May 9, 1996.

Public Affairs Specialist to the

Director, New York Foreign Press

Center, New York, NY. Effective May

30, 1996.

Authority: 5 U.S.C. 3301 and 3302; E.O.

10577, 3 CFR 1954–1958 Comp., P.218.

Office of Personnel Management.

Lorraine A. Green,

Deputy Director.

[FR Doc. 96–16214 Filed 6–25–96; 8:45 am]

BILLING CODE 6325–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–22034; 812–9998]

Qualivest Funds, et al.; Notice of

Application

June 20, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption Under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Qualivest Funds (the

‘‘Trust’’) and Qualivest Capital

Management, Inc. (‘‘QCMI’’).

RELEVANT ACT SECTION: Order requested

under section 17(d) of the Act and rule

17d–1 thereunder.

SUMMARY OF APPLICATION: Applicants

request an order to permit certain

investment companies to deposit their

uninvested cash balances in one or more

joint accounts to be used to enter into

short-term investments.

FILING DATES: The application was filed

on February 20, 1996, and amended on

May 17, 1996. Applicants agree to file

an additional amendment, the substance

of which is incorporated herein, during

the notice period.

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 who wish

to be notified of a hearing may request

notification by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 5th

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

Applicants: the Trust, 3435 Stelzer

Road, Columbus, Ohio 43219; QCMI,

P.O. Box 2758, 111 S.W. Fifth Avenue,

Portland, Oregon 97208.

FOR FURTHER INFORMATION CONTACT:

Sarah A. Buescher, Staff Attorney, at

(202) 942–0573, or Robert A. Robertson,

Branch Chief, (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 a fee at the SEC’s

Public Reference Branch.

Applicants’ Representations

1. The Trust, organized as a

Massachusetts business trust, is an

open-end management investment

company currently comprised of eleven

series (the ‘‘Funds’’). QCMI serves as

investment adviser to the Trust, and is

an affiliate of U.S. Bank, a whollyowned subsidiary of U.S. Bancorp.

BISYS Fund Services, a division of the

BISYS Group, Inc., acts as administrator

for each Fund of the Trust, and acts as

the Trust’s principal underwriter and

distributor.

2. The assets of the Funds of the

Trust, except for Qualivest International

Opportunities Fund are held by U.S.

National Bank of Oregon as custodian.

The assets of Qualivest International

Opportunities Fund are held by The

Bank of New York. Applicants request

that any relief granted pursuant to the

application also apply to any future
33152 Federal Register / Vol. 61, No. 124 / Wednesday, June 26, 1996 / Notices

Funds that are advised by QCMI, or any

entity controlling, controlled by, or

under common control with QCMI.

3. At the end of each trading day, the

Funds have uninvested cash balances in

their accounts at their respective

custodian banks that would not

otherwise be invested in portfolio

securities by QCMI. Generally such cash

balances are invested in short-term

liquid assets such as repurchase

agreements, commercial paper, or U.S.

Treasury bills.

4. Applicants propose to deposit

uninvested cash balances of the Funds

that remain at the end of the trading

day, as well as cash for investment

purposes, into one or more joint

accounts (the ‘‘Joint Accounts’’) and to

invest the daily balance of the Joint

Accounts in: (a) repurchase agreements

‘‘collateralized fully’’ (as defined in rule

2a–7 under the Act); (b) interest-bearing

or discounted commercial paper,

including dollar denominated

commercial paper of foreign issuers; and

(c) any other short-term taxable or taxexempt money market instruments,

including variable rate demand notes,

that constitute ‘‘Eligible Securities’’ (as

defined in rule 2a–7 under the Act)

(collectively, ‘‘Short-Term

Investments’’). The Funds that are

eligible to participate in a Joint Account

and that elect to participate in such

Account are collectively referred to as

‘‘Participants.’’

