
[Federal Register: October 1, 2008 (Volume 73, Number 191)]
[Notices]               
[Page 57161-57163]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01oc08-125]                         

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 28405; 812-13521]

 
Delaware Management Business Trust, et al.; Notice of Application

September 24, 2008.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (``Act'') for an exemption from rule 12d1-2(a) 
under the Act.

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Summary of Application: Applicants request an order to permit funds of 
funds relying on rule 12d1-2 under the Act to invest in certain 
financial instruments.

Applicants: Delaware Group Adviser Funds, Delaware Group Cash Reserve, 
Delaware Group Equity Funds I, Delaware Group Equity Funds II, Delaware 
Group Equity Funds III, Delaware Group Equity Funds IV, Delaware Group 
Equity Funds V, Delaware Group Foundation Funds, Delaware Group Global 
& International Funds, Delaware Group Government Fund, Delaware Group 
Income Funds, Delaware Group Limited-Term Government Funds, Delaware 
Group State Tax-Free Income Trust, Delaware Group Tax-Free Fund, 
Delaware Group Tax-Free Money Fund, Delaware Pooled Trust, Delaware VIP 
Trust, Voyageur Insured Funds, Voyageur Intermediate Tax-Free Funds, 
Delaware Investments Municipal Trust (formerly Voyageur Investment 
Trust), Voyageur Mutual Funds, Voyageur Mutual Funds II, Voyageur 
Mutual Funds III and Voyageur Tax-Free Funds (collectively, the 
``Trusts''), Delaware Management Business Trust (``DMBT''), on behalf 
of its series, Delaware Management Company (the ``Adviser'') and 
Delaware Distributors, L.P. (the ``Underwriter'').

Filing Date: The application was filed on April 15, 2008, and amended 
on September 19, 2008.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving

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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 
20, 2008, 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, c/o Bruce G. Leto, 
Esq. and/or Alison M. Fuller, Esq., Stradley, Ronon, Stevens & Young, 
LLP, 2600 One Commerce Square, Philadelphia, PA 19103.

FOR FURTHER INFORMATION CONTACT: Lewis Reich, Senior Counsel, at (202) 
551-6919, or Janet M. Grossnickle, 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 Room, 100 F Street, NE., Washington, DC 
20549-1520 (telephone (202) 551-5850).

Applicants' Representations

    1. Each Trust is organized as a Delaware statutory trust and is 
registered as an open-end management investment company under the Act. 
Applicants request the exemption to the extent necessary to permit any 
existing or future registered open-end management investment companies 
and their series that are in the same group of investment companies, as 
defined in section 12(d)(1)(G) of the Act, as the Trusts and which 
invests in other registered open-end management investment companies in 
reliance on section 12(d)(1)(G) of the Act, and which is also eligible 
to invest in securities (as defined in section 2(a)(36) of the Act) in 
reliance on rule 12d1-2 under the Act (together with the Trusts and 
their series, the ``Applicant Funds''), to also invest, to the extent 
consistent with its investment objective, policies, strategies and 
limitations, in financial instruments that may not be securities within 
the meaning of section 2(a)(36) of the Act (``Other Investments'').\1\
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    \1\ Every existing entity that currently intends to rely on the 
requested order is named as an applicant. Any existing or future 
entity that relies on the order in the future will do so only in 
accordance with the terms and conditions in the application.
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    2. The Adviser is a series of DMBT, which is registered as an 
investment adviser under the Investment Advisers Act of 1940 (the 
``Advisers Act''). The Adviser serves as the investment adviser to each 
series of the Trust. DMBT is a Delaware statutory trust and an 
indirect, wholly owned subsidiary of Delaware Management Holdings, 
Inc., which is an indirect subsidiary of the Lincoln National 
Corporation. The Underwriter serves as principal underwriter for all 
the mutual funds in the Delaware Investments Family of Funds, and is a 
registered broker-dealer under the Securities Exchange Act of 1934. The 
Underwriter is organized as a limited partnership under Delaware law, 
and Delaware Distributors, Inc., a Delaware corporation, is its general 
partner. Delaware Distributors, Inc. is a wholly owned indirect 
subsidiary of Delaware Management Holdings, Inc., and all of the 
limited partnership interests of the Underwriter are owned indirectly 
by Delaware Management Holdings, Inc.
    3. Consistent with its fiduciary obligations under the Act, each 
Applicant Fund's board of trustees or directors will review the 
advisory fees charged by the Applicant Fund's investment adviser to 
ensure that they are based on services provided that are in addition 
to, rather than duplicative of, services provided pursuant to the 
advisory agreement of any investment company in which the Applicant 
Fund may invest.

