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Federal Register / Vol. 72, No.

220 / Thursday, November 15, 2007 / Notices 64255

from sections 18(c) and 18(i) to permit Investment Company Act of 1940 (the 100 F Street, NE., Washington, DC
the Funds to issue multiple classes of ‘‘Act’’) exempting applicants from all 20549–0102 (tel. 202–551–5850).
shares. provisions of the Act, except section 9
4. Applicants submit that the Applicants’ Representations
and sections 36 through 53, and the
proposed allocation of expenses and rules and regulations under the Act. 1. Sonnenschein is a law firm
voting rights among multiple classes is With respect to sections 17 and 30 of the organized as a Delaware limited liability
equitable and will not discriminate Act, and the rules and regulations partnership. The Firm and its
against any group of shareholders. thereunder, and rule 38a–1 under the ‘‘affiliates,’’ as defined in rule 12b–2
Applicants submit that the proposed Act, the exemption is limited as set under the Securities Act of 1934 (the
arrangements would permit a Fund to forth in the application. ‘‘Exchange Act’’), are referred to
facilitate the distribution of its shares collectively as the ‘‘Sonnenschein
and provide investors with a broader SUMMARY OF APPLICATION: Applicants Group’’ and individually as a
choice of shareholder services. request an order to exempt certain ‘‘Sonnenschein Entity.’’
Applicants assert that the proposed investment vehicles formed for the 2. The Investment Fund is a Delaware
closed-end investment company benefit of partners and key eligible limited liability company. The
multiple class structure does not raise current and former employees of applicants may in the future offer
the concerns underlying section 18 of Sonnenschein Nath & Rosenthal LLP additional pooled investment vehicles
the Act to any greater degree than open- (‘‘Sonnenschein’’ or the ‘‘Firm’’) and identical in all material respects (other
end investment companies’ multiple certain of its affiliates from certain than form of organization, investment
class structures that are permitted by provisions of the Act. Each such entity objective and strategy) to the Investment
rule 18f–3 under the Act. Applicants will be an ‘‘employees’’ securities Fund (each, an ‘‘Additional Fund’’)
state that each Fund will comply with company’’ within the meaning of (together, the Investment Fund and the
the provisions of rule 18f–3 as if it were section 2(a)(13) of the Act. Additional Fund are referred to as the
an open-end investment company. APPLICANTS: Tower 21st Century Fund ‘‘Funds’’). The applicants anticipate that
5. Applicants also state that because LLC (the ‘‘Investment Fund’’) and each Additional Fund will also be
the Funds, like open-end investment Sonnenschein. structured as a limited liability
companies, will continuously offer their FILING DATES: The application was filed company, although an Additional Fund
shares and offer investors a variety of on July 2, 2002, and amended on could be structured, either domestically
distribution channels and service fees, December 30, 2003, July 7, 2004, March or, or for tax purposes, offshore, as a
they will comply with rule 12b–1 and 12, 2007 and November 7, 2007. general partnership, limited
6c–10 under the Act as if those rules partnership, corporation or other
HEARING OR NOTIFICATION OF HEARING:
applied to the Funds. business organization formed as an
An order granting the application will
‘‘employees’ securities company’’
Applicants’ Condition be issued unless the Commission orders
within the meaning of section 2(a)(13) of
Applicants agree that any order a hearing. Interested persons may
the Act. Each Fund will operate as a
granting the requested relief will be request a hearing by writing to the
non-diversified, closed-end
subject to the following condition: Commission’s Secretary and serving
management investment company. The
Each Fund relying on the order will applicants with a copy of the request,
Funds will be established to enable the
comply with the provisions of rules 6c– personally or by mail. Hearing requests
Partners (as defined below) and certain
10, 12b–1 and 18f–3 under the Act, as should be received by the Commission
employees of the Sonnenschein Group
amended from time to time, as if those by 5:30 p.m. on December 3, 2007, and
to participate in certain investment
rules applied to closed-end management should be accompanied by proof of
opportunities that come to the attention
investment companies, and will comply service on applicants, in the form of an
of the Sonnenschein Group.
with NASD Conduct Rule 2830(d), as affidavit or, for lawyers, a certificate of
Participation as investors in the Funds
amended from time to time, as if that service. Hearing requests should state
will allow the Eligible Investors (as
rule applied to all closed-end the nature of the writer’s interest, the
defined below) to diversify their
management investment companies. reason for the request, and the issues
investments and to have the opportunity
contested. Persons who wish to be
For the Commission, by the Division of to participate in investments that might
notified of a hearing may request
Investment Management, under delegated not otherwise be available to them or
authority. notification by writing to the
that might be beyond their individual
Commission’s Secretary.
Florence E. Harmon, means.
ADDRESSES: Secretary, U.S. Securities 3. The Funds will each be managed by
Deputy Secretary.
and Exchange Commission, 100 F an investment committee (‘‘Investment
[FR Doc. E7–22204 Filed 11–14–07; 8:45 am]
Street, NE., Washington, DC 20549– Committee’’), each member of which
BILLING CODE 8011–01–P
9303. Applicants, c/o Paul J. Miller, shall be a Partner of the Firm. The Firm
Esq., Sonnenschein Nath & Rosenthal will initially appoint the members
SECURITIES AND EXCHANGE LLP, 7800 Sears Tower, Chicago, Illinois (each, a ‘‘Manager’’ of the Fund) of each
COMMISSION 60611. Investment Committee and vacancies
FOR FURTHER INFORMATION CONTACT: Jaea thereafter will be filled by vote of the
[Investment Company Act Release No. F. Hahn, Senior Counsel, at (202) 551–
28046; 813–350]
remaining Managers. The Managers or
6870, or Nadya B. Roytblat, Assistant any person involved in the operation of
Tower 21st Century Fund LLC, et al.; Director, at (202) 551–6821 (Division of the Funds will register as an investment
Notice of Application Investment Management, Office of adviser if required under the Investment
Investment Company Regulation). Advisers Act of 1940, or the rules under
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November 8, 2007. SUPPLEMENTARY INFORMATION: The that Act.


