[Federal Register: July 17, 1998 (Volume 63, Number 137)] [Notices] [Page 38681-38682] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr17jy98-103] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Rel. No. IC-23311; 812-9982] Morgan Stanley & Co. Incorporated; Notice of Application July 10, 1998. AGENCY: Securities and Exchange Commission (``Commission'' or ``SEC''). [[Page 38682]] ACTION: Notice of application for an order under section 12(d)(1)(J) of the Investment Company Act of 1940 (the ``Act'') for an exemption from section 12(d)(1) of the Act. ----------------------------------------------------------------------- SUMMARY OF APPLICATION: Morgan Stanley & Co. Incorporated (``Morgan Stanley'') requests an order to amend a prior order that, among other things, permits registered investment companies to own a greater percentage of the total outstanding voting stock of the AJL PEPS Trusts for which Morgan Stanley serves, or will serve, as a principal underwriter (collectively, the ``Trusts'') than that permitted by section 12(d)(1) of the Act (``Prior Order'').\1\ The requested order would permit companies that are excepted from the defintion of investment company under section 3(c)(1) or 3(c)(7) of the Act to own a greater percentage of the total outstanding voting stock of a Trust than that permitted by section 12(d)(1)(A) of the Act. \1\ Morgan Stanley & Co. Incorporated, Investment Company Act Release Nos. 2235 (Sept. 20, 1996) (notice) and 22284 (Oct. 16, 1996) (order). --------------------------------------------------------------------------- FILING DATES: The application was filed on May 5, 1998. Applicant has agreed to file an amendment, the substance of which is incorporated in this notice, during the notice period. HEARING OR NOTIFICATION OF HEARING: An order granting the application will be issued unless the SEC orders a hearing. Interested persons may request a hearing by writing to the SEC's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the SEC by 5:30 p.m. on August 3, 1998, 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 may request notification of a hearing by writing to the SEC's Secretary. ADDRESSES: Secretary, SEC, 450 Fifth Street, N.W., Washington, D.C. 20549. Applicant, 1585 Broadway, New York, New York 10036. FOR FURTHER INFORMATION CONTACT: Brian T. Hourihan, Senior Counsel, at (202) 942-0526, or Mary Kay Frech, Branch Chief, at (202) 942-0564 (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 for a fee from the SEC's Public Reference Branch, 450 Fifth Street, N.W., Washington, D.C. 20549 (tel. (202) 942-8090). Applicant's Representations 1. The Trusts are limited-life, grantor trusts registered under the Act as nondiversified, closed-end management investment companies. Morgan Stanley serves, or will serve, as the principal underwriter for each Trust. 2. On October 16, 1996, the Commission issued the Prior Order. The Prior Order, among other things, permits registered investment companies to own a greater percentage of the total outstanding voting stock of the Trusts than that permitted by section 12(d)(1) of the Act. Applicant's Legal Analysis 1. Section 12(d)(1)(A)(i) of the Act prohibits any registered investment company from owning more than 3 percent of the total outstanding voting stock of any other investment company, and any investment company from owning in the aggregate more than 3 percent of the total outstanding voting stock of any registered investment company. A company that is excepted from the definition of investment company under section 3(c)(1) or 3(c)(7) of the Act is deemed to be an investment company for purposes of section 12(d)(1)(A)(i) of the Act under sections 3(c)(1) and 3(c)(7)(D) of the Act. 2. Section 12(d)(1)(J) of the Act provides that the Commission may exempt persons or transactions from any provision of section 12(d)(1), if, and to the extend that, the exemption is consistent with the public interest and the protection of investors. Applicant requests that the Prior Order be amended to permit companies excepted from the definition of investment company under section 3(c)(1) and 3(c)(7) of the Act to rely on the exemption from section 12(d)(1)(A) of the Act provided by the Prior Order. 3. Applicant asserts that investment in the Trusts by companies relying on section 3(c)(1) or 3(c)(7) of the Act will not raise concerns under section 12(d)(1) of the Act for the same reasons as those given in the application for the Prior Order with respect to registered fund's investment in the Trusts. Applicant agrees that any company relying on section 3(c)(1) or 3(c)(7) of the Act that invests in the Trusts may not rely on this order unless it complies with the terms and conditions of the Prior Order. For these reasons, applicant believes that the requested relief meets the standards of section 12(d)(1)(J). For the Commission, by the Division of Investment Management, pursuant to delegated authority. Margaret H. McFarland, Deputy Secretary. [FR Doc. 98-19051 Filed 7-16-98; 8:45 am] BILLING CODE 8010-01-M