[Federal Register: January 3, 2007 (Volume 72, Number 1)]
[Notices]
[Page 171-173]
[DOCID:fr03ja07-77]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54985; File No. SR-NYSE-2006-113]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Extend the Moratorium on the Qualification and Registration of New
Registered Competitive Market Makers and New Competitive Traders,
Governed by Rules 107A and 110, Respectively, for an Additional Six
Months

December 21, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 13, 2006, the New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been substantially prepared by the
Exchange.\3\ The Exchange has designated the proposed rule change as
constituting a ``non-controversial'' rule change under Section
19(b)(3)(A)(iii) of the Act,\4\ and Rule 19b-4(f)(6) thereunder,\5\
which renders the proposal effective upon filing with the Commission.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Certain technical corrections were made throughout the
discussion of the proposed rule change pursuant to a conversation
with NYSE staff. Telephone conversation between Jean Walsh,
Principal Rule Counsel, NYSE, and Sara Gillis, Attorney, Division of
Market Regulation, Commission, on December 18, 2006.
    \4\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \5\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The NYSE proposes to extend for six months the moratorium related
to the qualification and registration of Registered Competitive Market
Makers (``RCMMs'') pursuant to Exchange Rule 107A and Competitive
Traders (``CTs'') pursuant to Exchange Rule 110. The text of the
proposed rule change is available on the NYSE's Web site (http://www.nyse.com
), at the NYSE's Office of the Secretary, and at the

Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to extend for six months the current
moratorium related to the qualification and registration of RCMMs
pursuant to Exchange Rule 107A and CTs pursuant to Exchange Rule 110.
    On September 22, 2005, the Exchange filed SR-2005-63 \6\ (``Filing
2005-63'') with the Commission proposing to implement a moratorium on
the qualification and registration of new RCMMS and CTs in order to
allow the Exchange an opportunity to review the viability of RCMMs and
CTs in the NYSE HYBRID MARKETSM (``Hybrid Market'').\7\
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    \6\ See Securities Exchange Act Release No. 52648 (October 21,
2005), 70 FR 62155 (October 28, 2005) (SR-NYSE-2005-63).
    \7\ See Securities Exchange Act Release No. 53539 (March 22,
2006), 71 FR 16353 (March 31, 2006) (SR-NYSE-2004-05).
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    Subsequent to the submission of Filing 2005-63, the Exchange filed
SR-NYSE-2006-11 \8\ (``Filing 2006-11'') proposing to modify the
moratorium and grant RCMM firms the ability to replace a RCMM who
relinquishes his or her registration and ceases to conduct business as
a RCMM during the moratorium, with a newly qualified and registered
RCMM. The moratorium does not restrict RCMMs from joining any RCMM firm
or becoming or remaining an independent RCMM. Neither does the
moratorium restrict any RCMM firm from hiring any existing RCMMs.
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    \8\ See Securities Exchange Act Release No. 53549 (March 24,
2006), 71 FR 16388 (March 31, 2006) (SR-NYSE-2006-11).
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    Subsequently, the Exchange extended the moratorium, as amended, in
order to allow the Exchange to continue its review during the phasing
in of the Hybrid Market for an additional six months until on or about
December 31, 2006.\9\
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    \9\ See Securities Exchange Act Release No. 54140 (July 13,
2006), 71 FR 41491 (July 21, 2006) (SR-NYSE-2006-48).
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    The Exchange now proposes to extend the moratorium, as amended, for
an additional six months in order to include in its review, data from
the full operation of the Hybrid Market with respect to RCMMs and CTs
that can only be obtained when the remainder of the third phase and the
fourth phase of the Hybrid Market are implemented in the beginning of
2007. This data will allow the Exchange to make a more informed
decision as to the viability of RCMMs and CTs in the Hybrid Market. As
such, the Exchange believes an additional six-month extension of the
moratorium is necessary.
    The Exchange will issue an Information Memo announcing the
extension of the moratorium. The review is currently estimated to be
completed on or about June 29, 2007.
2. Statutory Basis
    The Exchange believes that the basis under the Act for this
proposed rule change is the requirement under Section 6(b)(5) \10\ that
an exchange have rules that are designed to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system and, in general,
to protect investors and the public interest. The moratorium gives the
Exchange time to fully study the future viability of RCMMs and CTs in
order to improve the market. The proposed rule change is a six month
extension of the RCMM and CT moratorium implemented in Filing 2005-63
and modified in Filing 2006-11.
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    \10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received written comments on
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the proposed rule change: (i) Does not significantly affect
the protection of investors or the public interest; (ii) does not
impose any significant burden on competition; and (iii) does not become
operative for 30 days after the date of the filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest, the proposed rule change has
become effective pursuant to Section 19(b)(3)(A) of the Act \11\ and
Rule 19b-4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii)
under the Act, the Exchange is required to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has requested that the Commission waive the 5-day pre-
filing notice requirement. The Commission has determined to waive
this requirement.

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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \13\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \14\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The NYSE has
requested that the Commission waive the 30-day operative delay. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because it will allow the moratorium to continue without interruption
so that the Exchange may have additional time to fully study the future
viability of RCMMs and CTs in the Hybrid Market. For these reasons, the
Commission designates that the proposed rule change become operative
immediately.\15\
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate the rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File Number SR-NYSE-2006-113 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2006-113. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, all

written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room. Copies of the filing
also will be available for inspection and copying at the principal
office of the Exchange. All comments received will be posted without
change; the Commission does not edit personal identifying information
from submissions. You should submit only information that you wish to
make available publicly. All submissions should refer to File Number
SR-NYSE-2006-113 and should be submitted on or before January 24, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6-22448 Filed 12-29-06; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 64 (Thursday, April 3, 2014)]
[Notices]
[Pages 18739-18748]
[FR Doc No: 2014-07424]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-30999; File No. 812-14203]

Minnesota Life Insurance Company, et al.; Notice of Application

March 28, 2014.
AGENCY: Securities and Exchange Commission (``SEC'' or ``Commission'').

ACTION: Notice of application for an order approving the substitution
of certain securities pursuant to Section 26(c) of the Investment
Company Act of 1940, as amended (the ``1940 Act'' or ``Act'') and an
order of exemption pursuant to Section 17(b) of the Act from Section
17(a) of the Act.

