[Federal Register Volume 83, Number 162 (Tuesday, August 21, 2018)]
[Notices]
[Pages 42324-42328]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17936]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33201; File No. 812-14831]


AXA Equitable Life Insurance Company, et al.

August 15, 2018.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of application for an order approving the substitution of 
certain securities pursuant to section 26(c) of the Investment Company 
Act of 1940, as amended (the ``Act'') and an order of exemption 
pursuant to section 17(b) of the Act from section 17(a) of the Act.

APPLICANTS: AXA Equitable Life Insurance Company (``AXA Equitable''), 
MONY Life Insurance Company of America (``MONY America''), Separate 
Account 70 of AXA Equitable (``Separate Account 70''), Separate Account 
A of AXA Equitable (``Separate Account A''), Separate Account FP of AXA 
Equitable (``Separate Account FP''), MONY America Variable Account K 
((``MONY America Separate Account K'') and together with Separate 
Account 70, Separate Account A and Separate Account FP, the ``Separate 
Accounts'') (collectively, the ``Section 26 Applicants''); and Separate 
Account 65 of AXA Equitable (``Separate Account 65'') and EQ Advisors 
Trust (the ``EQ Trust'' and collectively with Separate Account 65 and 
the Section 26 Applicants, the ``Section 17 Applicants'').\1\
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    \1\ For purposes of this Notice, Separate Account 65 is also a 
``Separate Account'' and collectively with Separate Account 70, 
Separate Account A, Separate Account FP and MONY America Separate 
Account K, the ``Separate Accounts.''

SUMMARY OF APPLICATION: The Section 26 Applicants seek an order 
pursuant to section 26(c) of the Act, approving the substitution of 
shares issued by certain investment portfolios of registered investment 
companies (the ``Removed Portfolios'') for shares of certain investment 
portfolios of the EQ Trust (the ``Replacement Portfolios''), held by 
the Separate Accounts (except for Separate Account 65) to support 
certain variable annuity contracts and/or variable life insurance 
contracts (the ``Contracts''). The Section 17 Applicants seek an order 
pursuant to section 17(b) of the Act exempting them from section 17(a) 
of the Act to the extent necessary to permit them to engage in certain 
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in-kind transactions.

FILING DATE: The application was filed on October 4, 2017 and was 
amended on February 8, 2018 and August 10, 2018.

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 Secretary of 
the Commission and serving the 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 September 10, 2018 and should be accompanied 
by proof of service on the Applicants in the form of an affidavit or, 
for lawyers, a certificate of service. Pursuant to rule 0-5 under the 
Act, hearing requests should state the nature of the writer's interest, 
any facts bearing upon the desirability of a hearing on the matter, 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: Steven M. Joenk, Managing 
Director and Chief Investment Officer, AXA Equitable Life Insurance 
Company, 1290 Avenue of the Americas, New York, New York 10104; 
Patricia Louie, Esq., Managing Director and Associate General Counsel, 
AXA Equitable Life Insurance Company, 1290 Avenue of the Americas, New 
York, New York 10104; and Mark C. Amorosi, Esq., K&L Gates LLP, 1601 K 
Street NW, Washington, DC 20006.

FOR FURTHER INFORMATION CONTACT: Jennifer O. Palmer, Senior Counsel, at 
(202) 551-5786, or David J. Marcinkus, Branch Chief at (202) 551-6825 
(Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's website by searching for the file number, or for an 
Applicant using the Company name box, at http://www.sec.gov.search/search.htm, or by calling (202) 551-8090.

Applicants' Representations

    1. AXA Equitable is a New York stock life insurance company 
licensed to conduct insurance business in all fifty states of the 
United States, the District of Columbia, Puerto Rico and the Virgin 
Islands. AXA Equitable is wholly-owned by AXA Financial, Inc. (``AXA 
Financial''), a holding company.
    2. MONY America is an Arizona stock life insurance company licensed 
to

