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No-Action Letter under:
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1 | Until February 25, 1991, PSI was known as Prudential-Bache Securities, Inc. |
2 | The Existing Orders are: Prudential-Bache Securities Inc., Investment Company Act Release Nos. 15622 (Mar. 13, 1987) (notice) and 15671 (Apr. 8, 1987) (order under section 6(c) of the Act exempting PSI from having to take for its own account or place with others $100,000 worth of units under an investment letter and enabling the Trusts to distribute capital gain dividends within a reasonable time after receipt); Prudential-Bache Unit Trusts, Investment Company Act Release Nos. 15180 (June 27, 1986) (notice) and 15231 (July 29, 1986) (order) (order under sections 6(c), 17(b), and 17(d) of the Act and rule 17d-1 under the Act to permit existing and future series of the Trust to purchase insurance from affiliates of PSI, to accept full settlements arising from claims made upon such insurance, and to allow the trustee of the Trust to make (and deduct as a Trust expense) premium payments for such insurance); Prudential-Bache Securities Inc., Investment Company Act Rel. Nos. 14943 (Feb. 18, 1986) (notice) and 14989 (Mar. 13, 1986) (order under section 11 of the Act amending a prior order (Investment Company Act Rel. No. 14010 (June 26, 1984)) and permitting certain offers of exchange); Prudential-Bache Securities Inc., Investment Company Act Rel. Nos. 13991 (June 4, 1984) (notice) and 14010 (June 26, 1984) (order under sections 6(c) and 11(a) of the Act permitting the exchange of units of any series of certain Trusts for units of any other series at a reduced fixed sales charge); Government Securities Equity Trust, Series I and Subsequent Series, Investment Company Act Rel. Nos. 16915 (Apr. 13, 1989) (notice) and 16959 (May 17, 1989) (order under sections 6(c) and 17(d) of the Act and rule 17d-1 under the Act, permitting series of a Trust to invest in shares of a Fund and zero coupon obligations, exempting PSI from having to take for its own account or place with others $100,000 worth of units, and permitting the Trust to distribute capital gain dividends resulting from redemption of Fund shares within a reasonable time after receipt); Government Securities Equity Trust, Investment Company Act Rel. Nos. 19608 (Aug. 3, 1993) (notice) and 19665 (Aug. 31, 1993) (order under sections 6(c), 11(a) and (c), 17(d) of the Act and rule 17d-1 under the Act permitting series of a Trust to invest in shares of a Fund and zero coupon obligations, exempting PSI from having to take for its own account or place with other $100,000 worth of units in the Trust, permitting the Trust to distribute capital gains resulting from redemptions of Fund shares within a reasonable time after receipt, permitting waiver of any sales load otherwise applicable to Fund shares that the Trust has purchased, permitting certain offers of exchange, and permitting certain affiliated transactions): Government Securities Equity Trust, Investment Company Act Rel. Nos. 18763 (June 8, 1992) (notice) and 18836 (July 7, 1992) (order) (same); Prudential Securities Incorporated, Investment Company Act Rel. Nos. 20922 (Feb. 27, 1995) (notice) and 20975 (Mar. 29, 1995) (order under sections 6(c) and 11(a) of the Act amending a prior order (Investment Company Act Rel. No. 14989 (Mar. 13, 1986)), permitting PSI to impose sales charges on sales of units of certain Trusts on a deferred basis and waive the deferred sales charge in certain cases, exchange Trust units having deferred sales charges, and exchange units of a terminating series of a Trust for units of the next available series of that Trust); National Equity Trust, Investment Company Act Rel. Nos. 21135 (June 14, 1995) (notice) and 21197 (July 11, 1995) (order under sections 6(c) and 17(b) of the Act permitting a terminating series of a Trust to sell portfolio securities to a new series of the Trust); Government Securities Equity Trust, Investment Company Act Rel. Nos. 20674 (Nov. 1, 1994) (notice) and 20741 (Nov. 29, 1994) (order under sections 6(c), 11(a) and (c), and 17(d) of the Act and rule 17d-1 under the Act permitting series of a Trust to invest in shares of a Fund and zero coupon obligations, exempting PSI from having to take for its own account or place with others $100,000 worth of units in the Trust, permitting the Trust to distribute capital gains resulting from redemptions of Fund shares within a reasonable time after receipt, permitting certain offers of exchange involving the Trust, and permitting certain affiliated transactions involving the Trust); Government Securities Equity Trust Series I and Subsequent Series, Investment Company Act Rel. Nos. 18260 (Aug. 6, 1991) (notice) and 18296 (Sept. 4, 1991) (order under sections 6(c) and 17(d) of the Act and rule 17d-1 under the Act amending a prior order (Rel. No. 16959 (May 17, 1989) to delete a condition that prohibits any series of the Trust from purchasing shares of multi-class Funds and prevents these Funds from establishing additional classes if their shares were held by any of the series of the Trust). The No-Action Letter is: Prudential Securities Incorporated (May 23, 2000) (Division would not recommend enforcement action under sections 2(a)(32), 2(a)(35), 22(c), 22(d) and 26(a)(2)(C) of the Act and rule 22c-1 under the Act if PSI relies on Investment Company Act Rel. No. 20975 (Mar. 29, 1995) (order) to implement a sales charge determined at the inception of a Trust's series that would be calculated at the time of each deduction as a fixed percentage of net asset value). |
3 | The Transfer is expected to take place on June 1, 2001. |
Cahill Gordon & Reindel
Eighty Pine Street
New York, N.Y. 10005-1702
Telephone 212-701-3000
Facsimile 212-269-5420
Writer's Direct Number, (212) 701-3484
April 18, 2001
1940 Act
Nadya B. Roytblat, Esq.
