[Federal Register Volume 78, Number 25 (Wednesday, February 6, 2013)]
[Notices]
[Pages 8601-8611]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-02561]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-30373; File No. 812-14036]
AXA Equitable Life Insurance Company, et al; Notice of
Application
January 31, 2013.
AGENCY: Securities and Exchange Commission (``SEC'' or ``Commission'').
ACTION: Notice of application for an order approving the substitution
of certain securities pursuant to Section 26(c) of the Investment
Company Act of 1940, as amended (the ``1940 Act'' or ``Act'') and an
order of exemption pursuant to Section 17(b) of the Act from Section
17(a) of the Act.
-----------------------------------------------------------------------
Applicants: AXA Equitable Life Insurance Company (``AXA Equitable''),
Separate Account 45 of AXA Equitable (``Separate Account 45''), and
Separate Account 49 of AXA Equitable (``Separate Account 49'' and
together with Separate Account 45, ``Separate Accounts''), AXA Premier
VIP Trust (``VIP Trust'') and EQ Advisors Trust (``EQ Trust'' and
together with VIP Trust, the ``Trusts''). AXA Equitable and the
Separate Accounts are referred to herein as the ``Substitution
Applicants.'' The Substitution Applicants and the Trusts are referred
to herein as the ``Section 17 Applicants.''
Summary of Application: The Substitution Applicants seek an order
pursuant to Section 26(c) of the 1940 Act, approving the substitution
of shares of certain series of the EQ Trust (``Replacement Funds'') for
shares of certain other series of the EQ Trust and the VIP Trust
(``Existing Funds''). Each of the Replacement and Existing Funds
currently serves as an underlying investment option for certain
variable annuity contracts issued by AXA Equitable (the ``Contracts'').
The Section 17 Applicants also seek an order pursuant to Section 17(b)
of the 1940 Act exempting them from Section 17(a) of the 1940 Act to
the extent necessary to permit them to engage in certain in-
[[Page 8602]]
kind transactions in connection with the substitution (``In-Kind
Transactions'').
DATES: Filing Date: The application was filed on May 31, 2012, and an
amended and restated application was filed on October 1, 2012, November
30, 2012, January 14, 2013 and January 30, 2013.
Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Secretary of the
Commission and serving the applicants with a copy of the request,
personally or by mail. Hearing requests should be received by the
Commission by 5:30 p.m. on February 25, 2013, and should be accompanied
by proof of service on the applicants in the form of an affidavit or,
for lawyers, a certificate of service. Hearing requests should state
the nature of the requester'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 Secretary of the Commission.
ADDRESSES: Secretary, SEC, 100 F Street NE., Washington, DC 20549-1090.
Applicants: Steven M. Joenk, Senior Vice President, AXA Equitable Life
Insurance Company, 1290 Avenue of Americas, New York, New York 10104;
Patricia Louie, Esq., Senior Vice President & Associate General
Counsel, AXA Equitable Life Insurance Company, 1290 Avenue of Americas,
New York, New York 10104; and Clifford J. Alexander, Esq. and Mark C.
Amorosi, Esq., K&L Gates LLP, 1601 K Street NW., Washington, DC 20006.
FOR FURTHER INFORMATION CONTACT: Alison White, Senior Counsel, or
Michael L. Kosoff, Branch Chief, Office of Insurance Products, Division
of Investment Management, at (202) 551-6795.
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling (202) 551-8090.
Applicants' Representations
1. AXA Equitable, on its own behalf and on behalf of its Separate
Accounts, proposes to substitute shares of the Replacement Funds for
shares of the Existing Funds held by the Separate Accounts to fund the
Contracts.
2. AXA Equitable is the depositor and sponsor of the Separate
Accounts.
3. Each of Separate Account 45 and Separate Account 49 is a
``separate account'' as defined by Rule 0-1(e) under the Act and each
is registered under the Act as a unit investment trust for purposes of
funding the Contracts. Security interests under the Contracts have been
registered under the Securities Act of 1933. The application sets forth
the registration statement file numbers for the Contracts and the
Separate Accounts.
4. The EQ Trust is a registered open-ended management investment
company of the series type (File Number 333-17217). It currently offers
72 separate series (each an ``EQ Portfolio'' and collectively, the ``EQ
Portfolios''). It has three classes of shares--Class IA shares, Class
IB shares and Class K shares. Only Class IA and Class IB shares will be
involved in the proposed Substitutions.
5. AXA Equitable Funds Management Group, LLC (``FMG'') currently
serves as investment manager (``Manager'') of each of the EQ Portfolios
pursuant to the Investment Management Agreements between the EQ Trust,
on behalf of each EQ Portfolio, and FMG (``Management Agreements'').
FMG is a wholly-owned subsidiary of AXA Equitable and is registered as
an investment adviser under the Investment Advisers Act of 1940, as
amended.
6. The VIP Trust is a registered open-end management investment
company of the series type (File No. 333-70754). It currently offers 20
separate series (each, a ``VIP Portfolio'' and collectively, the ``VIP
Portfolios''). It has three classes of shares--Class A shares, Class B
shares, and Class K shares. Only Class A and Class B shares will be
involved in the proposed Substitutions.
7. FMG currently serves as investment manager of each of the VIP
Portfolios pursuant to the Management Agreements between the VIP Trust,
on behalf of each VIP Portfolio, and FMG.
8. Both the EQ Trust and VIP Trust have received an exemptive order
from the Commission (``Multi-Manager Order'') that permits the Manager,
or any entity controlling, controlled by, or under common control
(within the meaning of Section 2(a)(9) of the 1940 Act) with the
Manager, subject to certain conditions, to hire and replace
unaffiliated subadvisors and to enter into and amend sub-advisory
agreements without shareholder approval.
9. The Contracts are individual and group deferred variable annuity
contracts. Under the Contracts, AXA Equitable reserves the right to
substitute different underlying investment options for current
underlying investment options offered as funding options under the
Contracts. The prospectuses for the Contracts include disclosure of the
reservation of this right. The Contracts which offer the Existing Funds
are registered in the registration statements listed in footnote 2 of
the application.
10. AXA Equitable, on its own behalf and on behalf of its Separate
Accounts, requests an order from the Commission pursuant to Section
26(c) of the 1940 Act approving the following 26 proposed
substitutions:
------------------------------------------------------------------------
Sub. No. Existing portfolio Replacement portfolio
------------------------------------------------------------------------
1............. EQ/Oppenheimer Global EQ/Global Multi-Sector
Portfolio. Equity Portfolio.
