Federal Register / Vol. 71, No.

78 / Monday, April 24, 2006 / Notices 21049

OFFICE OF PERSONNEL Publications Team, RIS Support Support Group, Center for Retirement
MANAGEMENT Services/Support Group, (202) 606– and Insurance Services, U.S. Office of
0623. Personnel Management, 1900 E Street,
Proposed Collection; Comment U.S. Office of Personnel Management. NW., Room 3349, Washington, DC
Request for Review of a Revised Linda M. Springer, 20415–3540.
Information Collection: RI 30–9 For Information Regarding
Director.
Administrative Coordination Contact:
AGENCY: Office of Personnel [FR Doc. 06–3826 Filed 4–21–06; 8:45 am]
Cyrus S. Benson, Team Leader,
Management. BILLING CODE 6325–38–P
Publications Team, RIS Support
ACTION: Notice.
Services/Support Group, (202) 606–
SUMMARY: In accordance with the 0623.
OFFICE OF PERSONNEL
Paperwork Reduction Act of 1995 (Pub. MANAGEMENT U.S. Office of Personnel Management.
L. 104–13, May 22, 1995), this notice Linda M. Springer,
announces that the Office of Personnel Proposed Collection; Comment Director.
Management (OPM) intends to submit to Request for Review of an Existing [FR Doc. 06–3827 Filed 4–21–06; 8:45 am]
the Office of Management and Budget Information Collection: RI 25–15
BILLING CODE 6325–38–P
(OMB) a request for review of a revised
AGENCY: Office of Personnel
information collection. RI 30–9,
Management.
Reinstatement of Disability Annuity
ACTION: Notice. SECURITIES AND EXCHANGE
Previously Terminated Because of
COMMISSION
Restoration to Earning Capacity, informs SUMMARY: In accordance with the
former disability annuitants of their Paperwork Reduction Act of 1995 (Pub. [Release No. IC–27290; 812–13012]
right to request restoration under title 5, L. 104–13, May 22, 1995 and 5 CFR
U.S.C. 8337. It also specifies the 1320), this notice announces that the Bridgeway Funds, Inc., et al.; Notice of
conditions to be met and the Office of Personnel Management (OPM) Application
documentation required for a person to intends to submit to the Office of April 18, 2006.
request reinstatement. Management and Budget (OMB) a AGENCY: Securities and Exchange
Comments are particularly invited on: request for review of an existing Commission (‘‘Commission’’).
Whether this collection of information information collection. RI 25–15, Notice ACTION: Notice of application for an
is necessary for the proper performance of Change in Student’s Status, is used to
of functions of the Office of Personnel order under (i) section 6(c) of the
collect sufficient information from adult Investment Company Act of 1940 (the
Management, and whether it will have children of deceased Federal employees
practical utility; whether our estimate of ‘‘Act’’) granting an exemption from
or annuitants to assure that the child sections 18(f) and 21(b) of the Act; (ii)
the public burden of this collection of continues to be eligible for payments
information is accurate, and based on section 12(d)(1)(J) of the Act granting an
from OPM. exemption from section 12(d)(1) of the
valid assumptions and methodology; Comments are particularly invited on:
and ways in which we can minimize the Act; (iii) sections 6(c) and 17(b) of the
—Whether this collection of information Act granting an exemption from sections
burden of the collection of information is necessary for the proper
on those who are to respond, through 17(a)(1) and 17(a)(3) of the Act; and (iv)
performance of functions of the Office section 17(d) of the Act and rule 17d–
the use of appropriate technological of Personnel Management, and
collection techniques or other forms of 1 under the Act to permit certain joint
whether it will have practical utility; transactions.
information technology. —Whether our estimate of the public
Approximately 200 forms are burden of this collection is accurate, Summary of Application: Applicants
completed annually. The form takes and based on valid assumptions and request an order that would permit
approximately 60 minutes to respond, methodology; and certain registered open-end management
including a medical examination. The —Ways in which we can minimize the investment companies to participate in
annual estimated burden is 200 hours. burden of the collection of a joint lending and borrowing facility.
