SEC Division of Investment Management staff letter: ABN AMRO Bank N.V.

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. . m¡';...~ ~.'il :~¡¡;;. iii,)l:i' ~tl ,',.,,;;;1 iI ur Ref. No. 97-39-CC ~ PULIO . N AMO BanN.V.; . VAll, AliIL MN AMO Asset Management (USA) Inc.; ABN AMO Asset Management REPONSE OF TH OFFICE OF CID COUNSEL (Far East) Limted DIVSION OF INTM MANAGEM File No. 132-3 Y Ol,ir letter dated March 7, 1997 requests our assurace that we wil not recommend enforcement action to thy Commission if neither ABN AMO Ban N. V. (" ABN AMO Ban"), nor cert of its afiltes, register under the Investment Advisers Act of 1940 (the

"Advisers Act"), if they share cert personnel with, and provide cert services to, ABN AMO Asset Management (USA) Inc. ("AA"), a registered investment adviser. In addition, you seek our assurace that we wil not recommend enforcement action to the

Commission if ABN AMO Ban or its unregistered afilates provide investment advisory services to their clients who are not residents of the United States solely in accordace with the laws of The Netherlands (or other applicable foreign law) without also complying with the provisions of the Advisers Act, except as provided in your letter. Background You state that ABN AMO Ban is a "universal ban" incorporated under the laws of The Netherlands. As a universal ban, it is engaged in.both the securities and commercial bang businesses, providig a wide varety of fmancial services diectly and through its subsidiares. ABN AMO Ban operates in the United States through its braches and agencies, and through severa subsidiares, includig AA.1 AA commenced operations in 1994 for the purpose of providing portolio management and investment supervisory services to U.S. institutional and individual clients, including clients of ABN AMO Ban and its afilates. You state that ABN AMO Asset Management (Far East) Limted ("Far East")2 is an investment adviser organ under the laws of Hong Kong. Far East provides investment

, management services to non-U.S. investors with respect to investments in the Far East, and also serves as sub-adviser to mutual funds registered under the laws of The Netherlands, which are not offered to U.S. persons. 1 ABN AMO Ban Holdig N. V., which is incorporated under the laws of The Netherlands, owns in excess of 99 % of the outstading voting securities of ABN AMO Ban. ABN AMO Ban wholly owns ABN AMO North America, Inc. ("AAA"), which in turn wholly owns AA. ') 2 Far East is an indirect, wholly owned subsidiar of ABN AMO Ban.

You state that LaSale Street Capita Management, lid. ("LSCM"),3 is registered as an investment adviser under the Advisers Act. LSCM provides investment management' services to U.S. and non-U.S. clients, and serves as investment adviser to the Rembradt Funds, a U.S. registered investment company. Proposal In addition to using its own employees, AA proposes to utie the services of cert personnel ("Shared Personnel") of ABN AMO Ban, Far East, LSCM or a Parcipatig Afilate. "Parcipatig Afilte" is defmed in your letter to include any unregistered (and otherwise non-U.S. regulated) afilate of AA, except ABN AMO Ban, that provides advice to the U.S. clients of AA,4 through or on behal of AA, or has access to any inormation concerng securities recommendations for AA's clients prior to the effective dissemiation of such recommendations. Shared Personnel may provide portfolio management and other, non~investment advisory services to U.S. clients of AA, as well as to other afiltes of ABN AMO Ban. Shared Personnel wil be priary employed by, and under the supervision of ABN AMO Ban, Far East, LSCM or a Paricipating Affilate, and wil have their priar place of work in the offces of one of

these entities.
You represent that those Shared Personnel who provide advisory services to clients ii of AA.s You state that responsibilty of AA wil be treated as "associated persons

for the management of specifc portions of a client's portolio wil be assigned to a portolio manager employed by AA, or to a portolio manager priary employed by one of its afilates, based upon the client's wishes and nees and the relative expertse among the portolio managers. You represent that AA wil enter into approprite argements with ABN AMO Ban, Far East, LSCM and any other Paricipatig Afate to assure compliance with the representations set forth in your letter. 3 LSCM is wholly owned by AAA. 4 The sta'looks to the defmition of U.S. person in pargrph 902(0) of Regulation S

under the Securities Act of 1933 for guidace in interpretig the meag of U.S. client in this response. Cf. Goodwin, Procter & Hoar (pub. avai. Feb. 28, 1997) (lookig to pargrph 902(0) of Regulation S for guidace in interpreting the meag of U.S. person for purposes of the Investment Company Act of 1940). 5 Section 202(a)(17) of the Advisers Act defmes "person associated with an investment

adviser" as "any parner, offcer, or diector of such investment adviser (or any person

pedorming simar functions), or any person directly or indirtly controllg or controlled by such investment adviser, includig any employee of such investment adviser, II except personS associated with an investment adviser whose functions ar clerica or minsterial.

You state that advisory personnel of AA and the Parcipatig Affilates may rely in par on reseach provided by brokerage reseach units of ABN AMO Ban and its afilates ("Brokerage Reseach Unitsii).6 You represent that the operations of Brokerage Reseach Units are completely distict from the reseach operations of the advisory personnel, and that Brokerage Reseach Units wil not have access to any inormation concerng the portolios of AA's U.S. clients, or the securities recommended to, or purchased or sold for, the accounts of AA's U.S. clients. You represent that there wil be a "Chiese Wal" between the Brokerage Reseach Units and the Shared Personnel and other AA personneL. You state that in those geogrphic locations where both Brokerage Reseach Units and Shared Personnel or AA personnel wil have offces, they wil be physicay separted. The Brokerage Reseach Units wil not have access to AA'sfIles, and the Brokerage Reseach Units wil not have

knowledge of the portolios of AA's clients or inormation concerng AA's investment decisions and recommendations. In addition,' the Shared Personnel and other AA personnel wil not be provided access to the fIles of the Brokerage Reseach Units' analysts and other employees. The Brokerage Reseach Units wil not prepare research reports or other inormation specifcaly for use by or on behal of U.S. clients of AA. You state that any contact between the Brokerage Reseach Units and the Shared Personnel and AA personnel wil be exclusively on an ar's-lengt basis comparble to the terms on which the Shared Personnel and AA have contact with unafilated entities that provide reseach. You. state that Brokerage Reseach Units wil not be considered to be

Parcipating Afilates, and their employees wil not be treated as "associated persons" of AA solely becuse they provide reseach to AA in, the maner described in your 7 letter. AA proposes to make argements with ABN AMO Ban and its afilates

(includig ABN AMO Chicago Corporation ("Chicago".), a U.S. registered investment

adviser and broker-deaer), 8 through which such entities may act as custodis for client

accounts, and provide data processing, related recordkeeing' and other admstrtive 'services. Al reports prepared for AA clients wil be reviewed by AA or Shared 6 The reseach wil consist of statistica and factual inormation'regardig currencies, industres, and companes, advice regardig ecnomic trnds, and remmendations on spifc companes and securities. You rereent that ths reseach is only par of the inormation that AA wil use in makg investment decisions and remmendations. You

state that sources of AA's inormation wil include (1) reseach provided by advisory personnel, and (2) seconda reseach and analytica inormation reeived directly from brokers and other fmancial or other economic institutions not afilated with AA. 7We do not express any view with regard to whether a Brokerage Reseach Unit would be required te register separtely under the Advisers Act. 8 Chicago is an indirect, wholly owned subsidiar of ABN AMRO Ban.

Personnel acting on its behal, and wil be trasmitted by AA on AA's letterhead. Cert employees of ABN AMO Ban wil be responsible for maitag, or wil have access to, records of AA. You represent that these employees wil be treated as II of AA.9 You also represent that any written agreement "advisory representatives

between AA and ABN AMO Ban or its afilates wil provide that any records ,maitaed on behal of AA wil be maitaed in accordace with the requirements of Rule 204-2 under the Advisers Act, that such recrds are the exc1usivepropert of AA, and the sta of the Commission wil be entitled to have access to such records. AA also proposes to execute and clea securities trsactions through ABN AMRa Ban and other broker-deaer afiltes. You represent that al such trsactions wil be executed on an "ar's-lengthll basis. Subject to applicable U.S. laws, trdes for AA's clients may be combined with trdes on behal of other clients of ABN AMO Ban and its afilates; You represent that ABN AMO Ban employees, and employees of afilates'of ABN AMO Ban who place trdes on behal of AA's clients wil be treated as II associated persons II of AA.10 Analysis
Section 203(a) of the Advisers Act requires the registrtion of any investment adviser
that uses the U. S. mais or any meas or instrumentaties of interstate eommerce in connection with its busi,ess as an investment adviser, unless the adviser is exempt from registration under Section 203(b) or excluded from registrtion with the Commssion pursuant 9 Rule 204-2(a)(12)(A) underthe Advisers Act defmes"advisory representative" as any parner, offcer or diector of an investment adviser; any employee who makes any

recommendation, who parcipates in the determtion of which recmmendation shal be made, or whose functions or duties relate to the determtion of which remmendation shal be made; any employee who, in connection with his duties, obtas any inormation concerng which securities ar being, recmmended prior to the effective dissemiation of such recmmendations or of the inormation concerng such remmendations; and any of the following persons who obta inormation concerng securities recommendations being

made by such investment adviser prior to the effective dissemiation of such recommendations or of the inormation concerng such reommendations: (1) any person in a control relationship to the investment adviser, (2) any afilted person of such controllg person and (3) any afilated person of such afilted person.

10 You have not asked for, and we do not express, any view with regard to argements contemplated by AA and its afilates for custody or the execution of securities trsactions. Nor do we express any view with regard to argements contemplated for the combination of trades on behal of clients of AA and clients of ABN AMa Ban and its affilates.

11 to Section 203A of the Advisers Act.