2............. EQ/MFS International Growth EQ/International Core PLUS
Portfolio. Portfolio.
3............. Multimanager International
Equity Portfolio.
4............. EQ/Capital Guardian EQ/Large Cap Core PLUS
Research Portfolio. Portfolio.
5............. EQ/Davis New York Venture
Portfolio.
6............. EQ/Lord Abbett Large Cap
Core Portfolio.
7............. EQ/UBS Growth and Income
Portfolio.
8............. Multimanager Large Cap Core
Equity Portfolio.
9............. EQ/Equity Growth PLUS EQ/Large Cap Growth PLUS
Portfolio. Portfolio.
10............ EQ/Montag & Caldwell Growth
Portfolio.
11............ EQ/T. Rowe Price Growth
Stock Portfolio.
12............ EQ/Wells Fargo Omega Growth
Portfolio.
13............ Multimanager Aggressive
Equity Portfolio.
14............ EQ/BlackRock Basic Value EQ/Large Cap Value PLUS
Equity Portfolio. Portfolio.
15............ EQ/Boston Advisors Equity
Income Portfolio.
16............ EQ/JPMorgan Value
Opportunities Portfolio.
[[Page 8603]]
17............ EQ/Van Kampen Comstock
Portfolio.
18............ Multimanager Large Cap
Value Portfolio.
19............ Multimanager Mid Cap Growth AXA Tactical Manager 400
Portfolio. Portfolio.
20............ Multimanager Mid Cap Value EQ/Mid Cap Value PLUS
Portfolio. Portfolio.
21............ Multimanager Small Cap AXA Tactical Manager 2000
Growth Portfolio. Portfolio.
22............ Multimanager Small Cap
Value Portfolio.
23............ EQ/Global Bond PLUS EQ/Core Bond Index
Portfolio. Portfolio.
24............ Multimanager Multi-Sector
Bond Portfolio.
25............ Multimanager Core Bond EQ/Quality Bond PLUS
Portfolio. Portfolio.
26............ EQ/PIMCO Ultra Short Bond EQ/AllianceBernstein Short
Portfolio. Duration Government Bond
Portfolio.
------------------------------------------------------------------------
11. A comparison of the strategies, risks and performance of each
Existing and Replacement Fund is included in the application. A
comparison of the objectives, primary investments and fees and expenses
(as of 12/31/2011) of each Existing and Replacement Fund follows:
------------------------------------------------------------------------
Sub No. Existing portfolio Replacement portfolio
------------------------------------------------------------------------
1............. EQ/Oppenheimer Global EQ/Global Multi-Sector
Portfolio. Equity Portfolio.
Objective: Capital Objective: Capital
appreciation. appreciation; emphasize
risk-adjusted returns and
managing volatility.
Primary Investments: U.S. Primary Investments: U.S.
and foreign equity and foreign equity
securities of companies of securities of companies of
any size. any size.
Class IA & IB.............. Class IA & IB.
Management fee .95%........ Management fee .72%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .16%........ Other expenses .20%.
Total Annual Operating Total Annual Operating
Expenses 1.36%. Expenses 1.17%.
Fee Waiver/Exp Reimb -.01%. Fee Waiver/Exp Reimb -.00%.
Total After Fee Waiver/Exp Total After Fee Waiver/Exp
Reimb 1.35%. Reimb 1.17%.
2............. EQ/MFS International Growth EQ/International Core PLUS
Portfolio. Portfolio.
Objective: Capital Objective: Capital growth;
appreciation. emphasize risk-adjusted
returns and managing
volatility.
Primary Investments: Primary Investments:
Foreign equity securities, Foreign equity securities
including emerging markets of issuers of any size,
equity securities. and including those in
developing economies.
Class IA & IB.............. Class IA & IB.
Management fee .85%........ Management fee .60%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .15%........ Other expenses .18%.
Total Annual Operating Total Annual Operating
Expenses 1.25%. Expenses 1.03%.
3............. Multimanager International EQ/International Core PLUS
Equity Portfolio. Portfolio.
Objective: Capital growth; Objective: Capital growth;
emphasize risk-adjusted emphasize risk-adjusted
returns and managing returns and managing
volatility. volatility.
Primary Investments: Primary Investments:
Foreign equity securities Foreign equity securities
of issuers of any size, of issuers of any size,
including those in including those in
developing economies. developing economies.
Class A & B................ Class IA & 1B.
Management fee .84%........ Management fee .60%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .20%........ Other expenses .18%.
Total Annual Operating Total Annual Operating
Expenses 1.29%. Expenses 1.03%.
4............. EQ/Capital Guardian EQ/Large Cap Core PLUS
Research Portfolio. Portfolio.
Objective: Capital growth.. Objective: Capital growth;
emphasize risk-adjusted
returns and managing
volatility.
Primary Investments: Equity Primary Investments: Equity
securities listed in the securities of large-cap
U.S. with market companies.
capitalization greater
than $1 billion.
Class IA & IB.............. Class IA & IB.
Management fee .64%........ Management fee .50%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .13%........ Other expenses .20%.
Acquired Fund Fees and Acquired Fund Fees and
Expenses N/A. Expenses .02%.
Total Annual Operating Total Annual Operating
Expenses 1.02%. Expenses .97%.
Fee Waiver/Exp Reimb -.05%. Fee Waiver/Exp Reimb -.00%.
Total After Fee Waiver/Exp Total After Fee Waiver/Exp
Reimb .97%. Reimb .97%.
5............. EQ/Davis New York Venture EQ/Large Cap Core PLUS
Portfolio. Portfolio.
Objective: Capital growth.. Objective: Capital growth;
emphasize risk-adjusted
returns and managing
volatility.
Primary Investments: Equity Primary Investments: Equity
securities of large-cap securities of large-cap
companies. companies.
Class IA & IB.............. Class IA & IB.
Management fee .85%........ Management fee .50%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .14%........ Other expenses .20%.
[[Page 8604]]
Acquired Fund Fees and Acquired Fund Fees and
Expenses N/A. Expenses .02%.
Total Annual Operating Total Annual Operating
Expenses 1.24%. Expenses .97%.