Office of Investment Company Regulation
Division of Investment Management
Securities and Exchange Commission
450 Fifth Street
Washington, DC 20549
Re: Prudential Investment Management Services LLC.
Dear Ms. Roytblat:
On behalf of Prudential Investment Management Services LLC ("PIMS"), we respectfully request that the Division of Investment Management (the "Staff") advise us that it will not recommend that the Securities and Exchange Commission (the "Commission") take enforcement action against PIMS if, under the circumstances described below, PIMS continues to rely upon existing orders set forth herein ("Existing Orders") and a no action position ("No Action Letter") issued to Prudential Securities Incorporated ("PSI"). PSI applied for the Existing Orders and the No Action Letter in connection with its business of sponsoring unit investment trusts (the "Trusts" or the "Trust", as the context requires). PSI and PIMS are each wholly owned indirect subsidiaries of The Prudential Insurance Company of America ("Prudential"). In connection with a corporate reorganization, PSI's unit investment trust business will be transferred to PIMS (the transfer of such business is referred to herein as the "Transfer"), expected to take place on June 1, 2001. PIMS, which was not an applicant to the applications for the Existing Orders, plans to engage in the types of transactions which were the subject of the Existing Orders and No Action Letter. In our view, the Transfer of PSI's Trust sponsorship business to PIMS, an entity that is under common control with PSI, with all essential facts and representations upon which the Existing Orders and No Action Letter are predicated remaining unchanged, should entitle PIMS to rely upon the Existing Orders and No Action Letter. We submit that the granting of a no-action letter in this regard will be consistent with the terms and conditions of the Existing Orders and the protection of investors.
PSI has been a sponsor of unit investment trusts for over fifteen years. In connection with PSI's sponsorship of Trusts, PSI was an applicant on an application for an Existing Order or applied for an Existing Order on behalf of a Trust. The consummation of the Transfer essentially will result in the reorganization within Prudential of an existing business and transfer such business to an affiliated entity under common control. There is no change in the investment objectives of the existing Trusts or the fees and charges in connection therewith. While a new entity will act as depositor and sponsor of the Trusts, the personnel administering such Trusts will remain the same. PIMS will assume all the duties and obligations of the depositor currently imposed on PSI under the trust indenture and agreement pursuant to which each Trust was organized. PIMS agrees to comply with the terms and conditions of the Existing Orders and the terms of the No Action Letter as though such terms and conditions were imposed directly on PIMS.
The Existing Orders are as follows:
No Action Letter issued to:
Prudential Securities Incorporated (May 23, 2000).
National Equity Trust, National Municipal Trust, Prudential Unit Trusts and Government Securities Equity Trust and any future Trust sponsored by PSI; any existing or future series of the Trusts; and PSI obtained a no action letter pursuant to which they would rely on an order (item No. 8 above) pursuant to Section 6(c) granting exemption from Sections 2(a)(32), 2(a)(35), 22(c), 22(d), and 26(a)(2)(C) of the Act and Rule 22c-1 under the Act to permit PSI to implement a sales charge determined at the inception of a Trust's series which will be calculated at the time of each deduction as a fixed percentage of net asset value.
PIMS is an entity affiliated with PSI. The persons operating the Trust business transferred to PIMs will be the same. The continuity of parties under common control will continue to exist subsequent to the Transfer and the business will be operated by the same personnel in the same manner as was the case prior to the Transfer. The Transfer will not impact the investors in the Trusts in that the objectives, structure and fees of the existing Trusts will not change as a result of the Transfer.
We believe that allowing PIMS to rely on the Existing Orders is consistent with the provisions, policies and purposes of the Act and with the Staff's prior no-action positions. In view of the foregoing, we respectfully request that the Staff confirm that it will not recommend enforcement action if PIMS relies on the Existing Orders and No Action Letter following completion of the Transfer.
Thank you in advance for your prompt consideration of this request. Should you have any questions or if I can provide additional information regarding this request, please do not hesitate to call the undersigned at (212) 701-3484.
Very truly yours,
Philip A. Heimowitz
1 | Until February 25, 1991, PSI was known as Prudential-Bache Securities, Inc. On that date, Prudential-Bache Securities, Inc. changed its name to Prudential Securities Incorporated. |
http://www.sec.gov/divisions/investment/noaction/prudential041901.htm
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