[Federal Register Volume 75, Number 45 (Tuesday, March 9, 2010)]
[Notices]
[Pages 10846-10850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-4908]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 29167; File No. 812-13676]
The Chile Fund, Inc., et al.; Notice of Application
March 2, 2010.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of application under section 6(c) of the Investment
Company Act of 1940 (``Act'') for an exemption from section 19(b) of
the Act and rule 19b-1 under the Act.
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Applicants: The Chile Fund, Inc. (``Chile Fund''), Aberdeen Australia
Equity Fund (``Australia Fund,'' together with the Chile Fund, the
``Current Funds''), Aberdeen Asset Management Asia Limited (``Aberdeen
Asia'') and Aberdeen Asset Management Investment Services Limited
(``Aberdeen'').
SUMMARY: Summary of Application: Applicants request an order to permit
certain registered closed-end investment companies to make periodic
distributions of long-term capital gains with respect to their
outstanding common stock as frequently as monthly in any one taxable
year, and as frequently as distributions are specified by or in
accordance with the terms of any outstanding preferred stock that such
investment companies may issue. The requested order would supersede a
prior order issued to the Australia Fund.
DATES: Filing Dates: The application was filed on July 27, 2009, and
amended on December 3, 2009, January 6, 2010, and February 25, 2010.
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 March 29, 2010 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, c/o Aberdeen Asset
Management Inc., 1735 Market Street, 32nd Floor, Philadelphia, PA
19103.
FOR FURTHER INFORMATION CONTACT: Lewis B. Reich, Senior Counsel, at
(202) 551-6919, or Jennifer L. Sawin, 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 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. The Current Funds are both Maryland corporations registered
under the Act as closed-end management investment companies.\1\ The
common
[[Page 10847]]
stock of each Current Fund is listed on the NYSE Amex. Applicants
believe that the shareholders of each Fund that would rely on the
requested order are generally conservative, dividend-sensitive
investors who desire current income periodically. Although the Current
Funds have not issued preferred stock, their boards of directors (the
``Chile Fund Board'' and the ``Australia Fund Board'') or the board of
directors or trustees of another Fund \2\ may authorize such issuances
in the future.
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\1\ The Current Funds are the only registered closed-end
investment companies that currently intend to rely on the requested
order. Applicants request that the order also apply to each
registered closed-end investment company that: (a) Is advised by
either Aberdeen or Aberdeen Asia (including any successor in
interest) or by any entity controlling, controlled by, or under
common control (within the meaning of section 2(a)(9) of the Act)
with Aberdeen or Aberdeen Asia (collectively with Aberdeen and
Aberdeen Asia, ``Advisers''), and (b) decides in the future to rely
on the order and complies with the terms and conditions of the
application (collectively with the Current Funds, ``Funds'' and
each, a ``Fund''). A successor in interest is limited to entities
that result from a reorganization into another jurisdiction or a
change in the type of business organization.
\2\ The board of directors or trustees of any Fund, including
the Current Funds, as used herein, a ``Board.''
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2. Aberdeen and Aberdeen Asia are direct wholly-owned subsidiaries
of Aberdeen Asset Management PLC, and are investment advisers
registered under the Investment Advisers Act of 1940 (``Advisers
Act''). Aberdeen serves as investment adviser to and is responsible for
the overall management of the Chile Fund, and Aberdeen Asia serves as
investment adviser to and is responsible for the overall management of
the Australia Fund. Any other Adviser will also be registered with the
Commission under the Advisers Act.
3. Applicants state that on June 24-25, 2009, the Chile Fund Board,
including a majority of the members who are not ``interested persons''
as defined in section 2(a)(19) of the Act (the ``Independent
Directors'') reviewed information regarding the purpose of the proposed
distribution policy (a ``Plan'', and for the Chile Fund, the ``Chile
Fund Plan''), the reasonably foreseeable effects of the Plan on the
Fund's long-term total return (in relation to market price and net
asset value per share (``NAV'')), whether the rate of distribution
under the Chile Fund Plan will exceed the Chile Fund's expected total
return (in relation to NAV). Applicants state that the Chile Fund
Board, including a majority of the Independent Directors, also
considered any conflicts of interest that Aberdeen, its affiliated
persons, and affiliated persons of the Chile Fund might have with
respect to the adoption or implementation of the Chile Fund Plan.