AGENCY: Securities and Exchange following is a summary of the 4. Interests in the Funds (‘‘Interests’’)
Commission (‘‘Commission’’). application. The complete application will be offered without registration in
ACTION: Notice of application for an may be obtained for a fee at the reliance on section 4(2) of the Securities
order under sections 6(b) and 6(e) of the Commission’s Public Reference Branch, Act of 1933 (the ‘‘Securities Act’’) or

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64256 Federal Register / Vol. 72, No. 220 / Thursday, November 15, 2007 / Notices

Regulation D under the Securities Act, these would not provide useful investment would violate applicable
or any successor rule. Interests will be information to Members because each law or regulation.
offered solely to Sonnenschein Entities Member will generally have differing 8. Each Fund will bear its own
or persons (each an ‘‘Eligible Investor’’) interest in the Fund’s various expenses. The Firm may be reimbursed
who, at the time of the offer, are either investments made since he or she by a Fund for reasonable services and
‘‘Eligible Employees’’ or ‘‘Qualified became a Member, and will not have an necessary out-of-pocket costs directly
Investment Vehicles’’. ‘‘Eligible economic interest in the holdings of the associated with the organization and
Employees’’ are (a) equity, non-equity, Fund on a consolidated basis. In operation of the Funds, including
special and retired partners and any addition, as soon as practicable after the administrative and overhead expenses.
other category of partners of the Firm end of each fiscal year, the Funds will There will be no allocation of any of the
(‘‘Partners’’), (b) current and former send a report to each Member setting Firm’s operating expenses to a Fund. No
lawyers who are of counsel to the Firm, forth such tax information as shall be management fee or other compensation
and (c) certain current and former key necessary for the preparation by the will be paid by the Fund or its Members
employees of the Firm involved in the Member of his or her federal and state to the Investment Committee or the
Firm’s non-legal business activities tax returns. Managers for their services in such
including its administrative, finance 6. A Member will be permitted to capacity.
and accounting, and marketing transfer his or her Interests only to a 9. The Funds may borrow from
activities, who in each case meet the Qualified Investment Vehicle or to an Sonnenschein Group, a Partner, or a
standards of an ‘‘accredited investor’’ Eligible Employee as permitted by the bank or other financial institution,
set forth in rule 501(a)(5) or rule Investment Committee in its sole provided that a Fund will not borrow
501(a)(6) of Regulation D under the discretion, or on death, by will, trust or from any person if the borrowing would
Securities Act.1 A ‘‘Qualified otherwise in accordance with the laws cause any person not named in section
Investment Vehicle’’ is a trust or other of descent and distribution, or to 2(a)(13) of the Act to own outstanding
entity the sole beneficiaries of which are another Member.3 Capital contributions
securities of the Fund (other than short-
an Eligible Employee, or one or more of made to a Fund by its Members will be
term paper). Any borrowings by a Fund
his or her ‘‘Immediate Family Members’’ placed in a liquid capital account
will be non-recourse to Members. If a
(parent, spouse, child, brother or sister, (‘‘LCA’’) to the credit of the contributor,
Sonnenschein Entity or a Partner makes
spouse of child and any step or adoptive pending the purchase price for an
a loan to the Funds, the interest rate on
relationship) or as to which the Eligible investment. Interests in the LCA may be
the loan will be no less favorable to the
