[Federal Register: December 31, 2008 (Volume 73, Number 251)]
[Notices]
[Page 80452-80454]
[DOCID:fr31de08-102]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC--28569; 812-13609]

UBS Securities LLC, et al.; Notice of Application and Temporary
Order

December 23, 2008.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Temporary order and notice of application for a permanent order
under section 9(c) of the Investment Company Act of 1940 (``Act'').

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    Summary of Application: Applicants have received a temporary order
exempting them from section 9(a) of the Act, with respect to an
injunction entered against UBS Securities LLC (``UBS Securities'') and
UBS Financial Services Inc. (``UBSFS,'' and together with UBS
Securities, the ``Settling Firms'') on December 23, 2008 by the United
States District Court for the Southern District of New York
(``Injunction'') until the Commission takes final action on an
application for a permanent order. Applicants also have applied for a
permanent order.
    Applicants: UBS Securities; UBSFS; UBS Fund Advisor, L.L.C.
(``UBSFA''); UBS Willow Management, L.L.C. (``UBS Willow''), UBS
Eucalyptus Management, L.L.C., UBS Tamarack Management, L.L.C., UBS
Juniper Management, L.L.C., and UBS Enso Management L.L.C.
(collectively, ``UBSFA Advisers''); UBS Global Asset Management
(Americas) Inc. (``UBS Global AM Americas''); UBS Global Asset
Management (US) Inc. (``UBS Global AM US''); and UBS AG and UBS IB Co-
Investment 2001 GP Limited (``ESC GP'') (together, other than UBS
Securities, ``Fund Servicing Applicants'' and together with UBS
Securities, the ``Applicants'').\1\
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    \1\ Applicants request that any relief granted pursuant to the
application also apply to any other company of which either of the
Settling Firms is or may become affiliated persons (together with
the Applicants, the ``Covered Persons'').
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    Filing Dates: The application was filed on December 16, 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 January 15, 2009, 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, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-1090; Applicants: UBS Securities, 299
Park Avenue, New York, NY 10171; UBSFS, 1200 Harbor Boulevard,
Weehawken, NJ 07086; UBSFA, UBSFA Advisers, and UBS Global AM US, 51
West 52nd Street, New York, NY 10019; UBS Global AM Americas, One North
Wacker Drive, Chicago, IL 60606; and UBS AG and ESC-GP, 677 Washington
Boulevard, Stamford, CT 06901.

FOR FURTHER INFORMATION CONTACT: John Yoder, Senior Counsel, at 202-
551-6878 or Julia Kim Gilmer, Branch Chief, at<PHONE_NUMBER> (Division
of Investment Management, Office of Investment Company Regulation).

SUPPLEMENTARY INFORMATION: The following is a temporary order and
summary of the application. The

complete application may be obtained for a fee at the Commission's
Public Reference Room, 100 F Street, NE., Washington, DC 20549-1520
(tel.<PHONE_NUMBER>).

Applicants' Representations

    1. UBS AG is a bank established under the laws of Switzerland that
directly or through its subsidiaries provides global wealth management,
securities and retail and commercial banking services. Each of the
Applicants are either directly or indirectly controlled by UBS AG. UBS
Securities is a full service investment banking firm engaged in
securities underwriting, sales and trading, investment banking,
financial advisory services and investment research services. UBSFS,
UBSFA, UBSFA Advisers and UBS Global AM Americas are registered as
investment advisers under the Investment Advisers Act of 1940 and
currently serve as investment advisers to registered management
investment companies (``Funds''). UBSFS and UBS Global AM U.S. are
registered as broker-dealers under the Securities Exchange Act of 1934
(``Exchange Act'') and act as principal underwriter to various open-end
Funds and unit investment trusts (``UITs''). UBSFS also serves as a
depositor to UITs. UBS AG and ESC GP provide investment advisory
services to employees' securities companies (``ESCs''), as defined in
section 2(a)(13) of the Act, which provide investment opportunities for
highly compensated key employees, officers, directors and current
consultants of UBS AG and its affiliates.
    2. On December 23, 2008, the United States District Court for the
Southern District of New York entered a judgment, which included the
Injunction, against the Settling Firms (``Judgment'') in a matter
brought by the Commission.\2\ The Commission alleged in the complaint
(``Complaint'') that the Settling Firms violated section 15(c) of the
Exchange Act in connection with the marketing and sale of auction rate
securities (``ARS''). The Complaint alleged that the Settling Firms
misled their customers regarding the fundamental nature and increasing
risks associated with ARS that the Settling Firms underwrote, marketed
and sold. The Complaint further alleged that the Settling Firms
misrepresented to their customers that ARS were safe, highly liquid
investments that were equivalent to cash or money-market funds. Without
admitting or denying any of the allegations in the Complaint, except as
to jurisdiction, the Settling Firms consented to the entry of the
Injunction and other equitable relief, including undertakings to take
various remedial actions for the benefit of purchasers of certain ARS.
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    \2\ Securities and Exchange Commission v. UBS Securities LLC and
UBS Financial Services Inc., Judgment as to UBS Securities LLC and
UBS Financial Services Inc., 1:08-CV-10754 (S.D.N.Y.) (entered Dec.
23, 2008).
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Applicants' Legal Analysis