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Applicants:  Minnesota Life Insurance Company (``Minnesota Life''),
Variable Annuity Account (``VAA''), Minnesota Life Variable Life
Account (``VLI''), Minnesota Life Variable Universal Life Account
(``VGUL''), Group Variable Universal Life Account (``Private VGUL I''),
Variable Universal Life Account II (``Private VGUL II''), Securian Life
Insurance Company (``Securian Life''), and Securian Life Variable
Universal Life Account (``SVGUL''). Minnesota Life and Securian Life
are referred to individually as a ``Life Company'' and collectively as
``Life Companies.'' VAA, VLI, VGUL, Private VGUL I, Private

VGUL II, and SVGUL are referred to individually as a ``Separate
Account'' and collectively as the ``Separate Accounts.'' The Life
Companies and the Separate Accounts collectively referred to as the
``Section 26 Applicants''. Securian Funds Trust (``SFT''), the Life
Companies and the Separate Accounts are collectively, referred to as
the ``Section 17 Applicants''.

Summary of Application: The Section 26 Applicants seek an order
pursuant to Section 26(c) of the 1940 Act, approving certain proposed
substitutions of securities (the ``Proposed Substitutions''). The
Section 17 Applicants seek an order of exemption pursuant to Section
17(b) of the 1940 Act from Section 17(a) of the Act to the extent
necessary to permit them to effectuate the Proposed Substitutions by
redeeming all or a portion of the securities of one or more of certain
existing portfolios in-kind and using those portfolio securities
received from these existing portfolios to purchase shares of
replacement portfolios (the ``In-Kind Transactions''). The date of the
Proposed Substitutions is expected to be on or about May 1, 2014 (the
``Substitution Date'').

DATES:  Filing Date: The application was filed on August 22, 2013, and
an amended and restated application was filed on March 27, 2014.

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 Secretary of the
Commission and serving the 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 April 22, 2014, 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 requester'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 Secretary of the Commission.

ADDRESSES: Secretary, SEC, 100 F Street NE., Washington, DC 20549-1090.
Applicants, Minnesota Life, VAA, VLI, VGUL, Private VGUL I, Private
VGUL II, Securian Life, SVGUL, and SFT, 400 Robert Street North, St.
Paul, Minnesota 55101-2098.

FOR FURTHER INFORMATION CONTACT: Alberto H. Zapata, Senior Counsel, or
Joyce M. Pickholz, Branch Chief, Insured Investments Office, Division
of Investment Management, at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling<PHONE_NUMBER>.

Applicants' Representations

    1. Minnesota Life serves as the depositor of all the Separate
Accounts except for SVGUL. Securian Life serves as the depositor for
SVGUL.
    2. Each of the Separate Accounts is a segregated asset account of
Minnesota Life or Securian Life, as applicable, and was established
under Minnesota law pursuant to resolutions of the applicable Life
Company's Board of Directors to fund the variable annuity contracts,
variable life insurance policies, or variable universal life insurance
policies described in the Application (the ``VA Contracts,'' ``VLI
Policies,'' ``VGUL Policies,'' ``SVGUL Policies,'' ``Private VGUL I
Policies,'' and ``Private VGUL II Policies,'' respectively; each a
``Contract,'' and collectively, the ``Contracts''). Each Separate
Account, except for Private VGUL I and Private VGUL II, is registered
under the 1940 Act as a unit investment trust. Interests under the
Contracts, except for Contracts issued through Private VGUL I and
Private VGUL II, are registered under the Securities Act of 1933, as
amended (the ``1933 Act''). Each Separate Account meets the definition
of ``separate account'' contained in Section 2(a)(37) of the 1940 Act.
    3. Each Separate Account is divided into subaccounts (each a
``Subaccount,'' collectively, the ``Subaccounts''). Each Subaccount
invests in the securities of a single portfolio of an underlying mutual
fund (``Portfolio''). Purchase payments under the Contracts are
allocated to one or more Subaccounts.
    4. The Contracts include the VA Contracts, VLI Policies, VGUL
Policies, SVGUL Policies, Private VGUL I Policies, and Private VGUL II
Policies listed in the Application. The Contracts may be issued as
individual or group Contracts. Contract owners (and participants in
group Contracts) (each a ``Contract Owner,'' and collectively, the
``Contract Owners'') may allocate some or all of their Contract value
(``Contract value'') to one or more Subaccounts that are available as
investment options under the Contracts.
    5. Under the Contracts, the Life Companies reserve the right to
substitute, for the shares of a Portfolio held in any Subaccount, the
shares of another Portfolio. The prospectuses or offering documents, as
applicable, for the Contracts include appropriate disclosure of this
reservation of right.
    6. SFT is registered with the Commission as an open-end management
investment company under the 1940 Act and its securities are registered
under the 1933 Act. SFT was organized as a Delaware statutory trust on
July 8, 2011. SFT's predecessor, Advantus Series Fund, Inc. (``Series
Fund'') was organized as a Minnesota corporation on February 25, 1985.
Effective May 1, 2012, each of the seven then-existing series of the
Series Fund was reorganized into a corresponding ``shell'' series of
SFT (``Series'') pursuant to an agreement and plan of reorganization
approved by a majority of the shareholders of each series of the Series
Fund on October 21, 2011.
    7. SFT currently consists of eight Series. The SFT Board of
Trustees (``Board'') has authorized the creation of four new Series. In
addition to one unaffiliated Portfolio, the Proposed Substitutions will
involve four new Series of SFT. Three of the new SFT Series, T. Rowe
Price Value Fund, Ivy Growth Fund, and Ivy Small Cap Growth Fund, will
offer a single class of shares. The fourth new SFT Series, Pyramis Core
Equity Fund, will offer two classes of shares (Class 1 and Class 2).
Each of the current eight Series offers two classes of shares (Class 1
and Class 2), except that the money market fund and managed volatility
fund offer shares in only one class. Shares of the Series are currently
offered through Minnesota Life and Securian Life separate accounts,
including the Separate Accounts, to fund variable annuities, variable
life insurance policies and variable universal life policies, including
the VA Contracts, VLI Policies, VGUL Policies, SVGUL Policies, Private
VGUL I Policies, and Private VGUL II Policies. Series shares also may
be offered to fund variable annuities, variable life insurance
policies, and variable universal life insurance policies issued by
other insurance companies. Currently, no other life insurance company
invests in any Series. SFT has adopted a plan of distribution pursuant
to rule 12b-1 under the 1940 Act (``Plan''), covering Class 2 shares
and shares of the money market fund and the managed volatility fund
(Class 1 shares are not part of the Plan). Under the Plan, each covered
share class pays a distribution fee which, on an annual basis, is equal
to .25% of the average daily net assets held in such covered share
class.
    8. Advantus Capital Management, Inc. (``Advantus'' or the
``Manager''), an indirect wholly-owned subsidiary of