Employee is settlor or the principal repurchased upon request by Members,
Funds than the rate that could be
decision maker and the primary in whole or in part, by notice to the
obtained on an arm’s length basis.
beneficiaries of which are one or more Investment Committee. Interests in
separate accounts for investments may 10. A Fund will not acquire any
of his or her Immediate Family
Members, which trust or other entity be repurchased only with the agreement security issued by a registered
meets the standards of an ‘‘accredited of the Investment Committee. No fee of investment company if immediately
investor’’ set forth in rule 501(a) of any kind will be charged in connection after the acquisition the Fund would
Regulation D under the Securities Act.2 with the sale of Interests. own more than 3% of the outstanding
Prior to offering Interests to an 7. A Member will not be permitted to voting stock of the registered investment
individual, the Investment Committee participate in any investment made by company.
must reasonably believe that the the Fund after that Member enters any Applicants’ Legal Analysis
individual is a sophisticated investor of the following categories: (a) A
capable of understanding and evaluating Member who has notified the 1. Section 6(b) of the Act provides, in
the risks of participating in the Fund Investment Committee before the part, that the Commission will exempt
without the benefit of regulatory effective date of the Investment employees’ securities companies from
safeguards. Each investor in a Fund Committee’s investment decision to the provisions of the Act to the extent
shall be a ‘‘Member’’ of such Fund. make an investment, which notice, that the exemption is consistent with
5. Each Eligible Investor will receive except in the absolute discretion of the the protection of investors. Section 6(b)
a copy of the Fund’s organizational Investment Committee, is irrevocable for provides that the Commission will
documents and the Application prior to one year, that that Member will not consider, in determining the provisions
his or her investment in such Fund. participate in future investments; (b) a of the Act from which the company
Each Fund will send its Members Member who ceases to be an Eligible should be exempt, the company’s form
annual reports as soon as practicable Investor when the Investment of organization and capital structure, the
after the end of each fiscal year. The Committee determines to make an persons owning and controlling its
annual report of a Fund will not contain investment; (c) a Member who the securities, the price of the company’s
financial statements of the Fund, since Investment Committee determines is no securities and the amount of any sales
longer able to bear the economic risk of load, how the company’s funds are
1 Any such former Partners, of counsel or
further investment; (d) a Member whose invested, and the relationship between
employees will maintain a sufficiently close nexus aliquot share would be below a required the company and the issuers of the
with the Firm so as to preserve the community of securities in which it invests. Section
interest between the Eligible Employee and the minimum; (e) a Member whose
Firm. continued membership would have 2(a)(13) defines an employees’ securities
2 The inclusion of entities controlled by an
adverse tax consequences to the Fund; company as any investment company
Eligible Employee in the definition of Eligible or (f) a Member whose continued all of whose securities (other than short-
Investor is intended to enable Eligible Employees term paper) are beneficially owned (a)
and their Immediate Family Members to make
by current or former employees, or
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3 No person may become a transferee or substitute