    1. Section 9(a)(2) of the Act, in relevant part, prohibits a person
who has been enjoined from engaging in or continuing any conduct or
practice in connection with the purchase or sale of a security, or in
connection with activities as an underwriter, broker or dealer, from
acting, among other things, as an investment adviser or depositor of
any registered investment company or a principal underwriter for any
registered open-end investment company, registered unit investment
trust, or registered face-amount certificate company. Section 9(a)(3)
of the Act makes the prohibition in section 9(a)(2) applicable to a
company, any affiliated person of which has been disqualified under the
provisions of section 9(a)(2). Section 2(a)(3) of the Act defines
``affiliated person'' to include, among others, any person directly or
indirectly controlling, controlled by, or under common control, with
the other person. Applicants state that the Settling Firms are
affiliated persons of each of the other Applicants within the meaning
of section 2(a)(3). Applicants state that, as a result of the
Injunction, they would be subject to the prohibitions of section 9(a).
    2. Section 9(c) of the Act provides that the Commission shall grant
an application for exemption from the disqualification provisions of
section 9(a) of the Act if it is established that these provisions, as
applied to Applicants, are unduly or disproportionately severe or that
the conduct of the Applicants has been such as not to make it against
the public interest or the protection of investors to grant the
exemption. Applicants have filed an application pursuant to section
9(c) seeking a temporary and permanent order exempting the Applicants
and the other Covered Persons from the disqualification provisions of
section 9(a).
    3. Applicants believe that they meet the standards for exemption
specified in section 9(c). Applicants state that the prohibitions of
section 9(a) as applied to them would be unduly and disproportionately
severe and that the conduct of Applicants has been such as not to make
it against the public interest or the protection of investors to grant
the requested exemption from section 9(a).
    4. Applicants state that the alleged conduct giving rise to the
Injunction did not involve any of the Applicants acting in the capacity
of investment adviser, sub-adviser or depositor to any registered
investment company or in the capacity of principal underwriter for any
open-end Fund or UIT (``Fund Service Activities''). Applicants note
that none of the current or former directors, officers, or employees of
the Applicants (other than the Settling Firms) had any involvement in
the conduct alleged in the Complaint, except as noted in footnote 3.\3\
Applicants further state that the personnel at the Settling Firms who
were involved in the violations alleged in the Complaint have had no
and will not have any future involvement in Fund Service Activities.
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    \3\ The Complaint alleges that several senior executives of the
Settling Firms sold all or some of their personal auction rate
securities holdings after becoming aware of undisclosed risk factors
associated with the auction rate securities program, including
concerns about the Settling Firms' ability and willingness to
support the auctions. Certain of these officers or employees may
also have been officers or employees of UBS AG. These officers or
employees have had no involvement in Applicants' Fund Service
Activities and are either no longer employed by the Settling Firms
or UBS AG or are not and will not have any involvement in
Applicants' Fund Service Activities.
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    5. Applicants state that the inability of the Applicants to engage
in Fund Service Activities would result in potentially severe financial
hardships for the registered investment companies they serve and the
registered investment companies' shareholders or unitholders.
Applicants state that they will distribute written materials, including
an offer to meet in person to discuss the materials, to the boards of
directors of the Funds (the ``Boards''), including the directors who
are not ``interested persons,'' as defined in section 2(a)(19) of the
Act, of such Funds, and their independent legal counsel as defined in
rule 0-1(a)(6) under the Act, if any, regarding the Injunction, any
impact on the Funds, and the application. Applicants state that they
will provide the Boards with all information concerning the Injunction
and the application that is necessary for the Funds to fulfill their
disclosure and other obligations under the federal securities laws.
    6. Applicants also state that, if they were barred from providing
Fund Service Activities to registered investment companies and ESCs,
the effect on their businesses and employees would be severe.
Applicants state that they have committed substantial resources to
establish an