Minnesota Mutual Companies, Inc., serves as the investment manager of
each of the Series of SFT. Securian Financial Services, Inc., also an
indirect wholly-owned subsidiary of Minnesota Mutual Companies, Inc.,
serves as the distributor for the shares of the Series.
    9. SFT and the Manager may rely on an order from the Commission (In
the Matter of Advantus Capital Management, Inc., et al., Investment
Company Act Release No. 23008 (Jan. 27, 1998) File No. 812-10542 (the
``Manager of Managers Order'')) that permits the Manager, subject to
certain conditions, including approval of the Board, including Trustees
who are not ``interested persons,'' as defined in Section 2(a)(19) of
the 1940 Act, and without the approval of shareholders, to: (i) Engage
a new or additional subadviser (``Subadviser'') for each Series; (ii)
enter into and materially amend existing sub-adviser agreements; and
(iii) terminate and replace Subadvisers.
    10. The Life Companies, on behalf of themselves and their Separate
Accounts, propose to exercise their contractual right to substitute
shares of one Portfolio for that of another Portfolio by replacing the
shares of 14 existing Portfolios listed below (the ``Existing
Portfolios'') that are held in Subaccounts of their Separate Accounts
with shares of the corresponding replacement Portfolios listed below
(the ``Replacement Portfolios''). Twelve of the Proposed Substitutions
will involve substitutions from unaffiliated Existing Portfolios to
affiliated Replacement Portfolios. Two of the Proposed Substitutions
will involve substitutions from unaffiliated Existing Portfolios to
unaffiliated Replacement Portfolios.

------------------------------------------------------------------------
                                                         Replacement
  Proposed substitution       Existing portfolio          portfolio
------------------------------------------------------------------------
1........................  American Century VP       SFT--T. Rowe Price
                            Value Fund: Class II      Value Fund.
                            Shares.
2........................  MFS VIT Value Series:     SFT--T. Rowe Price
                            Service Class Shares.     Value Fund.
3........................  American Century VP       SFT--Ivy Growth
                            Ultra Fund: Class II      Fund.
                            Shares.
4........................  Franklin Templeton VIP    SFT--Ivy Growth
                            Trust--Franklin Large     Fund.
                            Cap Growth Securities
                            Class 2 Shares.
5........................  Invesco VI American       SFT--Ivy Growth
                            Franchise: Series II      Fund.
                            Shares.
6........................  Ivy Funds VIP Growth....  SFT--Ivy Growth
                                                      Fund.
7........................  MFS VIT Investors Growth  SFT--Ivy Growth
                            Stock Series Service      Fund.
                            Class Shares.
8........................  Oppenheimer Variable      SFT--Ivy Growth
                            Account Funds--Capital    Fund.
                            Appreciation Fund/VA:
                            Service Shares.
9........................  Ivy Funds VIP Small Cap   SFT--Ivy Small Cap
                            Growth.                   Growth Fund.
10.......................  MFS VIT New Discovery     SFT--Ivy Small Cap
                            Series: Service Class     Growth Fund.
                            Shares.
11.......................  Invesco VI Core Equity    SFT--Pyramis Core
                            Fund: Series II Shares.   Equity Fund: Class
                                                      2 Shares.
12.......................  Fidelity VIP Contrafund:  SFT--Pyramis Core
                                                      Equity Fund:
                           Initial Class Shares....  Class 1 Shares.
                           Service Class 2 Shares..  Class 2 Shares.
13.......................  Fidelity VIP High         Ivy Funds VIP High
                            Income: Service Class 2   Income.
                            Shares.
14.......................  Oppenheimer Variable      Ivy Funds VIP High
                            Account Funds--Global     Income.
                            Strategic Income/VA:
                            Service Shares.
------------------------------------------------------------------------

    11. The following tables compare the fees and expenses of the
Existing Portfolio and the Replacement Portfolio using percentage daily
net assets as of December 31, 2012. The data for the Replacement
Portfolios in Proposed Substitutions 1 through 12 are estimates for the
current year.

                         Proposed Substitution 1
------------------------------------------------------------------------
                               Existing portfolio        Replacement
                               American Century VP    portfolio SFT--T.
                               Value Fund-- Class     Rowe Price Value
                                    II Shares               Fund
------------------------------------------------------------------------
Management Fees.............  0.90% of first $500   0.67% of first $1
                               million.              billion.
                              0.85% of next $500    0.65% of next $1.5
                               million.              billion.
                              0.80% over $1         0.60% over $2.5
                               billion.              billion.
Other Expenses..............  0.01%...............  0.09%
12b-1 Fees..................  0.25%...............  0.25%
Total Gross Expenses........  1.13%...............  1.01%
Expense Waiver..............  0.04%...............  0.00%
Total Net Expenses..........  1.09%...............  1.01%
------------------------------------------------------------------------

                         Proposed Substitution 2
------------------------------------------------------------------------
                               Existing portfolio        Replacement
                                  MFS VIT Value       portfolio SFT--T.
                                 Series--Service      Rowe Price Value
                                  Class Shares              Fund
------------------------------------------------------------------------
Management Fees.............  0.75% of first $1     0.67% of first $1
                               billion.              billion.
                              0.65% over $1         0.65% of next $1.5
                               billion.              billion
                              0.60% over $2.5       0.60% over $2.5
                               billion.              billion.
Other Expenses..............  0.06%...............  0.09%.
12b-1 Fees..................  0.25%...............  0.25%.
Total Gross Expenses........  1.03%...............  1.01%.
Expense Waiver..............  0.00%...............  0.00%.