The sta has stated that it wil not recommend enforcement action to the 'Commission

if a foreign investment advisory afilate of a registered investment adviser does not register

under the Advisers Act if: (1) the registered and unregistered entities are separtely organed (i.e., two distict entities); (2) the registered adviser is staed with personnel (whether located in the United States or abroad) who ar capable of providig investment advice; (3) al persons who provide advice to U.S clients or have access to any inormation concerng securities to be recommended to U. S. clients prior to the effective dissemiation of the recommendations are deemed to be "associated persons"12 of the registrt; and (4)

the Commssion has access to trdig and other records of the afilte involved in, or having access to, U.S. advisory activities, and to the afilate's personnel, to the extent necssar to monitor and poli~ conduct that may har U.S. clients or markets.13 In your letter, you make a series of representations designed to address the concerns of the sta. These representations, which are restated below, are substatiy simar to representations made to the sta in prior requests for relief.14 You state that under Dutch law, however, ABN AMO Ban is unable to make cert of the representations that were made in previous letters with respect to: (1) providing the Commission staf with access to 11 Section 203A of the Advisers Act, which wil be effective July 8, 1997, provides that no investment adviser that is regulated or reuired to be regulated in the state in which it maitas its pricipal offce and place of business shal i:gister with the Commssion, unless

the adviser has assets under management of not less than $25 mion (or such higher amount as the Commission by rule deems appropriate), or is an adviser to an investment company registered under the Investment Company Act of 1940. You represent that the afiltes of

ABN AMO Ban identifed in your letter as U.S. registered investment advisers wil contiue to be registere with the Commission afer the effective date of Section 203A, provided that such advisers contiue to fal withi the defmition of "investment adviser"

under Section 202(a)(1l) of the Advisers Act. Telephone converstion between Brenda C. Fox and Edward G. Eisert, May, 7, 1997. 12 See Section 202(a)(17) of the Advisers Act. A registere investment adviser may be subject to sanctions by the Commssion for faig resonably to supervise the activities of its associated persons who are subject to its supervision and who commit violations of the federa securities laws. See,~, Sections 203 (e) (5) and 204A of the Advisers Act. 13 Murry Johnstone Holdigs Limited (pub. avai. Oct. 7, 1994). 14 Id. See also Kleinwort Benson Investment Management Limited (pub. avai. Dec. 15,

1993); Mercury Asset
Management pIc (pub. avai. Apr. 16, 1993); The National Mutual .Group (pub. avai. Mar. 8, 1993); and Uniao de Bancos de Brasilerios S.A. (pub. avai. July 28, 1992).

, sta trding records of the type required by Rule 204-2(a)(12) ("Sta Tradig Records")l5 for its advisory representatives with respect to U. S. clients and for al persons deemed to be "associated persons" by AA; and (2) the avaibilty of personnel for questionig by the staf. More specifcay, you state that under Dutch law,16 the keeper of a "databasell which contas inormation on individuals, such as employees of ABN AMO Ban, is prohibited from releasing personal data contaed in the database to thid paries except in cert

lited circumstaces, none of which would include a Commission investigation or

inspection.17 In addition, you state that under Dutch law, an employer caot require an employee to cooperate with a Commission investigation if it would require the employee' to appea in the United States. You note that an employee's faiure to comply with the reasonable instrctions of his employer could lead to that employee's termation, but that

ABN AMO Ban caot force its employees to appea before the Commssion in The Netherlands or the United States. Becuse of this restriction, you believe ABN AMO Ban is unable to represent that it wil make its employees avaible for testiony or other questionig by the Commission at such ,place as the Commssion may designate in the United States. You state that to address the concerns of the sta in a maner that is consistent with Dutch law, ABN AMO Ban represents that it wil: (1) make a good faith effort to obta from al of ABN AMO Ban's "advisory representatives" with respect to U.S. clients of AA and al persons deemed to be "associated persons" by AA ("Covered Persons"), a written authorition to provide Sta Tradig Records to the Commssion; (2) with respect

to Covered Persons for which an authorition is not in effect, make avaible to the

Commssion copies of a Covere Person's Sta Tradig Records which do not include the Covered Person's name and any other inormation which would identi the Covered Person

15 Rule 204-2(a)(12) under the Advisers Act generay reuirs investment advisers to

maita a recrd of every trsaction in a security in which the investment adviser or any

advisory representative of such investment adviser has, or by reon of such trsaction

acquirs, any diect or indiect beneficia ownership, excet: (1) trsactions effected in any

account over which neither the investment adviser nor any advisory representative of the investment adviser has any dit or indit inuence or contrl; and (2) trsactions in

securities which ar diect obligations of the United States.

16 You represent that your understadig of Dutch law is based upon advice of Dutch

counsel to ABN AMO Ban, without any independent investigation. You further tepresent that these restrctions relate only to the asset management operations of ABN AMO Ban in The Netherlands. .

17 You state that personal data caot be released unless it is furnshed: (1) as a direct result of the purpose for which the data is maitaed; (2) with the specifc consent of the employee (which may be withdrawn); or (3) as reuired by the laws of The Netherlands.

(IIRedcted Sta Tradig Records"); and (3) assist the Commission in enlsting the assistace of the appropriate Dutch regulatory authorities if the Commission determines that it requires 18 inormation not included in the Redcted Sta Trading Records.

You note that'the United States and The Netherlands are paries to an Agreement on Mutual Admistrtive Assistace in the Exchange of Information in Securities Matters dated December 11, 1989 (the "Agreementll). You believe that the terms of the Agreement should provide additional assurace to the Commission that its regulatory concerns wil be addressed. You state that under Dutch law, the Securities Board of The Netherlads (the Stichting Toezicht Effectenverkeer, or IISTE") is empowered to request personal data in connection with an investigation made withi the context of the Agreement. You believe that under the Agreement, the Commission should b~ able to obta inormation contaed in Sta Tradig Records maitaed by ABN AMOBan with the assistace of Dutch regulatory authorities. ABN AMO Ban also represents that it wil condition the employment of al newly employed Covered Persons, and persons who are newly assigned to positions that would require them to be deemed Covered Persons, on an undertg to cooperate with Commission investigations, includig appeag for testimony before, or other questionig 19 by, the Commission at such place as the Commission may designate in the United States.

In addition, ABN AMO Ban represents that it wil tae al appropriate legal actions to compel compliance by such personnel with these undertgs and wil pursue àl avaiable

legal remedes agaist any person who fais to comply with the undertg. " You also represent that under Dutch law, an employee of ABN AMO Ban may be questioned by the STE, and that under the Agreement, the Commission may parcipate in an investigation by the STE in the Netherlads. An employee of ABN AMO Ban that fais to cooperate with an STE investigation may be subject to sactions and may 'be reported to the approprite Dutch law enforcement authority. You state that your proposa is designed to give AA's clients the benefits of the specia expertse of its afiltes' portolio managers whie at the same tie, permt the Commssion to monitor and police conduct that may har U.S. clients or markets. It is your view that the undertgs and reresentations made by ABN AMO Ban and the Parcipatig Aftes in your letter wil enable AA to serve clients effciently and effectively, and wil also addrss the Commission's regulatory concerns by providig the sta with suffcient access to the relevant ,aspects of the business of ABN AMO Ban and its afilates. 18 See Representation C.S. below. 19 See Representation C.6. below.

On the basis of the facts and representations in your letter, and without necessary agreeing with your legal analysis, we would not recommend that the Commission tae any enforcement action agaist ABN AMO Ban or its Parcipatig Afilates if they do not register under the Advisers Act and if they' share cert personnel with, and provide cert services to, AA, under the conditions described in your letter. You note that the Division has determed that the substative provisions 'of the Advisers Act generay should not govern the relationship between an investment adviser located outside the United States and its foreign clients, provided that these activities do not involve conduct, or give rise to effects, withi the United States.20 We would not recommend enforcement action agaist ABN AMO Ban and its unregistered (and otherwise non-U. S. regulated) afilates if they provide investment advisory services to their clients who are not U.S. residents solely in accordace with applicable foreign law except as specifed in your letter, provided that the unregistered entities' activities do not involve conduct or effects, in the United States. The positions expressed in this response are based on the facts and representations in your letter, which because of their importce are restated below. A. Representations of AA.21

AA represents that:

1. it wil promptly, upon recipt of an admstrtive subpoena, demand or a

request for volunta cooperation made durig a routie or specia inspection or otherwise, provide to the Commssion or to the sta of the Commssion any and al of the books and records that it is requir to kee under the Advisers Act and those kept under foreign law, and, to the extent withi its control and to the extent it may lawfully do so, make avaible for testiony before or other questionig by the Commssion or the sta of the Commssion any and al personnel (other than clerica or misteri personnel) identied by the Commssion, the sta of the Commssion, AA, any Parcipatig Afilte

or ABN AMO Ban as having accss to or having ben involved in providig advice to U.S. clients, or related trsactions, at such place as the Commssion may designate in the United States or, at the Commssion's option, in the countr where the records are kept or such personnel reside. AA wil authori al personnel described in the precedg sentence to testi about al

20 See notes 13 and 14, supra.
21 You indicate that AA may be merged into Chicago. In such event, Chicago would succee to the business of AA and would be bound by the representations made in

your letter.

advice provided to U.S. clients and related trsactions (except with respect to

the identity of non-U.S. clients). Subject to the foregoing, AA wil not (except with respect to the identity of non-U.S. clients) contest the valdity of

an admistrative subpoena for testiony or documents under any law or '

regulations other than those of the United States;'
2. it wil, to the extent that any books and records identifed above are not kept

in English, cause such books and records to be trslated into, English upon

reasonable advance request by the Commission or its sta;

3. it wil deem as an "associated person" each Parcipating Afilate, and each

employee of each Parcipatig Afilate and ABN AMa Ban, who: (a) provides advice (includig reseach) to AA's U.S. clients; or (b) has access to any inormation concerng which securities are being recommended

to AA's U.S. clients prior to the effective dissemiation of such recommendations; and
4. (a) any communications with U.S. clients (includig any recommendations or

reports) wil be through AA, not ABN AMO Ban or the Parcipating Affiltes, and AA wil require the Shared Personnel to make clea in any

communications between the Shared Personnel and AA's clients that such communications are from AA, not ABN AMO Ban or any Paricipatig Afilate; (b) when deag with clients or potential clients of AA, the Shared Personnel wil make it clea that they are actig in their capacity as representatives of AA, not ABN AMO Ban or any Parcipatig Afilte; and (c) AA wil disclose to its clients in its Form ADV that ABN

AMO Ban and the Paricipatig Afiltes may recmmend to their clients, or invest on behal of their clients in, securities that ar the subject of recommendations to, or discretionar trdig on behal of, AA's clients.

