[Federal Register: March 10, 2008 (Volume 73, Number 47)]
[Notices]
[Page 12782-12783]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10mr08-106]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 28183; 812-13418]
JPMorgan Trust I, et al.; Notice of Application
March 4, 2008.
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.
-----------------------------------------------------------------------
Summary of Application: Applicants request an order to permit funds
of funds relying on rule 12d1-2 under the Act to invest in certain
financial instruments.
Applicants: JPMorgan Trust I, JPMorgan Trust II, JPMorgan Insurance
Trust, J. P Morgan Mutual Fund Group, J. P Morgan Mutual Fund
Investment Trust, J. P Morgan Fleming Mutual Fund Group, Inc.,
Undiscovered Managers Funds, JPMorgan Institutional Trust, J. P Morgan
Series Trust II (collectively, the ``Trusts''), J. P Morgan Investment
Management, Inc. (``JPMIM'')), JPMorgan Investment Advisors, Inc.
(``JPMIA''), Security Capital Research & Management Incorporated
(``Security Capital,'' collectively with JPMIM and JPMIA, the
``Advisors''), and JPMorgan Distribution Services, Inc. (the
``Distributor'').
Filing Dates: The application was filed on August 9, 2007, and
amended on November 21, 2007 and January 30, 2008. 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 March 31, 2008 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, Commission, 100 F Street, NE., Washington, DC
20549-1520; Applicants, c/o Jessica K. Ditullio, JPMorgan Funds, 1111
Polaris Parkway, Columbus, Ohio 43271.
FOR FURTHER INFORMATION CONTACT: Lewis Reich, Senior Counsel, at (202)
551-6919, or Nadya B. Roytblat, Assistant Director, 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 for a fee at the
Commission's Public Reference Branch, 100 F Street, NE., Washington, DC
20549-0104 (telephone (202) 551-8090).
Applicants' Representations
1. Each Trust is organized as a Delaware statutory trust, a
Maryland corporation or a Massachusetts business trust and is
registered under the Act as an open-end management investment company.
The Trusts offer separate series (``Funds of Funds'') that may invest
in other registered open-end management investment companies in
reliance on section 12(d)(1)(G) of the Act and rule 12d1-2 under the
Act (``Underlying Funds'' and together with the Funds of Funds,
``Funds'').\1\ Applicants propose that the Funds of Funds be permitted
to invest in financial instruments that may not be considered
securities within the meaning of section 2(a)(36) of the Act (``Other
Investments'') and are consistent with the investment objective of a
Funds of Funds.\2\
---------------------------------------------------------------------------
\1\ Applicants request that the relief apply to all existing and
future series of the Trusts and any other registered open-end
management investment companies and their series that are in the
same group of investment companies, as defined in section
12(d)(1)(G) of the Act, as the Trusts. All Funds that currently
intend to rely on the order have been named as applicants. Any other
existing or future entity that relies on the order in the future
will do so only in accordance with the terms and conditions in the
application.
---------------------------------------------------------------------------
2. The Advisors are Delaware or Ohio corporations that are
indirect, wholly-owned subsidiaries of JPMorgan Chase & Co., a Delaware
bank holding company holding company. The Advisors are registered as
investment advisers under the Investment Advisers Act of 1940 and serve
as investment adviser to the Funds. The Distributor, a Delaware
corporation and a direct, wholly-owned subsidiary of JPMorgan Chase &
Co., is registered as a broker-dealer under the Securities Exchange Act
of 1934 Act (``Exchange Act'') and serves as the distributor for the
Funds.
Applicants Legal Analysis
1. Section 12(d)(1)(A) of the Act provides that no registered
investment
[[Page 12783]]
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.
2. Section 12(d)(1)(G) of the Act provides that section 12(d)(1)
will not apply to securities of an acquired company purchased by an
acquiring company if: (i) The acquiring company and acquired 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 management 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 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: (1)
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; (2) securities (other
than securities issued by an investment company); and (3) 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 provisions 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 proposed arrangement would comply with
the provisions of rule 12d1-2 under the Act, but for the fact that the
Funds of 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 Funds of Funds to
invest in Other Investments. Applicants assert that permitting the
Funds of 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' Conditions
Applicants agree that the order granting the requested relief will
be subject to the following conditions:
1. Before approving any advisory contract under section 15 of the
Act, the board of trustees of a Fund of Funds, including a majority of
the trustees who are not interested persons, as defined in section
2(a)(19) of the Act, will find that the advisory fees, if any, charged
under the contract are based on services provided that are in addition
to, rather than duplicative of, services provided pursuant to any
Underlying Fund's advisory contract or the advisory contract of any
other investment company in which the Funds of Funds may invest. Such a
finding, and the basis upon which it was made, will be recorded fully
in the minute books of the Fund of Funds.
2. Each Fund of Funds 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 of Funds from investing in Other Investments as
described in the application.
For the Commission, by the Division of Investment Management,
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-4616 Filed 3-7-08; 8:45 am]
BILLING CODE 8011-01-P