Total Net Expenses..........  1.03%...............  1.01%.
------------------------------------------------------------------------

                         Proposed Substitution 3
------------------------------------------------------------------------
                               Existing portfolio
                               American Century VP       Replacement
                               Ultra Fund-- Class    portfolio SFT--Ivy
                                    II Shares            Growth Fund
------------------------------------------------------------------------
Management Fees.............  0.90% of first $500   0.67% of first $500
                               million.              million.
                              0.85% of next $500    0.625% of next $300
                               million.              million.
                              0.80% over $1         0.60% of next $200
                               billion.              million.
                                                    0.50% over $1
                                                     billion.
Other Expenses..............  0.01%...............  0.05%.
12b-1 Fees..................  0.25%...............  0.25%.
Total Gross Expenses........  1.16%...............  0.97%.
Expense Waiver..............  0.04%...............  0.00%.
Total Net Expenses..........  1.12%...............  0.97%.
------------------------------------------------------------------------

                         Proposed Substitution 4
------------------------------------------------------------------------
                               Existing portfolio
                               Franklin Templeton
                               VIP Trust--Franklin       Replacement
                                Large Cap Growth     portfolio SFT--Ivy
                               Securities--Class 2       Growth Fund
                                     Shares
------------------------------------------------------------------------
Management Fees.............  0.75% up to $500      0.67% of first $500
                               million.              million.
                              0.625% over $500      0.625% of next $300
                               million.              million.
                              0.50% over $1         0.60% of next $200
                               billion.              million.
                                                    0.50% over $1
                                                     billion.
Other Expenses..............  0.05%...............  0.05%.
12b-1 Fees..................  0.25%...............  0.25%.
Total Gross Expenses........  1.05%...............  0.97%.
Expense Waiver..............  0.00%...............  0.00%.
Total Net Expenses..........  1.05%...............  0.97%.
------------------------------------------------------------------------

                         Proposed Substitution 5
------------------------------------------------------------------------
                               Existing portfolio
                               Invesco VI American       Replacement
                               Franchise-- Service   portfolio SFT--Ivy
                                    II Shares            Growth Fund
------------------------------------------------------------------------
Management Fees.............  0.695% first $250     0.67% of first $500
                               million.              million.
                              0.67% next $250       0.625% of next $300
                               million.              million.
                              0.645% next $500      0.60% of next $200
                               million.              million.
                              0.62% next $550       0.50% over $1
                               million.              billion.
                              0.60% next $3.45
                               billion.
                              0.595% next $250
                               million.
                              0.57% next $2.25
                               billion.
                              0.545% next $2.5
                               billion.
                              0.52% over $10
                               billion.
Other Expenses..............  0.30%...............  0.05%.
12b-1 Fees..................  0.25%...............  0.25%.
Total Gross Expenses........  1.23%...............  0.97%.
Expense Waiver..............  0.08%...............  0.00%.
Total Net Expenses..........  1.15%...............  0.97%.
------------------------------------------------------------------------

                         Proposed Substitution 6
------------------------------------------------------------------------
                                                         Replacement
                               Existing portfolio    portfolio SFT--Ivy
                              Ivy Funds VIP Growth       Growth Fund
------------------------------------------------------------------------
Management Fees.............  0.70% up to $1        0.67% of first $500
                               billion.              million.
                              0.65% over $1         0.625% of next $300
                               billion.              million.
                              0.60% over $2         0.60% of next $200
                               billion.              million.
                              0.55% over $3         0.50% over $1
                               billion.              billion.
Other Expenses..............  0.05%...............  0.05%.
12b-1 Fees..................  0.25%...............  0.25%.
Total Gross Expenses........  1.00%...............  0.97%.
Expense Waiver..............  0.03%...............  0.00%.

Total Net Expenses..........  0.97%...............  0.97%.
------------------------------------------------------------------------

                         Proposed Substitution 7
------------------------------------------------------------------------
                               Existing portfolio
                                MFS VIT Investors        Replacement
                              Growth Stock Series--  portfolio SFT--Ivy
                              Service Class Shares       Growth Fund

------------------------------------------------------------------------
Management Fees.............  0.75% of first $1     0.67% of first $500
                               billion.              million.
                              0.65% over $1         0.625% of next $300
                               billion.              million.
                                                    0.60% of next $200
                                                     million.
                                                    0.50% over $1
                                                     billion.
Other Expenses..............  0.08%...............  0.05%.
12b-1 Fees..................  0.25%...............  0.25%.
Total Gross Expenses........  1.08%...............  0.97%.
Expense Waiver..............  0.00%...............  0.00%.
Total Net Expenses..........  1.08%...............  0.97%.
------------------------------------------------------------------------

                         Proposed Substitution 8
------------------------------------------------------------------------
                               Existing portfolio
                              Oppenheimer Variable
                                 Account Funds--         Replacement
                              Capital Appreciation   portfolio SFT--Ivy
                                Fund/VA-- Service        Growth Fund
                                     Shares
------------------------------------------------------------------------
Management Fees.............  0 0.75% of first      0.67% of first $500
                               $200 million.         million.
                              0.72% of next $200    0.625% of next $300
                               million.              million.
                              0.69% of next $200    0.60% over $200
                               million.              million.
                              0.66% of next $200    0.50% over $1
                               million.              billion.
                              0.60% over $800
                               million.
Other Expenses..............  0.12%...............  0.05%.
12b-1 Fees..................  0.25%...............  0.25%.
Total Gross Expenses........  1.06%...............  0.97%.
Expense Waiver..............  0.01%...............  0.00%.
Total Net Expenses..........  1.05%...............  0.97%.
------------------------------------------------------------------------

                         Proposed Substitution 9
------------------------------------------------------------------------
                                                         Replacement
                               Existing portfolio    portfolio SFT--Ivy
                               Ivy Funds VIP Small    Small Cap Growth
                                   Cap Growth               Fund
------------------------------------------------------------------------
Management Fees.............  0.85% up to $1        0.85% up to $1
                               billion.              billion.
                              0.83% over $1         0.80% of next $2
                               billion.              billion.
                              0.80% over $2         0.76% over $3
                               billion.              billion.
                              0.76% over $3
                               billion.
Other Expenses..............  0.06%...............  0.11%.
12b-1 Fees..................  0.25%...............  0.25%.
Total Gross Expenses........  1.16%...............  1.21%.
Expense Waiver..............  0.02%...............  0.07%.
Total Net Expenses..........  1.14%...............  1.14%.
------------------------------------------------------------------------

                        Proposed Substitution 10
------------------------------------------------------------------------