Applicants further state that, after considering such information, the
Chile Fund Board, including its Independent Directors, determined that
the Chile Fund Plan was consistent with the Fund's investment
objectives and in the best interests of its stockholders, and adopted
the Chile Fund Plan in respect of the Chile Fund's outstanding common
stock.
4. Applicants state that, under the Chile Fund Plan, the Chile Fund
would make level quarterly distributions based upon a fixed percentage
of the rolling average of the Fund's prior four quarter-end net asset
values. Applicants state that the purpose of the Chile Fund Plan is to
allow the Chile Fund to make fixed periodic distributions to provide a
steady return to the Chile Fund's common stockholders. Applicants state
that the annual distribution rate with respect to the Chile Fund's
common shares will be independent of the Chile Fund's performance in
any particular period but would be expected not to exceed the Chile
Fund's total return over time. Applicants explain that, except for
extraordinary distributions and potential increases or decreases in the
final dividend periods in light of the Fund's performance for the
entire calendar year and to enable the Fund to comply with the
distribution requirements of subchapter M of the Internal Revenue Code
of 1986 (``Code'') for the calendar year, each distribution on the
common shares would be at the stated rate then in effect.
5. Applicants state that prior to implementing the Chile Fund Plan,
the Chile Fund Board will adopt policies and procedures under rule 38a-
1 under the Act (a) that are reasonably designed to ensure that all
notices required to be sent to the Chile Fund's stockholders pursuant
to section 19(a) of the Act, rule 19a-1 thereunder and condition D
below (each a ``19(a) Notice'') include the disclosure required by rule
19a-1 and by condition B.1 below, and that all other written
communications by the Chile Fund or its agents regarding distributions
under the Plan include the disclosure required by condition C below,
and (b) that require the Chile Fund to keep records that demonstrate
compliance with all of the conditions of the order and that are
necessary for the Chile Fund to form the basis for, or demonstrate the
calculation of, the amounts disclosed in its 19(a) Notices.
6. Applicants state that on December 12, 1997, the Australia Fund,
relying on a prior order (``Prior Order''),\3\ instituted a Plan with
respect to the Australia Fund's common stock (the ``Australia Fund
Plan'') that was discontinued on March 14, 2002 and subsequently re-
instituted on February 17, 2004. In instituting and re-instituting the
Australia Fund Plan, the Australia Fund Board, including a majority of
its Independent Directors, found that the Australia Fund Plan was in
the best interests of the Australia Fund's common stockholders.
Applicants state that the purpose of the Australia Fund Plan is to
allow the Australia Fund to make fixed periodic distributions to
provide a steady return to the Australia Fund's common stockholders.
Applicants state that the annual distribution rate with respect to the
Australia Fund's common shares will be independent of the Australia
Fund's performance in any particular period but would be expected not
to exceed the Australia Fund's total return over time. Applicants
explain that, except for extraordinary distributions and potential
increases or decreases in the final dividend periods in light of the
Fund's performance for the entire calendar year and to enable the Fund
to comply with the distribution requirements of subchapter M of the
Internal Revenue Code of 1986 (``Code'') for the calendar year, each
distribution on the common shares is at the stated rate then in effect.
The Australia Fund Plan currently pays quarterly distributions at an
annual rate, set once a year, that is a percentage of the rolling
average of the Fund's prior four quarter-end net asset values. Prior to
relying on the requested order in connection with the Australia Fund
Plan, the Australia Fund Board will have taken the actions described
in, and the Australia Fund will have satisfied the representations set
forth in, the application. When the requested order is issued, it will
supersede the Prior Order.
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\3\ The First Australia Fund, Inc., Release Nos. IC-23363 (July
28, 1998) (notice of application) and IC-23397 (August 24, 1998)
(order). The Australia Fund was formerly named The First Australia
Fund, Inc.
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Applicants' Legal Analysis
1. Section 19(b) generally makes it unlawful for any registered
investment company to make long-term capital gains distributions more
than once each year. Rule 19b-1 limits the number of capital gains
dividends, as defined in section 852(b)(3)(C) of the Code
(``distributions''), that a fund may make with respect to any one
taxable year to one, plus a supplemental ``clean up'' distribution made
pursuant to section 855 of the Code not exceeding 10% of the aggregate
amount distributed for the year, plus one additional capital gain
dividend made in whole or in part to avoid the excise tax under section
4982 of the Code.