Burden may vary depending on the time information on those who are to Applicants: Bridgeway Funds Inc.
required for a medical examination. For respond, through use of the (‘‘Bridgeway’’) and Bridgeway Capital
copies of this proposal, contact Mary appropriate technological collection Management, Inc. (the ‘‘Adviser’’).
Beth Smith-Toomey on (202) 606–8358, techniques or other forms of Filing Dates: The application was
FAX (202) 418–3251 or via E-mail to information technology. filed on August 28, 2003, and amended
[email protected]. Approximately 2,500 certifications are on April 12, 2006.
Please include a mailing address with processed annually. We estimate that Hearing or Notification of Hearing: An
your request. each form takes approximately 20 order granting the application will be
DATES: Comments on this proposal minutes to complete. The annual issued unless the Commission orders a
should be received within 60 calendar estimated burden is 835 hours. hearing. Interested persons may request
days from the date of this publication. For copies of this proposal, contact a hearing by writing to the
ADDRESSES: Send or deliver comments Mary Beth Smith-Toomey on (202) 606– Commission’s Secretary and serving
to Pamela S. Israel, Chief, Operations 8358, FAX (202) 418–3251 or E-mail to applicants with a copy of the request,
Support Group, Center for Retirement MaryBeth [email protected]. personally or by mail. Hearing requests
and Insurance Service, U.S. Office of Please include your mailing address should be received by the Commission
Personnel Management, 1900 E Street, with your request. by 5:30 p.m. on May 15, 2006 and
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NW., Room 3349, Washington, DC DATES: Comments on this proposal should be accompanied by proof of
20415–3540. should be received within 60 calendar service on the applicants, in the form of
For Information Regarding days from the date of this publication. an affidavit or, for lawyers, a certificate
Administrative Coordination Contact: ADDRESSES: Send or deliver comments of service. Hearing requests should state
Cyrus S. Benson, Team Leader, to Pamela S. Israel, Chief, Operations the nature of the writer’s interest, the

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 21050 Federal Register / Vol. 71, No. 78 / Monday, April 24, 2006 / Notices

reason for the request, and the issues instruments of the same maturity as the a borrowing Fund would pay lower
contested. Persons who wish to be bank loan. Applicants state that this interest rates than those offered by
notified of a hearing may request differential represents the profit the banks on short-term loans. In addition,
notification by writing to the banks would earn for serving as a Funds making short-term cash loans
Commission’s Secretary. middleman between a borrower and directly to other Funds would earn
ADDRESSES: Secretary, U.S. Securities lender. interest at a rate higher than they
and Exchange Commission, 100 F 4. Applicants request an order that otherwise could obtain from investing
Street, NE., Washington, DC 20549– would permit the Funds to enter into their cash in repurchase agreements.
1090; Applicants, 5615 Kirby Drive, Ste interfund lending agreements Thus, applicants believe that the
518, Houston, TX 77005–2448. (‘‘Interfund Lending Agreements’’) proposed credit facility would benefit
FOR FURTHER INFORMATION CONTACT: John
under which the Funds would lend and both borrowing and lending Funds.
Yoder, Senior Counsel, at (202) 551– borrow money for temporary purposes 8. The interest rate charged to the
6878, or Mary Kay Frech, Branch Chief, directly to and from each other through Funds on any Interfund Loan
at (202) 551–6821 (Division of a credit facility (‘‘Interfund Loan’’). (‘‘Interfund Loan Rate’’) would be the
Applicants believe that the credit average of the ‘‘Repo Rate’’ and the
Investment Management, Office of
facility would reduce the Funds’ ‘‘Bank Loan Rate,’’ both as defined
Investment Company Regulation).