investments in the Funds through private
investment vehicles for the purpose of personal and Member unless that person is a member of one of persons on retainer, of one or more
family investment and estate planning objectives. the classes listed in section 2(a)(13) of the Act, affiliated employers, (b) by immediate
Eligible Employees will exercise investment except that a legal representative or executor may
discretion and control over these investment hold an interest in a Fund in order to settle the
family members of such persons, or (c)
vehicles, thereby creating a close nexus between the estate of a decedent or bankrupt for similar by such employer or employers together
Firm and these investment vehicles. purposes. with any of the persons in (a) or (b).

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Federal Register / Vol. 72, No. 220 / Thursday, November 15, 2007 / Notices 64257

2. Section 7 of the Act generally financially sophisticated professionals, lockstep procedures described in
prohibits investment companies that are Eligible Investors will be able to condition 4 below. Applicants assert
not registered under section 8 of the Act evaluate the attendant risks. Applicants that the flexibility to structure co-
from selling or redeeming their assert that the community of interest investments and joint investments will
securities. Section 6(e) provides that, in among the Members and the Firm will not involve abuses of the type section
connection with any order exempting an provide the best protection against any 17(d) and rule 17d–1 were designed to
investment company from any provision risk of abuse. prevent.
of section 7, certain provisions of the 5. Section 17(d) of the Act and rule 7. Section 17(f) of the Act designates
Act, as specified by the Commission, 17d-1 under the Act prohibit any the entities that may act as investment
will be applicable to the company and affiliated person or principal company custodians, and rule 17f–2
other persons dealing with the company underwriter of a registered investment allows an investment company to act as
as though the company were registered company, or any affiliated person of an self-custodian, subject to certain
under the Act. Applicants request an affiliated person or principal requirements. Applicants request an
order under sections 6(b) and 6(e) of the underwriter, acting as principal, from exemption from section 17(f) and rule
Act exempting the Funds from all participating in any joint arrangement 17f–2 to permit the following exceptions
provisions of the Act, except section 9 with the company unless authorized by from the requirements of rule 17f–2: (a)
and sections 36 through 53, and the the Commission. Applicants request A Fund’s investments may be kept in
rules and regulations under the Act. relief to permit affiliated persons of each the locked files of the Firm or of a
With respect to sections 17 and 30 of the Fund, or affiliated persons of any of Partner; (b) for purposes of paragraph
Act, and the rules and regulations these persons, to participate in any joint (d) of the rule, (i) Partners and
thereunder, and rule 38a–1 under the arrangement in which the Fund is a employees of the Firm will be deemed
Act, the exemption is limited as set participant. Joint transactions in which employees of the Funds, (ii) each
forth in the application. a Fund may participate could include Manager of a Fund will be deemed to be
3. Section 17(a) generally prohibits the following: (a) An investment by one an officer of such Fund; and (iii) the
any affiliated person of a registered or more Funds in a security in which Investment Committee of a Fund will be
investment company, or any affiliated the Firm or its affiliated person deemed to be the board of directors of
person of an affiliated person, acting as (including Partners of the Firm), or the Fund; and (c) in place of the
principal, from knowingly selling or another Fund, is a participant, or with verification procedures under paragraph
purchasing any security or other respect to which the Firm or an (f) of the rule, verification will be
property to or from the company. affiliated person is entitled to receive effected quarterly by two employees of
Applicants request an exemption from fees (including, but not limited to, legal the Firm. Applicants assert that the
