

[Federal Register: October 4, 2007 (Volume 72, Number 192)]
[Notices]               
[Page 56808-56811]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04oc07-114]                         

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 28008; 812-13232]

 
Fidelity Rutland Square Trust, et al.; Notice of Application

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

ACTION: Notice of application for an order under section 12(d)(1)(J) of 
the Investment Company Act of 1940 (``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 exemption from section 17(a) of the Act.

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Summary of the Application: Applicants request an order to permit 
certain registered open-end management investment companies to acquire 
shares of other registered open-end management investment companies and 
unit investment trusts that are within and outside the same group of 
investment companies.

Applicants: Fidelity Management & Research Company (``FMR''), Fidelity 
Management Trust Company (``FMTC''), Strategic Advisers, Inc. (``SAI'') 
(collectively, the ``Adviser''); Fidelity Distributors Corporation 
(``FDC'') and National Financial Services LLC (``NFS'') (collectively, 
the ``Distributor''); and Fidelity Rutland Square Trust (the 
``Trust'').

Filing Dates: The application was filed on September 6, 2005, and 
amended on September 27, 2007.

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 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, Securities and Exchange Commission, 100 F Street, 
NE., Washington, DC 20549-1090; Applicants, 82 Devonshire Street, 
Boston, MA 02109.

FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior 
Counsel, at (202) 551-6879, or Michael W. Mundt, Assistant Director, at 
(202) 551-6821 (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 
Commission's Public Reference Desk, 100 F Street, NE., Washington, DC 
20549-0102 (telephone (202) 551-5850).

Applicants' Representations

    1. The Trust is a statutory trust organized under the laws of the 
state of Delaware and is registered under the Act as an open-end 
management investment company. The Trust currently offers three series 
that intend to rely on the relief requested by the application: PAS 
Small Cap Fund of Funds, PAS International Fund of Funds, and PAS U.S. 
Opportunity Fund of Funds (``PAS Funds,'' and each a ``Fund of 
Funds'').\1\ Each PAS Fund operates as a fund of funds and has its own 
distinct investment objectives, policies and restrictions.
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    \1\ Applicants request that the order extend to each registered 
open-end management investment company or series thereof that is 
part of the same group of investment companies, as defined in 
section 12(d)(1)(G)(ii) of the Act as the Trust (each included in 
the term ``Fund of Funds'') and advised by the Adviser or any 
investment adviser controlling, controlled by, or under common 
control with the Adviser (each included in the term ``Adviser''). 
Each existing registered open-end management investment company that 
currently intends to rely on the order is named as an applicant. Any 
other existing or future registered open-end management investment 
company that subsequently relies on the order will do so only in 
accordance with the terms and conditions of the application.
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    2. SAI currently serves as the investment adviser to each PAS Fund. 
FMR and SAI are investment advisers registered under the Investment 
Advisers Act of 1940 (the ``Advisers Act''). FMTC is a ``bank'' within 
the meaning of section 202(a)(2) of the Advisers Act and, accordingly, 
is exempt from registration under the Advisers Act. Any future Adviser 
will be registered under the Advisers Act or exempt from registration. 
Each of FMR, FMTC, and SAI is a direct or indirect subsidiary of FMR 
Corp., a Massachusetts corporation. FDC and NFS are broker-dealers 
registered under the Securities Exchange Act of 1934 (``Exchange 
Act''). Each of FDC and NFS is a direct or indirect subsidiary of FMR 
Corp. FDC is currently the distributor of the PAS Funds.
    3. Applicants request relief to permit: (a) A Fund of Funds to 
acquire shares of registered open-end management investment companies 
that are not part of the same ``group of investment companies'' (as 
defined in section 12(d)(1)(G)(ii) of the Act) as the Fund of Funds 
(the ``Non-Affiliated Investment Companies'') and unit investment 
trusts (``UITs'') that are not part of the same group of investment 
companies as the Fund of Funds (``Non-Affiliated Trusts,'' and together 
with the Non-Affiliated Investment Companies, the ``Non-Affiliated 
Underlying Funds''); (b) the Non-Affiliated Underlying Funds, their 
principal underwriter and brokers and dealers registered under the 
Exchange Act (``Brokers'') to sell such shares to the Fund of Funds; 
(c) a Fund of Funds to acquire shares of certain other registered open-
end management investment companies advised by the Adviser or series 
thereof and that are part of the same ``group of investment companies'' 
(as defined in section 12(d)(1)(G)(ii) of the Act) as the Fund of Funds 
(``Affiliated Underlying Funds,'' and together with the Non-Affiliated 
Underlying Funds, the ``Underlying Funds''); and (d) the Affiliated 
Underlying Funds, their principal underwriter and Brokers to sell such 
shares to the Fund of Funds.\2\ Certain of the Non-Affiliated 
Underlying Funds