borrowing costs and enhance their below. The Repo Rate for any day would
SUPPLEMENTARY INFORMATION: The
ability to earn higher interest rates on be the highest rate available to the
following is a summary of the short-term investments. Although the Funds from investing in overnight
application. The complete application credit facility would reduce the Funds’ repurchase agreements. The Bank Loan
may be obtained for a fee at the Public need to borrow from banks, the Funds Rate for any day would be calculated by
Reference Desk, U.S. Securities and would be free to establish new lines of the Credit Facility Team (as defined
Exchange Commission, 100 F Street, credit or other borrowing arrangements below) each day an Interfund Loan is
NE., Washington DC 20549–0102 with banks. made according to a formula established
(telephone (202) 551–5850). 5. Applicants anticipate that the by a Fund’s board of directors (‘‘Board’’)
Applicants’ Representations credit facility would provide a designed to approximate the lowest
borrowing Fund with significant savings interest rate at which bank short-term
Bridgeway is organized as a Maryland when the cash position of the Fund is loans would be available to the Funds.
corporation and is registered under the insufficient to meet temporary cash The formula would be based upon a
Act as an open-end management requirements. This situation could arise publicly available rate (e.g., Federal
investment company.1 Bridgeway is when redemptions exceed expected funds plus 25 basis points) and would
comprised of multiple series (each a volumes and certain Funds have vary with this rate so as to reflect
‘‘Fund’’, and together the ‘‘Funds’’). The insufficient cash to satisfy such changing bank loan rates. The Board of
Adviser is registered under the redemptions. When a Fund liquidates each Fund would periodically review
Investment Advisers Act of 1940 and portfolio securities to meet redemption the continuing appropriateness of using
serves as investment adviser to the requests, it often does not receive the publicly available rate, as well as the
Funds. payment in settlement for up to three relationship between the Bank Loan
2. Some Funds may lend money to days (or longer for certain foreign Rate and current bank loan rates that
banks or other entities by entering into transactions). The credit facility would would be available to the Funds. The
repurchase agreements or purchasing provide a source of immediate, short- initial formula and any subsequent
other short-term instruments. Other term liquidity pending settlement of the modifications to the formula would be
Funds may need to borrow money from sale of portfolio securities. subject to the approval of the Board.
the same or similar banks or other 6. Applicants also propose using the 9. The credit facility would be
entities for temporary purposes to credit facility when a sale of securities administered by a representative of
satisfy redemption requests, to cover fails due to circumstances beyond a Bridgeway’s accounting department, an
unanticipated cash shortfalls such as a Fund’s control, such as a delay in the investment professional within the
trade ‘‘fail’’ in which cash payment for delivery of cash to a Fund’s custodian Adviser (‘‘Portfolio Manager’’), and the
a security sold by a Fund has been or improper delivery instructions by the compliance officer for Bridgeway
delayed, or for other temporary broker effecting the transaction. Sales (collectively, the ‘‘Credit Facility
purposes. fails may present a cash shortfall if a Team’’). Under the proposed credit
3. If the Funds were to borrow money Fund has undertaken to purchase facility, the portfolio managers for each
from banks, the Funds would pay securities using the proceeds from the participating Fund could provide
interest on the borrowed cash at a rate securities sold. Under such standing instructions to participate
that would be higher than the rate that circumstances, the Fund could fail on daily as a borrower or lender. On each
would be earned by them on repurchase its intended purchase due to lack of business day, the Credit Facility Team
agreements and other short-term funds from the previous sale, resulting would collect data on the uninvested
in additional cost to the Fund, or sell a cash and borrowing requirements of all
1 Applicants request that the relief apply to any
security on a same day settlement basis, participating Funds from the Funds’
other existing or future registered open-end
management investment company or series thereof earning a lower return on the custodian. Once it determined the
that is advised by the Adviser or any person investment. Use of the credit facility aggregate amount of cash available for