[[Page 10848]]
2. Section 6(c) provides, in relevant part, that the Commission may
exempt any person or transaction from any provision of the Act to the
extent that 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.
3. Applicants state that one of the concerns leading to the
enactment of section 19(b) and adoption of rule 19b-1 was that
shareholders might be unable to distinguish between frequent
distributions of capital gains and dividends from investment income.
Applicants state, however, that rule 19a-1 effectively addresses this
concern by requiring that a separate statement showing the sources of a
distribution (e.g., estimated net income, net short-term capital gains,
net long-term capital gains and/or return of capital) accompany any
distributions (or the confirmation of the reinvestment of
distributions) estimated to be sourced in part from capital gains or
capital. Applicants state that the same information is included in each
Fund's annual report to stockholders. Further, IRS Form 1099-DIV is
sent to each common and preferred stockholder who received
distributions during a particular year (including shareholders who have
sold shares during the year).
4. Applicants further state that each Fund will make the additional
disclosures required by the conditions set forth below, and each of
them will have adopted compliance policies and procedures in accordance
with rule 38a-1 under the Act to ensure that all required notices and
disclosures are sent to shareholders. Applicants argue that rule 19a-l,
the Plans, the Funds' compliance policies and the conditions listed
below ensure that each Fund's shareholders would be provided sufficient
information to understand that their periodic distributions are not
tied to the Fund's net investment income (which for this purpose is the
Fund's taxable income other than from capital gains) and realized
capital gains to date, and may not represent yield or investment
return. Applicants also state that compliance with the Funds'
compliance procedures and condition C below will ensure that
prospective shareholders and third parties are provided with the same
information. Accordingly, applicants assert that continuing to subject
the Funds to section 19(b) and rule 19b-1 would afford stockholders no
additional protection.
5. Applicants note that section 19(b) and rule 19b-1 also were
intended to prevent improper fund share sales practices, including, in
particular, the practice of urging an investor to purchase shares of a
fund on the basis of an upcoming capital gains dividend (``selling the
dividend''), where the dividend would result in an immediate
corresponding reduction in NAV and would be in effect a taxable return
of the investor's capital. Applicants assert that the ``selling the
dividend'' concern should not apply to closed-end investment companies,
such as the Funds, which do not continuously distribute shares.
According to applicants, if the underlying concern extends to secondary
market purchases of shares of closed-end funds that are subject to a
large upcoming capital gains dividend, adoption of a periodic
distribution plan actually helps minimize the concern by avoiding,
through periodic distributions, any buildup of large end-of-the-year
distributions.
6. Applicants also note that common stock of a closed-end fund
often trades in the marketplace at a discount to its NAV. Applicants
believe that this discount may be reduced if the Fund is permitted to
pay more frequent dividends with respect to its common stock at a
consistent rate.
7. Applicants assert that the application of rule 19b-1 to the
Plans actually could have inappropriate influence on portfolio
management decisions. Applicants state that, in the absence of an
exemption from rule 19b-1, the adoption of a periodic distribution plan
imposes pressure on management (i) not to realize any net long-term
capital gains until the point in the year that the fund can pay all of
its remaining distributions in accordance with rule 19b-1 and (ii) not
to realize any long-term capital gains during any particular year in
excess of the amount of the aggregate pay-out for the year (since as a
practical matter excess gains must be distributed and accordingly would
not be available to satisfy pay-out requirements in following years),
notwithstanding that purely investment considerations might favor
realization of long-term gains at different times or in different
amounts. Applicants thus assert that the limitation on the number of
capital gain dividends that a Fund may make with respect to any one
year may prevent the normal and efficient operation of a periodic
distribution plan whenever that Fund's realized net long-term capital
gains in any year exceed the total of the periodic distributions that
may include such capital gains under the rule.