[[Page 56809]]

may be registered under the Act as either UITs or open-end management 
investment companies and have received exemptive relief to permit their 
shares to be listed and traded on a national securities exchange at 
negotiated prices (``ETFs''). Each Fund of Funds also may invest in 
stocks, bonds, money market instruments and other securities and 
financial instruments that are consistent with its investment 
objective.
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    \2\ With regard to purchases of shares of Non-Affiliated 
Underlying Funds, the requested order would apply to purchases made 
by a Fund of Funds only to the extent that the Fund of Funds could 
not rely on the provisions of section 12(d)(1)(F) of the Act.
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Applicants' Legal Analysis

A. Section 12(d)(1)

    1. Section 12(d)(1)(A) of the Act prohibits a registered investment 
company from acquiring shares of an investment company if the 
securities represent more than 3% of the total outstanding voting stock 
of the acquired company, more than 5% of the total assets of the 
acquiring company, or, together with the securities of any other 
investment companies, more than 10% of the total assets of the 
acquiring company. Section 12(d)(1)(B) of the Act prohibits a 
registered open-end investment company, its principal underwriter and 
any broker or dealer from selling the shares of the investment company 
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 
if the sale will cause more than 10% of the acquired company's voting 
stock to be owned by investment companies generally.
    2. Section 12(d)(1)(J) of the Act provides that the Commission may 
exempt any person, security, or transaction, or any class or classes of 
persons, securities or transactions, from any provision of section 
12(d)(1) if the exemption is consistent with the public interest and 
the protection of investors. Applicants seek an exemption under section 
12(d)(1)(J) of the Act to permit the Funds of Funds to acquire shares 
of the Underlying Funds and to permit the Underlying Funds, their 
principal underwriter and Brokers to sell shares to the Funds of Funds 
beyond the limits set forth in sections 12(d)(1)(A) and (B) of the Act.
    3. Applicants state that the proposed arrangement will not give 
rise to the policy concerns underlying sections 12(d)(1)(A) and (B), 
which include concerns about undue influence by a fund of funds over 
underlying funds, excessive layering of fees, and overly complex fund 
structures. Accordingly, applicants believe that the requested 
exemption is consistent with the public interest and the protection of 
investors.
    4. Applicants state that the proposed arrangement will not result 
in undue influence by a Fund of Funds or its affiliated persons over 
the Non-Affiliated Underlying Funds. The concern about undue influence 
does not arise in connection with a Fund of Funds' investment in the 
Affiliated Underlying Funds, since they are part of the same group of 
investment companies. To limit the control that a Fund of Funds may 
have over a Non-Affiliated Underlying Fund, applicants propose a 
condition prohibiting: (a) The Adviser and any person controlling, 
controlled by or under common control with the Adviser, any investment 
company or issuer that would be an investment company but for section 
3(c)(1) or section 3(c)(7) of the Act, advised or sponsored by the 
Adviser or any person controlling, controlled by or under common 
control with the Adviser (collectively, the ``Group''), and (b) any 
investment adviser to a Fund of Funds within the meaning of section 
2(a)(20)(B) of the Act (``Subadviser''), any person controlling, 
controlled by or under common control with the Subadviser, and any 
investment company or issuer that would be an investment company but 
for section 3(c)(1) or 3(c)(7) of the Act (or portion of such 
investment company or issuer) advised or sponsored by the Subadviser or 
any person controlling, controlled by or under common control with the 