5. Applicants propose to enter into

hold-in-custody repurchase agreements,

i.e., repurchase agreements where the

counterparty or one of its affiliated

persons may have possession of, or

control over, the collateral subject to the

agreement, only where cash is received

very late in the business day and

otherwise would be unavailable for

investment.

6. A Participant’s decision to use a

Joint Account would be based on the

same factors as its decision to make any

other short-term liquid investment. The

sole purpose of the Joint Accounts

would be to provide a convenient means

of aggregating what otherwise would be

one or more daily transactions for some

or all Participants necessary to manage

their respective daily account balances.

7. QCMI would be responsible for

investing funds held by the Joint

Accounts, establishing accounting and

control procedures, and ensuring fair

treatment of Participants. QCMI will

manage investments in the Joint

Accounts in essentially the same

manner as if it had invested in such

instruments on an individual basis for

each Participant.

8. Any repurchase agreements entered

into through the Joint Account will

comply with the terms of Investment

Company Act Release No. 13005

(February 2, 1983). Applicants

acknowledge that they have a

continuing obligation to monitor the

SEC’s published statements on

repurchase agreements, and represent

that repurchase agreement transactions

will comply with future positions of the

SEC to the extent that such positions set

forth different or additional

requirements regarding repurchase

agreements. In the event that the SEC

sets forth guidelines with respect to

other Short-Term Investments, all such

investments made through the Joint

Account will comply with those

guidelines.

Applicants’ Legal Analysis

1. Section 17(d) of the Act and rule

17d–1 thereunder prohibit an affiliated

person of a registered investment

company from participating in any joint

enterprise or arrangement in which such

investment company is a participant,

without an SEC order.

2. The Participants, by participating

in the proposed Joint Accounts, and

QCMI, by managing the proposed Joint

Accounts, could be deemed to be ‘‘joint

participants’’ in a transaction within the

meaning of section 17(d) of the Act. In

addition, the proposed Joint Accounts

could be deemed to be a ‘‘joint

enterprise or other joint arrangement’’

within the mean of rule 17d–1.

3. Although QCMI will realize some

benefits through administrative

convenience and some possible

reduction in clerical costs, the

Participants will be the primary

beneficiaries of the Joint Accounts

because the Account may result in

higher returns and would be a more

efficient means of administering daily

cash investments.

4. Participants may earn a higher rate

of return on investments through the

Joint Accounts relative to the returns

they could earn individually. Under

most market conditions, it is generally

possible to negotiate a rate of return on

larger repurchase agreements and other

Short-Term Investments that is higher

than the rate available on smaller

repurchase agreements and other ShortTerm Investments. The Joint Accounts

also may increase the number of dealers

and issuers willing to enter into ShortTerm Investments with the Participants

and may reduce the possibility that their

cash balances remain uninvested.

5. The Joint Accounts may result in

certain administrative efficiencies and a

reduction of the potential for errors by

reducing the number of trade tickets and

cash wires that must be processed by

the sellers of Short-Term Investments,

the Participants’ custodians, and

QCMI’s accounting and trading

departments. For the reasons set forth

above, applicants believe that granting

the requested order is consistent with

the provisions, policies, and purposes of

the Act and the intention of rule 17d–

1.

Applicants’ Conditions

Applicants will comply with the

following as conditions to any order

granted by the SEC:

1. The Joint Accounts will not be

distinguishable from any other accounts

maintained by Participants at their

custodians except that monies from

Participants will be deposited in the

Joint Account on a commingled basis.

The Joint Accounts will not have a

separate existence and will not have

indicia of a separate legal entity. The

sole function of the Joint Accounts will

be to provide a convenient way of

aggregating individual transactions

which would otherwise require daily

management by QCMI of uninvested

cash balances.

