[Federal Register: May 14, 1999 (Volume 64, Number 93)] [Notices] [Page 26466-26467] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr14my99-108] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 23829; 812-11232] New England Funds Trust I, et al,; Notice of Application May 10, 1999. AGENCY: Securities and Exchange Commission (``SEC''). ACTION: Notice of application for an order under section 6(c) of the Investment Company Act of 1940 (the ``Act'') to amend a prior order that granted an exemption from section 15(a) of the Act and rule 18f-2 Under the Act. ----------------------------------------------------------------------- SUMMARY OF APPLICATION: Applicants request an order amending a prior order that permits them to enter into and materially amend investment sub-advisory contracts without receiving shareholder approval (``Prior Order'').\1\ \1\ New England Funds Trust I, et al., Investment Company Act Release Nos. 22796 (Aug. 22, 1997) (notice) and 22824 (Sept. 17, 1997) (order). --------------------------------------------------------------------------- APPLICANTS: New England Funds Trust I, New England Funds Trust II, New England Funds Trust III, New England Cash Management Trust, New England Tax Exempt Money Market Trust (the ``New England Funds''), New England Zenith Fund (the ``Zenith Fund'') (together with the New England Funds, the ``Trusts'') New England Funds Management, L.P. (``NEFM''), and TNE Advisers, Inc. (``TNE Advisers''). FILING DATES: The application was filed on July 24, 1998, and amended on December 2, 1998, and on March 4, 1999. Applicants have agreed to file an amendment during the notice period, the substance of which is included in this notice. HEARING OR NOTIFICATION OF HEARING: An order granting the requested relief 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 June 3, 1999 and should be accompanied by proof of service on the 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 5th Street, NW, Washington, DC 20549- 0609. Applicants, 399 Boylston Street, 4th Floor, Boston, MA 02116. FOR FURTHER INFORMATION CONTACT: 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 SAC's Public Reference Branch, 450 5th Street, N.W., Washington, DC, 20549-0102 (tel. 202-942-8090). Applicants' Representations 1. The Trusts are open-end management investment companies registered under the Act. The Zenith Fund serves as a funding vehicle for certain variable annuity and variable life insurance products is sued by Metropolitan Life Insurance Company, and its subsidiary, New England Life Insurance Company. 2. NEFM and TNE Advisers are registered as investment advisers under the Investment Advisers Act of 1940. NEFM serves as investment adviser to each of the New England Funds, except the New England Growth Fund Series. TNE Advisers serves as investment adviser for each series of the Zenith Fund, except the Capital Growth Series. 3. Each series of each of the New England Funds (except the New England Growth Fund Series) and of the Zenith Fund (except the Capital Growth Series) (together, the ``Series'') utilizes an adviser/sub- adviser management structure. Under this structure, either NEFM or TNE Advisers acts as each Series' investment adviser, delegating the day- to-day portfolio management for each Series to one or more sub- advisers. 4. On September 17, 1997, applicants received the Prior Order permitting NEFM and TNE Advisers to enter into sub-advisory agreements for the Series without obtaining shareholder approval. Among other things, the Prior Order is subject to a condition that requires that a notice, in the form of an information statement, be sent to shareholders following the hiring of a new sub-adviser or the implementation of a material change to a sub-advisory agreement. Applicants seek to amend the Prior Order to preserve the requirement to provide notice to shareholders regarding the hiring of a new sub- adviser, but eliminate the [[Page 26467]] requirement to provide a notice in the form of an information statement of other material changes to a sub-advisory agreement. 5. Applicants assert that the requested amendment would save the Series the expense of preparing and mailing an information statement to shareholders, and would be consistent with the relief granted in the Prior Order. Applicants also state that any amendments to sub-advisory agreements which are material so as to warrant disclosure in the prospectus would be disclosed to shareholders by means of prospectus supplements commonly known as ``stickers''. Applicants' Legal Analysis 1. Section 6(c) of the Act authorizes the SEC to exempt persons or transactions from the provisions of the Act to the extent that such exemptions are 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. Applicants submit that amending the Prior Order as requested would be consistent with the standards of section 6(c) of the Act. Applicants' Conditions Applicants agree that the order granting the requested relief will be subject to the conditions of the Prior Order, with condition 3 of the Prior Order modified to read as follows: Within 90 days after the hiring of any new sub-adviser, the Trusts will furnish shareholders with all information about a new sub-adviser or sub-advisory agreement that would be included in a proxy statement. The information will include any change in the disclosure caused by the addition of a new sub-adviser. The Series will meet this condition by providing shareholders with an information statement meeting the requirements of Regulation 14C and Schedule 14C under the Securities Exchange Act of 1934 (the ``Exchange Act''). The information statement also will meet the requirements of Item 22 of Schedule 14A under the Exchange Act. The Zenith Fund will ensure that the information statement is furnished to the unitholders of any separate account for which the Zenith Fund serves as a funding vehicle. For the SEC, by the Division of Investment Management, under delegated authority. Margaret H. McFarland, Deputy Secretary. [FR Doc. 99-12231 Filed 5-13-99; 8:45 am] BILLING CODE 8010-01-M