------------------------------------------------------------------------
                Existing portfolio                       Replacement
                                                          Portfolio
MFS VIT New Discovery Series--Service Class Shares   SFT--Ivy Small Cap
                                                         Growth Fund
------------------------------------------------------------------------
Management Fees.............  0.90% of first $1     0.85% up to $1
                               billion.              billion.
                              0.80% over $1         0.80% of next $2
                               billion.              billion.
                                                    0.76% over $3
                                                     billion.
Other Expenses..............  0.07%...............  0.11%.
12b-1 Fees..................  0.25%...............  0.25%.
Total Gross Expenses........  1.22%...............  1.21%.
Expense Waiver..............  0.00%...............  0.07%.
Total Net Expenses..........  1.22%...............  1.14%.
------------------------------------------------------------------------

                        Proposed Substitution 11
------------------------------------------------------------------------

------------------------------------------------------------------------
                Existing portfolio                       Replacement
                                                          portfolio
   Invesco VI Core Equity Fund Series II Shares       SFT--Pyramis Core
                                                        Equity Fund--
                                                    Class 2 Shares
------------------------------------------------------------------------
Management Fees.............  0.65% first $250      0.65%.
                               million.
                              0.60% of the excess
                               over $250 million.
Other Expenses..............  0.29%...............  0.11%.
12b-1 Fees..................  0.25%...............  0.25%.
Total Gross Expenses........  1.15%...............  1.01%.
Expense Waiver..............  0.02%...............  0.12%.
Total Net Expenses..........  1.13%...............  0.89%.
------------------------------------------------------------------------

                        Proposed Substitution 12
------------------------------------------------------------------------

------------------------------------------------------------------------
                Existing portfolio                       Replacement
                                                          portfolio
              Fidelity VIP Contrafund                 SFT--Pyramis Core
                                                         Equity Fund
------------------------------------------------------------------------
Management Fees.............  The Existing          0.65% Class I
                               Portfolio pays the    Shares.
                               Adviser a monthly    0.65% Class 2
                               management fee        Shares.
                               which has two
                               components: a group
                               fee rate and an
                               individual fund fee
                               rate. The group fee
                               rate is based on
                               the monthly average
                               net assets of all
                               of the registered
                               investment
                               companies with
                               which the Adviser
                               has management
                               contracts.
Other Expenses..............  0.06% Initial Class   0.11% Class I
                               Shares.               Shares.
                              0.08% Service Class   0.11% Class 2
                               2 Shares.             Shares.
12b-1 Fees..................  0.00% Initial Class   0.00% Class I
                               Shares.               Shares.
                              0.25% Service Class   0.25% Class 2
                               2 Shares.             Shares.
Total Gross Expenses........  0.64% Initial Class   0.76% Class I
                               Shares.               Shares.
                              0.89% Service Class   1.01% Class 2
                               2 Shares.             Shares.
Expense Waiver..............  0.00% Initial Class   0.12% Class I
                               Shares.               Shares.
                              000% Service Class 2  0.12% Class 2
                               Shares.               Shares.
Total Net Expenses..........  0.64% Initial Class   0.64% Class I
                               Shares.               Shares.
                              0.89% Service Class   0.89% Class 2
                               2 Shares.             Shares.
------------------------------------------------------------------------

                        Proposed Substitution 13
------------------------------------------------------------------------

------------------------------------------------------------------------
                Existing portfolio                       Replacement
                                                          portfolio
 Fidelity VIP High Income--Service Class 2 Shares    Ivy Funds VIP High
                                                            Income
------------------------------------------------------------------------
Management Fees.............  The Existing          0.63%.
                               Portfolio pays the
                               Adviser a monthly
                               management fee
                               which has two
                               components: a group
                               fee rate and an
                               individual fund fee
                               rate. The group fee
                               rate is based on
                               the monthly average
                               net assets of all
                               of the registered
                               investment
                               companies with
                               which the Adviser
                               has management
                               contracts.
Other Expenses..............  0.12%...............  0.06%.
12b-1 Fees..................  0.25%...............  0.25%.
Total Gross Expenses........  0.93%...............  0.94%.
Expense Waiver..............  0.00%...............  0.00%.
Total Net Expenses..........  0.93%...............  0.94%.
------------------------------------------------------------------------

                        Proposed Substitution 14
------------------------------------------------------------------------

------------------------------------------------------------------------
                Existing portfolio                       Replacement
                                                          portfolio
    Oppenheimer Variable Account Funds--Global       Ivy Funds VIP High
        Strategic Income/VA--Service Shares                 Income
------------------------------------------------------------------------
Management Fees.............  0.75% of first $200   0.63%.
                               million.
                              0.72% of next $200
                               million.
                              0.69% of next $200
                               million.
                              0.66% of next $200
                               million.
                              0.60% of next $200
                               million.
                              0.50% over $1
                               billion.
Other Expenses..............  0.14%...............  0.06%.
12b-1 Fees..................  0.25%...............  0.25%.
Acquired Fund Fees &          0.06%...............  0.00%.
 Expenses.

Total Gross Expenses........  1.03%...............  0.94%.
Expense Waiver..............  0.06%...............  0.00%.
Total Net Expenses..........  0.97%...............  0.94%.
------------------------------------------------------------------------