6............. EQ/Lord Abbett Large Cap EQ/Large Cap Core PLUS
Core Portfolio. Portfolio.
Objective: Capital Objective: Capital growth;
appreciation and growth of emphasize risk-adjusted
income with reasonable returns and managing
risk. volatility.
Primary Investments: Equity Primary Investments: Equity
securities of large-cap securities of large-cap
companies. companies.
Class IA & IB.............. Class IA & IB.
Management fee .65%........ Management fee .50%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .14%........ Other expenses .20%.
Acquired Fund Fees and Acquired Fund Fees and
Expenses N/A. Expenses .02%.
Total Annual Operating Total Annual Operating
Expenses 1.04%. Expenses .97%.
Fee Waiver/Exp Reimb -.04%. Fee Waiver/Exp Reimb N/A.
Total After Fee Waiver/Exp Total After Fee Waiver/Exp
Reimb 1.00%. Reimb .97%.
7............. EQ/UBS Growth and Income EQ/Large Cap Core PLUS
Portfolio. Portfolio.
Objective: Total return Objective: Capital growth;
through capital emphasize risk-adjusted
appreciation and income. returns and managing
volatility
Primary Investments: Equity Primary Investments: Equity
securities of U.S. large- securities of large-cap
cap companies. companies.
Class IA & IB.............. Class IA & IB.
Management fee .75%........ Management fee .50%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .17%........ Other expenses .20%.
Acquired Fund Fees and Acquired Fund Fees and
Expenses N/A. Expenses .02%.
Total Annual Operating Total Annual Operating
Expenses 1.17%. Expenses .97%.
Fee Waiver/Exp Reimb -.12%. Fee Waiver/Exp Reimb N/A.
-Total After Fee Waiver/Exp Total After Fee Waiver/Exp
Reimb 1.05%. Reimb .97%.
8............. Multimanager Large Cap Core EQ/Large Cap Core PLUS
Equity Portfolio. Portfolio.
Objective: Capital growth; Objective: Capital growth;
emphasize risk-adjusted emphasize risk-adjusted
returns and managing returns and managing
volatility. volatility
Primary Investments: Equity Primary Investments: Equity
securities of U.S. large- securities of large-cap
cap companies. companies.
Class A & B................ Class IA & IB.
Management fee .70%........ Management fee .50%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .18%........ Other expenses .20%.
Acquired Fund Fees and Acquired Fund Fees and
Expenses N/A. Expenses .02%.
Total Annual Operating Total Annual Operating
Expenses 1.13%. Expenses .97%.
9............. EQ/Equity Growth PLUS EQ/Large Cap Growth PLUS
Portfolio. Portfolio.
Objective: Capital growth; Objective: Capital growth;
emphasize risk-adjusted emphasize risk-adjusted
returns and managing returns and managing
volatility. volatility.
Primary Investments: Equity Primary Investments: Equity
securities of large-cap securities of large-cap
growth companies. growth companies.
Class IA & IB.............. Class IA & IB.
Management fee .50%........ Management fee .50%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .25%........ Other expenses .18%.
Acquired Fund Fees and Acquired Fund Fees and
Expenses N/A. Expenses .02%.
Total Annual Operating Total Annual Operating
Expenses 1.00%. Expenses .95%.
10............ EQ/Montag & Caldwell Growth EQ/Large Cap Growth PLUS
Portfolio. Portfolio.
Objective: Capital Objective: Capital growth;
appreciation. emphasize risk-adjusted
returns and managing
volatility.
Primary Investments: Equity Primary Investments: Equity
securities of large-cap securities of large-cap
growth companies.. growth companies.
Class IA & IB.............. Class IA & IB.
Management fee .75%........ Management fee .50%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .14%........ Other expenses .18%.
Acquired Fund Fees and Acquired Fund Fees and
Expenses N/A. Expenses .02%.
Total Annual Operating Total Annual Operating
Expenses 1.14%. Expenses .95%.
11............ EQ/T. Rowe Price Growth EQ/Large Cap Growth PLUS
Stock Portfolio. Portfolio.
Objective: Capital Objective: Capital growth;
appreciation and emphasize risk-adjusted
secondarily, income. returns and managing
volatility.
Primary Investments: Equity Primary Investments: Equity
securities of large-cap securities of large-cap
growth companies. growth companies.
Class IA & IB.............. Class IA & IB.
Management fee .78%........ Management fee .50%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .12%........ Other expenses .18%.
Acquired Fund Fees and Acquired Fund Fees and
Expenses N/A. Expenses .02%.
Total Annual Operating Total Annual Operating
Expenses 1.15%. Expenses .95%.
12............ EQ/Wells Fargo Omega Growth EQ/Large Cap Growth PLUS
Portfolio. Portfolio.
[[Page 8605]]
Objective: Capital growth.. Objective: Capital growth;
emphasize risk-adjusted
returns and managing
volatility.
Primary Investments: Equity Primary Investments: Equity
securities of growth securities of large-cap
companies. growth companies.
Class IA & IB.............. Class IA & IB.
Management fee .65%........ Management fee .50%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .13%........ Other expenses .18%.
Acquired Fund Fees and Acquired Fund Fees and
Expenses N/A. Expenses .02%.
Total Annual Operating Total Annual Operating
Expenses 1.03%. Expenses .95%.
13............ Multimanager Aggressive EQ/Large Cap Growth PLUS
Equity Portfolio. Portfolio.
Objective: Capital growth; Objective: Capital growth;
emphasize risk-adjusted emphasize risk-adjusted
returns and managing returns and managing
volatility. volatility
Primary Investments: Equity Primary Investments: Equity
securities of large-cap securities of large-cap
growth companies.. growth companies.
Class IA & IB.............. Class IA & IB.
Management fee .57%........ Management fee .50%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .18%........ Other expenses .18%.
Acquired Fund Fees and Acquired Fund Fees and
Expenses N/A. Expenses .02%.
Total Annual Operating Total Annual Operating
Expenses 1.00%. Expenses .95%.
14............ EQ/BlackRock Basic Value EQ/Large Cap Value PLUS
Equity Portfolio. Portfolio.
Objective: Capital Objective: Capital growth;
appreciation and emphasize risk-adjusted
secondarily, income.. returns and managing
volatility.
Primary Investments: Equity Primary Investments: Equity
securities of large-cap securities of large-cap
value companies. value companies.
Class IA & IB.............. Class IA & IB.