section 17(a) to permit a Fund to: (a) fees, consulting fees, or other economic securities held by the Funds are most
Purchase, from the Firm or any affiliated benefits or interests); (b) an investment suitably kept in the Firm’s files, where
person thereof, securities or interests in by one or more Funds in an investment they can be referred to as necessary.
properties previously acquired for the vehicle sponsored, offered or managed 8. Section 17(g) and rule 17g–1
account of the Firm or any affiliated by the Firm; and (c) an investment by generally require the bonding of officers
person thereof; (b) sell, to the Firm or one or more Funds in a security in and employees of a registered
any affiliated person thereof, securities which an affiliate is or may become a investment company who have access to
or interests in properties previously participant. its securities or funds. Rule 17g–1
acquired by the Funds; (c) invest in 6. Applicants state that compliance requires that a majority of directors who
companies, partnerships or other with section 17(d) would cause the are not interested persons
investment vehicles offered, sponsored Funds to forego investment (‘‘disinterested directors’’) take certain
or managed by the Firm or any affiliated opportunities simply because a Member, actions and give certain approvals
person thereof; (d) to invest in securities the Firm or other affiliates of the Fund relating to fidelity bonding. Paragraph
of issuers for which the Firm or any also had made or contemplated making (g) of rule 17g–1 sets forth certain
affiliated person thereof have performed a similar investment. In addition, materials relating to the fidelity bond
services and from which they may have because investment opportunities of the that must be filed with the Commission
received fees; (e) purchase interests in types considered by the Funds often and certain notices relating to the
any company or other investment require that each participant make fidelity bond that must be given to each
vehicle (i) in which the Firm owns 5% available funds in an amount that may member of the investment company’s
or more of the voting securities, or (ii) be substantially greater than that board of directors. Paragraph (h) of rule
that otherwise is an affiliated person of available to the investor alone, there 17g–1 provides that an investment
the Fund (or an affiliated person of such may be certain attractive opportunities company must designate one of its
a person) or an affiliated person of the of which a Fund may be unable to take officers to make the filings and give the
Firm; and (f) to participate as a selling advantage except as a co-participant notices required by paragraph (g).
securityholder in a public offering in with other persons, including affiliates. Paragraph (j) of rule 17g–1 exempts a
which the Firm or any affiliated person Applicants note that, in light of the joint insured bond provided and
thereof acts as or represents as counsel Firm’s purpose of establishing the maintained by an investment company
a member of the selling group or the Funds so as to reward Eligible Investors and one or more other parties from
issuer or underwriter. and to attract highly qualified personnel section 17(d) of the Act and the rules
4. Applicants state that an exemption to the Firm, the possibility is minimal thereunder. Rule 17g–1(j)(3) requires
from section 17(a) is consistent with the that an affiliated party investor will that the board of directors of an
protection of investors and the purposes enter into a transaction with a Fund investment company satisfy the fund
of the Act. Applicants state that the with the intent of disadvantaging the governance standards defined in rule 0–
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Members will be informed by the Fund. Finally, applicants contend that 1(a)(7).
offering materials for a Fund of the the possibility that a Fund may be 9. Applicants request an exemption
possible extent of the Fund’s dealings disadvantaged by the participation of an from section 17(g) and rule 17g–1 to the
with the Firm or any affiliated person affiliate in a transaction will be extent necessary to permit each Fund to
thereof. Applicants also state that, as minimized by compliance with the comply with rule 17g–1 without the