controlling, controlled by, or under common under these circumstances would loans and borrowing demand, the Credit
control with the Adviser or its successors (included enable the Fund to have access to Facility Team would allocate loans
in the term ‘‘Funds’’). The term ‘‘successor’’ is
limited to entities that result from a reorganization immediate short-term liquidity without among borrowing Funds without any
incurring custodian overdraft or other further communication from portfolio
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into another jurisdiction or a change in the type of

business organization. All existing Funds that charges. managers (other than the Portfolio
currently intend to rely on the requested order have 7. While bank borrowings could Manager as a member of the Credit
been named as applicants. Any other existing or
future Fund that relies on the order in the future
supply needed cash to cover Facility Team). Applicants expect far
will comply with the terms and conditions of the unanticipated redemptions and sales more available uninvested cash each
application. fails, under the proposed credit facility day than borrowing demand. All

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 Federal Register / Vol. 71, No. 78 / Monday, April 24, 2006 / Notices 21051

allocations would require approval of at concerning the credit facility in its from causing or inducing the investment
least one member of the Credit Facility prospectus and/or statement of company to engage in lending
Team who is not the Portfolio Manager. additional information (‘‘SAI’’); and (c) transactions that unfairly inure to the
After the Credit Facility Team has the Fund’s participation in the credit benefit of such party and that are
allocated cash for Interfund Loans, the facility is consistent with its investment detrimental to the best interests of the
Credit Facility Team would invest any policies, limitations, and organizational investment company and its
remaining cash in accordance with the documents. shareholders. Applicants assert that the
standing instructions of portfolio 14. In connection with the credit proposed credit facility transactions do
managers or return remaining amounts facility, applicants request an order not raise these concerns because: (a) The
to the Funds. under (a) section 6(c) of the Act granting Adviser through the Credit Facility
10. The Credit Facility Team would relief from sections 18(f) and 21(b) of Team would administer the program as
allocate borrowing demand and cash the Act; (b) section 12(d)(1)(J) of the Act a disinterested fiduciary; (b) all
available for lending among the Funds granting relief from section 12(d)(1) of Interfund Loans would consist only of
on what the Credit Facility Team the Act; (c) sections 6(c) and 17(b) of the uninvested cash reserves that the Funds
believes to be an equitable basis, subject Act granting relief from sections 17(a)(1) otherwise would invest in short-term
to certain administrative procedures and 17(a)(3) of the Act; and (d) under repurchase agreements or other short-
applicable to all Funds, such as the time section 17(d) and rule 17d–1 under the term instruments; (c) the Interfund
of filing requests to participate, Act to permit certain joint arrangements. Loans would not involve a greater risk
minimum loan lot sizes, and the need to than such other investments; (d) the
Applicants’ Legal Analysis
minimize the number of transactions lending Fund would receive interest at
and associated administrative costs. To 1. Section 17(a)(3) generally prohibits a rate higher than it could obtain
reduce transaction costs, each loan any affiliated person, or affiliated through such other investments; and (e)
normally would be allocated in a person of an affiliated person, from the borrowing Fund would pay interest
manner intended to minimize the borrowing money or other property from at a rate lower than otherwise available
number of participants necessary to a registered investment company. to it under its bank loan agreements and
complete the loan transaction. The Section 21(b) generally prohibits any avoid the up-front commitment fees
method of allocation and related registered management company from associated with committed lines of
administrative procedures would be lending money or other property to any credit. Moreover, applicants believe that
approved by each Fund’s Board, person if that person controls or is the other conditions in the application
including a majority of trustees who are under common control with the would effectively preclude the
not ‘‘interested persons’’ of the Fund, as company. Section 2(a)(3)(C) of the Act possibility of any Fund obtaining an
defined in section 2(a)(19) of the Act defines an ‘‘affiliated person’’ of another undue advantage over any other Fund.
