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U.S. Securities and Exchange Commission

Investment Advisers Act of 1940 — Rule 206(4)-3
General Electric Company

August 2, 2010

RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF INVESTMENT MANAGEMENT

IM Ref. No. 201006221156
File No. 001-00035

We would not recommend enforcement action to the United States Securities and Exchange Commission ("Commission") under Section 206(4) of the Investment Advisers Act of 1940 ("Advisers Act") and Rule 206(4)-3 thereunder if any investment adviser that is required to be registered pursuant to Section 203 of the Advisers Act, including an affiliated adviser of General Electric Company ("GE"), pays GE, as solicitor within the meaning of Rule 206(4)-3(d)(1), a cash solicitation fee, directly or indirectly, for the solicitation of advisory clients in accordance with Rule 206(4)-3,1 notwithstanding an injunctive order issued by the United States District Court for the District of Columbia (the "Final Judgment") that otherwise would preclude such an investment adviser from paying such a fee, directly or indirectly, to GE.2

Our position is based on the facts and representations in your letter dated July 30, 2010, particularly the representations of GE that:

  1. it will conduct any cash solicitation arrangement entered into with any investment adviser registered or required to be registered under Section 203 of the Advisers Act in compliance with the terms of Rule 206(4)-3, except for the investment adviser's payment of cash solicitation fees, directly or indirectly, to GE, which is subject to the Final Judgment;

  2. the Final Judgment does not bar or suspend GE from acting in any capacity under the federal securities laws;3

  3. it will comply with the terms of the Final Judgment; and

  4. for ten years from the date of the entry of the Final Judgment, GE or any investment adviser with which it has a solicitation arrangement subject to Rule 206(4)-3 will disclose the Final Judgment in a written document that is delivered to each person whom the GE solicits (a) not less than 48 hours before the person enters into a written or oral investment advisory contract with the investment adviser or (b) at the time the person enters into such a contract, if the person has the right to terminate such contract without penalty within 5 business days after entering into the contract.

This position applies only to the Final Judgment and not to any other basis for disqualification under Rule 206(4)-3 that may exist or arise with respect to GE.

Rochelle Kauffman Plesset
Senior Counsel


Endnotes

You note that while, as of the date of this letter, GE does not act in any of the capacities set forth in Section 9(a) of the Investment Company Act, companies of which GE is an affiliated person do act in such capacities. The entry of the Final Judgment, absent the issuance of an order by the Commission pursuant to Section 9(c) of the Investment Company Act that exempts GE from the provisions of Section 9(a) of the Investment Company Act, would effectively prohibit GE and companies of which it is an affiliated person from acting in any of the capacities set forth in Section 9(a) of the Investment Company Act. You state that, pursuant to Section 9(c) of the Investment Company Act, certain affiliated persons of GE, on behalf of themselves and GE's future affiliated persons, submitted an application to the Commission requesting (i) an order of temporary exemption from Section 9(a) of the Investment Company Act and (ii) a permanent order exempting such persons from the provisions of Section 9(a) of the Investment Company Act.

On July 30, 2010, the Commission issued an order granting certain affiliated persons of GE and GE's future affiliated persons a temporary exemption from Section 9(a) of the Investment Company Act pursuant to Section 9(c) of the Investment Company Act, with respect to the Final Judgment, until the date the Commission takes final action on the application for a permanent order. In re GE Asset Management Incorporated, et al., SEC Rel. No. 29373 (July 30, 2010). Therefore, such persons are not currently barred or suspended from acting in any capacity specified in Section 9(a) of the Investment Company Act as a result of the Final Judgment.


Incoming Letter

The Incoming Letter is in Acrobat format.


http://www.sec.gov/divisions/investment/noaction/2010/ge080210.htm


Modified: 08/03/2010