Document ID: SEC-2007-1392-0001
Agency: sec
Document Type: Notice
Title: Van Eck Associates Corporation, et al.; Notice of Application
Posted Date: 2007-10-04T04:00Z

[Federal Register: October 4, 2007 (Volume 72, Number 192)]
[Notices]               
[Page 56811-56813]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04oc07-115]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-28007; 812-13426]

 
Van Eck Associates Corporation, et al.; Notice of Application

September 28, 2007.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application to amend a prior order under section 6(c) 
of the Investment Company Act of 1940 (``Act'') for an exemption from 
sections 2(a)(32), 5(a)(1), 22(d), 22(e) and 24(d) of the Act and rule 
22c-1 under the Act, under section 12(d)(1)(J) of the Act for an 
exemption from sections 12(d)(1)(A) and (B) of the Act, and under 
sections 6(c) and 17(b) of the Act for an

[[Page 56812]]

exemption from sections 17(a)(1) and (a)(2) of the Act.

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Summary of Application:  Applicants request an order to amend a prior 
order that permits: (a) Open-end management investment companies, whose 
series are based on equity securities indices (``Equity Funds''), to 
issue shares of limited redeemability (``Shares''); (b) secondary 
market transactions in the Shares of the Equity Funds to occur at 
negotiated prices; (c) dealers to sell Shares of Equity Funds to 
purchasers in the secondary market unaccompanied by a prospectus when 
prospectus delivery is not required by the Securities Act of 1933 
(``Securities Act''); (d) certain affiliated persons of the Equity 
Funds to deposit securities into, and receive securities from, the 
Equity Funds in connection with the purchase and redemption of 
aggregations of Shares; (e) certain registered management investment 
companies and unit investment trusts outside of the same group of 
investment companies as the Equity Funds to acquire Shares; and (f) 
under certain circumstances, the Equity Funds that track certain 
foreign equity securities indices to pay redemption proceeds more than 
seven days after the tender of Shares (the ``Prior Order'').\1\ 
Applicants seek to amend the Prior Order in order to offer additional 
series based on fixed income securities indices (the ``New Funds'' and 
together with the Equity Funds, the ``Funds'').
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    \1\ Van Eck Associates Corporation, et al., Investment Company 
Act Release Nos. 27283 (Apr. 7, 2006) (notice) and 27311 (May 2, 
2006) (order), subsequently amended by Van Eck Associates 
Corporation, et al., Investment Company Act Release Nos. 27694 (Jan. 
31, 2007) (notice) and 27742 (Feb. 27, 2007) (order).

Applicants:  Van Eck Associates Corporation (``Adviser''), Market 
Vectors ETF Trust (``Trust''), and Van Eck Securities Corporation 
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(``Distributor'').

Filing Dates:  The application was filed on September 25, 2007, and 
amended on September 28, 2007.

Hearing or Notification of Hearing:  An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary and serving applicants with a copy of the request, personally 
or by mail. Hearing requests should be received by the Commission by 
5:30 p.m. on October 23, 2007, 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 Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-1090. Applicants, 99 Park Avenue, 8th 
Floor, New York, NY 10016.

FOR FURTHER INFORMATION CONTACT: Julia Kim Gilmer, Branch Chief, or 
Michael W. Mundt, Assistant Director, at (202) 551-6821 (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 
Commission's Public Reference Branch, 100 F Street, NE., Washington, DC 
20549-0102 (tel. 202-551-5850).