Applicants' Legal Analysis

    1. Section 12(d)(1)(A) of the Act provides that no registered 
investment company (``acquiring company'') may acquire securities of 
another investment company (``acquired company'') if such securities 
represent more than 3% of the acquired company's outstanding voting 
stock or more than 5% of the acquiring company's total assets, or if 
such securities, together with the securities of other investment 
companies, represent more than 10% of the acquiring company's total 
assets. Section 12(d)(1)(B) of the Act provides that no registered 
open-end investment company may sell its securities to another 
investment company if the sale will cause the acquiring company to own 
more than 3% of the acquired company's voting stock, or cause more than 
10% of the acquired company's voting stock to be owned by investment 
companies.
    2. Section 12(d)(1)(G) of the Act provides that section 12(d)(1) 
will not apply to securities of an acquired company purchased by an 
acquiring company if: (i) The acquiring company and acquired company 
are part of the same group of investment companies; (ii) the acquiring 
company holds only securities of acquired companies that are part of 
the same group of investment companies, government securities, and 
short-term paper; (iii) the aggregate sales loads and distribution-
related fees of the acquiring company and the acquired company are not 
excessive under rules adopted pursuant to section 22(b) or section 
22(c) of the Act by a securities association registered under section 
15A of the Exchange Act or by the Commission; and (iv) the acquired 
company has a policy that prohibits it from acquiring securities of 
registered open-end management investment companies or registered unit 
investment trusts in reliance on section 12(d)(1)(F) or (G) of the Act.
    3. Rule 12d1-2 under the Act permits a registered open-end 
investment company or a registered unit investment trust that relies on 
section 12(d)(1)(G) of the Act to acquire, in addition to securities 
issued by another registered investment company in the same group of 
investment companies, government securities, and short-term paper: (1) 
Securities issued by an investment company that is not in the same 
group of investment companies, when the acquisition is in reliance on 
section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (2) securities (other 
than securities issued by an investment company); and (3) securities 
issued by a money market fund, when the investment is in reliance on 
rule 12d1-1 under the Act. For the purposes of rule 12d1-2, 
``securities'' means any security as defined in section 2(a)(36) of the 
Act.
    4. Section 6(c) of the Act provides that the Commission may exempt 
any person, security, or transaction from any provision of the Act, or 
from any rule under the Act, if such exemption is necessary or 
appropriate in the public interest and consistent with the protection 
of investors and the purposes fairly intended by the policies and 
provisions of the Act.
    5. Applicants state that the proposed arrangement would comply with 
the provisions of rule 12d1-2 under the Act, but for the fact that the 
Applicant Funds may invest a portion of their assets in Other 
Investments. Applicants request an order under section 6(c) of the Act 
for an exemption from rule 12d1-2(a) to allow the Applicant Funds to 
invest in Other Investments. Applicants assert that permitting the 
Applicant Funds to

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invest in Other Investments as described in the application would not 
raise any of the concerns that the requirements of section 12(d)(1) 
were designed to address.

Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    Applicants will comply with all provisions of rule 12d1-2 under the 
Act, except for paragraph (a)(2) to the extent that it restricts any 
Fund from investing in Other Investments as described in the 
application.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-23042 Filed 9-30-08; 8:45 am]

BILLING CODE 8011-01-P