Management fee .57%........ Management fee .48%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .12%........ Other expenses .17%.
Total Annual Operating Total Annual Operating
Expenses .94%. Expenses .90%.
15............ EQ/Boston Advisors Equity EQ/Large Cap Value PLUS
Income Portfolio. Portfolio.
Objective: Combination of Objective: Capital growth;
growth and income to emphasize risk-adjusted
achieve consistent total returns and managing
return. volatility.
Primary Investments: Equity Primary Investments: Equity
securities of large-cap securities of large-cap
value companies. value companies.
Class IA & IB.............. Class IA & IB.
Management fee .75%........ Management fee .48%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .13%........ Other expenses .17%.
Total Annual Operating Total Annual Operating
Expenses 1.13%. Expenses .90%.
Fee Waiver/Exp Reimb -.08%. Fee Waiver/Exp Reimb N/A.
Total After Fee Waiver/Exp Total After Fee Waiver/Exp
Reimb 1.05%. Reimb .90%.
16............ EQ/JPMorgan Value EQ/Large Cap Value PLUS
Opportunities Portfolio. Portfolio.
Objective: Capital Objective: Capital growth;
appreciation. emphasize risk-adjusted
returns and managing
volatility.
Primary Investments: Equity Primary Investments: Equity
securities of large- and securities of large-cap
mid-cap value companies. value companies.
Class IA & IB.............. Class IA & IB.
Management fee .60%........ Management fee .48%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .14%........ Other expenses .17%.
Total Annual Operating Total Annual Operating
Expenses .99%. Expenses .90%.
17............ EQ/Van Kampen Comstock EQ/Large Cap Value PLUS
Portfolio. Portfolio.
Objective: Capital growth Objective: Capital growth;
and income. emphasize risk-adjusted
returns and managing
volatility.
Primary Investments: Equity Primary Investments: Equity
securities of value securities of large-cap
companies of any value companies.
capitalization range.
Class IA & IB.............. Class IA & IB.
Management fee .65%........ Management fee .48%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .13%........ Other expenses .17%.
Total Annual Operating Total Annual Operating
Expenses 1.03%. Expenses .90%.
Fee Waiver/Exp Reimb -.03.. Fee Waiver/Exp Reimb N/A.
Total After Fee Waiver/Exp Total After Fee Waiver/Exp
Reimb 1.00%. Reimb .90%.
18............ Multimanager Large Cap EQ/Large Cap Value PLUS
Value Portfolio. Portfolio
Objective: Capital growth; Objective: Capital growth;
emphasize risk-adjusted emphasize risk-adjusted
returns and managing returns and managing
volatility. volatility.
Primary Investments: Equity Primary Investments: Equity
securities of U.S. large- securities of large-cap
cap value companies. value companies.
Class IA & IB.............. Class IA & IB.
Management fee .73%........ Management fee .48%.
12b-1 fee .25%............. 12b-1 fee .25%.
[[Page 8606]]
Other expenses .18%........ Other expenses .17%.
Total Annual Operating Total Annual Operating
Expenses 1.16%. Expenses .90%.
19............ Multimanager Mid Cap Growth AXA Tactical Manager 400
Portfolio. Portfolio.
Objective: Capital growth; Objective: Capital growth;
emphasize risk-adjusted emphasize risk-adjusted
returns and managing returns and managing
volatility. volatility.
Primary Investments: Equity Primary Investments: Equity
securities of mid-cap securities of mid-cap
growth companies. companies.
Class IA & IB.............. Class IA & IB.
Management fee .80%........ Management fee .45%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .21%........ Other expenses .27%.
Total Annual Operating Total Annual Operating
Expenses 1.26%. Expenses .97%.
Fee Waiver/Exp Reimb N/A... Fee Waiver/Exp Reimb -.02.
Total After Fee Waiver/Exp Total After Fee Waiver/Exp
Reimb 1.26%. Reimb .95%.
20............ Multimanager Mid Cap Value EQ/Mid Cap Value PLUS
Portfolio. Portfolio.
Objective: Capital growth; Objective: Capital growth;
emphasize risk-adjusted emphasize risk-adjusted
returns and managing returns and managing
volatility. volatility.
Primary Investments: Equity Primary Investments: Equity
securities of U.S. mid-cap securities of mid-cap
value companies. value companies.
Class IA & IB.............. Class IA & IB.
Management fee .80%........ Management fee .55%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .19%........ Other expenses .18%.
Acquired Fund Fees N/A..... Acquired Fund Fees.03%.
Total Annual Portfolio Total Annual Portfolio
Operating Expenses 1.24%. Operating Expenses 1.01%.
21............ Multimanager Small Cap AXA Tactical Manager 2000
Growth Portfolio. Portfolio.
Objective: Capital growth; Objective: Capital growth;
emphasize risk-adjusted emphasize risk-adjusted
returns and managing returns and managing
volatility. volatility.
Primary Investments: Equity Primary Investments: Equity
securities of U.S. small- securities of small-cap
cap growth companies. companies.
Class IA & IB.............. Class IA & IB.
Management fee .85%........ Management fee .45%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .18%........ Other expenses .25%.
Total Annual Operating Total Annual Operating
Expenses 1.28%. Expenses .95%.
22............ Multimanager Small Cap AXA Tactical Manager 2000
Value Portfolio. Portfolio.
Objective: Capital growth; Objective: Capital growth;
emphasize risk-adjusted emphasize risk-adjusted
returns and managing returns and managing
volatility. volatility.
Primary Investments: Equity Primary Investments: Equity
securities of U.S. small- securities of small-cap
cap value companies. companies.
Class IA & IB.............. Class IA & IB.
Management fee .85%........ Management fee .45%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .18%........ Other expenses .25%.
Total Annual Operating Total Annual Operating
Expenses 1.28%. Expenses .95%.
23............ EQ/Global Bond PLUS EQ/Core Bond Index
Portfolio. Portfolio.
Objective: Growth and Objective: Approximate
current income. total return performance
of the Barclays Capital
Intermediate U.S.
Government Credit Index.
Primary Investments: Primary Investments:
Investment-grade debt Certain U.S. Treasury and
securities of U.S. and government related,
foreign issuers. corporate, credit and
agency fixed rate
securities.
Class IA & IB.............. Class IA & IB.
Management fee .55%........ Management fee .35%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .19%........ Other expenses .12%.