Applicants' Representations

    1. The Trust is an open-end management investment company 
registered under the Act and organized as a Delaware statutory trust. 
The Trust is organized as a series fund with multiple series. The 
Adviser, an investment adviser registered under the Investment Advisers 
Act of 1940 (``Advisers Act''), will serve as investment adviser to the 
New Funds. The Adviser may retain sub-advisers (``Sub-Advisers'') to 
manage the assets of a New Fund. Any Sub-Adviser will be registered 
under the Advisers Act. The Distributor, a broker-dealer registered 
under the Securities Exchange Act of 1934 (the ``Exchange Act''), will 
serve as the principal underwriter and distributor of each New Fund's 
Shares.
    2. The Trust is currently permitted to offer Funds based on equity 
securities indices in reliance on the Prior Order. Applicants seek to 
amend the Prior Order to permit the Trust to offer the New Funds that, 
except as described in the application, would operate in a manner 
identical to the Equity Funds that are subject to the Prior Order.
    3. Each New Fund will invest in fixed-income securities 
(``Portfolio Securities'') selected to correspond generally to the 
price and yield performance of a fixed income securities index 
(``Underlying Index'').\2\ No entity that creates, compiles, sponsors, 
or maintains an Underlying Index is or will be an affiliated person, as 
defined in section 2(a)(3) of the Act, or an affiliated person of an 
affiliated person, of the Trust, the Adviser, any Sub-Adviser, the 
Distributor, or a promoter of a New Fund.
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    \2\ The New Funds identified in the application would have as 
their Underlying Indexes: the Lehman Brothers Short Managed Money 
Municipal Index, Lehman Brothers Intermediate Managed Money 
Municipal Index, Lehman Brothers Long Managed Money Municipal Index, 
Lehman Brothers Non-Investment Grade Municipal Index, Lehman 
Brothers Managed Money Municipal California Index, and the Lehman 
Brothers Managed Money Municipal New York Index.
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    4. The investment objective of each New Fund will be to provide 
investment results that correspond, before expenses, generally to the 
price and yield performance of the relevant Underlying Index. The 
Adviser may fully replicate a New Fund's relevant Underlying Index or 
use a representative sampling strategy where the New Fund will seek to 
hold a representative sample of the component securities of the 
Underlying Index.
    5. Under the Prior Order, applicants stated that each Equity Fund 
would invest at least 95% of its total assets in the component 
securities of its underlying index and may invest up to 5% of its 
assets in money market instruments, money market funds, futures 
contracts, options, options on futures contracts, swap contracts, cash 
and cash equivalents as well as in stocks not included in its 
underlying index but which the Adviser believes will help the Equity 
Fund track its underlying index. Applicants seek to amend the Prior 
Order to provide that each Fund generally will invest at least 80% or 
90% of its total assets, as disclosed in the relevant prospectus, in 
the securities that comprise the relevant Underlying Index, and at 
times may invest up to 20% of its total assets in certain futures, 
options, and swap contracts, cash and cash equivalents, as well as 
securities not included in its Underlying Index which the Adviser 
believes will help the Fund track its Underlying Index. At all times, a 
New Fund will hold, in the aggregate, at least 80% of its total assets 
in component securities and investments that have economic 
characteristics that are substantially identical to the economic 
characteristics of the component securities of its Underlying Index. 
Applicants expect that each New Fund will have a tracking error 
relative to the performance of its respective Underlying Index of less 
than 5 percent.
    6. Applicants state that the New Funds will comply with the federal 
securities laws in accepting a deposit of a portfolio of securities 
designated by the Adviser to correspond generally to the price and 
yield of the New Fund's Underlying Index (``Deposit

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Securities'') \3\ and satisfying redemptions with portfolio securities 
of the New Fund (``Fund Securities''), including that the Deposit 
Securities and Fund Securities are sold in transactions that would be 
exempt from registration under the Securities Act.\4\ The specified 
Deposit Securities and Fund Securities generally will correspond pro 
rata, to the extent practicable, to the Portfolio Securities of a New 
Fund.
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    \3\ Applicants state that a cash-in-lieu amount will replace any 
``to-be-announced'' (``TBA'') transaction that is listed as a 
Deposit Security or Fund Security of any New Fund. A TBA transaction 
is a method of trading mortgage-backed securities where the buyer 
and seller agree upon general trade parameters such as agency, 
settlement date, par amount and price. The actual pools delivered 
generally are determined two days prior to the settlement date. The 
amount of substituted cash in the case of TBA transactions will be 
equivalent to the value of the TBA transaction listed as a Deposit 
Security or Fund Security.
    \4\ In accepting Deposit Securities and satisfying redemptions 
with Fund Securities that are restricted securities eligible for 
resale pursuant to rule 144A under the Securities Act, the New Funds 
will comply with the conditions of rule 144A, including in 
satisfying redemptions with such rule 144A eligible restricted Fund 
Securities. The prospectus for a New Fund will also state that an 
authorized participant that is not a ``Qualified Institutional 
Buyer'' as defined in rule 144A under the Securities Act, will not 
be able to receive, as part of a redemption, restricted securities 
eligible for resale under rule 144A.
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    7. Applicants state that the New Funds will operate in a manner 
identical to the operation of the existing Funds in the Prior Order, 
except as specifically noted by applicants (and summarized in this 
notice). The New Funds will comply with the terms and provisions of the 
Prior Order except as modified by this application. Applicants agree 
that any amended order granting the requested relief will be subject to 
the same conditions as those imposed by the Prior Order. Applicants 
believe that the requested relief continues to meet the necessary 
exemptive standards.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-19630 Filed 10-3-07; 8:45 am]

BILLING CODE 8011-01-P