(‘‘Independent Directors’’), to ensure person, in part, to be any person directly 4. Section 17(a)(1) generally prohibits
that both borrowing and lending Funds or indirectly controlling, controlled by, an affiliated person of a registered
participate on an equitable basis. or under common control with, the investment company, or an affiliated
11. The Credit Facility Team would other person. Applicants state that the person of an affiliated person, from
(a) monitor the interest rates charged Funds may be under common control by selling any securities or other property
and other terms and conditions of the virtue of having the Adviser as their to the company. Section 12(d)(1)
Interfund Loans; (b) limit the common investment advisor and/or by generally makes it unlawful for a
borrowings and loans entered into by reason of having common officers and/ registered investment company to
each Fund to ensure that they comply or directors. purchase or otherwise acquire any
with the Fund’s investment policies and 2. Section 6(c) provides that an security issued by any other investment
limitations; (c) ensure equitable exemptive order may be granted where company except in accordance with the
treatment of each Fund; and (d) make an exemption is necessary or limitations set forth in that section.
quarterly reports to the Board appropriate in the public interest and Applicants state that the obligation of a
concerning any transactions by the consistent with the protection of borrowing Fund to repay an Interfund
Funds under the credit facility and the investors and the purposes fairly Loan may constitute a security under
Interfund Loan Rate charged. intended by the policy and provisions of sections 17(a)(1) and 12(d)(1). Section
12. The Adviser, through the Credit the Act. Section 17(b) authorizes the 12(d)(1)(J) provides that the Commission
Facility Team, would administer the Commission to exempt a proposed may exempt persons or transactions
credit facility as a disinterested transaction from section 17(a) provided from any provision of section 12(d)(1) if
fiduciary, and would receive no that the terms of the transaction, and to the extent such exemption is
additional fee for its services. The including the consideration to be paid consistent with the public interest and
Adviser may collect standard or received, are fair and reasonable and the protection of investors. Applicants
recordkeeping, bookkeeping and do not involve overreaching on the part contend that the standards under
accounting fees associated with the of any person concerned, and the sections 6(c), 17(b), and 12(d)(1)(J) are
transfer of cash and/or securities in transaction is consistent with the policy satisfied for all the reasons set forth
connection with repurchase and lending of the investment company as recited in above in support of their request for
transactions generally, including its registration statement and with the relief from sections 17(a)(3) and 21(b)
transactions effected through the credit general purposes of the Act. Applicants and for the reasons discussed below.
facility. Fees for these services would be believe that the proposed arrangements 5. Applicants state that section
no higher than those applicable for satisfy these standards for the reasons 12(d)(1) was intended to prevent the
comparable bank loan transactions. discussed below. pyramiding of investment companies in
13. No Fund may participate in the 3. Applicants submit that sections order to avoid imposing on investors
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credit facility unless: (a) The Fund has 17(a)(3) and 21(b) of the Act were additional and duplicative costs and
obtained shareholder approval for its intended to prevent a party with strong fees attendant upon multiple layers of
participation, if such approval is potential adverse interests to, and some investment companies. Applicants
required by law; (b) the Fund has fully influence over the investment decisions submit that the proposed credit facility
disclosed all material information of, a registered investment company does not involve these abuses.

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 21052 Federal Register / Vol. 71, No. 78 / Monday, April 24, 2006 / Notices

Applicants note that there will be no on loaned funds to all participating equivalent percentage of collateral to
duplicative costs or fees to the Funds or Funds and their shareholders. loan value as any outstanding loan that
shareholders, and that the Adviser will Applicants note that each Fund would requires collateral. If a Fund’s total
receive no additional compensation for have an equal opportunity to borrow outstanding borrowings immediately
its services in administering the credit and lend on equal terms consistent with after an interfund borrowing would be
facility through the Credit Facility its investment policies and fundamental greater than 10% of its total assets, the
Team. Applicants also note that the limitations. Applicants therefore believe Fund may borrow through the credit
purpose of the proposed credit facility that each Fund’s participation in the facility on a secured basis only. A Fund
is to provide economic benefits for all credit facility will be on terms that are may not borrow through the credit
of the participating Funds and their no different from or less advantageous facility or from any other source if its
shareholders. than that of other participating Funds. total borrowings immediately after the
6. Section 18(f)(1) prohibits open-end interfund borrowing would be more
investment companies from issuing any Applicants’ Conditions
than 331⁄3% of its total assets or its
senior security except that a company is Applicants agree that any order maximum borrowing limit set forth in
permitted to borrow from any bank, if granting the requested relief will be the Fund’s investment restrictions,
immediately after the borrowing, there subject to the following conditions: whichever is less.