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64258 Federal Register / Vol. 72, No. 220 / Thursday, November 15, 2007 / Notices

necessity of having a majority of the Applicants request exemptive relief to subject to examination by the
disinterested directors take such action the extent necessary to permit each Commission and its staff. All such
and make such approvals as are set forth Fund to report annually to its Members. records will be maintained in an easily
in the rule. Specifically, each Fund will Applicants also request an exemption accessible place for at least the first two
comply by having the Investment from section 30(h) to the extent years.
Committee take such actions and make necessary to exempt the Managers of 2. If purchases or sales are made by
such approvals as are set forth in rule each Fund and any other persons who a Fund from or to an entity affiliated
17g–1. Applicants state that, because the may be deemed members of an advisory with the Fund by reason of a Partner or
Managers will be interested persons of board of a Fund from filing Forms 3, 4 employee of the Sonnenschein Group
the Fund, a Fund could not comply and 5 under section 16 of the Exchange (a) serving as an officer, director, general
with rule 17g–1 without the requested Act with respect to their ownership of partner or investment adviser of the
relief. Applicants also request an Interests in the Fund. Applicants assert entity, or (b) having a 5% or more
exemption from the requirements of rule that, because there will be no trading investment in the entity, such
17g–1(g) and (h) relating to the filing of market and the transfers of Interests will individual will not participate in the
copies of fidelity bonds and related be severely restricted, these filings are Fund’s determination of whether or not
information with the Commission and unnecessary for the protection of to effect the purchase or sale.
the provision of notices to the board of investors and burdensome to those 3. The Investment Committee will
directors and from the requirements of required to make them. adopt, and periodically review and
rule 17g–1(j)(3). Applicants believe the 12. Rule 38a–1 requires investment update, procedures designed to ensure
filing requirements are burdensome and companies to adopt, implement and that reasonable inquiry is made, prior to
unnecessary as applied to the Funds. periodically review written policies and the consummation of any Section 17
The Investment Committee will procedures reasonably designed to Transaction, with respect to the possible
maintain the materials otherwise prevent violation of the federal involvement in the transaction of any
required to be filed with the securities laws and to appoint a chief affiliated person or promoter of or
Commission by rule 17g–1(g) and agree compliance officer. The Funds will principal underwriter for the Funds, or
that all such material will be subject to comply with rule 38a–1(a), (c) and (d), any affiliated person of such a person,
examination by the Commission and its except that (a) since the Funds do not promoter, or principal underwriter.
staff. The Investment Committee will have boards of directors, the Investment 4. The Investment Committee will not
designate a person to maintain the Committee will fulfill the acquire for a Fund any investment in
records otherwise required to be filed responsibilities assigned to a Fund’s which a Co-Investor, as defined below,
with the Commission under paragraph board of directors under the rule, and has acquired or proposes to acquire the
(g) of the rule. Applicants also state that (b) since the Managers are not same class of securities of the same
the notices otherwise required to be disinterested persons of the Funds, issuer, where the investment involves a
given to the board of directors would be approval by a majority of the joint enterprise or other joint