8. Applicants also assert that rule 19b-1 may force the fixed
regular periodic distributions to be funded with returns of capital \4\
(to the extent net investment income and realized short-term capital
gains are insufficient to fund the distribution), even though realized
net long-term capital gains otherwise would be available. To distribute
all of a Fund's long-term capital gains within the limits in rule 19b-
1, a Fund may be required to make total distributions in excess of the
annual amount called for by its periodic distribution plan or to retain
and pay taxes on the excess amount. Applicants thus assert that the
requested order would minimize these anomalous effects of rule 19b-1 by
enabling the Funds to realize long-term capital gains as often as
investment considerations dictate without fear of violating rule 19b-1.
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\4\ Returns of capital as used in the application means return
of capital for financial accounting purposes and not for tax
accounting purposes.
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9. Applicants state that Revenue Ruling 89-81 under the Code
requires that a fund that has both common shares and preferred shares
outstanding designate the types of income, e.g., investment income and
capital gains, in the same proportion as the total distributions
distributed to each class for the tax year. To satisfy the
proportionate designation requirements of Revenue Ruling 89-81,
whenever a fund has realized a long-term capital gain with respect to a
given tax year, the fund must designate the required proportionate
share of such capital gain to be included in common and preferred stock
dividends. Applicants state that although rule 19b-1 allows a fund some
flexibility with respect to the frequency of capital gains
distributions, a fund might use all of the exceptions available under
the rule for a tax year and still need to distribute additional capital
gains allocated to the preferred stock to comply with Revenue Ruling
89-81.
10. Applicants assert that the potential abuses addressed by
section 19(b) and rule 19b-1 do not arise with respect to preferred
shares issued by a closed-end fund. Applicants assert that such
distributions are either fixed or are determined in periodic auctions
by reference to short-term interest rates rather than by reference to
performance of the issuer, and Revenue Ruling 89-81 determines the
proportion of such distributions that are comprised of the long-term
capital gains.
11. Applicants also submit that the ``selling the dividend''
concern is not applicable to preferred stock, which entitles a holder
to no more than a periodic dividend at a fixed rate or the rate
determined by the market, and, like
[[Page 10849]]
a debt security, is priced based upon its liquidation value, dividend
rate, credit quality, and frequency of payment. Applicants state that
investors buy preferred stock for the purpose of receiving payments at
the frequency bargained for.
12. Applicants request an order pursuant to section 6(c) of the Act
granting an exemption from section 19(b) of the Act and rule 19b-1
thereunder to permit each Fund to make periodic capital gain dividends
(as defined in section 852(b)(3)(C) of the Code) as often as monthly in
any one taxable year in respect of its common stock and as often as
specified by or determined in accordance with the terms thereof in
respect of the Fund's preferred stock (if any).\5\
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\5\ In order to rely on the order, a future Fund must satisfy
each of the foregoing representations except that such
representations will be made in respect of actions by the Board of
such future Fund and will be made at a future time.
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Applicants' Conditions
Applicants agree that any order of the Commission granting the
requested relief will be subject to the following conditions:
A. Compliance Review and Reporting
Each Fund's chief compliance officer will:
1. Report to the Fund's Board, no less frequently than once every
three months or at the next regularly scheduled quarterly Board
meeting, whether:
(a) The Fund and its Adviser have complied with the conditions of
the order and
(b) A material compliance matter (as defined in Rule 38a-1(e)(2)
under the Act) has occurred with respect to such conditions; and
2. Review the adequacy of the policies and procedures adopted by
the Board no less frequently than annually.