[[Page 42325]]

conduct insurance business in all fifty states of the United States, 
the District of Columbia, Puerto Rico and the Virgin Islands. MONY 
America is an indirect wholly-owned subsidiary of AXA Financial.
    3. Each Separate Account meets the definition of ``separate 
account,'' as defined in section 2(a)(37) of the Act and rule 0-1(e) 
thereunder. With the exception of Separate Account 65, the Separate 
Accounts are registered under the Act as unit investment trusts. 
Separate Account 65 is excluded from registration under the Act 
pursuant to section 3(c)(11) of the Act and is not a Section 26 
Applicant. The assets of the Separate Accounts support the Contracts 
and interests in the Separate Accounts offered through such Contracts. 
AXA Equitable and MONY America are the legal owners of the assets in 
their respective Separate Accounts. The Separate Accounts are segmented 
into subaccounts, and each subaccount invests in an underlying 
registered open-end management investment company or series thereof.
    4. The Contracts are each registered under the Securities Act of 
1933, as amended (the ``1933 Act'') on Form N-4 or Form N-6, as 
applicable. Each Contract has particular fees, charges, and investment 
options, as described in the Contracts' respective prospectuses.
    5. The Contracts include individual and group variable annuity 
contracts or flexible premium, scheduled premium and single premium 
individual, second to die and corporate variable life policies. As set 
forth in the prospectuses for the Contracts, each Contract provides 
that AXA Equitable or MONY America, as applicable, reserves the right 
to substitute shares of the underlying investment options in which the 
Separate Accounts invest for shares of any underlying investment 
options already held or to be held in the future by the Separate 
Accounts.
    6. AXA Equitable and MONY America, on behalf of themselves and 
their respective Separate Accounts, propose to exercise their 
contractual rights to substitute shares of the Removed Portfolios for 
shares of the Replacement Portfolios (``Substitutions''), as shown in 
the table below:

------------------------------------------------------------------------
  Substitution No.        Removed portfolio       Replacement portfolio
------------------------------------------------------------------------
1...................  American Century VP Mid   EQ/American Century Mid
                       Cap Value Fund (Class     Cap Value Portfolio
                       II).                      (Class IB).
2...................  Fidelity[supreg] VIP      EQ/Fidelity
                       Contrafund[supreg]        Institutional AM\SM\
                       (Initial Class, Service   Large Cap Portfolio
                       Class 2).                 (Class K, Class IB).
3...................  Franklin Rising           EQ/Franklin Rising
                       Dividends VIP Fund        Dividends Portfolio
                       (Class 2).                (Class IB).
4...................  Franklin Strategic        EQ/Franklin Strategic
                       Income VIP Fund (Class    Income Portfolio (Class
                       2).                       IB).
5...................  Goldman Sachs VIT Mid     EQ/Goldman Sachs Mid Cap
                       Cap Value Fund (Service   Value Portfolio (Class
                       Class).                   IB).
6...................  Invesco V.I. Global Real  EQ/Invesco Global Real
                       Estate Fund (Series II    Estate Portfolio (Class
                       Class).                   IB).
7...................  Invesco V.I.              EQ/Invesco International
                       International Growth      Growth Portfolio (Class
                       Fund (Series II Class).   IB).
8...................  Ivy VIP Energy (Class     EQ/Ivy Energy Portfolio
                       II).                      (Class IB).
9...................  Ivy VIP Mid Cap Growth    EQ/Ivy Mid Cap Growth
                       (Class II).               Portfolio (Class IB).
10..................  Ivy VIP Science and       EQ/Ivy Science and
                       Technology (Class II).    Technology Portfolio
                                                 (Class IB).
11..................  Lazard Retirement         EQ/Lazard Emerging
                       Emerging Markets Equity   Markets Equity
                       Portfolio (Service        Portfolio (Class IB).
                       Class).
12..................  MFS International Value   EQ/MFS International
                       Portfolio (Service        Value Portfolio (Class
                       Class).                   IB).
13..................  MFS Technology Portfolio  EQ/MFS Technology
                       (Service Class).          Portfolio (Class IB).
14..................  MFS Utilities Series      EQ/MFS Utilities Series
                       (Initial Class, Service   Portfolio (Class K,
                       Class).                   Class IB).
15..................  PIMCO Real Return         EQ/PIMCO Real Return
                       Portfolio (Advisor        Portfolio (Class IB).
                       Class).
16..................  PIMCO Total Return        EQ/PIMCO Total Return
                       Portfolio (Advisor        Portfolio (Class IB).
                       Class).
17..................  T. Rowe Price Health      EQ/T. Rowe Price Health
                       Sciences Portfolio (II    Sciences Portfolio
                       Class).                   (Class IB).
------------------------------------------------------------------------