    12. The Proposed Substitutions are designed and intended to
simplify the Portfolio offerings by eliminating overlapping offerings
that largely duplicate one another by having substantially similar
investment objectives, strategies and risks. The Section 26 Applicants
believe that eliminating investment option redundancy via the Proposed
Substitutions would result in a more consolidated and attractive menu
of investment options under the Contracts. Moreover, because the
Proposed Substitutions involve consolidating duplicative investment
options, the diversity of investment options available under the
Contracts will not be adversely impacted.
    13. Except for Proposed Substitutions 9, 12, and 13, Contract
Owners with Contract value allocated to the Subaccounts of the Existing
Portfolios will experience lower total annual operating expenses
(before expense waivers or reimbursements) (``annual gross operating
expenses'') for the Replacement Portfolio than those of the
corresponding Existing Portfolio.
    14. Proposed Substitutions 9, 12 and 13 are expected to result in
annual gross operating expenses for the Replacement Portfolio that are
higher (0.05%, 0.12%, and 0.01%, respectively) than those of the
corresponding Existing Portfolio. However, total net operating expenses
are expected to be the same or lower for two years (for Proposed
Substitutions 9 and 13) and for the life of the Contracts outstanding
on the Substitution Date (for Proposed Substitution 12) after Life
Company reimbursements.
    15. Proposed Substitutions 11, 12, 13 and 14 are expected to result
in a management fee for the Replacement Portfolio that is higher
(0.04%, 0.09%, 0.07%, and 0.05%, respectively) than that of the
corresponding Existing Portfolio. Notwithstanding, total gross
operating expenses for the Replacement Portfolios in Proposed
Substitutions 11 and 14 are lower than the corresponding Existing
Portfolio. Moreover, the Section 26 Applicants agree that, except for
Proposed Substitutions 11 and 12, for a two year period commencing on
the Substitution Date, and for those Contracts with assets allocated to
an Existing Portfolio on the Substitution Date, the issuing Life
Company, as applicable, will, no later than the last business day of
each fiscal quarter, make a reduction in Separate Account (or
Subaccount) expenses, for each Contract outstanding on the Substitution
Date, to the extent that total annual operating expenses of each
Replacement Portfolio (taking into account applicable fee waivers and
expense reimbursements) (``annual net operating expenses'') for such
period exceeds, on an annualized basis, the corresponding Existing
Portfolio's total annual net operating expenses for the 2013 fiscal
year. The Section 26 Applicants further agree that, except for Proposed
Substitutions 11 and 12, Separate Account charges (net of any
reimbursements or waivers) for any Contract Owner on the Substitution
Date, will not be increased at any time during the two year period
following the Substitution Date, while the caps discussed in this
paragraph are in effect on the Replacement Portfolios. For Proposed
Substitutions 11 and 12, the reimbursements described above will apply
for the life of the Contract of all Contracts outstanding on the
Substitution Date. Accordingly, Contract Owners will bear the same or
lower expenses as a result of the Proposed Substitutions for a period
of two years following the Substitution Date (for Proposed
Substitutions 1-10, 13 and 14) and for the life of the Contract (for
Proposed Substitutions 11 and 12).
    16. Section 26 Applicants believe another benefit of the Proposed
Substitutions is that a greater number of Portfolios available through
the Contracts will be Series of SFT. The Section 26 Applicants state
that as a result more of the prospectuses and other disclosures and
communications that Contract Owners receive regarding their investment
options under the Contracts will be in a consistent format. The Section
26 Applicants state that fewer and more uniform disclosures and
communications also should result in cost savings to the Life
Companies.
    17. Section 26 Applicants state that the Proposed Substitutions
will result in more investment options under the Contracts having the
improved portfolio manager selection afforded by the Manager of
Managers Order, which the Section 26 Applicants believe will appeal to
both existing and prospective Contract Owners.
    18. The Section 26 Applicants state that the Proposed Substitutions
will enable the Life Companies to more efficiently administer those
aspects of the Contracts that pertain to Portfolios. These aspects
include not only coordinating mailings of Portfolio disclosures and
other communications to Contract Owners but also various compliance
matters, such as computing accumulation unit values pursuant to rule
22c-1 under the 1940 Act, detecting and preventing market timing or
other disruptive trading activities, and monitoring for potential
conflicts, including material irreconcilable conflicts due to so-called
``mixed and shared funding.''
    19. The Section 26 Applicants state that the Proposed Substitutions
are designed to provide Contract Owners with the ability to continue
their investment in similar investment options without interruptions
and at no additional cost to them. In this regard, the Life Companies
or an affiliate will bear all expenses and transaction costs incurred
in connection with the Proposed Substitutions and related filings and
notices, including legal, accounting, brokerage, and other fees and
expenses. The Proposed Substitutions will not cause the fees and
charges under the Contracts currently being paid by Contract Owners to
be greater after the Proposed Substitutions than before the Proposed
Substitutions. The charges for optional living benefit riders, of
course, may change from time to time and any such changes would be
unrelated to the Proposed Substitutions.
    20. The Proposed Substitutions will be described in supplements to
the applicable prospectuses for the Contracts filed with the Commission
or in other supplemental disclosure documents for the VGUL I and VGUL
II Policies (collectively, ``Supplements'') and delivered to all
affected Contract Owners at least 30 days before the Substitution Date.
The Supplements will give Contract Owners notice of the respective Life
Company's intent to take the necessary actions, including seeking the
order requested by this Application, to substitute shares of the
Existing Portfolios as described in this application on the
Substitution Date.
    21. The Section 26 Applicants will send the appropriate prospectus
supplement (or other notice, in the case of Contracts no longer
actively marketed and for which there are a relatively small number of
existing Contract Owners (``Inactive Contracts'')),

containing this disclosure to all existing Contract Owners. Prospective
purchasers and new purchasers of Contracts will be provided with a
Contract prospectus and the supplement containing disclosure regarding
the proposed Substitutions, as well as prospectuses and supplements for
the Replacement Portfolios.
    22. In addition to the Supplements distributed to Contract Owners,
within five (5) business days after the Substitution Date, the Life
Companies will send Contract Owners a written confirmation of the
completed Proposed Substitutions in accordance with rule 10b-10 under
the Securities Exchange Act of 1934, as amended. The confirmation
statement will include or be accompanied by a statement that reiterates
the free transfer rights disclosed in the Supplements. The Life
Companies will also send each Contract Owner current prospectuses for
the Replacement Portfolios involved to the extent that they have not
previously received a copy.
    23. Each Substitution will take place at the applicable Existing
and Replacement Portfolios' relative per share net asset values
determined on the Substitution Date in accordance with Section 22 of
the 1940 Act and rule 22c-1 under the Act.
    24. The process for accomplishing the transfer of assets from each
Existing Portfolio to its corresponding Replacement Portfolio will be
determined on a case-by-case basis. In most cases, it is expected that
the substitutions will be effected by redeeming shares of an Existing
Portfolio for cash and using the cash to purchase shares of the
Replacement Portfolio. In certain other cases, it is expected that the
substitutions will be effected by redeeming the shares of an Existing
Portfolio in-kind; those assets will then be contributed in-kind to the
corresponding Replacement Portfolio to purchase shares of that
Portfolio. All in-kind redemptions from an Existing Portfolio of which
any of the Section 26 Applicants is an affiliated person will be
effected in accordance with the conditions set forth in the Commission
staff's no-action letter issued to Signature Financial Group, Inc.
(Dec. 28, 1999).

