[Federal Register: February 6, 2008 (Volume 73, Number 25)]
[Notices]
[Page 7012-7016]
[DOCID:fr06fe08-90]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 28139; 812-13436]

MLIG Variable Insurance Trust and Roszel Advisors, LLC; Notice of
Application

January 31, 2008.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order under section 12(d)(1)(J) of
the Investment Company Act of 1940 (``Act'') for an exemption from
sections 12(d)(1)(A) and (B) of the Act, and under sections 6(c) and
17(b) of the Act for an exemption from section 17(a) of the Act.

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Summary of the Application: Applicants request an order that would
permit certain registered open-end management investment companies to
acquire shares of other registered open-end management investment
companies and unit investment trusts that are within and outside the
same group of investment companies.
    Applicants: MLIG Variable Insurance Trust (the ``Trust'') and
Roszel Advisors, LLC (``Roszel Advisors'') (together, the
``Applicants'').
    Filing Dates: The application was filed on October 9, 2007.
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 February 25, 2008, and should be accompanied by proof of
service on applicants in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street,
NE., Washington, DC 20549-1090; Applicants: c/o Barry G. Skolnick,
Secretary, MLIG Variable Insurance Trust, 1700 Merrill Lynch Drive,
Pennington, NJ 08534.

FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, at
(202) 551-6876, or Nadya Roytblat, Assistant Director, at (202) 551-
6821 (Office of Investment Company Regulation, Division of Investment
Management).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee at the
Commission's Public Reference Desk, 100 F Street, NE., Washington, DC
20549-0102 (telephone<PHONE_NUMBER>).

Applicants' Representations

    1. The Trust, organized as a Delaware statutory trust, is
registered under the Act as an open-end management investment company.
The Trust is currently comprised of twenty-four separate Portfolios (as
defined below), each of which pursues a distinct investment
objective(s).\1\ The shares of the Portfolios currently are offered and
sold through registered separate accounts (``Registered Separate
Accounts'') of Merrill Lynch Life Insurance Company and ML Life
Insurance Company of New York, both insurance companies that are
unaffiliated with Roszel Advisors. In the future, shares of the
Portfolios may be offered and sold through Registered Separate Accounts
of insurance companies that are affiliates of Roszel Advisors and may
be offered and sold through unregistered separate accounts of insurance
companies that either are or are not affiliates of Roszel Advisors
(``Unregistered Separate Accounts,'' and together with the Registered
Separate Accounts, the ``Separate Accounts'').
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    \1\ Applicants request that the order also extend to any future
series of the Trust, and any other existing or future registered
open-end management investment companies and any series thereof that
are part of the same group of investment companies, as defined in
section 12(d)(1)(G)(ii) of the Act, as the Trust and are, or may in
the future be, advised by Roszel Advisors or any other investment
adviser controlling, controlled by, or under common control with
Roszel Advisors (together with the existing series of the Trust, the
``Portfolios''). The Trust is the only registered investment company
that currently intends to rely on the requested order. Any other
entity that relies on the order in the future will comply with the
terms and conditions of the application.
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    2. Roszel Advisors is a Delaware limited liability company that is
registered as an investment adviser under the Investment Advisers Act
of 1940 (``Advisers Act''). Roszel Advisors is a wholly-owned indirect
subsidiary of Merrill Lynch & Co., Inc. Pursuant to an investment
management agreement and subject to the authority of the Trust's board
of trustees, Roszel Advisors serves as the Trusts' investment adviser
and conducts the business and affairs of the Trust. Roszel Advisors has
engaged at least one subadviser for each Portfolio (each a
``Subadviser'') to act as that Portfolio's investment adviser to
provide day-to-day portfolio management. Each Subadviser is and any
future Subadviser will be registered under the Advisers Act.\2\
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    \2\ Any investment adviser to the Portfolios that meets the
definition of section 2(a)(20)(A) of the Act is referred to as
Roszel Advisors. Any investment adviser to the Portfolios that meets
the definition in section 2(a)(20)(B) of the Act is referred to as
the Subadviser.
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    3. Applicants request relief to permit: (a) The Portfolios to
acquire shares of registered open-end management investment companies
that are not part of the same group of investment companies, as defined
in Section 12(A)(i)(G)(ii) of the Act, as the Portfolios (the
``Unaffiliated Underlying Funds''); (b) the Portfolios to acquire
shares of unit investment trusts (``UITs'') that are not part of the
same group of investment companies as the Portfolios (``Unaffiliated
Underlying Trusts''); (c) the Unaffiliated Underlying Funds and Trusts
(collectively, the ``Unaffiliated Funds'') to sell their shares to the
Portfolios; (d) the Portfolios to acquire shares of other registered
open-end investment companies in the same group of investment companies
as the Portfolios (the ``Affiliated Funds,'' and together with the
Unaffiliated Funds, the ``Underlying Funds'') and (e) the Affiliated
Funds to sell their shares to the Portfolios. Unaffiliated Underlying
Trusts or Unaffiliated Underlying Funds may be registered under the Act
as either UITs or open-end management investment companies and that
have obtained exemptions from the Commission necessary to permit their
shares to be listed and traded on a national securities exchange at
negotiated prices (``ETFs''). Currently, the Portfolios invest in
various types of securities that are not issued by registered
investment companies and other financial instruments. Applicants are
seeking to provide the Portfolios with the ability to invest in
Underlying Funds for broader diversification and the ability to gain
exposure to types of securities in which they would otherwise be unable
to invest because of inadequate trade size or lack of liquidity.