unnecessary as the Funds will not have disinterested board members required arrangement within the meaning of rule
boards of directors. The Funds will by rule 38a–1 will not be obtained. 17d–1 in which the Fund and the Co-
comply with all other requirements of Investor are participants, unless any
Applicants’ Conditions such Co-Investor, prior to disposing all
rule 17g–1.
10. Section 17(j) and paragraph (b) of The applicants agree that any order or part of its investment, (a) gives the
rule 17j–1 make it unlawful for certain granting the requested relief will be Investment Committee sufficient, but
enumerated persons to engage in subject to the following conditions: not less than one day’s, notice of its
fraudulent or deceptive practices in 1. Each proposed transaction to which intent to dispose of its investment, and
connection with the purchase or sale of a Fund is a party otherwise prohibited (b) refrains from disposing of its
a security held or to be acquired by a by section 17(a) or section 17(d) and investment unless the participating
registered investment company. Rule rule 17d–1 (each, a ‘‘Section 17 Fund holding such investment has the
17j–1 also requires that every registered Transaction’’) will be effected only if the opportunity to dispose of its investment
investment company adopt a written Investment Committee determines that: prior to or concurrently with, on the
code of ethics and that every access (a) The terms of the Section 17 same terms as, and on a pro rata basis
person of a registered investment Transaction, including the with the Co-Investor. The term ‘‘Co-
company report personal securities consideration to be paid or received, are Investor’’ with respect to any Fund
transactions. Applicants request an fair and reasonable to the Members of means any person who is (a) an
exemption from the requirements of rule the participating Fund and do not ‘‘affiliated person’’ (as defined in
17j–1, except for the anti-fraud involve overreaching of the Fund or its section 2(a)(3) of the Act) of the Fund;
provisions of paragraph (b), because Members on the part of any person (b) the Sonnenschein Group; (c) a
they are unnecessarily burdensome as concerned; and (b) the Section 17 Partner, lawyer, or employee of the
applied to the Funds. Transaction is consistent with the Sonnenschein Group; (d) an investment
11. Applicants request an exemption interests of the Members of the vehicle offered, sponsored, or managed
from the requirements in sections 30(a), participating Fund, the Fund’s by the Firm or an affiliated person of the
30(b) and 30(e), and the rules under organizational documents and the Firm; or (e) an entity in which a
those sections, that registered Fund’s reports to its Members. Sonnenschein Entity acts as a general
investment companies prepare and file In addition, the Investment partner or has a similar capacity to
with the Commission and mail to their Committee will record and preserve a control the sale or other disposition of
shareholders certain periodic reports description of such Section 17 the entity’s securities.
and financial statements. Applicants Transactions, its findings, the The restrictions contained in this
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contend that the forms prescribed by the information or materials upon which its condition, however, shall not be
Commission for periodic reports have findings are based and the basis deemed to limit or prevent the
little relevance to the Funds and would therefor. All such records will be disposition of an investment by a Co-
entail administrative and legal costs that maintained for the life of a Fund and at Investor: (a) To its direct or indirect
outweigh any benefit to the Members. least six years thereafter, and will be wholly-owned subsidiary, to any