Total Annual Portfolio Total Annual Portfolio
Operating Expenses .99%. Operating Expenses .72%.
24............ Multimanager Multi-Sector EQ/Core Bond Index
Bond Portfolio. Portfolio.
Objective: High total Objective: Approximate
return through a total return performance
combination of current of the Barclays Capital
income and capital Intermediate U.S.
appreciation. Government Credit Index.
Primary Investments: Primary Investments:
Diversified mix of Certain U.S. Treasury and
investment grade bonds. government related,
corporate, credit and
agency fixed rate
securities.
Class A & B................ Class IA & IB.
Management fee .52%........ Management fee .35%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .17%........ Other expenses .12%.
Total Annual Operating Total Annual Portfolio
Expenses .94%. Operating Expenses .72%.
25............ Multimanager Core Bond EQ/Quality Bond PLUS
Portfolio. Portfolio.
Objective: Balance of high Objective: High current
current income and capital income consistent with
appreciation. moderate risk to capital.
Primary Investments: Primary Investments:
Investment grade bonds; Investment-grade debt
U.S. government and securities of government,
corporate debt securities. corporate and agency
mortgage- and asset-backed
securities.
Class A & B................ Class IA & IB.
Management fee .52%........ Management fee .40%.
[[Page 8607]]
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .17%........ Other expenses .19%.
Acquired Fund Fees and Acquired Fund Fees and
Expenses N/A. Expenses .41% \1\.
Total Annual Operating Total Annual Operating
Expenses .94%. Expenses 1.25%.
........................... Fee Waiver/Exp Reimb -.40.
........................... Total After Fee Waiver/Exp
Reimb .85%.
26............ EQ/PIMCO Ultra Short Bond EQ/AllianceBernstein Short
Portfolio. Duration Government Bond
Portfolio.
Objective: Generate a Objective: Balance of
return in excess of current income and capital
traditional money market appreciation.
products.
Primary Investments: Primary Investments: Debt
Diversified portfolio of securities issued by the
fixed income instruments U.S. Government and its
of varying maturities and agencies and
financial instruments that instrumentalities and
derive their value from financial instruments that
such securities. derive their value from
such securities.
Class IA & IB.............. Class IA & 1B.
Management fee .46%........ Management fee .45%.
12b-1 fee .25%............. 12b-1 fee .25%.
Other expenses .12%........ Other expenses .13%.
Total Annual Operating Total Annual Operating
Expenses .83%. Expenses .83%.
------------------------------------------------------------------------
12. The Substitution Applicants state that the principal purposes
of the Substitutions are: (1) To streamline and simplify the investment
line-up that is available to Contract owners under the affected
contracts; (2) to provide Replacement Portfolios with similar principal
risks and strategies to their respective Existing Portfolios, but with
lower volatility and better risk-adjusted returns; (3) to provide
Replacement Portfolios with the same or lower net operating expenses;
and (4) to provide Contract owners with an opportunity to continue
their investment in a substantially similar Portfolio without
interruption or cost to them; (5) to reduce costs and enhance risk
management.
---------------------------------------------------------------------------
\1\ The portion of the acquired fund fees and expenses
attributable to the management fees of the underlying funds is
0.30%.
---------------------------------------------------------------------------
13. By supplements to the prospectuses for the Contracts and
Separate Accounts, which will be delivered to Contract owners at least
thirty (30) days before the proposed Substitutions, AXA Equitable will
notify all Contract owners of its intention to take the necessary
actions, including seeking the order requested by this Application, to
substitute shares of each Replacement Portfolio for the corresponding
Existing Portfolio as described herein. The supplements will advise
Contract owners that from the date of the supplement until the date of
the proposed Substitutions (``Substitution Date''), Contract owners are
permitted to make transfers of Contract value (or annuity unit value)
out of an Existing Portfolio subaccount to one or more other
subaccounts without the transfers (or exchanges) being treated as one
of a limited number of permitted transfers (or exchanges) or a limited
number of transfers (or exchanges) permitted without a transfer charge,
to the extent any transfer limitations or charges are applicable under
the Contract. The supplements also will inform Contract owners that AXA
Equitable will not exercise any rights reserved under any Contract to
impose additional restrictions on transfers until at least 30 days
after the proposed Substitutions. The supplement also will advise
Contract owners how to instruct AXA Equitable, if so desired in light
of the proposed Substitutions, to reallocate Contract value from an
Existing Portfolio subaccount to any other subaccount available for
investment under their Contracts. In addition, the supplements will
advise Contract owners that any Contract value remaining in an Existing
Portfolio subaccount on the Substitution Date will be transferred to
the corresponding Replacement Portfolio subaccount and that the
proposed Substitutions will take place at relative net asset value. The
supplements will also advise Contract owners that for at least 30 days
following the proposed Substitutions, AXA Equitable will permit
Contract owners to make transfers of Contract value (or annuity unit
value) out of a Replacement Portfolio subaccount to one or more other
subaccounts without the transfers (or exchanges) being treated as one
of a limited number of permitted transfers (or exchanges) or a limited
number of transfers (or exchanges) permitted without a transfer charge,
to the extent any transfer limitations or charges are applicable under
the Contract. AXA Equitable also will send Contract owners prospectuses
for the Replacement Portfolios prior to the Substitutions.
14. The Substitution Applicants will send the appropriate
prospectus supplement (or other notice, in the case of Contracts no
longer actively marketed and for which there are a relatively small
number of existing Contract owners), containing this disclosure to all
existing Contract owners. Prospective purchasers and new purchasers of
Contracts will be provided with a Contract prospectus and the
supplement containing disclosure regarding the proposed Substitutions,
as well as prospectuses and supplements for the Replacement Portfolios.
The Contract prospectus and supplement, and the prospectuses and
supplements for the Replacement Portfolios will be delivered to
purchasers of new Contracts in accordance with all applicable legal
requirements.