    7. The Replacement Portfolios are series of the EQ Trust, a 
Delaware statutory trust registered as an open-end management 
investment company under the Act (File No. 811-07953) and whose shares 
are registered under the 1933 Act (File No. 333-17217). The Replacement 
Portfolios are currently available only as investment allocation 
options under variable insurance contracts issued by AXA Equitable and 
MONY America.
    8. AXA Equitable Funds Management Group, LLC (``FMG''), a wholly-
owned subsidiary of AXA Equitable and an affiliate of MONY America, 
serves as the investment adviser of each Replacement Portfolio. FMG is 
a Delaware limited liability company that is registered as an 
investment adviser under the Investment Advisers Act of 1940. Each 
Replacement Portfolio is sub-advised by a registered investment adviser 
that is unaffiliated with the Section 26 Applicants, the Section 17 
Applicants or FMG.
    9. Applicants state that the proposed Substitutions are part of an 
ongoing effort by AXA Equitable and MONY America to make their 
Contracts more attractive to existing and prospective Contract owners. 
Applicants note that the proposed Substitutions are intended to improve 
portfolio manager selection \2\ and simplify fund lineups while 
reducing costs and maintaining a menu of investment options that would 
offer a similar diversity of investment options after the proposed 
Substitutions as is currently available under the Contracts. Applicants 
believe that the Replacement Portfolios have investment objectives, as 
described in their prospectuses, which are identical, and principal 
investment strategies and principal risks, as described in their 
prospectuses, which are identical or substantially similar to the 
corresponding Removed Portfolios, making those Replacement Portfolios 
appropriate candidates as substitutes. Information for each Removed 
Portfolio

[[Page 42326]]