Subadviser (collectively, the ``Subadviser Group'') from controlling 
(individually or in the aggregate) a Non-Affiliated Underlying Fund 
within the meaning of section 2(a)(9) of the Act.
    5. Applicants further state that condition 2 below precludes a Fund 
of Funds and its Adviser, Subadviser, promoter, principal underwriter 
and any person controlling, controlled by or under common control with 
any of these entities (each, a ``Fund Affiliate'') from causing any 
existing or potential investment by the Fund of Funds in a Non-
Affiliated Underlying Fund to influence the terms of any services or 
transactions between the Fund of Funds or a Fund Affiliate and the Non-
Affiliated Underlying Fund or its investment adviser(s), sponsor, 
promoter, principal underwriter and any person controlling, controlled 
by or under common control with any of these entities (each, a ``Non-
Affiliated Fund Affiliate''). Non-Affiliated Underlying Funds will be 
prohibited from purchasing a security in an offering of securities 
during the existence of any underwriting or selling syndicate of which 
a principal underwriter is an officer, director, member of an advisory 
board, Adviser, Subadviser, or employee of the Fund of Funds, or a 
person of which any such officer, director, member of an advisory 
board, Adviser, Subadviser, or employee is an affiliated person (each, 
an ``Underwriting Affiliate,'' except any person whose relationship to 
the Non-Affiliated Underlying Fund is covered by section 10(f) of the 
Act is not an Underwriting Affiliate). An offering of securities during 
the existence of an underwriting or selling syndicate of which a 
principal underwriter is an Underwriting Affiliate is an ``Affiliated 
Underwriting.''
    6. Applicants also propose a condition that once an investment by a 
Fund of Funds in the securities of a Non-Affiliated Investment Company 
exceeds the limit in section 12(d)(1)(A)(i) of the Act, the board of 
directors or trustees of the Non-Affiliated Investment Company, 
including a majority of the independent directors or trustees, will 
determine that any consideration paid by the Non-Affiliated Investment 
Company to the Fund of Funds or a Fund Affiliate Service Provider \3\ 
in connection with any services or transactions: (a) Is fair and 
reasonable in relation to the nature and quality of the services and 
benefits received by the Non-Affiliated Investment Company; (b) is 
within the range of consideration that the Non-Affiliated Investment 
Company would be required to pay to another unaffiliated entity in 
connection with the same services or transactions; and (c) does not 
involve overreaching on the part of any person concerned.
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    \3\ A ``Fund Affiliate Service Provider'' is the Adviser, any 
Subadviser, promoter or principal underwriter of the Fund of Funds, 
and any person controlling, controlled by or under common control 
with any of these entities, provided that (i) such person would 
reasonably be expected to be in a position to provide services of a 
securities-related nature (that is, investment advisory, brokerage, 
distribution, transfer agency, administration, participant 
recordkeeping or shareholder services) to a Non-Affiliated 
Underlying Fund, or (ii) if such person is not described by clause 
(i), to the actual knowledge of the Adviser, any Subadviser, 
promoter or principal underwriter of the Fund of Funds, such person 
currently has or is reasonably expected to begin having a material 
business relationship with a Non-Affiliated Underlying Fund.
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    7. To further assure that a Non-Affiliated Investment Company 
understands the implications of an investment by a Fund of Funds under 
the requested order, prior to a Fund of Funds' investment in a Non-
Affiliated Investment Company in excess of the limit in section 
12(d)(1)(A)(i) of the Act, the Fund of Funds and Non-Affiliated 
Investment Company will execute an agreement stating, without 
limitation,