Applicants' Legal Analysis

A. Section 12(d)(1)

    1. Section 12(d)(1)(A) of the Act prohibits a registered investment
company from acquiring shares of an investment company if the
securities represent more than 3% of the total outstanding voting stock
of the acquired company, more than 5% of the total

assets of the acquiring company, or, together with the securities of
any other investment companies, more than 10% of the total assets of
the acquiring company. Section 12(d)(1)(B) of the Act prohibits a
registered open-end investment company, its principal underwriter and
any broker or dealer from selling the shares of the investment company
to another investment company if the sale will cause the acquiring
company to own more than 3% of the acquired company's voting stock, or
if the sale will cause more than 10% of the acquired company's voting
stock to be owned by investment companies generally.
    2. Section 12(d)(1)(J) of the Act provides that the Commission may
exempt any person, security, or transaction, or any class or classes of
persons, securities or transactions, from any provision of section
12(d)(1) if the exemption is consistent with the public interest and
the protection of investors. Applicants seek an exemption under section
12(d)(1)(J) of the Act from the limitations of sections 12(d)(1)(A) and
(B) to the extent necessary to permit the Portfolios to acquire shares
of the Underlying Funds in excess of the limits set forth in section
12(d)(1)(A) of the Act and to permit the Underlying Funds, their
principal underwriters and any broker or dealer to sell their shares to
the Portfolios in excess of the limits set forth in section 12(d)(1)(B)
of the Act.
    3. Applicants state that the proposed arrangement will not give
rise to the policy concerns underlying sections 12(d)(1)(A) and (B)
which include concerns about undue influence by a fund of funds or its
affiliated persons over underlying funds, excessive layering of fees,
and overly complex fund structures. Accordingly, Applicants believe
that the requested exemptions are consistent with the public interest
and the protection of investors.
    4. Applicants state that the proposed arrangement will not result
in undue influence by the Portfolios or their affiliated persons over
the Underlying Funds. The concern about undue influence does not arise
in connection with the Portfolios' investment in the Affiliated Funds,
since they are part of the same group of investment companies.
Applicants further propose condition 1 which provides that: (a) Roszel
Advisors and any person controlling, controlled by or under common
control with Roszel Advisors, any investment company and any issuer
that would be an investment company but for section 3(c)(1) or section
3(c)(7) of the Act advised or sponsored by Roszel Advisors or any
person controlling, controlled by or under common control with Roszel
Advisors (collectively, the ``Group''), and (b) any Subadviser to the
Portfolios and any person controlling, controlled by or under common
control with the Subadviser, and any investment company or issuer that
would be an investment company but for section 3(c)(1) or 3(c)(7) of
the Act (or portion of such investment company or issuer) advised by
the Subadviser or any person and any person controlling, controlled by
or under common control with the Subadviser (collectively, the
``Subadviser Group'') will not control (individually or in the
aggregate) an Unaffiliated Fund within the meaning of section 2(a)(9)
of the Act.
    5. Applicants further state that condition 2 precludes the
Portfolios or Roszel Advisors, any Subadviser, promoter or principal
underwriter of the Portfolios, as well as any person controlling,
controlled by or under common control with any of those entities (each,
a ``Portfolio Affiliate'') from taking advantage of an Unaffiliated
Fund, with respect to transactions between the Portfolios or a
Portfolio Affiliate and the Unaffiliated Fund or the Unaffiliated