and Replacement Portfolio, including investment objectives, principal 
investment strategies, principal risks, and comparative performance 
history, can be found in the application.
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    \2\ The EQ Trust and FMG may rely on an order from the 
Commission that permits FMG, subject to certain conditions, 
including approval of the EQ Trust's board of trustees but without 
the approval of shareholders, to select certain wholly-owned and 
non-affiliated investment sub-advisers to manage all or a portion of 
the assets of each portfolio of the EQ Trust pursuant to an 
investment sub-advisory agreement with FMG, and to materially amend 
sub-advisory agreements with FMG. See EQ Advisors Trust and EQ 
Financial Consultants, Inc., Investment Company Act Release Nos. 
23093 (Mar. 30, 1998) (notice) and 23128 (April 24, 1998) (the 
``Manager of Managers Order''). After the Substitution Date (defined 
below), FMG will not change a Replacement Portfolio's sub-adviser, 
add a new sub-adviser, or otherwise rely on the Manager of Managers 
Order or any replacement order from the Commission with respect to 
any Replacement Portfolio without first obtaining shareholder 
approval of the change in sub-adviser, the new sub-adviser, or the 
Replacement Portfolio's ability to rely on the Manager of Managers 
Order or any replacement order from the Commission, at a shareholder 
meeting, the record date for which will be after the proposed 
Substitution has been effected.
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    10. The Section 26 Applicants agree that, for a period of two years 
following the implementation of the proposed Substitution (the 
``Substitution Date''), and for those Contracts with assets allocated 
to the Removed Portfolio on the Substitution Date, AXA Equitable, MONY 
America or an affiliate thereof (other than the EQ Trust) will 
reimburse, on the last business day of each fiscal quarter, the 
Contract owners whose subaccounts invest in the applicable Replacement 
Portfolio to the extent that the Replacement Portfolio's net annual 
operating expenses (taking into account fee waivers and expense 
reimbursements) for such period exceeds, on an annualized basis, the 
net annual operating expenses of the Removed Portfolio for the most 
recent fiscal year preceding the date of the most recently filed 
application. Neither AXA Equitable nor MONY America will increase the 
Contract fees and charges that would otherwise be assessed under the 
terms of the Contracts for a period of at least two years following the 
Substitution Date. Importantly, for each Substitution, the combined 
current management fee and rule 12b-1 fee of the Replacement Portfolio 
at all asset levels will be no higher than that of the corresponding 
Removed Portfolio at corresponding asset levels.
    11. Applicants represent that as of the Substitution Date, the 
Separate Accounts will redeem shares of the Removed Portfolios for cash 
or in-kind. Redemption requests and purchase orders will be placed 
simultaneously so that Contract values will remain fully invested at 
all times.
    12. Each Substitution will be effected at the relative net asset 
values of the respective shares of the Replacement Portfolios in 
conformity with section 22(c) of the Act and rule 22c-1 thereunder 
without the imposition of any transfer or similar charges by the 
Section 26 Applicants. The Substitutions will be effected without 
change in the amount or value of any Contracts held by affected 
Contract owners.\3\
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    \3\ The Section 26 Applicants state that, because the 
Substitutions will occur at relative net asset value, and the fees 
and charges under the Contracts will not change as a result of the 
Substitutions, the benefits offered by the guarantees under the 
Contracts will be the same immediately before and after the 
Substitutions. The Section 26 Applicants also state that what effect 
the Substitutions may have on the value of the benefits offered by 
the Contract guarantees would depend, among other things, on the 
relative future performance of the Removed Portfolios and 
Replacement Portfolios, which the Section 26 Applicants cannot 
predict. Nevertheless, the Section 26 Applicants note that at the 
time of the Substitutions, the Contracts will offer a comparable 
variety of investment options with as broad a range of risk/return 
characteristics.