B. Disclosures To Fund Stockholders
1. Each 19(a) Notice disseminated to the holders of the Fund's
common stock, in addition to the information required by Section 19(a)
and Rule 19a-1:
(a) Will provide, in a tabular or graphical format:
(1) The amount of the distribution, on a per common share basis,
together with the amounts of such distribution amount, on a per common
share basis and as a percentage of such distribution amount, from
estimated: (A) Net investment income; (B) net realized short-term
capital gains; (C) net realized long-term capital gains; and (D) return
of capital or other capital source;
(2) The fiscal year-to-date cumulative amount of distributions, on
a per common share basis, together with the amounts of such cumulative
amount, on a per common share basis and as a percentage of such
cumulative amount of distributions, from estimated: (A) Net investment
income; (B) net realized short-term capital gains; (C) net realized
long-term capital gains; and (D) return of capital or other capital
source;
(3) The average annual total return in relation to the change in
NAV for the 5-year period (or, if the Fund's history of operations is
less than five years, the time period commencing immediately following
the Fund's first public offering) ending on the last day of the month
ended immediately prior to the most recent distribution record date
compared to the current fiscal period's annualized distribution rate
expressed as a percentage of NAV as of the last day of the month prior
to the most recent distribution record date; and
(4) The cumulative total return in relation to the change in NAV
from the last completed fiscal year to the last day of the month prior
to the most recent distribution record date compared to the fiscal
year-to-date-cumulative distribution rate expressed as a percentage of
NAV as of the last day of the month prior to the most recent
distribution record date;
Such disclosure shall be made in a type size at least as large and
as prominent as the estimate of the sources of the current
distribution; and
(b) Will include the following disclosure:
(1) ``You should not draw any conclusions about the Fund's
investment performance from the amount of this distribution or from the
terms of the Fund's Plan'';
(2) ``The Fund estimates that it has distributed more than its
income and capital gains; therefore, a portion of your distribution may
be a return of capital. A return of capital may occur, for example,
when some or all of the money that you invested in the Fund is paid
back to you. A return of capital distribution does not necessarily
reflect the Fund's investment performance and should not be confused
with `yield' or `income' ''; \6\ and
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\6\ The disclosure in this condition B.1.(b)(2) will be included
only if the current distribution or the fiscal year-to-date
cumulative distributions are estimated to include a return of
capital.
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(3) ``The amounts and sources of distributions reported in this
19(a) Notice are only estimates and are not being provided for tax
reporting purposes. The actual amounts and sources of the amounts for
tax reporting purposes will depend upon the Fund's investment
experience during the remainder of its fiscal year and may be subject
to changes based on tax regulations. The Fund will send you a Form
1099-DIV for the calendar year that will tell you how to report these
distributions for Federal income tax purposes.''
Such disclosure shall be made in a type size at least as large as
and as prominent as any other information in the 19(a) Notice and
placed on the same page in close proximity to the amount and the
sources of the distribution;
2. On the inside front cover of each report to stockholders under
Rule 30e-1 under the Act, the Fund will:
(a) Describe the terms of the Plan (including the fixed amount or
fixed percentage of the distributions and the frequency of the
distributions);
(b) Include the disclosure required by condition B.1.(b)(1) above;
(c) State, if applicable, that the Plan provides that the Board may
amend or terminate the Plan at any time without prior notice to Fund
stockholders; and
(d) Describe any reasonably foreseeable circumstances that might
cause the Fund to terminate the Plan and any reasonably foreseeable
consequences of such termination; and
3. Each report provided to stockholders under Rule 30e-1 under the
Act and each prospectus filed with the Commission on Form N-2 under the
Act, will provide the Fund's total return in relation to changes in NAV
in the financial highlights table and in any discussion about the
Fund's total return.
C. Disclosure to Stockholders, Prospective Stockholders and Third
Parties
1. Each Fund will include the information contained in the relevant
19(a) Notice, including the disclosure required by condition B.1.(b)
above, in any written communication (other than a communication on Form
1099) about the Plan or distributions under the Plan by the Fund, or
agents that the Fund has authorized to make such communication on the
Fund's behalf, to any Fund common stockholder, prospective common
stockholder or third-party information provider;
2. The Fund will issue, contemporaneously with the issuance of any
19(a) Notice, a press release containing the information in the 19(a)
Notice and file with the Commission the information contained in such
19(a) Notice, including the disclosure required by condition B.1.(b)
above, as an exhibit to its next filed Form N-CSR; and
[[Page 10850]]
3. The Fund will post prominently a statement on its (or its
Adviser's) Web site containing the information in each 19(a) Notice,
including the disclosure required by condition B.1.(b) above, and
maintain such information on such Web site for at least 24 months.
D. Delivery of 19(a) Notices to Beneficial Owners
If a broker, dealer, bank or other person (``Financial
Intermediary'') holds common stock issued by a Fund in nominee name, or
otherwise, on behalf of a beneficial owner, the Fund:
1. Will request that the Financial Intermediary, or its agent,
forward the 19(a) Notice to all beneficial owners of the Fund's shares
held through such Financial Intermediary;
2. Will provide, in a timely manner, to the Financial Intermediary,
or its agent, enough copies of the 19(a) Notice assembled in the form
and at the place that the Financial Intermediary, or its agent,
reasonably requests to facilitate the Financial Intermediary's sending
of the 19(a) Notice to each beneficial owner of the Fund's shares; and
3. Upon the request of any Financial Intermediary, or its agent,
that receives copies of the 19(a) Notice, will pay the Financial
Intermediary, or its agent, the reasonable expenses of sending the
19(a) Notice to such beneficial owners.