is asset coverage of at least 300 per 1. The Interfund Loan Rate to be 5. Before any Fund that has
centum for all borrowings of the charged to the Funds under the credit outstanding interfund borrowings may,
company. Under section 18(g) of the facility will be the average of the Repo through additional borrowings, cause its
Act, the term ‘‘senior security’’ includes Rate and the Bank Loan Rate. outstanding borrowings from all sources
any bond, debenture, note or similar 2. On each business day, the Credit to exceed 10% of its total assets, the
obligation or instrument constituting a Facility Team will compare the Bank Fund must first secure each outstanding
security and evidencing indebtedness. Loan Rate with the Repo Rate and will Interfund Loan by the pledge of
Applicants request relief from section make cash available for Interfund Loans segregated collateral with a market
18(f)(1) to the limited extent necessary only if the Interfund Loan Rate is (a) value at least equal to 102% of the
to implement the credit facility (because more favorable to the lending Fund than outstanding principal value of the loan.
the lending Funds are not banks). the Repo Rate, and, if applicable, the If the total outstanding borrowings of a
7. Applicants believe that granting yield of any money market fund in Fund with outstanding Interfund Loans
relief under section 6(c) is appropriate which the lending Fund could exceed 10% of its total assets for any
because the Funds would remain otherwise invest and (b) more favorable other reason (such as a decline in net
subject to the requirement of section to the borrowing Fund than the Bank asset value or because of shareholder
18(f)(1) that all borrowings of the Fund, Loan Rate. redemptions), the Fund will within one
including combined interfund and bank 3. If a Fund has outstanding business day thereafter (a) repay all its
borrowings, have at least 300% asset borrowings, any Interfund Loans to the outstanding Interfund Loans; (b) reduce
coverage. Based on the conditions and Fund (a) will be at an interest rate equal its outstanding indebtedness to 10% or
safeguards described in the application, to or lower than any outstanding bank less of its total assets; or (c) secure each
applicants also submit that to allow the loan; (b) will be secured at least on an outstanding Interfund Loan by the
Funds to borrow from other Funds equal priority basis with at least an pledge of segregated collateral with a
pursuant to the proposed credit facility equivalent percentage of collateral to market value at least equal to 102% of
is consistent with the purposes and loan value as any outstanding bank loan the outstanding principal value of the
policies of section 18(f)(1). that requires collateral; (c) will have a loan until the Fund’s total outstanding
8. Section 17(d) and rule 17d–1 maturity no longer than any outstanding borrowings cease to exceed 10% of its
generally prohibit any affiliated person bank loan (and in any event not over total assets, at which time the collateral
of a registered investment company, or seven days); and (d) will provide that, called for by this condition (5) shall no
affiliated persons of an affiliated person, if an event of default occurs under any longer be required. Until each Interfund
when acting as principal, from effecting agreement evidencing an outstanding Loan that is outstanding at any time that
any joint transactions in which the bank loan to the Fund, that event of a Fund’s total outstanding borrowings
company participates unless the default will automatically (without need exceeds 10% is repaid or the Fund’s
transaction is approved by the for action or notice by the lending Fund) total outstanding borrowings cease to
Commission. Rule 17d–1 provides that constitute an immediate event of default exceed 10% of its total assets, the Fund
in passing upon applications filed under under the Interfund Lending Agreement will mark the value of the collateral to
the rule, the Commission will consider entitling the lending Fund to call the market each day and will pledge such
whether the participation of a registered Interfund Loan (and exercise all rights additional collateral as is necessary to
investment company in a joint with respect to any collateral) and that maintain the market value of the
enterprise on the basis proposed is such call will be made if the lending collateral that secures each outstanding
consistent with the provisions, policies, bank exercises its right to call its loan Interfund Loan at least equal to 102% of
and purposes of the Act and the extent under its agreement with the borrowing the outstanding principal value of the
to which the company’s participation is Fund. loan.