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    13. Contract owners will not incur any fees or charges as a result 
of the proposed Substitutions. The obligations of the Section 26 
Applicants and the rights of the affected Contract owners, under the 
Contracts of affected Contract owners will not be altered in any way. 
AXA Equitable, MONY America and/or their affiliates (other than the EQ 
Trust) will pay all expenses and transaction costs of the 
Substitutions, including legal and accounting expenses, any applicable 
brokerage expenses and other fees and expenses. No fees or charges will 
be assessed to the affected Contract owners to effect the 
Substitutions. The proposed Substitutions will not cause the Contract 
fees and charges currently being paid by Contract owners to be greater 
after the proposed Substitution than before the proposed Substitution. 
In addition, the Substitutions will in no way alter the tax treatment 
of affected Contract owners in connection with their Contracts, and no 
tax liability will arise for Contract owners as a result of the 
Substitutions.
    14. From the date of the Pre-Substitution Notice (defined below) 
through 30 days following the Substitution Date, Contract owners may 
make at least one transfer of Contract value from the subaccount 
investing in a Removed Portfolio (before the Substitution) or the 
Replacement Portfolio (after the Substitution) to any other available 
subaccount under the Contract without charge and without imposing any 
transfer limitations. Further, on the Substitution Date, Contract 
values attributable to investments in each Removed Portfolio will be 
transferred to the corresponding Replacement Portfolio without charge 
and without being subject to any transfer limitations. Moreover, except 
as described in the disruptive transfer or market timing provisions of 
the relevant prospectus, AXA Equitable and MONY America will not 
exercise any rights reserved under the Contracts to impose restrictions 
on transfers between the subaccounts under the Contracts, including 
limitations on the future number of transfers, for a period beginning 
at least 30 days before the Substitution Date through at least 30 days 
following the Substitution Date.
    15. At least 30 days prior to the Substitution Date, Contract 
owners will be notified via prospectus supplements that the Section 26 
Applicants received or expect to receive Commission approval of the 
applicable proposed Substitutions and of the anticipated Substitution 
Date (the ``Pre-Substitution Notice''). Pre-Substitution Notices sent 
to Contract owners will be filed with the Commission pursuant to rule 
497 under the 1933 Act. The Pre-Substitution Notice will advise 
Contract owners that from the date of the Pre-Substitution Notice 
through the date 30 days after the Substitutions, Contract owners may 
make at least one transfer of Contract value from the subaccounts 
investing in the Removed Portfolios (before the Substitutions) or the 
Replacement Portfolios (after the Substitutions) to any other available 
subaccount without charge and without imposing any transfer 
limitations. Among other information, the Pre-Substitution Notice will 
inform affected Contract owners that, except as described in the 
disruptive transfers or market timing provisions of the relevant 
prospectus, AXA Equitable and MONY America will not exercise any rights 
reserved under the Contracts to impose additional restrictions on 
transfers out of a Replacement Portfolio subaccount from the date of 
the Pre-Substitution Notice, including limitations on the future number 
of transfers, until at least 30 days after the Substitution Date. 
Additionally, all affected Contract owners will be sent prospectuses of 
the applicable Replacement Portfolios at least 30 days before the 
Substitution Date.
    16. In addition to the Supplements distributed to the Contract 
owners, within five business days after the Substitution Date, Contract 
owners whose assets are allocated to a Replacement Portfolio as part of 
the proposed Substitutions will be sent a written notice (each, a 
``Confirmation'') informing them that the Substitutions were carried 
out as previously notified. The Confirmation also will restate the 
information set forth in the Pre-Substitution Notice. The Confirmation 
will also reflect the values of the Contract owner's positions in the 
Removed Portfolio before the Substitution and the Replacement Portfolio 
after the Substitution.

