SECTION
15(f) OF THE INVESTMENT COMPANY ACT OF 1940
15
U.S.C. § 80a-15(f) (1988)
(1) An
investment adviser, or a corporate trustee performing the functions of an
investment adviser, of a registered investment company or an affiliated person
of such investment adviser or corporate trustee may receive any amount or
benefit in connection with a sale of securities of, or a sale of any other
interest in, such investment adviser or corporate trustee which results in an
assignment of an investment advisory contract with such company or the change
in control of or identity of such corporate trustee, if-
(A) for a period of three
years after the time of such action, at least 75 per centum of the members of
the board of directors of such registered company or such corporate trustee (or
successor thereto, by reorganization or otherwise) are not (i) interested
persons of the investment adviser of such company or such corporate trustee, or
(ii) interested persons of the predecessor investment adviser or such corporate
trustee; and
(B) there is not imposed
an unfair burden on such company as a result of such transaction or any express
or implied terms, conditions, or understandings applicable thereto.
(2)(A)
For the purpose of paragraph (1)(A) of this subsection, interested persons of a
corporate trustee shall be determined in accordance with section
80a-2(a)(19)(B) of this title: Provided, That no person shall be deemed to be
an interested person of a corporate trustee solely by reason of (i) his being a
member of its board of directors or advisory board or (ii) his membership in
the immediate family of any person specified in clause (i) of this
subparagraph.
(B) For
the purpose of paragraph (1)(B) of this subsection, an unfair burden on a
registered investment company includes any arrangement, during the two-year
period after the date on which any such transaction occurs, whereby the
investment adviser or corporate trustee or predecessor or successor investment
advisers or corporate trustee or any interested person of any such adviser or
any such corporate trustee receives or is entitled to receive any compensation
directly or indirectly (i) from any person in connection with the purchase or
sale of securities or other property to, from, or on behalf of such company,
other than bona fide ordinary compensation as principal underwriter for such
company, or (ii) from such company or its security holders for other than bona
fide investment advisory or other services.
(3) If-
(A) an
assignment of an investment advisory contract with a registered investment
company results in a successor investment adviser to such company, or if there
is a change in control of or identity of a corporate trustee of a registered
investment company, and such adviser or trustee is then an investment adviser
or corporate trustee with respect to other assets substantially greater in
amount than the amount of assets of such company, or
(B) as
a result of a merger of, or a sale of substantially all the assets by, a
registered investment company with or to another registered investment company
with assets substantially greater in amount, a transaction occurs which would
be subject to paragraph (1)(A) of this subsection, such discrepancy in size of
assets shall be considered by the Commission in determining whether or to what
extent an application under section 80a-6(c) of this title for exemption from
the provisions of paragraph (1)(A) of this subsection should be granted.
(4)
Paragraph (1)(A) of this subsection shall not apply to a transaction in which a
controlling block of outstanding voting securities of an investment adviser to
a registered investment company or of a corporate trustee performing the
functions of an investment adviser to a registered investment company is-
(A)
distributed to the public and in which there is, in fact, no change in the
identity of the persons who control such investment adviser or corporate
trustee, or
(B)
transferred to the investment adviser or the corporate trustee, or an
affiliated person or persons of such investment adviser or corporate trustee,
or is transferred from the investment adviser or corporate trustee to an
affiliated person or persons of the investment adviser or corporate trustee:
Provided, That (i) each transferee (other than such adviser or trustee) is a
natural person and (ii) the transferees (other than such adviser or trustee)
owned in the aggregate more than 25 per centum of such voting securities for a
period of at least six months prior to such transfer.