B. Representations of Paricipatig Afates.

Each Parcipatig Afilate represents that:

1. any advice given to U.S. clients of AA, by or on behal of AA, wil
   be given only through AA or through employees who AA deems to be "associated persons";
2. it wil provide to AA, and AA's ,Form ADV wil disclose, the names

and other inormation required by Form ADV for al II associated persons" of AA who are employees of Paricipating Afiltes as described in AA's representations;

3., staf trdig records required by Rule 204-2(a)(12) under the Advisers Act wil

be maitaed for al of its II advisory representatives" with respect to U. S. clients ofAA and for al persons deemed to' be "associated persons" by

AA who are employees of Parcipating Afilates;
4. it wil keep books and records of the tye described in Rules 204-2(a)(1), (2),

(4), (5) and (6) and 204-2(c) under the Advisers Act for al trsactions. With

respect to trsactions involving AA's U.S. clients and al related trasactions, it wil also reta records of the tye described in Rules 204 2(a)(3) and (7) under the Advisers Act. Al of the books and recrds described above wil be maitaed and preserved in an easily accessible place in the countr where such records are kept for a period of not less than five yeas from the end of the fiscal yea durig which the last entry was made on

such book or record;
5. it wil, to the extent that any books and records identied above are not kept

in English, cause such books and records to be trslated into English upon

reasonable advance request by the Commssion or its sta;
6. it wil promptly, upon receipt of an adminstrtive subpoena, demand or a

request for volunta cooperation made durig a routie or special inspection or otherwise, provide to the Commission or to the sta of the Commssion any and al of the books and records described above, and, to the extent withi its control and to the extent it may lawfully do so, make avaiable for testiony before, or other questionig by, the Commission or the sta of the Commission any and al personnel (other than clerica or minsteri personnel) identifed by the Commission, the sta of the Commssion, AA or itself as having access to or having been involved in providig advice to be used for or on behal ofAA's U.S. clients or related trsactions, at such place as the Commssion may designate in the Unite States or, at the Commssion's option, in the countr where the rerds are kept or such personnel reside. It wil authori al personnel describe in the preg sentence to testi about al advice used for or on behal of AA's U.S. clients and related trasactions (except with respect to the identity of non-U.S. clients). Subject to the foregoing, it wil not (excet with respect to the identity of non-U.S.

clients) contest the valdity of admstrtive subpoenas for testiony or documents under any law or regulations other than those of the United States; and
7. it wil submit to the jurisdiction of U.S. federa courts for actions arsing

under the U.S. securities laws in connection with investment advisory activities for U. S. clients of AA. It wil designate and appoint an agent for service

of process upon whom may be served al process, pleadings and other papers in (a) any investigation or adminstrative proceeing conducted by the

Commission; and
(b) any civil suit or action brought agaist AA or itself or to which AA or it has been joined as a defendat or respondent, in connection with the investment advisory activities and related securities activities arsing out of or relating to any investment advisory services provided to U.S. clients of AA or any related trasaction. It wil appoint a successor agent if it or any person discharges the agent, or the agent is unwilg or unable to accept service on its behal at any tie until six yeas have elapsed from the date of AA's last investment advisory activity. It wil not have access to or provide advice ,to be used for or on behal of U. S. clients of AA until documents effectig the appointment of an agent have

been fIled by it with the Commission in a form that is reasonably acceptable to the sta.

C. Representations of ABN AMO Ban.,

ABN AMO Ban represents that:

1. any,
   advice given to U.S. clients of AA, by or on behal of AA, wil be given only through AA or through employees who AA deems to be II associated persons II;
2. it wil provide toAA, and AA's Form ADV wil disclose, the names

and other inormation required by Form ADV for al "associated persons" of AA as described in AA's representations;
3. it wil keep books and records of the tye described in Rules 204-2(a)(1), (2),

(4), (5) and (6) and 204-2(c) under the Advisers Act for al trsactions. With

respet to trsactions involving AA's U.S. clients and al related trsactions, it wil also reta recrds of the type described in Rules 204 2(a)(3) and (7) under the Advisers Act. Al of the books and records describe in the preg sentence wil be maitaed and preserved in an

easily accssible place in the countr where such reords ar kept for a period of not less th five yeas from the end of the fisca yea durig which the last entr was made on such book ,or recrd; .
4. it wil, to the extent it may lawfully do so, promptly, upon recipt of an

admistrtive subpoena, demand or a reuest for volunta cooperation made

durig a routie or specia inspection or otherwise, provide to the Commssion or to the sta of the Commssion any and al of the books and records

described in Section C.3, at such place as the Commission may designate in the United States or, at the Commission's option, in the countr where the recrds are kept. To the extent legaly permissible, it wil not (except with respect to the identity of non-U.S. clients) contest the valdity of adminstrative subpoenas for any document described in Section C.3. under any laws or

regulations other than those of the United States;
5. it wil maita Sta Tradig Records of the tye required by Rule 204
2(a)(12) under the Advisers Act for al of its "advisory representatives" with

respect to U.S. clients of AA and for al persons deemed to be II associated II by AA (for purposes of this Section C.5., such persons are persons collectively referred to as "Covered Persons"), and it wil: (a) make a good faith effort to obta from al Covered Persons written authoritions (each an "Authorition") to provide their own Sta Tradig Records to the Commission or the sta of the Commission upon receipt of an admistrative ,subpoena, demand or request for volunta cooperation durig a routie or

special inspection or otherwise; and (b) wil make avaiable, upon receipt of an admistrative subpoena, demand or request for volunta cooperation durig a

routine or special insption or otherwise of the Commssion or the sta of the Commission, copies of redcted Sta Tradig Records (as specifed below, "Redcted Sta Tradig Records" of those Covered Persons for whom a duly

signed Authorition is not in effect. If the Commssion or the sta of the Commission requires access to the inormation that has not been included in Redcted Staf Tradig Records, it wil assist the Commission and the staf of the Commission, to the extent it may lawfully do so, in enlsting the assistace of the appropriate Netherlands regulatory authorities in obtag access to the inormation not inCluded in such Redcted Sta Tradig Records, and wil respond to any lawful request for such inormation that is made by such Netherlads regulatory authority. "Redcted Sta Tradig Records" meas a copy of any Covered Person's Sta Tradig Records which does not include

such Covered Person's name and other inormation which would identi such

Covered Person. It wil maita a key or codig system by which the identity

of Covere Persons for whom Redcted Tradig Records have been produced

ca be determined;

6. it,wil make avaible in The Netherlads for questionig by the sta of the

Coinssion, to the extent it may lawfully do so, any and al personnel (other than clerica or misteri personnel) identied by the Coinssion, the sta of the Coinssion, AA or itself as having accss to or having been involved in providig advice to be used for or on behal of AA's U.S. clients or related trsactions. It wil authori al personnel described in the

precg sentence to testi about al advice used for or on behal of AA's U.S. clients and related trasactions (except with respect to the identity of non￾U.S. clients). To the extent legaly permissible, it wil not (except with

respect to the identity of non-U. S. clients) contest the valdity of adminstrative subpoenas for testiony or documents under any laws or regulations other than those of the United States. It wil condition the employment of (a) al of its "advisory representatives" with respect to U. S. clients of AA, and (b) al persons deemed to be "associated persons" by AA to be newly employed

by ABN AMO Ban, or to be newly assignedto positions that would require them to be deemed to be "advisory representatives II with respect to U. S. clients of AA, or "associated persons" by AA, to the extent it may lawfully do so, on an undertg to cooperate with Commission

investigations, includig appeag for testiony before, or other questionig by, the Commission or the sta of the Commssion at such place as the Commission may designate in the United States;
7. it wil tae al appropriate legal actions to compel compliance by al personnel

described in Section C.6. above with the undertgs referred to in Section C.6., above, and wil pursue al avaiable legal remedies agaist any such person that fais to comply with such undertgs;
8. it wil, to the extent that any books and records identifed in this Section C.

are not kept in English, cause such books and records to be trslated into

English upon reasonable advance request by the Commission or its sta; and

9. it wil submit to the jurisdiction of U.S. federa courts for actions arsing

under the U. S. securities laws in connection with investment advisory activities for U.S. clients of AA. It wil designate and appoint an agent for service

of process upon whom may be served al process, pleadings and other papers in (a) any investigation or adminstrtive proceeg conducted by the Commission; and (b) any civil suit or action brought agaist AA or itself '

or to which AA or it has been joined as a defendat or respondent, in connection with the investment advisory activities and related securities activities arsing out of or relatig to any investment advisory services

provided to U. S. clients of AA or any related trsaction. It wil also appoint a successor agent if it or any person discharges the agent, or the agent is unwilg or unable to accept service on its behal at any time unti six yeas have elapsed from the date of AA's last investment advisory activity. It wil not have accss to or provide advice to be used for or on behal of U.S.

clients of AA unti documents effectig the appointment of an agent have

been fIled by it with the Commssion in a form that is resonably acctable to the sta.

Conclusion
Because these positions are based upon the facts and representations in your letter, you should note that any dierent facts or representations may require a diferent' conclusion. Further, this response expresses the Division's position on enforcement action only, and does not purport to express any legal conclusions on the questions presented.