15. In addition to the prospectus supplements distributed to
Contract owners, within five business days after the Substitution Date,
Contract owners will be sent a written notice of the Substitutions
informing them that the Substitutions were carried out and that they
may transfer all Contract value or cash value under a Contract in a
subaccount invested in a Replacement Portfolio on the date of the
notice to one or more other subaccounts available under their Contract
at no cost and without regard to the usual limit on the frequency of
transfers among the variable investment options, to the extent any
transfer limitations or charges are applicable under the Contract. The
notice will also reiterate that (other than with respect to
implementing policies and procedures designed to prevent disruptive
transfers and other market timing activity) AXA Equitable will not
exercise any rights reserved by it under the Contracts to impose
additional restrictions on transfers or, to the extent transfer charges
apply to a Contract, to impose any charges on transfers until at least
30 days after the Substitution Date. AXA
[[Page 8608]]
Equitable will also send each Contract owner a current prospectus for
the Replacement Portfolios if they have not previously received a
current version.
16. AXA Equitable also is seeking approval of the proposed
Substitutions from any state insurance regulators whose approval may be
necessary or appropriate.
17. The proposed Substitutions will take place at relative net
asset value determined on the Substitution Date pursuant to Section 22
of the 1940 Act and Rule 22c-1 thereunder with no change in the amount
of any Contract owner's Contract value, cash value, or death benefit or
in the dollar value of his or her investment in the Separate Accounts.
Likewise, any guaranteed living or death benefits whose determination
depends upon the Contract value, cash value, or death benefit will not
change as a result of the Substitutions.
18. The proposed Substitutions will be effected by redeeming shares
of each Existing Portfolio in cash and/or in-kind on the Substitution
Date at their net asset value and using the proceeds of those
redemptions to purchase shares of each corresponding Replacement
Portfolio at their net asset value on the same date. All in-kind
redemptions will be effected in accordance with the conditions set
forth in the no-action letter issued by the staff of the Commission to
Signature Financial Group, Inc. (pub. Avail. Dec. 28, 1999).
19. Contract owners will not incur any fees or charges as a result
of the proposed Substitutions, nor will their rights or insurance
benefits or AXA Equitable's obligations under the Contracts be altered
in any way. All expenses incurred in connection with the proposed
Substitutions, including any brokerage, legal, accounting, and other
fees and expenses, will be paid by AXA Equitable. In addition, the
proposed Substitutions will not impose any tax liability on Contract
owners. The proposed Substitutions will not cause the Contract fees and
charges currently being paid by Contract owners to be greater after the
Substitutions than before the Substitutions; all Contract-level fees
will remain the same after the Substitutions. In addition, because the
Substitutions will not be treated as a transfer for purposes of
assessing transfer charges or computing the number of permissible
transfers under the Contracts, no fees will be charged on the transfers
made at the time of the Substitutions, to the extent any transfer
limitations or charges are applicable under the Contracts.
20. It is anticipated that the total annual operating expense
ratio, taking into account fee waivers and reimbursements, for each
class of shares of each Replacement Portfolio will be the same as or
lower than that of the corresponding class of shares of the
corresponding Existing Portfolio immediately after the Substitution.
Accordingly, the Substitution will benefit Contract owners by lowering,
or at least maintaining, the total annual operating expense ratio,
taking into account fee waivers and reimbursements. To ensure that
those who were Contract owners on the date of the proposed Substitution
do not incur higher expenses for a period of two years after the
Substitution, AXA Equitable will reimburse, on the last business day of
each fiscal period (not to exceed a fiscal quarter) during the two
years following the date of the proposed Substitution, the subaccounts
investing in the Replacement Portfolio such that the sum of the
Replacement Portfolio's total annual operating expense ratio, taking
into account any expense waivers or reimbursements, and subaccount
expense ratio (asset-based fees and charges deducted on a daily basis
from subaccount assets and reflected in the calculations of subaccount
unit value) for such period will not exceed, on an annualized basis,
the sum of the Existing Portfolio's total annual operating expense
ratio, taking into account any expense waivers or reimbursements, and
subaccount expense ratio for fiscal year 2012. In addition, for twenty-
four months following the date of the proposed substitutions, AXA
Equitable will not increase asset-based fees or charges for Contracts
that are in force on the date of the proposed Substitution.
21. With respect to Substitution 25 substituting shares of the EQ/
Quality Bond PLUS Portfolio for shares of the Multimanager Core Bond
Portfolio, if the management fees attributable to the underlying funds
in which the EQ/Quality Bond PLUS Portfolio invests are included with
the EQ/Quality Bond PLUS Portfolio's management fee, then the
management fee plus 12b-1 fee of the EQ/Quality Bond PLUS Portfolio may
be higher than the management fee plus 12b-1 fee of the Multimanager
Core Bond Portfolio. To ensure that those Contract owners with
subaccount assets invested in the Multimanager Core Bond Portfolio on
the date of the proposed Substitution do not incur higher expenses, AXA
Equitable will reimburse, on the last business day of each fiscal
period (not to exceed a fiscal quarter) for the life of each such
Contract, the subaccounts investing in the EQ/Quality Bond PLUS
Portfolio as a result of the Substitution, such that the sum of the EQ/
Quality Bond PLUS Portfolio's total annual operating expense ratio,
taking into account any expense waivers or reimbursements, and
subaccount expense ratio (asset-based fees and charges deducted on a
daily basis from subaccount assets and reflected in the calculations of
subaccount unit value) for such period will not exceed, on an
annualized basis, the sum of the Multimanager Core Bond Portfolio's
total annual operating expense ratio, taking into account any expense
waivers or reimbursements, and subaccount expense ratio for fiscal year
2012. In addition, for the life of each such Contract, AXA Equitable
will not increase the asset-based fees and charges for affected
Contracts that are in force on the date of the proposed Substitution.
Legal Analysis and Conditions
Section 26(c) Relief
1. The Substitution Applicants request that the Commission issue an
order pursuant to Section 26(c) of the 1940 Act approving the proposed
Substitutions. Section 26(c) of the Act requires the depositor of a
registered unit investment trust holding the securities of a single
issuer to obtain Commission approval before substituting the securities
held by the trust.
2. The Substitution Applicants have reserved the right under the
Contracts to substitute shares of another underlying investment option
for one of the current underlying investment options offered as a
funding option under the Contracts. The prospectuses for the Contracts
and the Separate Accounts contain appropriate disclosure of this right.
3. The Substitution Applicants represent that the proposed
Substitutions will protect the Contract owners who have allocated
Contract value to the Existing Portfolio by: (1) Providing an
underlying investment option for subaccounts invested in the Existing
Portfolio that is sufficiently similar to, and in many cases
substantially similar to, the Existing Portfolio; (2) generally
providing such Contract owners with simpler disclosure documents; and
(3) providing such Contract owners with an investment option that would
have total operating expenses after the Substitution that are lower
than or equal to the current investment option.