2. Cash in the Joint Accounts will be

invested in one or more of the

following, as directed by QCMI: (a)

repurchase agreements ‘‘collateralized

fully’’ as defined in rule 2a–7 under the

Act; (b) interest-bearing or discounted

commercial paper, including dollar

denominated commercial paper of

foreign issuers; and (c) any other shortterm taxable and tax-exempt money

market instruments, including variable

rate demand notes, that constitute

‘‘Eligible Securities’’ (as defined in rule

2a–7 under the Act) (defined as ‘‘ShortTerm Investments’’). Short-Term

Investments that are repurchase

agreements would have a remaining

maturity of 60 days or less and other

Short-Term Investments would have a

remaining maturity of 90 days or less,

each as calculated in accordance with

rule 2a–7 under the Act. No Participant

would be permitted to invest in a Joint

Account unless the Short-Term

Investments in such Joint Accounts

satisfied the investment policies and

guidelines of that Participant.

3. All assets held in the Joint

Accounts would be valued on an

amortized cost basis to the extent

permitted by applicant SEC releases,

rules or orders.

4. Each Participant valuing its net

assets in reliance on rule 2a–7 under the

Act will use the average maturity of the

instruments in the Joint Account in

which such Participant has an interest

(determined on a dollar weighted basis)

for the purpose of computing its average

portfolio maturity with respect to its
Federal Register / Vol. 61, No. 124 / Wednesday, June 26, 1996 / Notices 33153

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4 (1995).

3The proposal also included an amendment to

Amex Rules 904, ‘‘Position Limits,’’ and 905,

‘‘Exercise Limits,’’ to require Amex members who

trade non-Amex listed option contracts and who are

not members of the exchange where the options are

traded to comply with the option position and

exercise limits set by the exchange where the

transactions are effected. The Amex amended that

portion of its proposal to indicate that the Exchange

will apply the interpretations and policies of

another exchange when applying that exchange’s

position and exercise limit rules to an Amex

member’s transactions on that exchange. See Letter

from Claire McGrath, Managing Director and

Special Counsel, Derivative Securities, Amex, to

Michael Walinskas, Branch Chief, Derivatives

Regulation, Office of Self-Regulatory Oversight,

Division of Market Regulation (‘‘Division’’),

Commission, dated September 19, 1995

(‘‘Amendment No. 1’’).

4See note 3, supra.

5 In Amendment No. 2, the Amex modified the

text of Amex Rule 900(a) to read as follows: ‘‘The

Rules in this Part V shall be applicable to (i) the

trading on the Exchange of options contracts issued

by the Options Clearing Corporation and the terms

and conditions thereof; and (ii) the exercise and

settlement, the handling of orders, and the conduct

of accounts and other matters relating to option

contracts dealt in by any member or member

organization on any exchange.’’ See Letter from

Claire P. McGrath, Managing Director and Special

Counsel, Derivative Securities, Amex, to Michael

Walinskas, Branch Chief, Derivatives Regulation,

Office of Self-Regulatory Oversight, Division,

Commission, dated March 5, 1996 (‘‘Amendment

No. 2’’).

6See Securities Exchange Act Release No. 36353

(October 10, 1995), 60 FR 54266.

portion of the assets held in a Joint

Account on that day.

5. In order to assure that there will be

no opportunity for any Participant to

use any part of a balance of a Joint

Account credited to another Participant,

no Participant will be allowed to create

a negative balance in any Joint Account

for any reason, although each

Participant would be permitted to draw

down its entire balance at any time.

Each Participant’s decision to invest in

a Joint Account would be solely at its

option, and no Participant will be

obligated to invest in the Joint Account

or to maintain any minimum balance in

the Joint Account. In addition, each

Participant will retain the sole rights of

ownership to any of its assets invested

in the Joint Account, including interest

payable on such assets invested in the

Joint Account.

6. QCMI would administer the

investment of cash balances in and

operation of the Joint Accounts as part

of its general duties under its advisory

agreements with Participants and will

not collect any additional or separate

fees for advising any Joint Account.

7. The administration of the Joint

Accounts would be within the fidelity

bond coverage required by section 17(g)

of the Act and rule 17g–1 thereunder.