~c~
Brenda C. Fox
Attorney

SCH U LT E ROTH & ZABEL LLP
900 THIRD AVENUE

R A. ABRAHAMS
Ki !PTlSTE
LE~ M. BLIWISE
MARK A. NEPORENT
PETER A. NUSSBAUM
JAMES M. PECK
NEW YORK, N.Y. 10022 FLORIDA OFFICE
PHILLIPS POINT, WEST TOWER
STEPHANIE R. BRESLOW
DAVID M. BRODSKY
MARTIN L. PERSCHETZ
GREGORY P. PRESSMAN (212) 756-2000 SUITE 1002:
777 SOUTH FLAGLER DRIVE
BROOKS R. BURDETTE FREDERIC L. RAGUCCI WEST PALM BEACH. FLORIDA 33401 BONNIE L. DIXON KURT F, ROSELL FACSIMILE NUMBER: 1561' 659-9800 EDWARD G, EISERT ROBERT ROSENBERG 12121593- 5955 HOWARD B, EPSTEIN PAUL N. ROTH MICHAEL J, FEINMAN MICHAEL S, FELDBERG WILLIAM A. RUSKIN JEFFREY S. SABIN CABLE: OLYMPUS NEWYORK STEVEN J. FREDMAN FREDERICK P. SCHAFFER STUART D, FREEDMAN STEPHEN J. SCHULTE WRITER'S DIRECT NUMBER:
SUSAN C. FRUNZI DANIEL S, SHAPIRO
KENNETH S. GERSTEIN CHAYE ZUCKERMAN SHAPOT
ALAN R. GLICKMAN HOWARD F. SHARFSTEIN
HOWARD O. GODNICK
LAWRENCE S. GOLDBERG
JOSEPH R. SIMONE
IRWIN J. SUGARMAN (212) 756-2579
FRED R. GREEN SHLOMO C. TWERSKI
MARCY RESSLER HARRIS JANET C. WALDEN
DANIEL J. KRAMER ALAN S, WALDEN BERG
BURTON LEHMAN PAUL N. WATTERSON, JR.
ISAAC B. LUSTGARTEN PAUL E. WEBER
JOHN G. McGOLDRICK MARC WEINGARTEN
MICHAEL C. MULITZ ANDRE WEISS
ROBERT 5, NASH WILLIAM 0, ZABEL
CONFIDENTIAL TREATMENT REQUESTED
Jack W. Murhy, Esq.
Chief Counsel
Division of Investment Management
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Investment Advisers Act of 1940. Sections 203 and 208

Dear Mr. Murhy:
We are wrting to you on behalf of our clients, ABN AMRO Ban N. V. '(IABN' AMa Ban"), ABN AMRO Asset Management (USA) Inc. ("AA") and ABN AMRa Asset Management (Far East) Limited ("AAFE") to request your concurrence with our opinion that neither ABN AMRO Ban nor the Paricipating Affliates, as defined below, will be required to register under the Investment Advisers Act of 1940, as amended (the "AdvisersAct"), if they share certain personnel with, and provide certain services as described below to, AAAM, an investment adviser that is registered under the Advisers Act, under the circumstances described below. In addition; we seek assurance that the staff of the Securities and Exchange Commission (the "Commissionll) wil not recommend enforcement action against ABN AMRa Bank or any of its unregistered (and otherwise non-U.S. regulated) affiliates if they provide investment advisory services to their clients who are not residents of the U.S. solely in

accordance with the securities laws of
The Netherlands (or other applicable foreign law) without also complying with the provisions of the Advisers Act, except as provided below.

1. Background.

A. ABN AMRa Bank.

ABN AMRO Ban, incorporated under the law of The Netherlands with executive offces in Amsterdam, is the largest ban in The Netherlands and one of the largest banks in the world. ABN AMRa Bank is a subsidiar. of ABN AMRO Bank Holding N.V. ("ABN AMRO Holding"), also incorporated under the law of The Netherlands with executive offces in, Amsterdam. ABN AMRO Holding conducts no operations other than through ABN AMRa Bank. ABN AMRO Ban comprises a global financial services organization with offices, throughout the world and is a "universal ban", as defined under the law of The Netherlands, because it engages in the securties business as well as the commercial baning business. ' Through its subsidiaries, ABN AMRO Ban provides a wide range of customer financial services, including baning, investment banng, investment advisory and custody, foreign exchange and ,underwiting, and insurance, and operates both in the United States and abroad. ABN AMROBan operates in the U.S. through ten branches and agencies and its . ' wholly owned subsidiar, ABNAMRO Nort America, Inc., a Delaware corporation ("AAA"). AANA wholly ownsAAAM, a Delaware corporation. AANA also wholly owns LaSalle , National CoI'oration, a Delaware corporation, which, in tu, wholly owns LaSalle National Bancorp, Inc., which itself wholly owns LaSalle Natiomi.l Ban, a national banng association ("LNBII). AANA also wholly owns LaSalle Street Capital Management, Ltd., a Delaware .. ' corporation, and an investment adviser that is registered under the Advisers Act ("LSCMII).
B. AAM....

:A commenced business in Januar, 1994, and was organized for the purose of providing: (i) portfolio management services to U.S. institutional clients (including clients of ABN AMRO Holding owns in excess of99% of the outstanding voting securities of ABN AMRO Bank. .. , LNB, as a national banking association, is e?,cluded from the definition of "investmentadviser" under the Advisers Act. LNB is subject to regulation by the Offce of the Comptroller of the Currency. ... AAAM may be merged into the ABN AMRO Chicago Corporation, a Delaware corporation ("AACC") and an indirect, wholly-owned subsidiary of ABN AMRO Bank, which is registered as an investment adviser under the Advisers Act and as a broker-dealer under the Securities Exchange Act of i 934, as amended (the "Exchange Act"). In such event, AACC would succeed to the business of AAAM and AACC would be bound by the representations of AAAM set forth herein.

affliated banks (e.g., European American Ban (IlEAB")), such as corporations, charitable foundations and endowment funds, educational institutions, and pension (or other retirement) plans sponsored by governents, corporations and unions, and registered investment companies; (ii) portfolio management services to U.S. individuals, including persons who may maintain accounts at the U.S. branches and agencies of ABN AMRO Ban and at U.S. affliated banks, e.g., EAB, and non-U.S. individuals who may maintain accounts at the U.S. branches and agencies of ABN AMRO Ban and at U.S. affliated bans; and (iii) investment supervisory services for its clients. The portfolio management services provided wil be primarily discretionar, although non-discretionar services also may be provided. As more fully

discussed below, in providing services to its clients, AAM may obtain certain services from its affiliates, including ABN AMRa Ban and LSCM~ and may effect certain transactions through ABN AMRO Ban and its affiiates. AAM has been capitalized with more than $1;000,000. The portfolio management services ofAAAMrelate to U.S. and non-U.S; issuers, securities and investments. AAM is in the process of registering with the Securities Board of The Netherlands, Stichting Toezicht Effectenverkeer (the IlSTEIl), and, if necessar, wil either fie an application with the Securities and Futures Commission in Hong Kong (the IlSFCIl) for exempt investment adviser status or register with the SFC. The regulations applicable to AAMunder the laws of the Netherlands are described in greater detail below. AAM'intends to register in each other jurisdiction in which the natue of its activities may require such registration in the future. ' The management and the proposed operations of AAAM are discussed in more detail below in Sections III and iv.
II. Advisory Operations of ABN AMRa Ban and Subsidiaries.

A. General.

i. Advisory Operations.

ABN AMO Ban staed its international fud management operations circa
1930. As of
December 31, 1996, ABN,AMOBan managed directly and though its subsidiaries approximately $50 bilion. Asset management operations may be grouped into two categories: (i) services provided directly by ABN AMRO Ban through its ban subsidiares, branches 'and agencies located throughout the world to institutional and individual clients; and (ii) services provided by investment management subsidiaries, including LSCM, to institutional (including mutual funds) and individual clients. , The subsidiaries referred to in subsection (ii) above act as advisers or sub-advisers to more than 50 mutual funds which are not registered under the Investment Company Act of

1940, as amended (the "Company Act"), and which are not offered or sold to U.S. persons. LSCM, and one of ABN AMRa Bank's other registered investment adviser subsidiaries, advise the Rembrandt FundsCI, a diversified, open-end management company, registered under the Company Act. ABN AMRO Bank and its subsidiaries are managed by a Managing Board which is comprised of nine members, eight of whom have functional responsibilities with respect to the six divisions into which ABN AMRO Ban and its subsidiares are organized, including: (i) the Domestic Division; (ii) the International Division; and (iii) the Division Investment Banng & Global Clients (the "IB&GC Division"). The advisory operations of ABN AMRO Ban and its subsidiaries are under the jurisdiction of the .latter two divisions. All of ABN AMRO Ban's operations in North America, including those conducted by AAM and LSCM, are organized within the International Division. The asset management operations are supervised by an individual'who is Chairman ofthe Board of AAAM. ABN AMRa Ban's non-U:S. asset management operations are organzed within the International Division or theIB&GC Division. From a product point of view all asset management operations are supervised by the Directorate General Asset Management & Trust (the "General AM&T Directorate"). In order to enable AA and LSCM to utilze the knowledge and expertise of their coùnterpars in the International Division and the IB&GC Division; the manager of North American asset management operations fuctionally reports to the Director of the General￾AM&T Directorate, as do the managers of the non-U.S. asset management operations. As a result of this' organizational matrix, AA and LSCM fuctionally are under the supervision of the General AM&T Directorate. AA proposes to utilze the advisory services of certn personnel who will be primarly employed by ABNAMRO Ban; AAE and LSCM and will have their primar place of work at the offces of one of the foregoing entities. In addition, ABN,AMRO Ban will ,:
provide certain other servces to AA, as more fully described below.
2. Regulatory Supervision Under Netherlands Law.

The ban regulatory system in The Netherlands is a comprehensive system based ' on the provisions of the Act on the Supervision of the Credit System 1992 (Wet Toezicht Kredietwezen 1992) ("ASCS 1992"). De Nederlandsche Ban N.V., the Dutch Central Ban C'DNB"), through directives issued pursuant to statutory authority, regulates the activities of , ABN AMRO Ban on behalf of the Netherlands Minister of Finance. DNB regulations focus on ' the solvency, liquidity and administrative organization ) monetary supervision and supervision of .' of ABN AMRO Bank.