4. The Substitution Applicants generally submit that the proposed
Substitutions meet the standards that the Commission and its staff have
applied to similar substitutions that the
[[Page 8609]]
Commission previously has approved. The Substitution Applicants also
submit that the proposed Substitutions are not of the type that Section
26(c) was designed to prevent. Unlike traditional unit investment
trusts where a depositor could only substitute investment securities in
a manner that permanently affected all the investors in the trust, the
Contracts provide each Contract owner with the right to exercise his or
her own judgment, and transfer Contract values and cash values into and
among other investment options available to Contract owners under their
Contracts. Additionally, the proposed Substitutions will not reduce in
any manner the nature or quality of the available investment options.
As such, investments in any of the Replacement Portfolios may be
temporary investments for Contract owners as each Contract owner may
exercise his or her own judgment as to the most appropriate investment
alternative available. In this regard, the proposed Substitutions
retain for Contract owners the investment flexibility that is a central
feature of the Contracts. Moreover, the Substitution Applicants will
offer Contract owners the opportunity to transfer amounts out of the
affected subaccounts without any cost or other penalty (other than
those necessary to implement policies and procedures designed to
prevent disruptive transfer and other market timing activity) that may
otherwise have been imposed for a period beginning on the date of the
supplement notifying Contract owners of the proposed Substitutions
(which supplement will be delivered to Contract owners at least thirty
(30) days before the Substitutions) and ending no earlier than thirty
(30) days after the Substitutions. The proposed Substitutions,
therefore, will not result in the type of costly forced redemption that
Section 26(c) was designed to prevent.
5. The proposed Substitutions also are unlike the type of
substitution that Section 26(c) was designed to prevent in that by
purchasing a Contract, Contract owners select much more than a
particular underlying fund in which to invest their Contract values;
they also select the specific type of insurance coverage offered by the
Substitution Applicants under the applicable Contract, as well as
numerous other rights and privileges set forth in the Contract.
Contract owners also may have considered AXA Equitable's size,
financial condition, and its reputation for service in selecting their
Contract. These factors will not change as a result of the proposed
Substitutions, nor will the annuity, life or tax benefits afforded
under the Contracts held by any of the affected Contract owners.
6. AXA Equitable will reimburse, on the last business day of each
fiscal period (not to exceed a fiscal quarter) during the two years
following the date of the proposed Substitution, the subaccounts
investing in the Replacement Portfolio such that the sum of the
Replacement Portfolio's total annual operating expense ratio, taking
into account any expense waivers or reimbursements, and subaccount
expense ratio (asset-based fees and charges deducted on a daily basis
from subaccount assets and reflected in the calculations of subaccount
unit value) for such period will not exceed, on an annualized basis,
the sum of the Existing Portfolio's total annual operating expense
ratio, taking into account any expense waivers or reimbursements, and
subaccount expense ratio for fiscal year 2012. In addition, for twenty-
four months following the date of the proposed substitutions, AXA
Equitable will not increase asset-based fees or charges for Contracts
that are in force on the date of the proposed Substitution.
7. AXA Equitable will reimburse, on the last business day of each
fiscal period (not to exceed a fiscal quarter) for the life of each
such Contract, the subaccounts investing in the EQ/Quality Bond PLUS
Portfolio as a result of the Substitution, such that the sum of the EQ/
Quality Bond PLUS Portfolio's total annual operating expense ratio,
taking into account any expense waivers or reimbursements, and
subaccount expense ratio (asset-based fees and charges deducted on a
daily basis from subaccount assets and reflected in the calculations of
subaccount unit value) for such period will not exceed, on an
annualized basis, the sum of the Multimanager Core Bond Portfolio's
total annual operating expense ratio, taking into account any expense
waivers or reimbursements, and subaccount expense ratio for fiscal year
2012. In addition, for the life of each such Contract, AXA Equitable
will not increase the asset-based fees and charges for affected
Contracts that are in force on the date of the proposed Substitution.
8. The Substitution Applicants submit that, for all the reasons
stated above, the proposed Substitutions are consistent with the
protection of investors and the purposes fairly intended by the policy
and provisions of the 1940 Act.
Section 17(b) Relief
1. The Section 17 Applicants request that the Commission issue an
order pursuant to Section 17(b) of the 1940 Act exempting them from the
provisions of Section 17(a) of the 1940 Act to the extent necessary to
permit them to carry out the In-Kind Transactions.
2. Section 17(a)(1) of the 1940 Act, in relevant part, prohibits
any affiliated person of a registered investment company, or any
affiliated person of such a person, acting as principal, from knowingly
selling any security or other property to that company. Section
17(a)(2) of the 1940 Act generally prohibits the same persons, acting
as principals, from knowingly purchasing any security or other property
from the registered investment company.
3. The Existing Portfolios and the Replacement Portfolios may be
deemed to be affiliated persons of one another, or affiliated persons
of an affiliated person. Shares held by a separate account of an
insurance company are legally owned by the insurance company. AXA
Equitable and its affiliates collectively own substantially all of the
shares of the Trusts. Accordingly, the Trusts and their respective
Portfolios could be deemed to be under the control of AXA Equitable. If
the Trusts and their respective Portfolios are under the common control
of AXA Equitable, then AXA Equitable is an affiliated person or an
affiliated person of an affiliated person of the Trusts and their
respective Portfolios. If the Trusts and their respective Portfolios
are under the control of AXA Equitable, then the Trusts and their
respective Portfolios are affiliated persons of AXA Equitable.
Regardless of whether or not AXA Equitable can be considered to
control the Trusts and their respective Portfolios, because AXA
Equitable and its affiliates own of record more than 5% of the shares
of each Portfolio, AXA Equitable may be deemed to be an affiliated
person of each Portfolio. Likewise, each Portfolio may be deemed to be
an affiliated person of AXA Equitable and an affiliated person of an
affiliated person of each other Portfolio.
Similarly, because the Manager is an affiliated person of each
Trust and its Portfolios by virtue of serving as the investment manager
to each Portfolio and is under common control with AXA Equitable, then
AXA Equitable may be deemed to be an affiliated person, or an
affiliated person of an affiliated person, of each Portfolio.