expertise in providing Fund Service Activities. Applicants further
state that prohibiting them from providing advisory and distribution
services would not only adversely affect their businesses, but would
also adversely affect over 450 employees that are involved in those
activities. Applicants also state that disqualifying UBS AG and ESC GP
from continuing to provide investment advisory services to ESCs is not
in the public interest or in furtherance of the protection of
investors. Because the ESCs have been formed for the benefit of key
employees, officers, directors and current consultants of UBS AG and
its affiliates, it would not be consistent with the purposes of the ESC
provisions of the Act to require another entity not affiliated with UBS
AG to manage the ESCs. In addition, participants in the ESCs have
subscribed for interests in the ESCs with the expectation that the ESCs
would be managed by an affiliate of UBS AG.
    7. Applicants state that UBS Securities and certain other
Applicants have previously received an order under section 9(c) of the
Act.\4\ Applicants also state that affiliated persons of UBS Securities
previously have received exemptions under section 9(c) as the result of
conduct that triggered section 9(a), as described in greater detail in
the application.
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    \4\ UBS Securities L.L.C., et al., Investment Company Act Rel.
Nos. 26245 (Oct. 31, 2003) (notice) and 27047 (Apr. 25, 2005)
(order).
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Applicants' Condition

    Applicants agree that any order granting the requested relief will
be subject to the following condition:
    Any temporary exemption granted pursuant to the application shall
be without prejudice to, and shall not limit the Commission's rights in
any manner with respect to, any Commission investigation of, or
administrative proceedings involving or against, Covered Persons,
including without limitation, the consideration by the Commission of a
permanent exemption from section 9(a) of the Act requested pursuant to
the application or the revocation or removal of any temporary
exemptions granted under the Act in connection with the application.

Temporary Order

    The Commission has considered the matter and finds that the
Applicants have made the necessary showing to justify granting a
temporary exemption.
    Accordingly,
    It is hereby ordered, pursuant to section 9(c) of the Act, that
Applicants and any other Covered Persons are granted a temporary
exemption from the provisions of section 9(a), solely with respect to
the Injunction, subject to the condition in the application, from
December 23, 2008, until the Commission takes final action on their
application for a permanent order.

    By the Commission.
Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-31087 Filed 12-30-08; 8:45 am]

BILLING CODE 8011-01-P


			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on April 7, 2004

NOTICE OF ACTION TAKEN -- DOCKET OST 1997-2272

________________________________________________________________________
________________________________________________________

This serves as notice to the public of the action described below, taken
by the Department official indicated (no additional confirming order
will be issued in this matter).

Applicant:  COMPANIA MEXICANA de AVIACION, S.A. de C.V.
         Date Filed:  March 18, 2004

Relief requested:  Exemption from 49 USC section 41301 to permit the
applicant to continue to conduct scheduled, combination service between
Mexico City, Mexico, and Las Vegas, Nevada.

If renewal, date and citation of last action:  April 14, 2003, in this
Docket.

Applicant representative:  Charles F. Donley II,<PHONE_NUMBER>      DOT
analyst:  Allen F. Brown,<PHONE_NUMBER>

Responsive pleadings:  None.

	DISPOSITION

Action:  Approved.
                                           Action date:  April 7, 2004

Effective dates of authority granted:  April 7, 2004, through April 14,
2005.

Basis for approval (bilateral agreement/reciprocity):  United
States-Mexico Air Transport Services Agreement.

Except to the extent exempted/waived, this authority is subject to the
terms, conditions, and limitations indicated:  Standard exemption
conditions.

Special conditions/Remarks:

Action taken by:   Paul L. Gretch, Director, Office of International
Aviation

________________________________________________________________________
______________________________________________________

Under authority assigned by the Department in its regulations, 14 CFR
Part 385, we found that (1) our action was consistent with Department
policy; (2) grant of the authority was consistent with the public
interest; and (3) grant of the authority would not constitute a major
regulatory action under the Energy Policy and Conservation Act of 1975.
To the extent not granted/deferred/dismissed, we denied all requests in
the referenced Docket.  We may amend, modify, or revoke the authority
granted in this Notice at any time without hearing at our discretion.

Persons entitled to petition the Department for review of the action set
forth in this Notice under the Department’s regulations, 14 CFR
§385.30, may file their petitions within seven (7) days after the date
of issuance of this Notice.  This action was effective when taken, and
the filing of a petition for review will not alter such effectiveness.

An electronic version of this document is available on the World Wide
Web at:

http://dms.dot.gov//reports/reports_aviation.asp