Fund's investment adviser(s), sponsor, promoter, and principal
underwriter and any person controlling, controlled by or under common
control with any of those entities (each, an ``Unaffiliated Fund
Affiliate''). No Portfolio or Portfolio Affiliate (except to the extent
it is acting in its capacity as an investment adviser to an
Unaffiliated Underlying Fund or sponsor to an Unaffiliated Underlying
Trust) will cause an Unaffiliated Fund to purchase a security in an
offering of securities during the existence of any underwriting or
selling syndicate of which a principal underwriter is an officer,
director, trustee, advisory board member, investment adviser,
Subadviser, or employee of the Portfolio, or a person of which any such
officer, director, trustee, investment adviser, Subadviser, member of
an advisory board, or employee is an affiliated person (each, an
``Underwriting Affiliate,'' except any person whose relationship to the
Unaffiliated Fund is covered by section 10(f) of the Act is not an
Underwriting Affiliate). An offering of securities during the existence
of any underwriting or selling syndicate of which a principal
underwriter is an Underwriting Affiliate is an ``Affiliated
Underwriting.''
    6. To further assure that an Unaffiliated Underlying Fund
understands the implications of an investment by a Portfolio under the
requested order, prior to the Portfolios' investment in the shares of
an Unaffiliated Underlying Fund in excess of the limit in section
12(d)(1)(A)(i) of the Act, the Portfolio and the Unaffiliated
Underlying Fund will execute an agreement stating, without limitation,
that their boards of directors or trustees (``Boards'') and their
investment advisers understand the terms and conditions of the order
and agree to fulfill their responsibilities under the order
(``Participation Agreement''). Applicants note that an Unaffiliated
Fund (other than an ETF whose shares are purchased by a Portfolio in
the secondary market) will retain its right at all times to reject any
investment by the Portfolio.\3\
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    \3\ An Unaffiliated Fund, including an ETF, would retain its
right to reject any initial investment by a Portfolio in excess of
the limit in section 12(d)(1)(A)(i) of the Act by declining to
execute the Participation Agreement with the Portfolio.
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    7. Applicants do not believe that the proposed arrangement will
involve excessive layering of fees. To assure that the investment
advisory or management fees are not duplicative, Applicants state that,
prior to the approval of any investment advisory or management contract
under section 15 of the Act, the Board of each Portfolio, including a
majority of the Disinterested Trustees will find that the management or
advisory fees charged under the Portfolio's advisory contract are based
on services provided that are in addition to, rather than duplicative
of, services provided pursuant to any Underlying Fund's advisory
contract(s). Applicants further state that Roszel Advisors will waive
fees otherwise payable to them by a Portfolio in an amount at least
equal to any compensation (including fees received pursuant to any plan
adopted by an Unaffiliated Underlying Fund pursuant to rule 12b-1 under
the Act) received from an Unaffiliated Fund by Roszel Advisors, or an
affiliated person of Roszel Advisors, other than any advisory fees paid
to Roszel Advisors or an affiliated person of Roszel Advisors by the
Unaffiliated Fund, in connection with the investment by the Portfolio
in the Unaffiliated Fund.
    8. Applicants state that with respect to Registered Separate
Accounts that invest in the Portfolios, no sales load will be charged
at the Portfolios' level or at the Underlying Fund level. Other sales
charges and service fees, as defined in Rule 2830 of the Conduct Rules
of the NASD (``NASD Conduct Rule 2830''), will only be charged at the
Portfolio level or at the Underlying