[[Page 56810]]

that their boards of directors or trustees and their investment 
advisers understand the terms and conditions of the order and agree to 
fulfill their responsibilities under the order (``Participation 
Agreement''). Applicants note that a Non-Affiliated Underlying Fund 
(other than an ETF whose shares are purchased by a Fund of Funds in the 
secondary market) will retain the right to reject an investment from a 
Fund of Funds.\4\
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    \4\ A Non-Affiliated Investment Company (including an ETF) would 
retain its right to reject any initial investment by a Fund of Funds 
in excess of the limits in section 12(d)(1)(A)(i) of the Act by 
declining to execute the Participation Agreement with the Fund of 
Funds.
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    8. Applicants do not believe that the proposed arrangement will 
involve excessive layering of fees. With respect to investment advisory 
fees, applicants state that, prior to approving any investment advisory 
contract under section 15 of the Act, the board of trustees of the Fund 
of Funds (the ``Board''), including a majority of the trustees who are 
not ``interested persons,'' as defined in section 2(a)(19) of the Act 
(the ``Independent Trustees''), will find that the investment advisory 
fees charged under the Fund of Fund's investment advisory contract are 
based on services provided that are in addition to, rather than 
duplicative of, services provided pursuant to any Underlying Fund's 
advisory contract(s). Applicants further state that the Adviser or 
Distributor will waive fees otherwise payable to it by a Fund of Funds 
in an amount at least equal to any compensation (including fees 
received pursuant to any plan adopted by a Non-Affiliated Investment 
Company under rule 12b-1 under the Act) received from a Non-Affiliated 
Underlying Fund by the Adviser, or an affiliated person of the Adviser, 
other than any advisory fees paid to the Adviser or its affiliated 
person by the Non-Affiliated Investment Company, in connection with the 
investment by the Fund of Funds in the Non-Affiliated Underlying Fund. 
Applicants also state that any sales charges and/or service fees, as 
defined in Rule 2830 of the Conduct Rules of the NASD (``NASD Conduct 
Rule 2830''), charged with respect to shares of a Fund of Funds will 
not exceed the limits applicable to a funds of funds set forth in NASD 
Conduct Rule 2830.
    9. Applicants state that the proposed arrangement will not create 
an overly complex fund structure. Applicants note that an Underlying 
Fund will be prohibited from acquiring securities of any investment 
company or company relying on section 3(c)(1) or 3(c)(7) of the Act in 
excess of the limits contained in section 12(d)(1)(A), except in 
certain circumstances identified in condition 10 below. Applicants also 
represent that a Fund of Funds' prospectus and sales literature will 
contain concise, ``plain English'' disclosure designed to inform 
investors about the unique characteristics of the proposed arrangement, 
including its expense structure and the additional expenses of 
investing in Underlying Funds.\5\
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    \5\ Each Fund of Funds also will comply with the disclosure 
requirements concerning the aggregate expenses of investing in 
Underlying Funds set forth in Investment Company Act Release No. 
27399 (June 20, 2006).
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B. Section 17(a)

