
[Federal Register Volume 76, Number 70 (Tuesday, April 12, 2011)]
[Notices]
[Pages 20388-20389]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-8577]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29623; File No. 812-13870]


Russell Investment Company, et al.; Notice of Application

April 6, 2011.
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 open-end 
management investment companies relying on rule 12d1-2 under the Act to 
invest in certain financial instruments.

Applicants: Russell Investment Company and Russell Investment Funds 
(each a ``Trust and collectively the ``Trusts), Russell Investment 
Management Company (``RIMCo''), and Russell Financial Services, Inc. 
(``RFS'')

DATES: Filing Dates: The application was filed on February 17, 2011. 
Applicants have agreed to file an amendment during the notice period, 
the substance of which is reflected in this notice.

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 May 2, 2011 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: 1301 Second Avenue, 18th 
Floor, Seattle, WA, 98101.

FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, at 
(202) 551-6876, or Dalia Osman Blass, Branch Chief, 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 via the 
Commission's Web site by searching for the file number, or an applicant 
using the Company name box, at http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Applicants' Representations

    1. The Trusts are organized as Massachusetts business trusts and 
are registered under the Act as open-end management investment 
companies. RIMCo, a Washington corporation, is an investment adviser 
registered under the Investment Advisers Act of 1940, as amended (the 
``Advisers Act'') and currently serves as investment adviser to each 
existing Applicant Fund (as defined below). RFS is a Washington 
corporation, registered as a broker-dealer under the Securities 
Exchange Act of 1934, as amended, and serves as the distributor for the 
Applicant Funds that are series of the Trusts.
    2. Applicants request the exemption to the extent necessary to 
permit any existing or future series of the Trusts and any other 
existing or future registered open-end investment company or series 
thereof that (i) Is advised by RIMCo or any person controlling, 
controlled by or under common control with RIMCo (any such adviser or 
RIMCo, an ``Adviser'') \1\; (ii) invests in other registered open-end 
investment companies (``Underlying Funds'') in reliance on section 
12(d)(1)(G) of the Act; and (iii) 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 (each an ``Applicant Fund''), to also invest, 
to the extent consistent with its investment objectives, 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'').\2\ Applicants also request that the order exempt any 
entity controlling, controlled by or under common control with RFS that 
now or in the future acts as principal underwriter with respect to the 
transactions described in the application.
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    \1\ Any other Adviser will also be registered under the Advisers 
Act.
    \2\ 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 requested order will do so only in 
accordance with the terms and condition in the application.
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    3. Consistent with its fiduciary obligations under the Act, each 
Applicant Fund's board of trustees will review the advisory fees 
charged by the Applicant Fund's 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 and companies controlled by them.
    2. Section 12(d)(1)(G) of the Act provides, in part, that section 
12(d)(1) will not apply to securities of an acquired company purchased 
by an acquiring company if: (i) The acquired company and acquiring 
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 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

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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: (i) 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; (ii) securities (other than 
securities issued by an investment company); and (iii) 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 Applicant Funds will comply with 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 while investing in Underlying Funds. Applicants assert that 
permitting the Applicant Funds to 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 the 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.
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-8577 Filed 4-11-11; 8:45 am]
BILLING CODE 8011-01-P