Fund level, not both.\4\ With respect to other investments in the
Portfolios, any sales charges and/or service fees charged with respect
to shares of the Portfolios will not exceed the limits applicable to a
fund of funds set forth in NASD Conduct Rule 2830.
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    \4\ Applicants represent that each Portfolio will represent in
the Participation Agreement that no insurance company sponsoring a
Registered Separate Account funding variable insurance contracts
will be permitted to invest in the Portfolio unless the insurance
company has certified to the Portfolio that the aggregate of all
fees and charges associated with each contract that invests in the
Portfolio, including fees and charges at the separate account,
Portfolio, and Underlying Fund levels, will be reasonable in
relation to the services rendered, the expenses expected to be
incurred, and the risks assumed by the insurance company.
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    9. Applicants state that the proposed arrangement will not create
an overly complex fund structure because no Underlying Fund will
acquire securities of any other investment company or company relying
on section 3(c)(1) or 3(c)(7) of the Act in excess of the limits
contained in section 12(d)(1)(A) of the Act, except to the extent that
such Underlying Fund: (a) Receives securities of another investment
company as a dividend or as a result of a plan of reorganization of a
company (other than a plan devised for the purpose of evading section
12(d)(1) of the Act); or (b) acquires (or is deemed to have acquired)
securities of another investment company pursuant to exemptive relief
from the Commission permitting such Underlying Fund to: (i) Acquire
securities of one or more affiliated investment companies for short-
term cash management purposes, or (ii) engage in interfund borrowing
and lending transactions. Applicants also represent that the
Portfolios' prospectus and sales literature will contain clear,
concise, ``plain English'' disclosure designed to inform investors
about the unique characteristics of the proposed arrangement,
including, but not limited to, the expense structure and the additional
expenses of investing in Underlying Funds.