8. The Boards of Trustees/Directors of

the Funds (each a ‘‘Board’’ and

collectively the ‘‘Boards’’) will adopt

procedures pursuant to which the Joint

Accounts will operate, which will be

reasonably designed to provide that the

requirements of this application will be

met. Each of the Boards will make and

approve such changes as they deem

necessary to ensure that such

procedures are followed. In addition,

the Boards of each Fund will determine,

no less frequently than annually, that

the Joint Accounts have been operated

in accordance with the proposed

procedures and will only permit a Fund

to continue to participate therein if it

determines that there is a reasonable

likelihood that the Fund and its

shareholders will benefit from the

Fund’s continued participation.

9. Any Short-Term Investments made

through the Joint Accounts will satisfy

the investment criteria of all

Participants in that investment.

10. QCMI and the custodian of each

Participant will maintain records

documenting, for any given day, each

Participant’s aggregate investment in a

Joint Account and each Participant’s pro

rata share of each investment made

through such Joint Account. The records

maintained for each Participant shall be

maintained in conformity with section

31 of the Act and the rules and

regulations thereunder.

11. Every Participant in the Joint

Accounts will not necessarily have its

cash invested in every Short-Term

Investment. However, to the extent that

a Participant’s cash is applied to a

particular Short-Term Investment, the

Participant will participate in and own

its proportionate share of such ShortTerm Investment, and any income

earned or accrued thereon, based upon

the percentage of such investment

purchased with monies contributed by

the Participant.

12. Short-Term Investments held in a

Joint Account generally will not be sold

prior to maturity except if: (a) QCMI

believes the investment no longer

presents minimal credit risks; (b) the

investment no longer satisfies the

investment criteria of all Participants in

the investment because of a

downgrading or otherwise; or (c) in the

case of a repurchase agreement, the

counterparty defaults. QCMI may,

however, sell any Short-Term

Investment (or any fractional portion

thereof) on behalf of some or all

Participants prior to the maturity of the

investment if the cost of such

transactions will be borne solely by the

selling Participants and the transaction

will not adversely affect other

Participants participating in that Joint

Account. In no case would an early

termination by less than all Participants

be permitted if it would reduce the

principal amount or yield received by

other Participants in a particular Joint

Account or otherwise adversely affect

the other Participants. Each Participant

in a Joint Account will be deemed to

have consented to such sale and

partition of the investments in the Joint

Account.

13. Short-Term Investments held

through a Joint Account with a

remaining maturity of more than seven

days, as calculated pursuant to rule 2a–

7 under the Act, will be considered

illiquid and, for any Participant that is

an open-end investment company

registered under the Act, subject to the

restriction that the fund may not invest

more than 15% (or such other

percentage as set forth by the SEC from

time to time) of its net assets in illiquid

securities, if QCMI cannot sell the

instrument, or the Fund’s fractional

interest in such instrument, pursuant to

the preceding condition.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–16290 Filed 6–25–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37328; File No. SR–Amex–

95–35]

Self-Regulatory Organizations; Order

Granting Partial Approval to a

Proposed Rule Change and Notice of

Filing and Order Granting Accelerated

Approval to Amendment No. 2 to the

Proposed Rule Change by the

American Stock Exchange, Inc.,

Relating to the Amex’s Enforcement

Authority Over Members’ Transactions

Effected on Other Options Exchanges

June 19, 1996.

On August 25, 1995, the American

Stock Exchange, Inc. (‘‘Amex’’ or

‘‘Exchange’’) submitted to the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’), pursuant to Section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’),1 and Rule 19b–4

thereunder,2 a proposed rule change to

amend Amex Rule 900(a),

‘‘Applicability,’’ to confirm the

Exchange’s enforcement authority over

Amex members’ options transactions

effected on another options exchange.3

the Amex subsequently filed

Amendment Nos. 1 4 and 2 5 to the

proposal.

Notice of the proposed rule change

and Amendment No. 1 were published

for comment and appeared in the

Federal Register on October 20, 1995.6