Securities and Exchange Commission (“SEC” or “Commission”).
Notice of an application for an order under section 10(e)(3) of the Investment Company Act of 1940 (“Act”) suspending the operation of section 10(b) of the Act.
Summary of Application: Applicants request an order extending, until August 31, 2000, the thirty-day period provided for by section 10(e)(1) of the Act during which a vacancy on the boards of trustees (“Boards”) of Goldman Sachs Trust (“GST”) and Goldman Sachs Variable Insurance Trust (“GSVIT”) may be filed by action of the Boards in order to bring the composition of the Boards into compliance with section 10(b) of the Act. Applicants further request that the order grant retroactive relief for the period from July 2, 2000, the expiration date of the statutory thirty-day period, to the date on which the order is issued.
Applicants: GST and GSVIT.
Filing Dates: The application was filed on June 30, 2000, and amended on July 28, 2000.
Hearing or Notification of Hearing: An order granting the application will be issued unless the SEC orders a hearing. Interested persons may request a hearing by writing to the SEC's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the SEC by 5:30 p.m. on August 24, 2000, 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 SEC's Secretary.
Secretary, SEC, 450 Fifth Street, N.W., Washington, D.C. 20549-0609. Applicants, 4900 Sears Tower, Chicago, IL 60606-6303.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Bruce R. MacNeil, Staff Attorney, at (202) 942-0634, or Nadya B. Roytblat, Assistant Director, at (202) 942-0564 (Office of Investment Company Regulation, Division of Investment Management).End Further Info End Preamble Start Supplemental Information
The following is a summary of the application. The complete application may be obtained for a fee at the SEC's Public Reference Branch, 450 Fifth Street, N.W., Washington, D.C. 20549-0102 (telephone (202) 942-8090).
1. GST and GSVIT (collectively, the “Trusts”), each a Delaware business trust, are open-end management investment companies comprised of multiple series and registered under the Act. GSVIT serves as an investment vehicle for separate accounts of participating insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies (“Contracts”). Goldman Sach & Co. (“GSC”) serves as principal Start Printed Page 48260underwriter to the Trusts and is employed by the Trusts as a regular broker.
2. The Boards are identically organized with respect to the individual trustees. Prior to June 3, 2000, each Board was comprised of nine members, five of whom were not “interested persons,” as defined in section 2(a)(19) of the Act, of GSC (“Disinterested Trustees”). Mr. Jackson Smart, a Disinterested Trustee, died on June 3, 2000, reducing each Board to eight members, four of whom are Disinterested Trustees. The Boards are seeking to identify a replacement Disinterested Trustee.
Applicants' Legal Analysis
1. Section 10(b) of the Act provides, in relevant part, that no registered investment company shall (1) employ as its regular broker any director, officer, or employee of such registered investment company, or any affiliated person of such director, officer or employee unless a majority of the board of directors of such registered investment company are not such brokers or affiliated persons of such brokers, (2) use as its principal underwriter any director, officer, or employee of such registered investment company or any person of which such director, officer or employee is an interested person unless a majority of the board of directors of such registered investment company are not such principal underwriters or interested persons of such principal underwriters, or (3) have as director, officer or employee any investment banker, or any affiliated person of any investment banker, unless a majority of the board of directors of such registered persons are persons who are not investment bankers or affiliated persons of any investment banker.
2. Section 10(e)(1) of the Act suspends the operation of Section 10(b) for a period of thirty days if action by the board of directors is required to fill a vacancy caused by the death, disqualification, or bona fide resignation of a director. Section 10(e)(3) authorizes the SEC, by order upon application, to prescribe a longer period as is not inconsistent with the protection of investors. Applicants request an order pursuant to section 10(e)(3) of the Act extending the thirty-day period provided for by section 10(e)(1) of the Act to August 31, 2000. Applicants further request that the order grant retroactive relief for the period from July 2, 2000, the expiration date of the statutory thirty-day period, to the date on which the order is issued. Applicants state that the requested relief meets the standard in section 10(e)(3) for the reasons discussed below.
3. Applicants state that under section 10(b), in order for GSC to continue to serve as principal underwriter and regular broker for the Trusts, each Board's vacancy must be filled by a Disinterested Trustee. Applicants state further that the remaining Board members have determined that it was the prudent course to retain GSC as the principal underwriter and a regular broker and retain each of the other Board members past July 2, 2000, the date upon which the thirty-day period provided by section 10(b)(1) would expire.
4. Applicants state that it is in the best interests of the Trusts' shareholders and the Contracts' owners for the Board to take the necessary time to identify a qualified and competent Disinterested Trustee.
5. Applicants state that retroactive relief is necessary because Mr. Smart's death was unexpected, and that thirty days is not sufficient time to prepare and file with the Commission, and for the Commission to consider, issue a notice and grant an order upon, an application for exemptive relief.
Applicants agree that any order granting the requested relief will be subject to the following conditions:
1. The Trusts will ensure that 50 percent of the Boards' members will be Disinterested Trustees until the earlier of August 31, 2000, or the Boards' approval of an additional Disinterested Trustee.
2. Any action taken by the Boards during the period covered by the requested order will be approved by at least a majority of each Board's Disinterested Trustees.Start Signature
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Margaret H. McFarland,
[FR Doc. 00-19907 Filed 8-4-00; 8:45 am]
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