B. Section 17(a)

    1. Section 17(a) of the Act generally prohibits sales or purchases
of securities between a registered investment company and any
affiliated persons of the company. Section 2(a)(3) of the Act defines
an ``affiliated person'' of another person to include (a) any person
directly or indirectly owning, controlling, or holding with power to
vote, 5% or more of the outstanding voting securities of the other
person; (b) any person 5% or more of whose outstanding voting
securities are directly or indirectly owned, controlled, or held with
power to vote by the other person; and (c) any person directly or
indirectly controlling, controlled by, or under common control with the
other person.
    2. Applicants state that the Portfolios and the Affiliated Funds
might be deemed to be under common control of Roszel Advisors and
therefore affiliated persons of one another. Applicants also state that
the Portfolios and the Underlying Funds might be deemed affiliated
persons of one another if the Portfolios acquire 5% or more of an
Underlying Fund's outstanding voting securities. In light of these
possible affiliations, section 17(a) could prevent an Underlying Fund
from selling shares to and redeeming shares from the Portfolios.
    3. Section 17(b) of the Act authorizes the Commission to grant an
order permitting a transaction otherwise prohibited by section 17(a) if
it finds that (a) the terms of the proposed transaction are fair and
reasonable and do not involve overreaching on the part of any person
concerned; (b) the proposed transaction is consistent with the policies
of each registered investment company involved; and (c) the proposed
transaction is consistent with the general purposes of the Act. Section
6(c) of the Act permits the Commission to exempt any person or
transactions from any provision of the Act if such exemption is
necessary or appropriate in the public interest and consistent with the
protection of investors and the purposes fairly intended by the policy
and provisions of the Act.
    4. Applicants believe that the proposed transactions satisfy the
requirements for relief under sections 17(b) and 6(c) of the Act, as
the terms are fair and reasonable and do not involve overreaching.\5\
Applicants state that the terms upon which an Underlying Fund will sell
its shares to or purchase its shares from the Portfolios will be based
on the net asset value of each Underlying Fund.\6\ Applicants also
state that the proposed transactions will be consistent with the
policies of the Portfolios and Underlying Fund, and with the general
purposes of the Act.
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    \5\ Applicants acknowledge that receipt of compensation by (a)
an affiliated person of the Portfolios, or an affiliated person of
such person, for the purchase by the Portfolios of shares of an
Underlying Fund or (b) an affiliated person of an Underlying Fund,
or an affiliated person of such person, for the sale by the
Underlying Fund of its shares to the Portfolios is subject to
section 17(e)(1) of the Act. The Participation Agreement also will
include this acknowledgement.
    \6\ Applicants note that the Portfolios generally would purchase
and sell shares of an Underlying Fund that operates as an ETF
through secondary market transactions at market prices rather than
through principal transactions with the Underlying Fund at net asset
value. Applicants would not rely on the requested relief from
section 17(a) for such secondary market transactions. The Portfolios
could seek to transact in ``Creation Units'' directly with an ETF
pursuant to the requested section 17(a) relief.
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Applicants' Conditions

    Applicants agree that the order granting the requested relief shall
be subject to the following conditions:
    1. The members of the Group will not control (individually or in
the aggregate) an Unaffiliated Fund within the meaning of section
2(a)(9) of the Act. The members of the Subadviser Group will not
control (individually or in the aggregate) an Unaffiliated Fund within
the meaning of section 2(a)(9) of the Act. If, as a result of a
decrease in the outstanding voting securities of an Unaffiliated Fund,
the Group or a Subadviser Group, each in the aggregate, becomes a
holder of more than 25% of the outstanding voting securities of the
Unaffiliated Fund, then the Group or the Subadviser Group (except for
any member of the Group or the Subadviser Group that is a Separate
Account) will vote its shares of the Unaffiliated Fund in the same
proportion as the vote of all other holders of the Unaffiliated Fund's
shares. This Condition 1 will not apply to a Subadviser Group with
respect to an Unaffiliated Fund for which the Subadviser or a person
controlling, controlled by, or under common control with the Subadviser
acts as the investment adviser within the meaning section 2(a)(20)(A)
of the Act (in the case of an Unaffiliated Underlying Fund) or as the
sponsor (in the case of an Unaffiliated Trust).
    A Registered Separate Account will seek voting instructions from
its contract holders and will vote its shares of an Unaffiliated Fund
in accordance with the instructions received and will vote those shares
for which no instructions were received in the same proportion as the
shares for which instructions were received. An Unregistered Separate
Account will either: (i) Vote its shares of the Unaffiliated Fund in
the same proportion as the vote of all other holders of the
Unaffiliated Fund's shares; or (ii) seek voting instructions from its
contract holders and vote its shares in accordance with the
instructions received and vote those shares for which no instructions
were received in the same proportion as the shares for which
instructions were received.
    2. No Portfolio or Portfolio Affiliate will cause any existing or
potential