Under the terms of the ASCS 1992 ABN AMRO Bank is a universal bank, i.e., the bank is engaged in the securities business as well as the commercial banking business. The securities activities of ABN AMRO Ban are regulated under the Act on the Supervision of Investment Institutions (Wet Toezicht Beleggingsinstellngen 1990) ("ASH 1990") and under the Act on the Supervision of Securities Trade (Wet Toezicht Effectenverkeer, 1995) ("ASST 1995"). The activities of the investment institutions that are part of the ABN AMRO group in The Netherlands are governed by ASH 1990. ASH 1990 regulates mutual fuds and collective investment fuds (individually, an llInvestment Institution" and collectively, "Investment Institutions") which solicit or obtain in 'or from The Netherlands moneys or other goods beyond a restricted circle in exchange for units in an Investment Institution. Supervision ofInvestment Institutions is cared out by DNB. An Investment Institution which falls within the scope of the Act is required to have a license, unless an exemption applies. Licenses are issued by DNB upon application and only if the Investment' Institution has proved that it meets certain requirements.' Once a license has been obtained, an Investment Institution must send certain financial information to investors on a monthly basis. Furthermore, ASH 1990 contains requirements concerning auditing and publication of annual accounts. ASST 1995, together with the decrees and regulations promulgated pursuant " thereto, provides a comprehensive framework for the conduct of the securities 'trade in or from The Netherlands (including portfolio management activities) and establishes a legal basis for .the supervision of the securities exchanges by the STE. AS,ST 1995 contains rules relating to the issuance of securties, regulates securities brokerage and portolio management activities, and provides a basis for supervision of securties "exchanges as well as provisions on insider trading- insecurties. Securties brokerage withn the meang of ASST 1995 covers the intermediation in securties and interest, curency and equity swap transactions, market-m~g activities, the, acquirng and'placing of securties .. upon issuace thereof and the offering of an investment account (an account by means of which "" transactions in securties can be effected). Portolió management under ASST 1995 relates only to individual portfolio management on a contractual basis. Collective portfolio management activities are regulated by ASH 1990. The enforcement of the provisions of the Act (ASST 1995) is delegated to the STE, to which the Netherlands Minister of Finance has delegated certain of its powers under ASST 1995. To engage in activities in the securities business a license is required, which must be obtained from the STE. The STE shall, upon request, grant to members of a self-regulatory organization of a Securities Stock Exchange, such as ABN AMRO Bank, a license to engage in

securities activities within the scope of the regulations of such self regulatory organization, if the STE has received a notification from such self regulatory organization containing the information specified in article 9 of ASST 1995. As a credit institution registered and fully licensed under ASCS 1992, ABN AMRO Ban is exempt from the obligation to obtain a license from the STE for its securities business. Members of a self regulatory organization, such as ABN AMRO Bank, must comply with the rules of its self regulatory organization, instead of the decrees and regulations issued pursuant to ASST 1995. Both the self regulatory organization of which ABN AMRO Ban is a member and the Securities Stock Exchange itself are supervised by the STE. ABN AMRO Ban is a member of the major Dutch Securities exchanges, such as the Amsterdam Stock Exchange and the European Options Exchange. After AAA is registered with the STE, AAAM wil be subject to regulation in accordance with the principles described above. ·

B. Asset Management & Trust

The asset management activities of ABN AMRO Ban and its affiliates are organized within two Directorates within the General AM&T Directorate: Global Asset . Management & Trust (the "Global AM&T Directorate") and Asset Management Netherlands (the "Asset Management Netherlands Directoratell). The Global AM&T Directorate coordinates and has final responsibilty for worldwide asset l1ahagement operations. The Asset Management Netherlapds.Directorate is divided into varous groups which are responšible for Portfolio Management, Client Servicing and Fund Administration & Support.
I. Portfolio Management. Portfolio management activity is organzed withn

the Asset Management Netherlands Directorate and is pedormed on behalf of institutional and private clients and investment fuds. The pórtolios of U.S. and non-U.S. clìents are managed , though ths Directorate. The selection of portfolio investments is the responsibilty of the EquitY Management and FI4edIncome Management Deparents. The portolio managers are ' responsible for and provide asset management services with -respect to the investment fuds and

each client portolio or pprton thereof allocated to them. Reseach is pedormed within each

deparent by investment professionals, who provide advice and assistace in making decisions as to the purchase/sale 'of individual investments and the composition of a client's'total portfolio or portion thereof managed by that deparent. The portfolio managers and other investment ' We note that the U.S. and The Netherlands are parties to an Agreement on Mutual Administrative Assistance in the Exchange of Infonnation in Securities Matters, dated January i 2, i 990 (the "Agreement on Mutual Assistance"). ABN AMRO Bank believes that thetennsofthis Agreement provide an additiönallevel of assurance to the Commission that its regulatory concerns are addressed,

professionals within the Asset Management Netherlands Directorate are hereinafter referred to collectively, as "AMN Portfolio Managers".
2. Client Servicing. Institutional Services is responsible for the management

and administration of institutional clients and determines, among other things, the appropriate asset allocation for clients and fuishes account information to clients. Institutional Services is also responsible for marketing and the contacts with pension fud consultants. Client Services Private Clients is responsible for the management and administration of private clients.
3. Fund Administration & Support. Fund Administration & Support is

responsible for the management and administration of the Amsterdam-based investment funds and the associated investment companies.
C. AAAMFE.

AAMFEis an investment adviser organized under Hong Kong law. It is registered with the SFC in Hong Kong and.must comply with local law in conducting its business. Organizationally, AAFE, an indirect wholly owned subsidiar of ABN AMRO Bank, reports to the Director of the General AM&T Directorate. AAMFE provides investment management services with respect to'Investments primarily in the Far East to both private and institutiqnal ~on..U.S. investqrs and acts as a sub￾adviser to investment advisers, organzed ,under the law of The Netherlands and wholly owned ' indirectly by ABN AMRO Ban, which manage mutual fuds registered under the law of The , Netherlands which are not offered to U.S. persons. The office of AAFE is located in Hong Kong where approximately seven investment personnel (whose fuctions include research) are based (collectively, the "AAFE Portfolio Managers"). The AAFE Portfolio Managers are employed by ABN'AMRO Ban or AAMFE, although their actìvities are supervised by AAFE. D. LSCM.

LSCM provides investment management services to U.S. and non-U.S. institutional and private clients, including clients ofLNa, LSCM also is the investment adviser to the Rembrandt FundstI, which offers a family of investment fuds to U.S. clients. The offices ofLSCM are located in Chicago, Ilinois where foureen investment personnel (whose functions include research) are based (collectively, the "LSCM Portfolio Managers"). LSCM is registered as an investment adviser under the Advisers Act and, accordingly, is subject to the Commission's regulation and supervision.

E. ABN AMRO Bank Asset Management Decision Making Process.
Global strategy with regard to the asset and regional allocation of investments is formulated by the Global Investment Committee of ABN AMRO Bank (the "GIC") with the support of Regional Investment Committees (IRICs"). The GIC includes representatives of the principal operating units of ABN AMRO Ban involved in asset management, including economic research units, senior strategists, portfolio managers and marketing and sales units. The GIC meets at least quarerly. Each RIC, in tu, meets monthly and includes representatives

from the units which are involved in providing asset management services in the three primar global regions served, i.e., the North American Region, the European Region and the Far East Region. The GIC establishes general investment policies and guidelines with respect to international securities based upon macroeconomic analyses, interest rate and stock market trends. The recommendations of the GIC relate only to geographic areas and,regional sectors; the GI C does not discuss specific securities held by, clients and does not make recommendations as to specific securities to be purchased or sold for the account of clients. Accordingly, the GIC does not have access to individual client portfolio information. Subsequent to each meeting of the GIC, all portfolio managers are briefed on the impact of the broad strategy of the GIC on the individual requirements of paricular types of clients. Portfolio managers then make investment decisions and recommendations as to specific" securties based onthe investment objectives and guidelines of each particular client consistent with the general policies of the GIC. . '
III. Current Affiliations Among AAAM. ABN AMRO Ban and its Affliates.
A. Composition of the Board of AAM.

. Directors of AA may also serve' as directors or offcers of other entities withn ABN AMRO Ban's organzation; Such persons will devote such time and attention to the' management of the operations of AA as is necessar. None of such persons ,makes specific investment decisions or recommendations on behalf of any ABN AMRO Ban affliate or any client thereof, other than AA or LSCM. B. AAAM Relationship With Affiliates. AAAM plans to engage in certn transactions with or obtain certain services from its affiliates, as more fully discussed below.

1. Supporting Services of Certain
   PersonneL. AAM's portfolio managers wil devote substantially all of their business time and attention to the management of the portfolios of AAAM clients (collectively, the "AAAM Portfolio Managers"). Under AAAM's

proposal (as described below), in providing advisory services to its clients, AAAM may also rely upon persons who primarily will be employees of ABN AMRO Bank, AAAMFE and LSCM.
2. Books and Records. AAM may have arangements with ABN AMRO

Bank and its affiliates through which they may act as custodians for client accounts, provide data processing and related record services and provide other administrative services as agreed by the parties. AAAM also may obtain data processing and related record keeping services from ABN AMRO Chicago CC?rporatio.n ("AACC"), which is registered as an investment adviser under the Advisers Act and as a broker-dealer under the Securities Exchange Act of 1934, as amended. Under AAM's proposal (as described below), AACCmay provide AAM with additional administrative services as agreed to by.the paries. Also, under AAM's proposal (as described below), AAM may obtain similar services from.ABN AMRO Ban and its affiliates.
3. Execution of
Transactions. Under AA's proposal (as described ' below), AAAM may execute and clear securities transactions through ABN AMRO Bank and

other broker-dealer affliates.

iv. Proposed Activities.