Legal Analysis

    1. The Section 26 Applicants request that the Commission issue an 
order pursuant to section 26(c) of the Act approving the proposed 
Substitutions. Section 26(c) prohibits any depositor or trustee of a 
unit investment trust that invests exclusively in the securities of a 
single issuer from substituting the securities of another issuer 
without the approval of the Commission. Section 26(c) provides that 
such approval shall

[[Page 42327]]

be granted by order from the Commission if the evidence establishes 
that the substitution is consistent with the protection of investors 
and the purposes of the Act.
    2. The Section 26 Applicants submit that the Substitutions meet the 
standards set forth in section 26(c) and that, if implemented, the 
Substitutions would not raise any of the concerns that Congress 
intended to address when the Act was amended to include this provision. 
Applicants state that each Substitution protects the Contract owners 
who have Contract value allocated to a Removed Portfolio by providing 
Replacement Portfolios with identical investment objectives and 
identical or substantially similar strategies and risks, and providing 
Contract owners with investment options that have net annual operating 
expense ratios that are lower than, or equal to, their corresponding 
investment options before the Substitutions.
    3. AXA Equitable and MONY America have reserved the right under the 
Contracts to substitute shares of another underlying portfolio for one 
of the current portfolios offered as an investment option under the 
Contracts. The Contracts and the Contracts' prospectuses disclose this 
right.
    4. The Section 26 Applicants submit that the ultimate effect of the 
proposed Substitutions will be to simplify the investment line-ups that 
are available to Contract owners while reducing expenses and continuing 
to provide Contract owners with a wide array of investment options. The 
Section 26 Applicants state that the proposed Substitutions will not 
reduce in any manner the nature or quality of the available investment 
options and the proposed Substitutions also will permit AXA Equitable 
and MONY America to present information to their Contract owners in a 
simpler and more concise manner. The Section 26 Applicants also state 
it is anticipated that after the proposed Substitutions, Contract 
owners will be provided with disclosure documents that contain a 
simpler presentation of the available investment options under the 
Contracts. The Section 26 Applicants also assert that the proposed 
Substitutions are not of the type that section 26 was designed to 
prevent because they will not result in costly forced redemption, nor 
will they affect other aspects of the Contracts. In addition, the 
proposed Substitutions will not adversely affect any features or riders 
under the Contracts because none of the features or riders will change 
as a result of the Substitutions. Accordingly, no Contract owner will 
involuntarily lose his or her features or riders as a result of any 
proposed Substitution. Moreover, the Section 26 Applicants will offer 
Contract owners the opportunity to transfer amounts out of the affected 
subaccounts without any cost or other penalty (other than those 
necessary to implement policies and procedures designed to detect and 
deter disruptive transfers and other ``market timing'' activities) that 
may otherwise have been imposed for a period beginning on the date of 
the Pre-Substitution Notice (which supplement will be delivered to the 
Contract owners at least 30 days before the Substitution Date) and 
ending no earlier than 30 days after the Substitution Date. The 
proposed Substitutions are also unlike the type of substitution that 
section 26(c) was designed to prevent in that the Substitutions have no 
impact on other aspects of the Contracts.
    5. The Section 17 Applicants request an order under section 17(b) 
exempting them from the provisions of section 17(a) to the extent 
necessary to permit the Section 17 Applicants to carry out some or all 
of the proposed Substitutions. The Section 17 Applicants state that 
because the proposed Substitutions may be effected, in whole or in 
part, by means of in-kind redemptions and purchases, the proposed 
Substitutions may be deemed to involve one or more purchases or sales 
of securities or property between affiliated persons.
    6. Section 17(a)(1) of the Act, in relevant part, prohibits any 
affiliated person of a registered investment company, or any affiliated 
person of such person, acting as principal, from knowingly selling any 
security or other property to that company. Section 17(a)(2) of the Act 
generally prohibits the persons described above, acting as principals, 
from knowingly purchasing any security or other property from the 
registered investment company.
    7. The Section 17 Applicants state that the proposed transactions 
may involve a transfer of portfolio securities by the Removed 
Portfolios to the Separate Accounts. Immediately thereafter, the 
Separate Accounts would purchase shares of the Replacement Portfolios 
with the portfolio securities received from the Removed Portfolios. 
Accordingly, the Section 17 Applicants provide that to the extent AXA 
Equitable, MONY America and the Removed Portfolios, and AXA Equitable, 
MONY America and the Replacement Portfolios, are deemed to be 
affiliated persons of one another under section 2(a)(3) or section 
2(a)(9) of the Act, it is conceivable that this aspect of the proposed 
Substitutions could be viewed as being prohibited by section 17(a). 
Accordingly, the Section 17 Applicants have determined to seek relief 
from section 17(a).
    8. The Section 17 Applicants submit that the terms of the proposed 
in-kind purchases of shares of the Replacement Portfolios by the 
Separate Accounts, including the consideration to be paid and received, 
as described in the application, are reasonable and fair and do not 
involve overreaching on the part of any person concerned. The Section 
17 Applicants submit that the terms of the proposed in-kind 
transactions, including those considered to be paid to each Removed 
Portfolio and received by each Replacement Portfolio involved, are 
reasonable, fair and do not involve overreaching principally because 
the transactions will conform with all but one of the conditions 
enumerated in rule 17a-7 under the Act. The proposed transactions will 
take place at relative net asset value in conformity with the 
requirements of section 22(c) of the Act and rule 22c-1 thereunder 
without the imposition of any transfer or similar charges by the 
Section 26 Applicants. The Substitutions will be effected without 
change in the amount or value of any Contract held by the affected 
Contract owners. The Substitutions will in no way alter the tax 
treatment of affected Contract owners in connection with their 
Contracts, and no tax liability will arise for Contract owners as a 
result of the Substitutions. The fees and charges under the Contracts 
will not increase because of the Substitutions. Even though the 
Separate Accounts, AXA Equitable, MONY America and the EQ Trust may not 
rely on rule 17a-7, the Section 17 Applicants believe that the rule's 
conditions outline the type of safeguards that result in transactions 
that are fair and reasonable to registered investment company 
participants and preclude overreaching in connection with an investment 
company by its affiliated persons.
    9. The Section 17 Applicants also submit that the proposed in-kind 
purchases by the Separate Accounts are consistent with the policies of 
the EQ Trust and the Replacement Portfolios, as provided in the EQ 
Trust's registration statement and reports filed under the Act. 
Finally, the Section 17 Applicants submit that the proposed 
Substitutions are consistent with the general purposes of the Act.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. The Substitutions will not be effected unless AXA Equitable or 
MONY America determines that: (i) The

[[Page 42328]]

