[Federal Register Volume 76, Number 70 (Tuesday, April 12, 2011)]
[Notices]
[Pages 20388-20389]
From the Federal Register Online via the Government Publishing 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