    10. Section 17(a) of the Act generally prohibits sales or purchases 
of securities between a registered investment company and any 
affiliated person of the company. Section 2(a)(3) of the Act defines an 
``affiliated person'' of another person to include: (a) Any person 
directly or indirectly owning, controlling, or holding with power to 
vote, 5% or more of the outstanding voting securities of the other 
person; (b) any person 5% or more of whose outstanding voting 
securities are directly or indirectly owned, controlled, or held with 
power to vote by the other person; and (c) any person directly or 
indirectly controlling, controlled by, or under common control with the 
other person.
    11. Applicants state that if a Funds of Funds and an Affiliated 
Underlying Fund were deemed to be under common control, they would be 
affiliated persons of each another. Applicants also state that a Funds 
of Funds and an Underlying Fund might be deemed to be affiliated 
persons of one another if a Fund of Funds acquires 5% or more of an 
Underlying Fund's outstanding voting securities. In light of these 
possible affiliations, section 17(a) could prevent an Underlying Fund 
from selling shares to and redeeming shares from a Fund of Funds.\6\
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    \6\ Applicants note that a Fund of Funds investing in ETFs 
generally would purchase and sell shares of an ETF through secondary 
market transactions at market prices rather than through principal 
transactions with the Underlying Fund. Applicants would not rely on 
the requested relief from section 17(a) for such secondary market 
transactions. To the extent that a Fund of Funds purchases or 
redeems shares from an ETF that is an affiliated person of the Fund 
of Funds in exchange for a basket of specified securities as 
described in the application for the exemptive order upon which the 
ETF relies, applicants also request relief from section 17(a) for 
those transactions.
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    12. Section 17(b) of the Act authorizes the Commission to grant an 
order permitting a transaction otherwise prohibited by section 17(a) if 
it finds that (a) The terms of the proposed transaction are fair and 
reasonable and do not involve overreaching on the part of any person 
concerned; (b) the proposed transaction is consistent with the policies 
of each registered investment company involved; and (c) the proposed 
transaction is consistent with the general purposes of the Act. Section 
6(c) of the Act permits the Commission to exempt any person or 
transactions from any provision of 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 policy 
and provisions of the Act.
    13. Applicants submit that the proposed transactions satisfy the 
standards for relief under sections 17(b) and 6(c) of the Act as the 
terms are fair and reasonable and do not involve overreaching.\7\ 
Applicants note that the terms upon which an Underlying Fund will sell 
its shares to or purchase its shares from a Fund of Funds will be based 
on the net asset value of each Underlying Fund. Applicants state that 
the proposed arrangement will be consistent with the policies of each 
Fund of Funds and Underlying Fund, and with the general purposes of the 
Act.
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    \7\ Applicants acknowledge that receipt of any compensation by 
(a) An affiliated person of a Fund of Funds, or an affiliated person 
of such person, for the purchase by the Fund of Funds of shares of 
an Underlying Fund or (b) an affiliated person of an Underlying 
Fund, or an affiliated person of such person, for the sale by the 
Underlying Fund of its shares to a Fund of Funds is subject to 
section 17(e) of the Act. The Participation Agreement also will 
include this acknowledgement.
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Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. The members of the Group will not control (individually or in 
the aggregate) a Non-Affiliated Underlying Fund within the meaning of 
section 2(a)(9) of the Act. The members of the Subadviser Group will 
not control (individually or in the aggregate) a Non-Affiliated 
Underlying Fund within the meaning of section 2(a)(9) of the Act. If, 
as a result of a decrease in the outstanding voting securities of a 
Non-Affiliated Underlying Fund, the Group or the Subadviser Group, each 
in the aggregate, becomes a holder of more than 25% of the outstanding 
voting securities of a Non-Affiliated Underlying Fund, it will vote its 
shares of the Non-Affiliated Underlying Fund in the same proportion as 
the vote of all other holders of the Non-Affiliated Underlying Fund's 
shares. This condition will not apply to the

[[Page 56811]]