A. Legal Framework.

1. The Staff
   Report and Recent Developments. In the past, the staff (the "Staft') of the Division ofInvestment Management (the "Division") has tclen the position that a , , * non-U.S. company need not register as an investment adviser, provided that it establishes a registered subsidiar ttatmeets certin criteria, commonly known as the "Ells Rules". The Staff now acknowledges that the separate personnel requirement of the Ells

Rules may work to the detrment of clients of a U.S. registered investment adviser and has

The "Ells Rules" were derived from the Commission staffs response to a "no-action" request letter:
Richard Ells (pub. avaiL. Sept. i 7, i 98 i). Under the Ells Rules, a subsidiary wil be regarded by the staff as having a separate, independent existence and to be functioning independently of its parent only if it: (i) is adequately capitalized; (ii) has a buffer, such as a board of directors a majority of whose members are independent of the parent, between the subsidiar's personnel and the parent; (ii) has employees, offcers and directors, who, if engaged in providing advice in the day-to-day business of the subsidiary entity, are not otherwise engaged in an investment advisory business of the parent; (iv) itself makes the decisions as to what investment advice is to be communicated to, or is to be used on behalf of, its clients and has and uses sources of investment information not limited to its parent; and (v) keeps its investment advice confidential until communicated to its clients.

recommended that the position taken in Richard Ellis be modified in order that a registered adviser may share advisory personnel with unregistered affiliates. * Indeed, the separate personnel requirement of the Ellis Rules would restrict AAAM's abilty to draw fully upon the expertise and talent of portfolio managers (whose functions may include research) employed by ABN AMRO Bank and its affliates. AAM's proposal, as described below, is designed to give the clients of AAAM the benefits of the, specialized expertise of portfolio managers of its affiiates while at the same time, in the event of any alleged violation of U.S. securities law, permitting the Commission to seek enforcement action against ABN AMRO Ban, AAFE, and any other unregistered (and otherwise nOh￾U.S. regulated) affiiate that provides advice-to the D.S: clients ofAAAM, through or on behalf of AAAM, or has access to any information concerning which securities are recommended for AA's clients prior to the effective dissemination of such recommendations (such entities, other than ABN AMRO Ban, collectively, the "Paricipating Affliates"). Based upon the more flexible policies reflected in the Staff Report, the Staff, already has grated relief to a number of organizations which engage in multinational investment advisory activities, conditioned on various 'representations made to address the concerns of the Staff:* As discussed below, Dutch law materially restricts the abilty ofABN AMRO Ban to make certain of such representations in the same form. * However, ABN AMRO Ban believes' that the representations which are set fort below in Sections V.C.5 and V.C6 address the concerns of the Staffin a maner which also is .in compliance with Dutch legal requirements.
2. Dutch Legal Considerations. Dutch law materially restricts the abilty of

ABN AMRO Ban to provide access to Staff
Trading Records of its ','advisory representatives"', with respect to U:S. clients of AA and for all persons deemed to be lIassociated persons" by AAM (collectively, "Covered Persons") and to make Covered Persons available for testimony before, or other questionig by, the Commssion or the, Sta. These restrctions relate: only to the asset management operations of ABN AMO Ban in The Netherlands. Under Dutch law, the keeper of a "database", such as ABN AMO Ban, which contains information on individuals, such as employees of ABN AMRO Ban, is prohibited from fuishing the "personal data" contaned in such database to thrd paries uness the .information " See SEC Divisipn of Investment Management. Protecting Investors: A Half Centtiy of Investment , ' Company Regulation. Chapter 5. The Reach of the Investment Advisers Act of 1940 (May 1992) (the "Staff Report"). . .. Murray Johnstone Holdings Limited (pub. avaiL. Oct. 7, 1994), Kleinwort Benson Investment Management. Ltd. (pub. avaiL. Dec. 15, 1993), Mercury Asset Management pIc (pub. avaiL. April 16, 1993) and Uniao de Bancos de Brasileiros S.A. (pub. avaiL. July 28, 1992). ... The discussion of Dutch law set forth herein is based solely upon the advice of Dutch counsel to ABN AMRa Bank, without any independent investigation.

is furnished: (i) as a "direct result" ofthe purpose for which the data is maintained; (ii) with the specific consent of the employee; or (ii) as required by the laws of The Netherlands. The exception provided by clause (i) above does not include the funishing of information to third parties on the sole basis that it is not "incompatible" with the specific purpose for which it is maintained. Since personal data is not maintained by ABN AMRO Ban regarding its employees for the purose of being fuished to the Commission, ABN AMRO Ban can not furnish such data to the Commission based upon this exception. With respect to the exception provided by clause (ii) above, any such consent, even if in writing, may be withdrawn at any time. Furthermore, ABN AMRO Ban could not, for instance, effectively condition the employment of an individual on an undertng to provide the Commission with access to such

person's Staff
Trading Records. However, tidèr Dutch law and the Agreement on Mutual

Assistance, ABN AMRO Ban is required to provide personal data regarding its'employees to

the STE and the Commission under the circumstaces discussed below.

Under Dutch law, the STE is empowered to request paries active in the securities industry to provide personal data in connection with an investigation made within the context of the Agreement on Mutual Assistace. Accordingly, ABN AMRO Ban would be required to ' provide the relevant Dutch, regulatory authorities with Staff Trading Records, in the context of a Commission investigation, upon a request therefor. Pursuant to the Agreement on Mutual Assistace, the STE should cooperate, subject to the provisions of the Agreement on .Mutual Assistance, with the Coniission in obtaining and exchanging necessar .information in connection with a Commission investigation., Accordingly, subject to the ,provisions of the, Agreement on Mutual Assistace and with the assistace of.the appropriate Dutch regulatory authority, ,the Comtission should be able to obtain information included in Staff Trading Records that are maintained by ABNAMO Ban. Also, 'under Dutch law; upon request of an, employer, such as ABNAMRO Ban, an employee would generally be required to cooperate with a Commission investigation, if that ' did not require their appearance in the U.S. The available remedies for an employee's failure to comply with the reasonable intrctions of ABN AMO Ban are dismissal and rescission of the employment contract. Neither of these actions would result in ABN AMRO Ban being able to ,force the employee to appear before the Commssion in The Netherlands or in the U.S. However, any employee must cooperate with the STE. Under ths general obligation, the STE " may be allowed to question employees, but such employees canot be heard under oath. The Staff of the Commission may paricipate in an investigation by the STE in The Netherlands., provided that such offcials follow the instructions of the STE. Furermore, under Dutch law, an individual who fails to cooperate with the STE could be subject to sanctions and the STE

could report such person's failure to cooperate to the appropriate enforcement authority in The

Netherlands.

In order to address the concerns of the Staff in a manner which is consistent with Dutch law, ABN AMRO Ban is making representations with respect to providing access to Staff Trading Records with respect to Covered Persons and making Covered Persons available

Jack W. Murphy', Esq.

for testimony before, or other questioning by, the Commission or the Staff. We understand that the Staff has conferred with the staff ofthe STE with respect to the operation of the Agreement on Mutual Assistace in such situations. The Agreement on Mutual Assistance provides a

~ measure of additional comfort to the Staff that its concerns have been addressed.

With respect to providing access to Staff
Trading Records, as more specifically set forth in Section V.C.5., below, ABN AMRO Ban is representing thatit wil make a good faith effort to obtain from all Covered Persons written authorizations to provide their own Staff Trading Records, and it wil make available to the Commission or the Staff of the Commission, copies of redacted Staff Trading Records Redacted Trading Records") of ,(" those Covered Persons for whom a duly signed authorization is not in effect. (ABN AMO Ban wil maintain a key or coding system by which the identity of employees for whom Redacted Trading Records have been produced càn be determined.) ABN AMRO Ban also is representing that if the. Commission or the Staff determines' that it requires access to the information that has not been included in the Redacted Trading Records that it wil assist the Commission and the Sta in enlisting the assistace ofthe appropriate Dutch regulatory authorities to obtain such information. With respectto makng employees available for questioning before the Commssion and the Staff, as more specifically set forth in Section V.C.6., below, ABN.AMO Ban wil condition the employment of all Covered Persons to be newly employed by it, or to be newly assigned to positions that would require them to be deemed to be Covered Persons, on an ,,' undertng to cooperate with Commission investigations, including appearg for testimony' " ' before, or other questioning 'by, the Commissiön'or the Staff at such place, as the Commssion may designate in the U.S.ABN AMO Banis.also representing that it wil tae all appropriate' legal actions to compel compliance by all such personnel with the aforesaid undertgs and will pursue all available legal remedies against any such person that fails to comply with such undertngs. B. Supporting Servces óf Certin PersonneL.

AA proposes to utilze the services of cert of the AM Portolio Managers, the AAE Portolio Managers and the LSCM Portfolio Managers (collective1y;the "Advisory Personnel ") to provide advisory services to its clients. The Advisory Personnel will" be priarly employed by, and under the-supervision of, ABN AMO Ban, AAE or LSCM, and will have their primar place of work at the offices of one of the foregoing, entities. Advisory Personnel who provide advisory services to clients of AA as well as to clients of other affliated entities are hereinafter referred to as, individually, a "Shared Adviserll, and collectively, IIShared Advisers". The Shared Advisers wil be physically located in the offces of ABN AMRO Ban in Amsterdam, AAMFE in Hong Kong, or LSCM in Chicago. Initially, AAAM also proposes to utilize the services of certin of the employees of certin affiliates, including LSCM, to service its clients and market the investment advisory services of AAAM, and in the future AAAM may similarly utilize the services of its own employees or the services

of certain portfolio managers of ABN AMRO Bank and AAAMFE (individually, a "Client Servicer" and, collectively, "Client Servicers"). Under the proposal, responsibility for the management of specific portions of a customer's portfolio willbe assigned to an AAM Portfoiio Manager or a Shared Adviser based upon the customer's wishes and needs and the relative expertise among the AAAM Portfolio Managers and the Shared Advisers. Thus, a Shared Adviser might 'be responsible for managing a portion of the investments of each account of AAAM because it may be more efficient to have Advisory Personnel who specialize in a paricular geographic region or industry make investment decisions for clients of AAM. A Shared Adviser might also be responsible for providing advice or recommendations as to the securities of companies in a region or with respect to an industry as to which such person has special.expertise. Although the person who would be primarily responsible for investment decisions might be a Shared Adviser who is primarily employed by, and under the supervision of, ABN AMRO Ban, AAFE, LSCM, or a Paricipating Affiliate generally, the Client Servicer for a particular AAAM client would be primarily employed by, and under the supervision of, either AAAM, ABN AMRO Ban, AAFE, LSCM or a Paricipating Affliate. In the future, in some cases, a Shared Adviser who is employed by, and under the supervision of, ABN AMRO Ban, AAMFE, LSCM or a Paricipating Affiliate might act as the Client Servicer for a paricular AA client. AA will enter into appropriate arangements with ABN AMRO Ban, AAAMFE, LSCM and any. other Paricipating Affiliates to assure compliance with the ' understadings set forth herein and the availability of Shared Advisers and Client Servicers 'who are primarily employed by, and under the supervisi~n of, ABN AMO Ban, AAMFE or LSCM and any other Paricipating Affiliates; respectively. Shared Advisers, who wil be

primarily employed by and imderthe supervision of ABN AMRO Ban and AAFE, or II of AM. Paricipating Affliate will be treated as'''aSsociated persons