Contracts allow the substitution of shares of registered open-end 
investment companies in the manner contemplated by the application; 
(ii) the Substitutions can be consummated as described in the 
application under applicable insurance laws; and (iii) any regulatory 
requirements in each jurisdiction where the Contracts are qualified for 
sale have been complied with to the extent necessary to complete the 
Substitutions.
    2. After the Substitution Date, FMG will not change a sub-adviser, 
add a new sub-adviser, or otherwise rely on the Multi-Manager Order, or 
any replacement order from the Commission, with respect to any 
Replacement Portfolio without first obtaining shareholder approval of 
the change in sub-adviser, the new sub-adviser, or the Replacement 
Portfolio's ability to rely on the Multi-Manager Order, or any 
replacement order from the Commission, at a shareholder meeting, the 
record date for which shall be after the proposed Substitution has been 
affected.
    3. AXA Equitable, MONY America or an affiliate thereof (other than 
the EQ Trust) will pay all expenses and transaction costs of the 
Substitutions, including legal and accounting expenses, any applicable 
brokerage expenses and other fees and expenses. No fees or charges will 
be assessed to the affected Contract owners to effect the 
Substitutions. The proposed Substitutions will not cause the Contract 
fees and charges currently being paid by Contract owners to be greater 
after the proposed Substitution than before the proposed Substitution.
    4. The Substitutions will be effected at the relative net asset 
values of the respective shares of the Replacement Portfolios in 
conformity with section 22(c) of the Act and rule 22c-1 thereunder 
without the imposition of any transfer or similar charges by the 
Section 26 Applicants. The Substitutions will be effected without 
change in the amount or value of any Contracts held by affected 
Contract owners.
    5. The Substitutions will in no way alter the tax treatment of 
affected Contract owners in connection with their Contracts, and no tax 
liability will arise for Contract owners as a result of the 
Substitutions.
    6. The obligations of the Section 26 Applicants, and the rights of 
the affected Contract owners, under the Contracts of affected Contract 
owners will not be altered in any way.
    7. Affected Contract owners will be permitted to make at least one 
transfer of Contract value from the subaccount investing in the Removed 
Portfolio (before the Substitution Date) or the Replacement Portfolio 
(after the Substitution Date) to any other available investment option 
under the Contract without charge for a period beginning at least 30 
days before the Substitution Date through at least 30 days following 
the Substitution Date. Except as described in any market timing/short-
term trading provisions of the relevant prospectus, the Section 26 
Applicants will not exercise any rights reserved under the Contracts to 
impose restrictions on transfers between the subaccounts under the 
Contracts, including limitations on the future number of transfers, for 
a period beginning at least 30 days before the Substitution Date 
through at least 30 days following the Substitution Date.
    8. All affected Contract owners will be notified, at least 30 days 
before the Substitution Date about: (i) The intended Substitution of 
Removed Portfolios with the Replacement Portfolios; (ii) the intended 
Substitution Date; and (iii) information with respect to transfers as 
set forth in Condition 7 above. In addition, the Section 26 Applicants 
will also deliver to affected Contract owners, at least 30 days before 
the Substitution Date, a prospectus for each applicable Replacement 
Portfolio.
    9. The Section 26 Applicants will deliver to each affected Contract 
owner within five business days of the Substitution Date a written 
confirmation which will include: (i) A confirmation that the 
Substitutions were carried out as previously notified; (ii) a 
restatement of the information set forth in the Pre-Substitution 
Notice; and (iii) values of the Contract owner's positions in the 
Removed Portfolio before the Substitution and the Replacement Portfolio 
after the Substitution.
    10. For a period of two years following the Substitution Date, for 
Contract owners who were Contract owners as of the Substitution Date, 
AXA Equitable, MONY America or an affiliate thereof (other than the EQ 
Trust) will reimburse, on the last business day of each fiscal quarter, 
the Contract owners whose subaccounts invest in the applicable 
Replacement Portfolio to the extent that the Replacement Portfolio's 
net annual operating expenses (taking into account fee waivers and 
expense reimbursements) for such period exceed, on an annualized basis, 
the net annual operating expenses of the Removed Portfolio for the most 
recent fiscal year preceding the date of this application. In addition, 
the Section 26 Applicants will not increase the Contract fees and 
charges that would otherwise be assessed under the terms of the 
Contracts for affected Contract owners for a period of at least two 
years following the Substitution Date.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-17936 Filed 8-20-18; 8:45 am]
 BILLING CODE 8011-01-P