Subadviser Group with respect to a Non-Affiliated Underlying Fund for 
which the Subadviser or a person controlling, controlled by, or under 
common control with the Subadviser, acts as the investment adviser 
within the meaning section 2(a)(20)(A) of the Act (in the case of a 
Non-Affiliated Investment Company) or as the sponsor (in the case of a 
Non-Affiliated Trust).
    2. No Fund of Funds or Fund Affiliate will cause any existing or 
potential investment by the Fund of Funds in a Non-Affiliated 
Underlying Fund to influence the terms of any services or transactions 
between the Fund of Funds or a Fund Affiliate and the Non-Affiliated 
Underlying Fund or a Non-Affiliated Fund Affiliate.
    3. The Board of the Fund of Funds, including a majority of the 
Independent Trustees, will adopt procedures reasonably designed to 
assure that the Adviser and any Subadviser are conducting the 
investment program of the Fund of Funds without taking into account any 
consideration received by the Fund of Funds or a Fund Affiliate from a 
Non-Affiliated Underlying Fund or a Non-Affiliated Fund Affiliate in 
connection with any services or transactions.
    4. Once an investment by a Fund of Funds in the securities of a 
Non-Affiliated Investment Company exceeds the limit in section 
12(d)(1)(A)(i) of the Act, the board of directors or trustees of the 
Non-Affiliated Investment Company, including a majority of the 
independent directors or trustees, will determine that any 
consideration paid by the Non-Affiliated Investment Company to the Fund 
of Funds or a Fund Affiliate Service Provider in connection with any 
services or transactions: (a) Is fair and reasonable in relation to the 
nature and quality of the services and benefits received by the Non-
Affiliated Investment Company; (b) is within the range of consideration 
that the Non-Affiliated Investment Company would be required to pay to 
another unaffiliated entity in connection with the same services or 
transactions; and (c) does not involve overreaching on the part of any 
person concerned. This condition does not apply with respect to any 
services or transactions between a Non-Affiliated Investment Company 
and its investment adviser(s), or any person controlling, controlled 
by, or under common control with such investment adviser(s).
    5. No Non-Affiliated Underlying Fund will purchase a security in 
any Affiliated Underwriting.
    6. Before investing in a Non-Affiliated Investment Company in 
excess of the limit in section 12(d)(1)(A)(i) of the Act, the Fund of 
Funds and the Non-Affiliated Investment Company will execute a 
Participation Agreement stating, without limitation, that their boards 
of directors or trustees and their investment advisers understand the 
terms and conditions of the order and agree to fulfill their 
responsibilities under the order. At the time of its investment in 
shares of a Non-Affiliated Investment Company in excess of the limit in 
section 12(d)(1)(A)(i), the Fund of Funds will notify the Non-
Affiliated Investment Company of the investment. At such time, the Fund 
of Funds will also transmit to the Non-Affiliated Investment Company a 
list of the names of each Fund Affiliate Service Provider. The Fund of 
Funds will notify the Non-Affiliated Investment Company of any changes 
to the list of names as soon as reasonably practicable after a change 
occurs. The Non-Affiliated Investment Company and the Fund of Funds 
will maintain and preserve a copy of the order, the Participation 
Agreement, and the list with any updated information for the duration 
of the investment and for a period of not less than six years 
thereafter, the first two years in an easily accessible place.
    7. Before approving any advisory contract under section 15 of the 
Act, the Board of the Fund of Funds, including a majority of the 
Independent Trustees, will find that the advisory fees charged under 
the advisory contract will be based on services provided that will be 
in addition to, rather than duplicative of, services provided under the 
advisory contract(s) of any Underlying Fund in which the Fund of Funds 
may invest. These findings and the basis upon which they are made will 
be recorded fully in the minute books of the appropriate Fund of Funds.
    8. The Adviser or Distributor will waive fees otherwise payable to 
it by a Fund of Funds in an amount at least equal to any compensation 
(including fees received pursuant to any plan adopted by a Non-
Affiliated Investment Company under rule 12b-1 under the Act) received 
from a Non-Affiliated Underlying Fund by the Adviser, or an affiliated 
person of the Adviser, other than any advisory fees paid to the Adviser 
or its affiliated person by the Non-Affiliated Investment Company, in 
connection with the investment by the Fund of Funds in the Non-
Affiliated Underlying Fund. Any Subadviser will waive fees otherwise 
payable to the Subadviser, directly or indirectly, by the Fund of Funds 
in an amount at least equal to any compensation received from a Non-
Affiliated Underlying Fund by the Subadviser, or an affiliated person 
of the Subadviser, other than any advisory fees paid to the Subadviser 
or its affiliated person by the Non-Affiliated Investment Company, in 
connection with the investment by the Fund of Funds in the Non-
Affiliated Underlying Fund made at the direction of the Subadviser. In 
the event that the Subadviser waives fees, the benefit of the waiver 
will be passed through to the Fund of Funds.
    9. Any sales charges and/or service fees (as defined in NASD 
Conduct Rule 2830) charged with respect to shares of a Fund of Funds 
will not exceed the limits applicable to a fund of funds set forth in 
NASD Conduct Rule 2830.
    10. No Underlying Fund will acquire securities of any investment 
company or company relying on section 3(c)(1) or 3(c)(7) of the Act in 
excess of the limits contained in section 12(d)(1)(A) of the Act, 
except to the extent that such Underlying Fund: (a) Receives securities 
of another investment company as a dividend or as a result of a plan of 
reorganization of a company (other than a plan devised for the purpose 
of evading section 12(d)(1) of the Act); or (b) acquires (or is deemed 
to have acquired) securities of another investment company pursuant to 
exemptive relief from the Commission permitting such Underlying Fund to 
(i) Acquire securities of one or more affiliated investment companies 
for short-term cash management purposes, or (ii) engage in interfund 
borrowing and lending transactions.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-19631 Filed 10-3-07; 8:45 am]

BILLING CODE 8011-01-P