The proposed In-Kind Transactions could be seen as the indirect
purchase of shares of certain Replacement Portfolios with portfolio
securities of certain Existing Portfolios and the indirect sale of
portfolio securities of certain Existing Portfolios for shares of
[[Page 8610]]
certain Replacement Portfolios. Pursuant to this analysis, the proposed
In-Kind Transactions also could be categorized as a purchase of shares
of certain Replacement Portfolios by certain Existing Portfolios,
acting as principal, and a sale of portfolio securities by certain
Existing Portfolios, acting as principal, to certain Replacement
Portfolios. In addition, the proposed In-Kind Transactions could be
viewed as a purchase of securities from certain Existing Portfolios,
and a sale of securities to certain Replacement Portfolios, by AXA
Equitable (or its Separate Accounts), acting as principal. If
categorized in this manner, the proposed In-Kind Transactions may be
deemed to contravene Section 17(a) due to the affiliated status of
these participants.
4. The Section 17 Applicants submit that the terms of the proposed
In-Kind Transactions, including the consideration to be paid and
received, as described in this Application, are reasonable and fair and
do not involve overreaching on the part of any person concerned. The
Section 17 Applicants also submit that the proposed In-Kind
Transactions are consistent with the policies of the relevant Existing
Portfolios and the relevant corresponding Replacement Portfolios, as
recited in the current registration statement and reports of the
relevant investment company filed with the Commission under the federal
securities laws. Finally, the Section 17 Applicants submit that the
proposed In-Kind Transactions are consistent with the general purposes
of the 1940 Act.
5. The Section 17 Applicants maintain that the terms of the
proposed In-Kind Transactions, including the consideration to be paid
and received, are reasonable, fair and do not involve overreaching
because: (1) The In-Kind Transactions will not adversely affect or
dilute the interests of Contract owners; and (2) the In-Kind
Transactions will comply with the conditions set forth in Rule 17a-7,
other than the requirement relating to cash consideration.
The In-Kind Transactions will be effected at the respective net
asset values of each of the relevant Existing Portfolios and each of
the relevant Replacement Portfolios, as determined in accordance with
the procedures disclosed in the registration statement for the relevant
investment company and as required by Rule 22c-1 under the 1940 Act.
The In-Kind Transactions will not change the dollar value of any
Contract owner's investment in any of the Separate Accounts, the value
of any Contract, the accumulation value or other value credited to any
Contract, or the death benefit payable under any Contract. After the
proposed In-Kind Transactions, the value of a Separate Account's
investment in a Replacement Portfolio will equal the value of its
investments in the corresponding Existing Portfolio (together with the
value of any pre-existing investments in the Replacement Portfolio)
before the In-Kind Transactions.
The Section 17 Applicants assert that because the proposed In-Kind
Transactions would comply in substance with the principal conditions of
Rule 17a-7, the Commission should consider the extent to which the In-
Kind Transactions would meet these or other similar conditions and
issue an order if such conditions would provide the substance of the
protections embodied in Rule 17a-7. The Section 17 Applicants will
assure themselves that the investment companies will carry out the
proposed In-Kind Transactions in conformity with the conditions of Rule
17a-7, except that the consideration paid for the securities being
purchased or sold will not be cash.
The proposed In-Kind Transactions will be effected based upon the
independent current market price of the portfolio securities as
specified in paragraph (b) of Rule 17a-7 and at the respective net
asset values of each of the relevant Existing Portfolios and each of
the relevant Replacement Portfolios, as determined in accordance with
the procedures disclosed in the registration statement for the relevant
investment company and as required by Rule 22c-1 under the 1940 Act.
The proposed In-Kind Transactions will be consistent with the policy of
each registered investment company and separate series thereof
participating in the In-Kind Transactions, as recited in the relevant
registered investment companies' registration statement or reports in
accordance with paragraph (c) of Rule 17a-7. In addition, the proposed
In-Kind Transactions will comply with paragraph (d) of Rule 17a-7
because no brokerage commission, fee or other remuneration (except for
any customary transfer fees) will be paid to any party in connection
with the proposed In-Kind Transactions. Moreover, the Trusts are in
compliance with the board oversight and fund governance provisions of
paragraphs (e) and (f) of Rule 17a-7. Finally, a written record of the
proposed In-Kind Transactions will be maintained and preserved in
accordance with paragraph (g) of Rule 17a-7.
Even though the proposed In-Kind Transactions will not comply with
the cash consideration requirement of paragraph (a) of Rule 17a-7, the
terms of the proposed In-Kind Transactions will offer to each of the
relevant Existing Portfolios and each of the relevant Replacement
Portfolios the same degree of protection from overreaching that Rule
17a-7 generally provides in connection with the purchase and sale of
securities under that Rule in the ordinary course of business. In
particular, AXA Equitable and its affiliates cannot effect the proposed
In-Kind Transactions at a price that is disadvantageous to any
Replacement Portfolio and the proposed In-Kind Transactions will not
occur absent an exemptive order from the Commission. The Section 17
Applicants intend that the In-Kind Transactions will be carried out in
substantial compliance with the other conditions of Rule 17a-7 as
discussed above.
6. The proposed redemption of shares of each of the relevant
Existing Portfolios will be consistent with the investment policies of
that Existing Portfolio, as recited in the relevant investment
company's current registration statement, because the shares will be
redeemed at their net asset value in conformity with Rule 22c-1 under
the 1940 Act. Likewise, the proposed sale of shares of each of the
relevant Replacement Portfolios for investment securities is consistent
with the investment policies of that Replacement Portfolio, as recited
in the relevant Trust's current registration statement, because: (1)
The shares will be sold at their net asset value; and (2) the
investment securities will be of the type and quality that a
Replacement Portfolio could have acquired with the proceeds from the
sale of its shares had the shares been sold for cash. To assure that
the second of these conditions is met, the Manager and relevant Adviser
will examine the portfolio securities being transferred to each
Replacement Portfolio to ensure that they are consistent with that
Replacement Portfolio's investment objective and policies and could
have been acquired by the Replacement Portfolio in a cash transaction.
Conclusion
For the reasons and upon the facts set forth above and in the
application, the Substitution Applicants and the Section 17 Applicants
believe that the requested orders meet the standards set forth in
Section 26(c) of the Act and Section 17(b) of the Act, respectively,
and should therefore, be granted.
[[Page 8611]]
For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-02561 Filed 2-5-13; 8:45 am]
BILLING CODE 8011-01-P