investment by the Portfolio in an Unaffiliated Fund to influence the
terms of any services or transactions between the Portfolio or a
Portfolio Affiliate and the Unaffiliated Fund or an Unaffiliated Fund
Affiliate.
    3. The Board of each Portfolio, including a majority of the
Disinterested Trustees, will adopt procedures reasonably designed to
assure that Roszel Advisors and any Subadviser are conducting the
investment program of the Portfolio without taking into account any
consideration received by the Portfolio or Portfolio Affiliate from an
Unaffiliated Fund or an Unaffiliated Fund Affiliate in connection with
any services or transactions.
    4. Once an investment by a Portfolio in the securities of an
Unaffiliated Underlying Fund exceeds the limit of section
12(d)(1)(A)(i) of the Act, the Board of the Unaffiliated Underlying
Fund, including a majority of the Disinterested Trustees, will
determine that any consideration paid by the Unaffiliated Underlying
Fund to the Portfolio or a Portfolio Affiliate in connection with any
services or transactions: (a) Is fair and reasonable in relation to the
nature and quality of the services and benefits received by the
Unaffiliated Underlying Fund; (b) is within the range of consideration
that the Unaffiliated Underlying Fund would be required to pay to
another unaffiliated entity in connection with the same services or
transactions; and (c) does not involve overreaching on the part of any
person concerned. This condition does not apply with respect to any
services or transactions between an Unaffiliated Underlying Fund and
its investment adviser(s), or any person controlling, controlled by, or
under common control with such investment adviser(s).
    5. No Portfolio or Portfolio Affiliate (except to the extent it is
acting in its capacity as an investment adviser to an Unaffiliated
Underlying Fund or sponsor to an Unaffiliated Underlying Trust) will
cause an Unaffiliated Fund to purchase a security in any Affiliated
Underwriting.
    6. The Board of an Unaffiliated Underlying Fund, including a
majority of the Disinterested Trustees, will adopt procedures
reasonably designed to monitor any purchases of securities by the
Unaffiliated Underlying Fund in an Affiliated Underwriting once an
investment by a Portfolio in the securities of the Unaffiliated
Underlying Fund exceeds the limit of section 12(d)(1)(A)(i) of the Act,
including any purchases made directly from an Underwriting Affiliate.
The Board of the Unaffiliated Underlying Fund will review these
purchases periodically, but no less frequently than annually, to
determine whether or not the purchases were influenced by the
investment by the Portfolio in the Unaffiliated Underlying Fund. The
Board of the Unaffiliated Underlying Fund will consider, among other
things: (a) Whether or not the purchases were consistent with the
investment objectives and policies of the Unaffiliated Underlying Fund;
(b) how the performance of securities purchased in an Affiliated
Underwriting compares to the performance of comparable securities
purchased during a comparable period of time in underwritings other
than Affiliated Underwritings or to a benchmark such as a comparable
market index; and (c) whether or not the amount of securities purchased
by the Unaffiliated Underlying Fund in Affiliated Underwritings and the
amount purchased directly from an Underwriting Affiliate have changed
significantly from prior years. The Board of an Unaffiliated Underlying
Fund will take any appropriate actions based on its review, including,
if appropriate, the institution of procedures designed to assure that
purchases of securities in Affiliated Underwritings are in the best
interests of shareholders.
    7. Each Unaffiliated Underlying Fund will maintain and preserve
permanently in an easily accessible place a written copy of the
procedures described in the preceding condition, and any modifications
to such procedures, and will maintain and preserve for a period of not
less than six years from the end of the fiscal year in which any
purchase from an Affiliated Underwriting occurred, the first two years
in an easily accessible place, a written record of each purchase of
securities in an Affiliated Underwriting once an investment by a
Portfolio in the securities of an Unaffiliated Underlying Fund exceeds
the limit of section 12(d)(1)(A)(i) of the Act, setting forth the: (a)
Party from whom the securities were acquired, (b) identity of the
underwriting syndicate's members, (c) terms of the purchase, and (d)
information or materials upon which the determinations of the Board of
the Unaffiliated Underlying Fund were made.
    8. Prior to its investment in shares of an Unaffiliated Underlying
Fund in excess of the limit in section 12(d)(1)(A)(i) of the Act, the
Portfolio and the Unaffiliated Underlying Fund will execute a
Participation Agreement stating, without limitation, that their Boards
and their investment advisers understand the terms and conditions of
the order and agree to fulfill their responsibilities under the order.
At the time of its investment in shares of an Unaffiliated Underlying
Fund in excess of the limit in section 12(d)(1)(A)(i), the Portfolio
will notify the Unaffiliated Underlying Fund of the investment. At such
time, the Portfolio will also transmit to the Unaffiliated Underlying
Fund a list of the names of each Portfolio Affiliate and Underwriting
Affiliate. The Portfolio will notify the Unaffiliated Underlying Fund
of any changes to the list as soon as reasonably practicable after a
change occurs. The Unaffiliated Underlying Fund and the Portfolio will
maintain and preserve a copy of the order, the Participation Agreement,
and the list with any updated information for the duration of the
investment and for a period of not less than six years thereafter, the
first two years in an easily accessible place.
    9. Before approving any advisory contract under section 15 of the
Act, the Board of each Portfolio, including a majority of the
Disinterested Trustees, shall find that the advisory fees charged under
the advisory contract are based on services provided that are in
addition to, rather than duplicative of, services provided under the
advisory contract(s) of any Underlying Fund in which the Portfolio may
invest. Such finding, and the basis upon which the finding was made,
will be recorded fully in the minute books of the appropriate
Portfolio.
    10. Roszel Advisors will waive fees otherwise payable to it by a
Portfolio in an amount at least equal to any compensation (including
fees received pursuant to any plan adopted by an Unaffiliated
Underlying Fund pursuant to rule 12b-1 under the Act) received from an
Unaffiliated Fund by Roszel Advisors, or an affiliated person of Roszel
Advisors, other than any advisory fees paid to Roszel Advisors or its
affiliated person by the Unaffiliated Fund, in connection with the
investment by the Portfolio in the Unaffiliated Fund. Any Subadviser
will waive fees otherwise payable to the Subadviser, directly or
indirectly, by the Portfolio in an amount at least equal to any
compensation received by the Subadviser, or an affiliated person of the
Subadviser, from an Unaffiliated Fund, other than any advisory fees
paid to the Subadviser or its affiliated person by the Unaffiliated
Underlying Fund, in connection with the investment by the Portfolio in
the Unaffiliated Underlying Fund made at the direction of the
Subadviser. In the event that the Subadviser waives fees, the benefit
of

