SEC Division of Investment Management staff letter: Highbridge Statistical Market Neutral Fund

RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF INVESTMENT MANAGEMENT
September 29, 2008
Our Ref. No. 20089261142
Highbridge Statistical Market
Neutral Fund (a series of
JPMorgan Trust I)
File No. 811- 21295
By letter dated September 29, 2008, you request that the staff agree not to recommend enforcement action to the Commission against JPMorgan Chase & Co. and its affiliates ("JPM") under sections 17(a) and 17(d) ofthe Investment Company Act of 1940 (the "Act"), and rule 17d-1 thereunder, with respect to the short selling arrangements described in your letter. More specifically, you request that we not recommend enforcement action to the Commission ifthe Highbridge Statistical Market Neutral Fund (a series ofJPMorgan Trust I) (the "Fund") moves its prime brokerage services from its current, unaffiliated prime broker back to Bear, Stearns Securities Corp. ("BSSC"), which you indicate may be deemed to be an affiliated person of the Fund under section 2(a)(3) ofthe Act.' You request this relief on a temporary basis only-- until february 1,2009, or such earlier date as the Fund is able to find a suitable, unaffiliated prime broker. We grant the requested reliee based on the facts and representations in your letter, including, but not limited to: (i) the extraordinary circumstances presented; (ii) the fact that BSSC used to be the Fund's prime broker and the Fund now intends to enter into a prime brokerage arrangement with BSSC on terms that will not disadvantage the Fund in any way, and on terms that will be (a) substantially similar to those that were established, through arms-length negotiation, when BSSC and the Fund were unaffiliated, and (b) similar to and no less favorable to the Fund than the terms on which BSSC provides prime brokerage services to similarly situated, unaffiliated customers now; (iii)the fact that the Board of Trustees, including a majority ofthe Trustees who are not interested persons, as defined in section 2(a)(l9) ofthe Act, has approved the contemplated new prime brokerage arrangements with BSSC, notwithstanding the potential affiliation between BSSC and the Fund; (iv) your representation that the Board of Trustees, including a majority ofthe Trustees who are not interested persons, will determine, at each regular quarterly meeting while the Fund uses BSSC as its prime broker, that the transactions with BSSC pursuant to your letter, including the consideration paid to BSSC, are fair and reasonable under the circumstances; and (v) the temporary nature ofthe requested relief. This letter expresses our position on enforcement action only, and does not express any legal conclusion on the issues presented. Because our position is based on I BSSC became an affiliated person of the Fund as a result of the May 30, 2008 merger between JPM and The Bear Stearns Companies, Inc. ("SSC"). 2 This letter confirms oral no-action relief provided by Andrew J. Donohue, Director, Division of Investment Management, to Nina O. Shenker, Esq, Managing Director and General Counsel, JPMorgan Asset Management, on September 18,2008.

the facts and representations in your incoming letter, you should note that any different facts or representations may require a different conclusion. This relief is granted until February 1, 2009 only. We have considered your request for confidential treatment of your letter and our response. We have determined that your request is reasonable and appropriate under 17 CFR 200.8l(b). Accordingly, your letter and our response will not be made public until the earlier of (i) January 29, 2009, or (ii) the date on which the information in your letter has otherwise been made public. Edward J. Rubenstein Senior Special Counsel Office of Chief Counsel Division of Investment Management U.S. Securities and Exchange Commission 2