E. Additional Board Determinations for Funds Whose Common Stock Trades
at a Premium
If:
1. A Fund's common stock has traded on the stock exchange on which
it primarily trades at the time in question at an average premium to
NAV equal to or greater than 10%, as determined on the basis of the
average of the discount or premium to NAV of the Fund's common stock as
of the close of each trading day over a 12-week rolling period (each
such 12-week rolling period ending on the last trading day of each
week); and
2. The Fund's annualized distribution rate for such 12-week rolling
period, expressed as a percentage of NAV as of the ending date of such
12-week rolling period, is greater than the Fund's average annual total
return in relation to the change in NAV over the 2-year period ending
on the last day of such 12-week rolling period; then:
(a) At the earlier of the next regularly scheduled meeting or
within four months of the last day of such 12-week rolling period, the
Board including a majority of the Independent Directors:
(1) Will request and evaluate, and the Fund's Adviser will furnish,
such information as may be reasonably necessary to make an informed
determination of whether the Plan should be continued or continued
after amendment;
(2) Will determine whether continuation, or continuation after
amendment, of the Plan is consistent with the Fund's investment
objective(s) and policies and is in the best interests of the Fund and
its stockholders, after considering the information in condition
E.2.(a)(1) above; including, without limitation: (A) Whether the Plan
is accomplishing its purpose(s); (B) the reasonably foreseeable
material effects of the Plan on the Fund's long-term total return in
relation to the market price and NAV of the Fund's common stock; and
(C) the Fund's current distribution rate, as described in condition E.2
above, compared with the Fund's average annual taxable income or total
return over the 2-year period, as described in condition E.2, or such
longer period as the Board deems appropriate; and
(3) Based upon that determination, will approve or disapprove the
continuation, or continuation after amendment, of the Plan; and
(b) The Board will record the information it considers, including
its consideration of the factors listed in condition E.2.(a)(2) above,
and the basis for its approval or disapproval of the continuation, or
continuation after amendment, of the Plan in its meeting minutes, which
must be made and preserved for a period of not less than six years from
the date of such meeting, the first two years in an easily accessible
place.
F. Public Offerings
A Fund will not make a public offering of the Fund's common stock
other than:
1. A rights offering below NAV to holders of the Fund's common
stock;
2. An offering in connection with a dividend reinvestment plan,
merger, consolidation, acquisition, spin-off or reorganization of the
Fund; or
3. An offering other than an offering described in conditions F.1
and F.2 above, provided that, with respect to such other offering:
(a) The Fund's annualized distribution rate for the six months
ending on the last day of the month ended immediately prior to the most
recent distribution record date,\7\ expressed as a percentage of NAV as
of such date, is no more than 1 percentage point greater than the
Fund's average annual total return for the 5-year period ending on such
date; \8\ and
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\7\ If a Fund has been in operation fewer than six months, the
measured period will begin immediately following the Fund's first
public offering.
\8\ If a Fund has been in operation fewer than five years, the
measured period will begin immediately following the Fund's first
public offering.
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(b) The transmittal letter accompanying any registration statement
filed with the Commission in connection with such offering discloses
that the Fund has received an order under Section 19(b) to permit it to
make periodic distributions of long-term capital gains with respect to
its common stock as frequently as twelve times each year, and as
frequently as distributions are specified by or determined in
accordance with the terms of any outstanding preferred stock as such
Fund may issue.
G. Amendments to Rule 19b-1
The requested order will expire on the effective date of any
amendments to Rule 19b-1 that provide relief permitting certain closed-
end investment companies to make periodic distributions of long-term
capital gains with respect to their outstanding common stock as
frequently as twelve times each year.
For the Commission, by the Division of Investment Management,
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-4908 Filed 3-8-10; 8:45 am]
BILLING CODE 8011-01-P