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Federal Register / Vol. 72, No. 220 / Thursday, November 15, 2007 / Notices 64259

company (a ‘‘parent’’) of which the Co- SECURITIES AND EXCHANGE in Item IV below. Amex has prepared
Investor is a direct or indirect wholly- COMMISSION summaries, set forth in Sections A, B,
owned subsidiary, or to a direct or and C below, of the most significant
[Release No. 34–56766; File No. SR–Amex–
indirect wholly-owned subsidiary of its aspects of such statements.
2007–114]
parent; (b) to Immediate Family A. Self-Regulatory Organization’s
Members of the Co-Investor or a trust Self-Regulatory Organizations; Statement of the Purpose of, and
established for any such Immediate American Stock Exchange LLC; Notice Statutory Basis for, the Proposed Rule
Family Member; (c) when the of Filing and Immediate Effectiveness Change
investment is comprised of securities of a Proposed Rule Change Relating to
Collection of the Activity Assessment 1. Purpose
that are listed on a national securities
exchange registered under section 6 of Fee Background
the Exchange Act; or (d) when the November 7, 2007. Effective August 6, 2004, the
investment is comprised of securities Pursuant to Section 19(b)(1) of the Commission established new
that are national market system Securities Exchange Act of 1934 procedures that govern the calculation,
securities pursuant to section 11A(a)(2) (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 payment, and collection of fees and
of the Exchange Act and rule 11Aa2–1 notice is hereby given that on October assessments on securities transactions
thereunder. 26, 2007, the American Stock Exchange owed by each national securities
5. The Investment Committee of each LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with exchange and association.6 Pursuant to
the Securities and Exchange the new procedures, each exchange and
Fund will send to each Member who
Commission (‘‘Commission’’) the association must provide data on its
had an interest in that Fund at any time
proposed rule change as described in securities transactions to the
during the fiscal year then ended, Fund Commission using Form R31. Generally,
financial statements. Such financial Items I, II, and III below, which Items
have been substantially prepared by only data obtained from a registered
statements may be unaudited. At the clearing agency may be submitted to the
end of each fiscal year, the Investment Amex. Amex filed the proposal
pursuant to Section 19(b)(3)(A)(ii) of the Commission for this purpose.7 The
Committee will make a valuation or Commission in turn, calculates the
have a valuation made of all of the Act 3 and Rule 19b–4(f)(2) 4 thereunder,
amount of fees and assessments based
assets of the Fund, as of such fiscal year as establishing or changing a due, fee, or
on the aggregate dollar volume of these
other charge applicable to a member,
end in a manner consistent with the transactions and the fee rate in effect at
which renders the proposed rule change
customary practice with respect to the that time and bills the exchange or
effective upon filing with the
valuation of assets of the kind held by association that amount twice annually.
Commission. The Commission is Historically, the Exchange has funded
the Fund. In addition, as soon as publishing this notice to solicit
practicable after the end of each fiscal the payment of these fees by requiring
comments on the proposed rule change members pursuant to Rule 393 to: (i)
year of each Fund, the Managers of the from interested persons.
Fund shall send a report to each person Report on a monthly basis the aggregate
who was a Fund Investor at any time I. Self-Regulatory Organization’s volume of equity sales, aggregate sales
during the fiscal year then ended, Statement of the Terms of Substance of price of those equity sales, and the
the Proposed Rule Change amount of the fee owed; and (ii) submit
setting forth such tax information as
along with the monthly report a check
shall be necessary for the preparation by The Exchange proposes to amend
in the amount of the fee owed. The
the Fund Investor of his or her federal Amex Rule 393 and the Amex Fee
funds collected by the Exchange
and state income tax returns and a Schedule to revise the procedures by
pursuant to Rule 393 for all equity
report of the investment activities of which the Exchange collects fees from securities are then remitted to the
such Fund during such year. its members and member organizations Commission in accordance with Rule
to offset its fee obligations under 31. In addition, the Exchange uses the
6. Each Fund and its Investment
Section 31 of the Act.5 The text of the OCC to collect the funds to offset the
Committee will maintain and preserve,
proposed rule change is available on the payment of Section 31 fees owed based
for the life of that Fund and at least six
Amex’s Web site at http:// on the sales of options and sales of
years thereafter, such accounts, books www.amex.com, Amex’s principal
and other documents as constitute the securities resulting from the exercise of
office, and the Commission’s Public physical delivery options. OCC collects
record forming the basis for the Reference Room.
financial statements and annual reports fees directly from Exchange members
of such Fund to be provided to its II. Self-Regulatory Organization’s through their clearing firms and remits
Members, and agree that all such Statement of the Purpose of, and the amount collected to the Commission
Statutory Basis for, the Proposed Rule on behalf of Amex.
records will be subject to examination
by the Commission and its staff. All Change Proposal
such records will be maintained in an In its filing with the Commission, The Exchange now proposes to amend
easily accessible place for at least the Amex included statements concerning Rule 393 and the Amex Fee Schedule to
first two years. the purpose of, and basis for, the revise the current procedures used to
proposed rule change and discussed any
For the Commission, by the Division of
comments it received on the proposed 6 See Securities Exchange Act Release No. 49928
Investment Management, pursuant to
rule change. The text of these statements (June 28, 2004), 69 FR 1060 (July 7, 2004).
delegated authority.
may be examined at the places specified 7 In connection with these new procedures the
Florence E. Harmon,
pwalker on PROD1PC71 with NOTICES

Commission concluded that the data collected by a


Deputy Secretary. 1 15 registered clearing agency is the most reliable and
U.S.C. 78s(b)(1).
auditable source for covered sales information. The
[FR Doc. E7–22297 Filed 11–14–07; 8:45 am] 2 17 CFR 240.19b–4. National Securities Clearing Corporation (‘‘NSCC’’)
3 15 U.S.C. 78s(b)(3)(A)(ii).
BILLING CODE 8011–01–P is the primary source of data for equity transactions
4 17 CFR 240.19b–4(f)(2).
and the Options Clearing Corporation (‘‘OCC’’) is
5 15 U.S.C. 78ee. the primary source of data for option transactions.

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