C. Research.

, In addition to other sources, Advisory Personnel rely on brokerage research provided by unaffliated entities and by the brokerage research unts of ABN AMRO Ban and its affiliates (collectively, the "Brokerage Research Units"). . The research provided by the Brokerage Research Units is only a par of the total "mix" of information which AA wil use in reaching its investment decisions and recommendations. , This, "mix" also is anticipated to include: (i) research provided by Advisory Personnel; and (ii) secondar research and analytical information received directly from brokers and.other financial or economic institutions not affiiated with AAAM. The research regularly produced by the Brokerage Research Units consists of statistical and other factual information on the U.S. dollar, non-U.S. currencies, U.S. and non

U.S. industries and companies, advice regarding U.S. and non-U.S. economic factors and trends, and information, advice and recommendations on specific companies and securities. Such research is published externally and is provided in the ordinary course of business to Clients of the Brokerage Research Units, which consist largely of industry professionals, such as AAAM. Research obtained by AAAM from the Brokerage Research Units is not provided directly by AAAM to the U.S. clients of AAM and is not customized by the Brokerage Research Units for the U.S. clients of AAAM. The operations of the Brokerage Research Units are completely distinct from the research operations of the Advisory PersonneL. The operations of the Brokerage Research Units and the entities which employ, or are primarly responsible for the supervision of, Advisory Personnel are supervised so as to ensure that the Brokerage Research Units will not have access to any information concernng the portfolios of the U.S. clients of AAM or the securities recommended to, or purchased or sold for the accounts of, the U.S. clients of AAAM. There wil be a IIChinese Wallll between,the Brokerage Research Units and the Shared Advisers, the Client ServiCers-and'otherAAM personnel, and in those geographic locations where the Brokerage Research Units and Shared Advisers, Client Servicers and other AAAM personnel both wil have offces, they will be physically separated. The Brokerage Research Units wil not have access to AA's files; and the Brokerage Research Units wil not , ,have knowledge of the portfolios of AAM's clients or information concerning AA's investment decisions and recommendations. 'In addition, the Shared Advisers, Client Servicers and other AAM personnel will not be provided access, to the files 'of the Brokerage Research Units' analysts (id other employees. The Brokerage Research Units will not prepare research , reports or other informatìon specifically for use' by, or on behalf of, the U.S. clients ofAA. Although the Brokerage Research Units may have contact with the Shared

Advisers, the Client Servicers and other AA personnel" such contact is and wil be

maintained exclusively on an ar's-len.gt basis on terms which are comparable to the terms on

which the Shared Advisers, Client Services and other AA ,personnel have contact with unaffliated entities that provide brokerage research. AAM will be solely responsible for the conduct of its investment management , and advisory business, including the development and implementation of investment policy and strategy, and all investment decisions for the purchase and sale of securities for its clients' accounts and the timing thereof. The research prepared by the Brokerage Research Units is treated by the Advisory Personnel as if it were received from unaffliated entities. Accordingiy~ AAAM wil not necessarily follow the recommendations provided to it by the Brokerage Research Units.' Based upon the foregoing, the Brokerage Research Units wil not be considered to be Participating Affiiates, and the e.rployees thereof wil not be treated as "associated

persons" of AAAM, solely because they provide AAAM with research in the manner described ) above. i

D. Books and Records.

As noted above, AAAM wil make arrangements with affiliates through which, affiiates may act as custodian for client accounts, provide data processing and related record services and provide other administrative services as agreed by the parties. Also, AAAM may obtain similar services from ABN AMRO Ban1e ABN AMRO Bank may prepare client reports, including quarerly or more frequent portfolio reports which detail the exact status of each client's portfolio, e.g., asset breakdown, performance data and a transaction review. Such portfolio reports may be supplemented with a written explanation of the investment strategies employed in connection with such portfolios. All reports to AAAM's clients wil be reviewed by AAAM (or Client Servicers acting on behalf of AAAM), transmitted by AAAM and printed on AAM's letterhead. Approximately 30 employees ,of ABN AMRO Ban wil be responsible for maintaining, or wil have access to, records of AAM. ,Such employees wil be treated as "advisory representatives" of AAM. Any written agreement between AAM and ABN AMRO Ban or its affiiates wil provide that any records maintained on behalf of AA will be ' maintained in accordance with the requirements of Rule 204-2 under the Advisers Act, that such records are the exclusive property of AAA and that the staff of the Commission wil be entitled to have access to such records. E. Execution of Transactions. Regional central trading units are being established at LSCM/ AA in Chicago and at ABN AMRO Ban in Amsterdam, and may be established at AAMFE in Hong Kong' (individually, a "Central Trading Unit") to serve the Advisory Personnel within the Nort American Region, the European Region and the Far East Region, respectively. Each Central Trading Unit wil have a central order collection and processing fuction, and will pursue' accurate and optimal order execution of tranactions relating to' equities; bonds, other securties and foreign exchange. All orders will be collected, then executed and cleared either by in-house securities brokers and-broker-dealer afliates (on an "ar's-lengt" bais) or by unafliated brokers. It is the policy ofABN AMO Ban that all broker-dealer afliates be properly registered with the appropriate regulatory authorities and comply with applicable regulations in ' the respective jurisdictions in which they operate. In order to ensure that trades effected for AA's clients are executed on terms no less favorable than trades executedJor other clients of affliated entities, subject to applicable U.S. laws (such as the Emplo'yee Retirement Income Security Act of 1974, as amended, and the Company Act), trades for AAAM's clients generally wil be placed through the appropriate Central Trading Unit and could be combined with trades on behalf of other clients of ABN AMRO Bank and its affiliates. Individuals in the North American Central Trading Unit who place trades on behalf of AAAM may be jointly employed by AAAM and LSCM. ABN AMRO

, Bank employees, and employees of other entities within ABN AMRO Bank's organization, who place trades on behalf of AAAM's clients wil be treated as "associated persons" of AAAM.
V. Representations of AAAM. ABN AMRO Bank and Participating Affliates.
In order to address the concerns of the Staff expressed in the Staff Report, such as the Commission's access to trading and other records of ABN AMRO Ban, the Paricipating Affiliates and their personnel, to the extent necessar to monitor and police conduct that may harm U.S. investors, AAM, ABN AMRO Ban and the Participating' Affiiates make the representations set forth below. A. Representations of AAAM.

AAAM has authorized us to state that it represents that:

1. it wil promptly, upon receipt of an administrative subpoena, demand or a

request for voluntar cooperation made during a routine or special inspection or otherwise, provide to the Commission or to the Staff of the Commission any and all of the books and records that it is required to keep under the Advisers Act and those kept under foreign law, and, to the extent within its control and to the extent it may lawflly do so, make available for testimony before or other questioning by the Commission or the Staff of the Commission any and all personnel (other than ,clerical or ministerial personnel) identified by the Commission, the Staff of the Commission, AA, any Paricipating Affiliate or ABN AMRO Ban as having access to or having bèen involved in providing advice to U.S. clients, or related transactions, at such place as 'the Comiission may designate in the U.S. or, at t4e Commission's option, in the coUntr where the records are kept or such personnel reside. AA will authorize all personnel described in the , preceding sentence to testify about all'advice provided to U.S. clients and related tranactions (except with ,respect to the identity of non-U.S. clients). Subject to the foregoing,AA will not (except with respect to the identity of non-U.S. clients) contest the validity of an administrative subpoena for , testimony or documents under any law or regulations other than those' of the U.S.;
2. it wil, to the extent that any books and records identified above are not kept, '

in English, cause such books and records to be translated into English upon ' reasonable advance request by the Commission or its Staff;
3. it wil
deem as an "associated person" each Participating Affliate, and each employee of each Participating Affiliate an.d ABN AMRO Bank, who: (a) provides advice (including research) to AAAM's U.S. clients; or (b) has

access to any information concerning which securities are being recommended to AAAM's U.S. clients prior to the effective dissemination of such recommendations; and
4. (a) any communications with U.S. clients (including any recommendations

or reports) wil be through AAM, not ABN AMRO Ban or the Paricipating Affiliates, and AAAM will require the Shared Advisers and Client Servicers to make clear in any communications between the Shared Advisers and Client Servicers and AAAM's clients that such communications are from AA, not ABN AMRO Bank or any Paricipating Affliate; (b) when dealing with clients or potential clients of AAAM, the Shared Advisers and Client Servicers wil make it clear that they are acting in their capacity as representatives of AAM, not ABN AMRO Ban or any Paricipating Affliate; and (c) AAM wil disclose to its clients in its Form ADV that ABN AMRO Ban and the Paricipating Affiiates may recommend to their clients, or invest on behalf of their clients, in, securties that are the subject of recommendations to, or discretionar trading on behalf of, AA's clients. B. Representations of Paricipating Affiiates. Each Paricipating Affiliate has authorized l.S to state that they represent that:
i. any advice given to U.s. clients of AAM,' by or on behalf of AAM,

wil be given only through AA or though employees who AAM deems to be lIassociated personsll;
2. it wil provide to AA, and AA's Form ADV wil disclose, the

names and other inormation required by Form ADV for all "associated, persons" of AA who are employees of Paricipating Affliates as ' described in AA's representations;
3. staff
trading records required by Rule 204-2(a)(12) will be maintained for' all of its "advisory representatives II with respect to U.S. clients of AAM and for all persons deemed to be "associated persons II by AAM who are employees of Paricipating Affiiates;
4. it wil keep books and records of
the type described in Rules 204-2(a)(1),
(2), (4), (5) and (6) and 204-2(c) for all transactions. With respect to transactions involving AAM's U.S. clients and all related transactions, it wil also retain records of the type described in Rules 204-2(a)(3) and (7). All the books and records described above will be maintained and preserved in an easily accessible place in the country where such records