on a basis different from or less 4. A Fund may make an unsecured 6. No Fund may lend to another Fund
advantageous than that of other borrowing through the credit facility if through the credit facility if the loan
participants. its outstanding borrowing from all would cause its aggregate outstanding
9. Applicants submit that the purpose sources immediately after the interfund loans through the credit facility to
of section 17(d) is to avoid overreaching borrowing total 10% or less than its exceed 15% of its net assets at the time
by and unfair advantage to investment total assets, provided that if the Fund of the loan.
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company insiders. Applicants believe has a secured loan outstanding from any 7. A Fund’s Interfund Loans to any
that the credit facility is consistent with other lender, including but not limited one Fund shall not exceed 5% of the
the provisions, policies, and purposes of to another Fund, the Fund’s interfund lending Fund’s net assets.
the Act in that it offers both reduced borrowing will be secured on at least an 8. The duration of Interfund Loans
borrowing costs and enhanced returns equal priority basis with at least an will be limited to the time required to

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 Federal Register / Vol. 71, No. 78 / Monday, April 24, 2006 / Notices 21053

receive payment for securities sold, but default is not cured within two business shall address procedures designed to
in no event more than seven days. Loans days from its maturity or from the time achieve the following objectives: (a)
effected within seven days of each other the lending Fund makes a demand for That the Interfund Loan Rate will be
will be treated as separate loan payment under the provisions of the higher than the Repo Rate and, if
transactions for purposes of this Interfund Lending Agreement, the applicable, the yield of the money
condition. Credit Facility Team will promptly refer market funds, but lower than the Bank
9. Each Interfund Loan may be called the loan for arbitration to an Loan Rate; (b) compliance with the
on one business day’s notice by a independent arbitrator selected by the collateral requirements as set forth in
lending Fund and may be repaid on any Board of any Fund involved in the loan the application; (c) compliance with the
day by a borrowing Fund. who will serve as arbitrator of disputes percentage limitations on interfund
10. A Fund’s participation in the concerning Interfund Loans.2 The borrowing and lending; (d) allocation of
credit facility must be consistent with arbitrator will resolve any problems interfund borrowing and lending
its investment policies and limitations promptly, and the arbitrator’s decision demand in an equitable manner and in
and organizational documents. will be binding on both Funds. The accordance with procedures established
11. The Credit Facility Team will arbitrator will submit, at least annually, by the Board; and (e) that the interest
calculate total Fund borrowing and a written report to the Board setting rate on any Interfund Loan does not
lending demand through the credit forth a description of the nature of any exceed the interest rate on any third
facility, and allocate Interfund Loans on dispute and the actions taken by the party borrowings of a borrowing Fund at
an equitable basis among the Funds Funds to resolve the dispute. the time of the Interfund Loan. After the
without the intervention of any portfolio 15. Each Fund will maintain and final report is filed, the Fund’s external
manager of the Funds (other than the preserve for a period of not less than six auditors, in connection with their Fund
Portfolio Manager acting in his or her years from the end of the fiscal year in audit examinations, will continue to
capacity as a member of the Credit which any transaction under the credit review the operation of the credit
Facility Team). All allocations will facility occurred, the first two years in facility for compliance with the
require approval of at least one member an easily accessible place, written conditions of the application and their
of the Credit Facility Team who is not records of all such transactions setting review will form the basis, in part, of
the Portfolio Manager. The Credit forth a description of the terms of the the auditor’s report on internal
Facility Team will not solicit cash for transaction, including the amount, the accounting controls in Form N–SAR.