Legal Analysis and Conditions

Section 26(c) Relief

    1. The Section 26 Applicants request that the Commission issue an
order pursuant to Section 26(c) of the 1940 Act approving the Proposed
Substitutions. Section 26(c) of the 1940 Act makes it unlawful for the
depositor of a registered unit investment trust that invests in the
securities of a single issuer to substitute another security for such
security unless the Commission approves the substitution. Section 26(c)
requires the Commission to issue an order approving a substitution if
the evidence establishes that it is consistent with the protection of
investors and the purposes fairly intended by the policy and provisions
of the 1940 Act.
    2. The Section 26 Applicants argue that the terms and conditions of
the Proposed Substitutions are consistent with the principles and
purposes of Section 26(c) and do not entail any of the abuses that
Section 26(c) is designed to prevent. The Section 26 Applicants further
state that the Proposed Substitutions will not result in the type of
costly forced redemption that Section 26(c) was intended to guard
against and, for the following reasons, are consistent with the
protection of investors and the purposes fairly intended by the 1940
Act.
    3. Minnesota Life and Securian Life are also seeking approval of
the Proposed Substitutions from any state insurance regulator where
approval may be necessary.
    4. The Section 26 Applicants submit that each of the Proposed
Substitutions is consistent with the protection of investors and the
policy and provisions of the 1940 Act and supported by applicable
precedent.
    5. Moreover, the Section 26 Applicants agree that, except for
Proposed Substitutions 11 and 12, for a two year period commencing on
the Substitution Date, and for those Contracts with assets allocated to
an Existing Portfolio on the Substitution Date, the issuing Life
Company, as applicable, will, no later than the last business day of
each fiscal quarter, make a reduction in Separate Account (or
Subaccount) expenses, for each Contract outstanding on the Substitution
Date, to the extent that total annual operating expenses of each
Replacement Portfolio (taking into account applicable fee waivers and
expense reimbursements) (``annual net operating expenses'') for such
period exceeds, on an annualized basis, the corresponding Existing
Portfolio's total annual net operating expenses for the 2013 fiscal
year.
    6. The Section 26 Applicants further agree that, except for
Proposed Substitutions 11 and 12, Separate Account charges (net of any
reimbursements or waivers) for any Contract Owner on the Substitution
Date, will not be increased at any time during the two year period
following the Substitution Date, while the caps discussed above are in
effect on the Replacement Portfolios.
    7. For Proposed Substitutions 11 and 12, the reimbursements
described above will apply for the life of the Contract of all
Contracts outstanding on the Substitution Date. Accordingly, Contract
Owners will bear the same or lower expenses as a result of the Proposed
Substitutions for a period of two years following the Substitution Date
(for Proposed Substitutions 1-10, 13 and 14) and for the life of the
Contract (for Proposed Substitutions 11 and 12).
    8. The Contract value for each Contract Owner impacted by the
Proposed Substitutions will not change as a result of the
Substitutions. In addition, the Section 26 Applicants agree that the
Life Companies will not increase total Separate Account charges for any
existing Contract Owner on the Substitution Date for two (2) years from
the Substitution Date, or for Proposed Substitutions 11 and 12, for
life of the Contracts outstanding on the Substitution Date.
    9. For Proposed Substitutions 13 and 14, Applicants will not
receive, for three years from the Substitution Date, any direct or
indirect benefits paid by the Replacement Portfolios, its advisers or
underwriters (or their affiliates), in connection with assets
attributable to Contracts affected by the Substitution, at a higher
rate than Applicants have received from the corresponding Existing
Portfolios, its advisers or underwriters (or their affiliates),
including without limitation rule 12b-1 fees, shareholder service,
administration, or other service fees, revenue sharing, or other
arrangements in connection with such assets. Proposed Substitutions 13
and 14, and the selection of the Replacement Portfolio were not
motivated by any financial consideration paid or to be paid to the Life
Companies or their affiliates by the Replacement Portfolio, its
advisers underwriters or their affiliates.
    10. Notwithstanding the Manager of Managers Order, SFT has agreed,
as a condition of this Application, that it will not change a
Subadviser, add a new Subadviser, or otherwise relay on the Manager of
Managers Order with respect to any SFT Replacement Portfolio without
first obtaining shareholder approval of the change in Subadviser, the
new Subadviser, or the SFT Replacement Portfolio's ability to add or to
replace a Subadviser in reliance on the Manager of Managers Order at a
shareholder meeting, the record date for which shall be after the
Proposed Substitution has been effected.