are kept for a period of not less than five years from the end of the fiscal year during which the last entry was made on such book or record;
5. it wil, to the extent that any books and records identified above are not

kept in English, cause such books and records to be translated into English upon reasonable advance request by the Commission or its Staff;
6. it will promptly, upon receipt of an administrative subpoena, demand or a

request for volunta cooperation made durng a routine or special inspection or otherwise, provide to the Commission or to the Staff of the Commission any and all of the books and records described above, and, to the extent within its control and to the extent it may lawflly do so, make available for testilUony before, or other questioning by, the Commission or the Staf of the Commission any and all personnel (other than clerical or ministerial personnel) identified by the Commission, the Staff of the Commission, AAM or itself as having access to or having been involved in providing advice to be used for or on behalf of AAM's U.S. clients or related transactions, at such place as the Commission may designate in the U.S. or, at the Commission's option, in the country, where the records are kept or such personnel reside. It wil authorize all personnel described in

the preceding sentence to testify about all advice to be used for or on ' behalf of AA's U.S. clients and related transactions ,(except with respect to,the identity of non-U.S. clients). Subject to the foregoing, it will not (except with respect to the identity of non-U.S. clients) contest the validity of administrative subpoenas for testimony or document under any , laws or regulations other than those of the U.S.; and
7. it wil submit to the jurisdiction of U.S. federal cour for actions arising
under the U.S. securties laws in connection with investment advisory activities for U.S. clients of AA. It will designate and appoint an agent for service of process upon whom may be served all process, pleadings or other papers in: (a) any investigation or administrative

proceeding conducted by the Commission; and (b) any civil suit or action ,brought against AA and itself or to which AA or it has been joined as a defendant or respondent, in connection with the investment advisory activities and related securties activities arsing out of or relating to any investment advisory services provided to U.S. clients of AAAM or any related transaction. It wil also appoint a successor agent if it or any person discharges the agent, or the agent is unwillng or unable to accept service on its behalf at any time until six years have elapsed from the date of AAAM's last investment advisory activity. It wil not have access to or ') provide advice to be used for or on behalf ofU~S. clients of AAAM until

documents effecting the appointment of an agent have been filed by it with the Commission in a form that is reasonably acceptable to the Staff.
C. Representations of ABN AMRO Bank

ABN AMRO Ban has authorized us to state that it represents that:

1. any advice given to U.S. clients of AAM, by or on behalf of AAAM,

wil be given only through AAAM or through employees who AAAM deems to be "associated persons";
2. it wil provide to AA, and AAM's Form ADV wil
disclose, the names and other information required by Form ADV for all "associated II of AA as described in AAAM's representations; persons
3. it wil keep books and records of
the type described in Rules 204-2(a)(1),
(2), (4), (5) and (6) and 204-2(c) foran transactions. With respect to transactions involving AAM's U.S. clients and an related transactions, it win also retain records of the type described in Rules 204-2(a)(3) and (7). An the books and records'described in the preceding sentence wil be maintained and preserved in an easily accessible place in the country where such records are kept for a period of not less than five years from the end of the fiscal year during which the last entry was made on such book or record;
4. it wil, to the'extent it may lawfny do so, promptly, upon receipt of an

, administrative subpoena, demand or a request for volurtary cooperation made during a routine or special inspection or otherwise; provide to the Commission or to the Staff of the Commission any and all of the books and records descnbed in Section C.3. at such place as the COmnission may designate in the U.S. or, at the Commission's option, in the countr where the records are kept. To the extent legally permissible, it wil1.not non-U.S. clients) contest the validity of administrative subpoenas for any document described in Section C.3. (except with respect to the identity of

under any laws or regulations other thai those of the U.S.;
5. it wil maintain Sta Trading Records of the type required by Rule

204-2(a)(12) for an of its "advisory representatives" with respect to U.S. clients of AAM and for all persons deemed to be "associated persons" by AAAM (for puroses of this Section C.5., such persons are collectively referred to as "Covered Persons"), and it wil: (a) make a good faith effort to obtain from all Covered Persons written authorizations (each, an '''Authorization'') to provide their own Staff Trading Records to the

Page 20 "
Commission or the Staff of the Commission upon receipt of an administrative subpoena, demand or a request for voluntary cooperation during a routine or special inspection or otherwise; and (b) wil make available, upon receipt of an administrative subpoena, demand or a request for voluntar cooperation during a routine or special inspection or otherwise of the Commission or the Staff of the Commission, copies of redacted Staff Trading Records (as specified below, IIRedacted Staff Trading Recordsll) of those Covered Persons for whom a duly signed Authorization is not in effect. If the Commission or the Staff of the Commission determines that it requires access to the information that has not been included in Redacted Staff Trading Records, it wil assist the Commission and the ,Staf of the Cómmission, to the extent it may lawflly do so, in enlisting the assistance of the appropriate Netherlands regulatory authorities in obtaining access to the information not included in such Redacted Staff Trading Records, and wil respond to any lawfl

request for such infomiation that is made by such Netherlands regulatory authority. "Redacted Staff Trading Records" means a copy of any Covered Person's Staff Trading Records which does not include such Covered Person's name and other information which would identify such Covered Person. It wil maintain a key or coding system by which the identity of Covered Persons for whom Redacted Trading Records have been produced can be determined.
6. it will make available in The Netherlands for questioning by the staff of

the Commission, to the extent it may lawflly do so, any and all personnel (other than clerical or ministerial personnel) identified by the Commission, the Staff of the Commssion, AAM or itself as having access to or having been involved in providing advice,to be used for or on behalf of AA's U.S. clients or related transactions. It will authorize all personnel described in the preceding sentence to testify about all advice to be used for or on behalf of AA's U.S."clients and related transactions, (except with respect to the identity of non-U.S. clients). To the extent legally permissible, it will not (except with respect to the identity of non:
U.S. clients) contest the validity of administrative subpoenas for testimony or documents under any laws or regulations other than those of the U.S. It will condition the employment of all of its "advisory representatives" with respect to U.S. clients of AAM and for all persons deemed to be. "associated persons II by AAAM to be newly employed by ABN AMRO Ban, or to be newly assigned to positions that would require them to be II with respect to U.S. clients of deemed to be "advisory representatives

AAAM or "associated persons" by AAAM, to the extent it may lawfully do so, on an undertaking to cooperate with Commission investigations,

including appearing for testimony before, or other questioning by, the Commission or the Staff of the Commission at such place as the Commission may designate in the U.S.
7. it will take all appropriate legal actions to compel compliance by all

personnel described in Section C.6. above with the undertakings referred in Section C.6., above, and will pursue all available legal remedies against any such person that fails to comply with such undertakings.
8. it wil, to the extent that any books and records identified in this Section C.

are not kept in English, cause such books and records to be translated into English upon reasonable advance request by the Commission or its Staff;
9. it wil subInit to the jursdiction of
U.S. federal courts for actions arising under the U.S. securities laws in connection with investment advisory activities for U.S. clients of AAM. It wil designate and appoint an agent for service of process upon whom may be served all process, pleadings or other papers in: (a) any investigation or administrative proceeding conducted by the Commission; and (b) any civil suit or action brought againstAA and itself or to which AAAM, or it has been joined

as a defendant or respondent, in connection with the investment advisory , activities and related securities activities arsing out of or relating to any investment advisory services provided to U.S. clients of AA or any related transaction. Itwill also appoint a successor agent if it or any person discharges the agent, or the agent is unwillng or unable to accept service on its behalf at any time until six years have elapsed from the date of AA's last investment advisory activity. It wil not have accesS to or provide advice to be used for or on behalf of U.S. clients of AAM until documents effecting the appointment of an agent have been fied by it with the Commission in a form that is reasonably acceptable to the Staff.
VI. Conclusion.

In view of the Stas flexible approach towards extraterritorial application of the Advisers Act, as expressed in the Staff Report, Muray Johnstone Holdings Limited (pub. avaiL. Oct. 7, 1994), Kleinwort Benson Investment Management Ltd. (pub. avaiL. Dec. 15, 1993), Mercur Asset Management pIc (pub. avaiL. April 16, 1993) and Uniao de Bancos de Brasileiros S.A. (pub. avaiL. July 28, 1992) and in view of the undertakings described above, in particular that ABN AMRO Ban and the Participating Affiliates each undertkes to provide the Commission with access to the books and records described above, it is our view that ABN AMRO Ban, AAAM and each Paricipating Affiiate have created a workable approach that will enable AAAM to serve clients efficiently and effectively, and will also address the Stafrs regulatory concerns by providing the Staff of the Commission with reasonable access to the

, Jack W. Murphy, Esq. relevant aspects of ABN AMRO Bank's and AAAM's affiliate's businesses in accordance with * the representations set forth above. Therefore, it is our opinion that ABN AMRO Ban and the Participating Affiiates nee~ not register as investment advisers under the circumstances described in this letter. For the reasons set forth above, we respectfully request your concurence with our opinion that ABN AMRO Bank and the Paricipating Affliates are not required to register under the Advisers Act if AAAM proceeds as described above. In addition, we seek assurance that the Staff of the Commission will not recommend enforcement action against ABN AMRO Bank or any ofits unegistered (and otherwise non-U.S. regulated) affiliates if they provide investment advisory services to their clients who are not residents of the U.S.-solely in accordance with the securities laws of The Netherlands (or other applicable foreign law) without also complying with the provisions of the Advisers Act, except as specified above, provided that such activities do 'not. constitute conduct occurng within the terrtury of the U.S. and do not have, and are not intended to have, substantial and foreseeable effects within the U.S. We would request the opportity to discuss these matters fuher with the Staff in the event that the Division or the Commission proposes to withhold all or any par of the no￾action relief requested in ths letter. If you have any questions, or require any fuher' information, please contact the undersigned at (212) 756-2579. In accordance with Release No:
3306269 (December 5, 1980) we have enclosed al original and seven'(7) copies of this no-action letter request. ~m~ Edward G. Eisert We believe that the tenns of the Agreement on Mutual Assistance between the U.S. and The Netherlands provides an additional level of assurance to the Commission that its regulatory concerns are addressed.