the credit facility from any Fund or maturity and rate of interest on the loan, 17. No Fund will participate in the
prospectively publish or disseminate the rate of interest available at the time credit facility upon receipt of requisite
loan demand data to portfolio managers on short-term repurchase agreements regulatory approval unless all material
(except to the extent that the Portfolio and bank borrowings, the yield on any facts about its intended participation are
Manager has access to loan demand data money market fund in which the fully disclosed in the Fund’s SAI.
in his or her capacity as a member of the 18. A Fund’s borrowings through the
lending Fund could otherwise invest
Credit Facility Team). The Credit credit facility, as measured on the day
and such other information presented to
Facility Team will invest any amounts when the most recent loan was made,
the Fund’s Board in connection with the
remaining after satisfaction of borrowing will not exceed the greater of 125% of
review required by conditions 12 and
demand in accordance with the the Fund’s total net cash redemptions or
13.
standing instructions from portfolio 16. The Credit Facility Team will 102% of sales fails for the preceding
managers or return remaining amounts prepare and submit to the Board for seven calendar days.
to the Funds. 19. The Board of each Fund will
review an initial report describing the
12. The Credit Facility Team will satisfy the fund governance standards as
operations of the credit facility and the
monitor the Interfund Loan Rate defined in rule 0–1(a)(7) under the Act
procedures to be implemented to ensure
charged and the other terms and by the compliance date for the rule.
that all Funds are treated fairly. After
conditions of the Interfund Loans and For the Commission, by the Division of
the commencement of operations of the
will make a quarterly report to the Investment Management, under delegated
credit facility, the Credit Facility Team
Board concerning the participation of authority.
will report on the operations of the
the Funds in the credit facility and the Nancy M. Morris,
credit facility at the quarterly meetings
terms and other conditions of any Secretary.
of each Fund’s Board. In addition, for
extensions of credit under the facility. [FR Doc. E6–6068 Filed 4–21–06; 8:45 am]
13. The Board of each Fund, two years following the commencement
including a majority of the Independent of the credit facility, the independent BILLING CODE 8010–01–P

Directors: (a) Will review no less public accountant for each Fund shall
frequently than quarterly the Fund’s prepare an annual report that evaluates
the Credit Facility Team’s assertion that SECURITIES AND EXCHANGE
participation in the credit facility during COMMISSION
the preceding quarter for compliance it has established procedures reasonably
with the conditions of any order designed to achieve compliance with [Release No. 34–53657; File No. SR–Amex–
permitting the transactions; (b) will the conditions of the order. The report 2006–32]
establish the Bank Loan Rate formula will be prepared in accordance with the
Statements on Standards for Attestation Self-Regulatory Organizations;
used to determine the interest rate on American Stock Exchange LLC; Notice
Interfund Loans and review no less Engagements No. 10 and it shall be filed
pursuant to Item 77Q3 of Form N–SAR, of Filing and Immediate Effectiveness
frequently than annually the continuing of Proposed Rule Change Relating to
appropriateness of the Bank Loan Rate as such statements or form may be
revised, amended, or superseded from Commentary .10 to Amex Rule 958 and
formula; and (c) will review no less
rmajette on PROD1PC67 with NOTICES

time to time. In particular, the report Commentary .09 to Amex Rule 958–
frequently than annually the continuing ANTE
appropriateness of the Fund’s 2 If a dispute involves Funds with separate
participation in the credit facility. April 14, 2006.
Boards, the respective Boards will agree on an
14. In the event an Interfund Loan is independent arbitrator that is satisfactory to each Pursuant to section 19(b)(1) of the
not paid according to its terms and the Fund. Securities Exchange Act of 1934

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