the waiver will be passed through to the Portfolio.
    11. With respect to Registered Separate Accounts that invest in a
Portfolio, no sales load will be charged at the Portfolio level or at
the Underlying Fund level. Other sales charges and service fees, as
defined in NASD Conduct Rule 2830, if any, will only be charged at the
Portfolio level or at the Underlying Fund level, not both. With respect
to other investment in a Portfolio, any sales charges and/or service
fees charged with respect to shares of the Portfolio will not exceed
the limits applicable to a funds of funds set forth in NASD Conduct
Rule 2830.
    12. No Underlying Fund will acquire securities of any other
investment company or company relying on section 3(c)(1) or 3(c)(7) of
the Act in excess of the limits contained in section 12(d)(1)(A) of the
Act, except to the extent that such Underlying Fund: (a) Receives
securities of another investment company as a dividend or as a result
of a plan of reorganization of a company (other than a plan devised for
the purpose of evading section 12(d)(1) of the Act); or (b) acquires
(or is deemed to have acquired) securities of another investment
company pursuant to exemptive relief from the Commission permitting
such Underlying Fund to: (i) Acquire securities of one or more
affiliated investment companies for short-term cash management
purposes, or (ii) engage in interfund borrowing and lending
transactions.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-2120 Filed 2-5-08; 8:45 am]

BILLING CODE 8011-01-P