Section 17(b) Relief

    1. The Section 17 Applicants respectfully request that the
Commission issue an order pursuant to Section 17(b) of the 1940 Act
exempting them from the provisions of Section 17(a) of the 1940 Act to
the extent necessary to permit them to carry out the In-Kind
Transactions.
    2. Section 17(a)(1) of the 1940 Act, in relevant part, prohibits
any affiliated person of a registered investment company, or any
affiliated person of such a person, acting as principal, from knowingly
selling any security or other property to that company. Section
17(a)(2) of the 1940 Act generally prohibits the same persons, acting
as principals, from knowingly purchasing any security or other property
from the registered investment company.
    3. Certain Existing and Replacement Portfolios may be deemed to be
affiliated persons of one another, or affiliated persons of an
affiliated person. Shares held by a separate account of an insurance
company are legally owned by the insurance company. In addition,
Advantus, as the Manager of the Replacement Portfolios, may be deemed
to be a control person. Because the Life Companies and Advantus are
under common control, entities that they control likewise may be deemed
to be under common control, and thus affiliated persons of each other,
notwithstanding the fact that the Contract Owners may be considered the
beneficial owners of those shares held in the Separate Accounts. The
Existing Portfolios and the Replacement Portfolios also may be deemed
to be affiliated persons of affiliated persons. This result follows
from the fact that, regardless of whether the Life Companies can be
considered to control these Existing and Replacement Portfolios, the
Life Companies may be deemed to be an affiliated person thereof because
it, through its Separate Accounts, owns of record 5% or more of the
outstanding shares of such Portfolios. In addition, the Life Companies
may be deemed an affiliated person of the Replacement Portfolios
because its affiliate, Advantus, may be deemed to control the
Replacement Portfolios by virtue of serving as their investment
adviser. As a result of these relationships, each of these Existing
Portfolios may be deemed to be an affiliated person of an affiliated
person (the Life Companies or the Separate Accounts) of the Replacement
Portfolios, and vice versa. The proposed In-Kind Transactions,
therefore, could be seen as the indirect purchase of shares of a
Replacement Portfolio with portfolio securities of the corresponding
Existing Portfolio and conversely the indirect sale of portfolio
securities of the Existing Portfolio for shares of the corresponding
Replacement Portfolio. The proposed In-Kind Transactions also could be
categorized as a purchase of shares of the Replacement Portfolio by the
Existing Portfolio, acting as principal, and a sale of portfolio
securities by the Existing Portfolio, acting as principal, to the
Replacement Portfolio. In addition, the proposed In-Kind Transactions
could be viewed as a purchase of securities from the Existing Portfolio
and a sale of securities to the Replacement Portfolio by the Life
Companies (or the Separate Accounts), acting as principal. If
characterized in this manner, the proposed In-Kind Transactions may be
deemed to contravene Section 17(a) due to the affiliated status of
these entities.
    4. The Section 17 Applicants submit that the terms of the proposed
In-Kind Transactions, including the consideration to be paid and
received, as described in this Application, are reasonable and fair and
do not involve overreaching on the part of any person concerned
because: (1) The proposed In-Kind Transactions will not adversely
affect or dilute the interests of Contract Owners; and (2) the proposed
In-Kind Transactions will comply with the conditions set forth in rule
17a-7 and the 1940 Act, other than the requirement relating to cash
consideration. The Section 17 Applicants also submit that the proposed
In-Kind Transactions are, or will be, consistent with the policies of
each of the Existing Portfolios and the Replacement Portfolios involved
in such Transactions, as recited in their registration statements and
reports filed with the Commission. Finally, the Section 17 Applicants
submit that the proposed In-Kind Transactions are consistent with the
general purposes of the 1940 Act.
    5. The In-Kind Transactions will be effected at the respective net
asset values of the Existing Portfolio and the Replacement Portfolio
involved, as determined in accordance with the procedures disclosed in
their respective registration statements and as required by rule 22c-1
under the 1940 Act. The In-Kind Transactions will not change the dollar
value of any Contract Owner's investment in any of the Separate
Accounts, the value of any Contract, the accumulation value or other
value credited to any Contract, or the death benefit payable under any
Contract. Immediately after the proposed In-Kind Transactions, the
value of a Separate Account's investment in a Replacement Portfolio
will equal the value of its investments in the corresponding Existing
Portfolio (together with the value of any pre-existing investments in
the Replacement Portfolio) immediately before the In-Kind Transactions.
In addition, the Section 17 Applicants will carry out the In-Kind
Transactions in compliance with the conditions of rule 17a-7, which
outline the types of safeguards that parties to such transactions
should implement to ensure that the terms of a transaction involving a
registered investment company and an affiliated person thereof are fair
and reasonable, and that the transaction does not involve overreaching
on the part of any person involved in the transaction.
    6. The proposed In-Kind Transactions will be effected based upon
the independent current market price of the portfolio securities as
specified in paragraph (b) of rule 17a-7. The proposed In-Kind
Transactions will be consistent with the policy of each registered
investment company and separate series thereof participating in the In-
Kind Transactions, as recited in the relevant registered investment
companies' registration statements or reports in accordance with
paragraph (c) of rule 17a-7. In addition, the proposed In-Kind
Transactions will comply with paragraph (d) of rule 17a-7 because no
brokerage commission, fee, or other remuneration (except for any
customary transfer fees) will be paid to any party in connection with
the proposed In-Kind Transactions. Moreover, each of the Existing and
Replacement Portfolios involved will be responsible for compliance with
the applicable board oversight and fund governance provisions of
paragraphs (e) and (f) of rule 17a-7. Finally, a written record of the
proposed In-Kind Transactions will be maintained and preserved in
accordance with paragraph (g) of rule 17a-7.
    7. Even though the proposed In-Kind Transactions will not comply
with the cash consideration requirement of paragraph (a) of rule 17a-7,
the terms of the proposed In-Kind Transactions will offer to the
relevant Existing and Replacement Portfolios the same degree of
protection from overreaching that rule 17a-7 generally provides in
connection with the purchase and sale of securities under that rule in
the ordinary course of business. The Section 17 Applicants represent
that the In-Kind Transactions will be carried out in compliance with
the other conditions of rule 17a-7.
    8. The proposed redemption of shares of each Existing Portfolio
will be consistent with its investment policies,

as recited in its current registration statement, because the shares
will be redeemed at their net asset value in conformity with rule 22c-1
under the 1940 Act. Likewise, the proposed sale of shares of each
Replacement Portfolio for investment securities will be consistent with
its investment policies, as recited in its registration statement,
because: (1) The shares will be sold at their net asset value; and (2)
the investment securities will be of the type and quality that the
Replacement Portfolio could have acquired with the proceeds from the
sale of their shares had the shares been sold for cash.
    9. The Section 17 Applicants submit that the proposed In-Kind
Transactions, are consistent with the general purposes of the 1940 Act
as stated in the Findings and Declaration of Policy in Section 1 of the
1940 Act. The proposed In-Kind Transactions do not present any
conditions or abuses that the 1940 Act was designed to prevent.
    10. The Section 17 Applicants respectfully submit that, for all the
reasons stated above, the Commission should issue an order pursuant to
Section 17(b) of the 1940 Act exempting them from the provisions of
Section 17(a) of the 1940 Act to the extent necessary to permit them to
carry out the proposed In-Kind Transactions. The Section 17 Applicants
assert that the terms of the proposed In-Kind Transactions, including
the consideration to be paid and received, are reasonable and fair to:
(1) Each Existing Portfolio and corresponding Replacement Portfolio;
and (2) Contract Owners. The Section 17 Applicants also assert that the
proposed In-Kind Transactions do not involve overreaching on the part
of any person concerned. Furthermore, the Section 17 Applicants
represent that the proposed In-Kind Transactions are, or will be,
consistent with all relevant policies of (1) each Existing Portfolio
and corresponding Replacement Portfolio as stated in their respective
registration statements and reports filed under the 1940 Act, and (2)
the general purposes of the 1940 Act.

Conclusion

    For the reasons and upon the facts set forth in this Application,
the Section 26 Applicants and Section 17 Applicants, respectively,
submit that the Proposed Substitutions and the related In-Kind
Transactions meet the standards of Section 26(c) of the 1940 Act and
Section 17(b) of the 1940 Act and respectfully request that the
Commission issue an order of approval pursuant to Section 26(c) of the
1940 Act and an order of exemption pursuant to Section 17(b) of the
1940 Act.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-07424 Filed 4-2-14; 8:45 am]
BILLING CODE 8011-01-P