SEC Division of Investment Management staff letter: HSBC Investor Funds

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON. D.C. 20549
DIVISION OF
INVESTMENT MANAGEMENT
June 25,2008
David J. Harris
Dechert LLP
1774 I Street, N.W.
Washington, DC 20006-2401
Re: HSBC Investor Funds-HSBC Investor Money Market Fund (File No. 81 1-04782) Dear Mr. Harris:
In January 2008, HSBC Investor Funds (the "Trust"), on behalf of its series HSBC Investor Money Market Fund (the "Fund"), and HSBC Global Asset Management Limited (formerly HSBC Group Investment Businesses Limited) ("ISGB"), entered into a letter of indemnity ("LOI"). The LO1 obligates ISGB to make a cash contribution to the Fund sufficient to restore the Fund's net asset value ("NAV") to a specified minimum permissible NAV. ISGB is an affiliated person of the Fund's investment adviser, HSBC Global Asset Management (USA) Inc. (formerly HSBC Investments USA, Inc.) (the "Adviser"), as defined in Section 2(a)(3) of the Act. The LO1 was entered into after the staff of the Division of Investment Management informed the Trust and ISGB on January 9,2008, that it would not recommend enforcement action to the Commission if the arrangement was effected.' The Trust and ISGB now seek to amend the LO1 to extend the termination date from June 24,2008 to December 3 1,2008 ("December Termination Date"). You, and counsel to the independent trustees in his June 18,2008 letter, represent the following with respect to the extension request:
(i) The Fund holds notes (the "Notes") issued by Whistlejacket Capital LLC and Victoria Finance LLC (the "Issuers"). The Issuers are structured investment vehicles, and both are currently engaged in restructuring efforts that are expected to continue until the December Termination Date; 1 See HSBC Investor Funds, SEC Staff No-Action Letter (Jan. 18,2008).

(ii) The Adviser has informed the Fund and the Fund's Board of Trustees (the "Board") of its belief that greater value would be realized on the Notes if the LO1 was extended until the restructuring of the Issuers is finalized; (iii) The Adviser is confident that the current maximum contriiution amount specified in the LO1 is adequate; (iv) The LO1 also will be amended to permit the Board to terminate the LO1 earlier than the December Termination Date if the Board determines that the maximum indemnity amount specified in the LO1 is no longer adequate to maintain the Fund's market-based net asset value2 at the minimum permissible net asset value specified in the LOI; and (v) The Board, including all the trustees who are not "interested persons" as that term is defined in section 2(a)(19) of the Act, has determined that extending the termination date of the LO1 is in the best interests of the Fund and its shareholders, and approved the December Termination Date. On the basis of the facts and representations above, the Trust and ISGB may continue to rely on the no-action assurance granted by the staff on January 9,2008.~ Very truly yours, Dalia Osman Blass Senior Counsel 2 Money market funds are required by rule 2a-7 to calculate, at such intervals as the board of directors determines appropriate and reasonable in light of current market conditions, the extent of any deviation between a fund's current market-based net asset value per share from a fund's amortized cost price per share. This process is referred to in the rule as "shadow pricing." 3 This letter confirms the position of the staff that was provided orally by the undersigned to Cynthia D. Baughman on June 24,2008.

1775 1 Street. N.W.
Washington, DC 20066-2401 Dechert +1 202 261 3300 Main +I 202 261 3333 Fax www.dechert,com DAVID J. HARRIS June 24,2908 Robert E: Plaze Associate Directbr U.S. Securities md Exchange Commission Division'of Investment Management 100F Street, N.E. Washington, DC 20549 Re: HSBC 1nvestor.Flinds;:Request for Extension of Termination Date of Letter of Indemnity Dear Mr. Plaze:
As you we.aware, in a No-Action letter granted January 18, 2008,the HSBC Investor one^ Market Fund (the ''Fundn) was pulnitted to enter into a Letter of Indemnity ("LOI'') with HSBC Global Asset Management Limited (formerly HSBC Group Investment Businesses Limited$ ("TSGB"), which is an affiliate of the Fund's investme'nt adviser, HSBC Giobal Asset Management (USA) Ine. (formerly HSBC Investments (USA) Enc;) (the. "Adviser"3 pursuant to which ISOB would make indemnification-paymentsto tht:Fund were the Fund to realize losses from its holdings of notes issued by certain structured investment vehicles. TheLO1 is currently scheduled to terminate.on June 24,2008. As Fund counsel, we have had several conversations with you and your staff in regards to the possibility of extending the termination date of the LO1 to December 31,
2008. We, along with independent trustee counsel, Fund management and others, have
had discussions with the Fund's Board on the possibility of extending the LO1 and at its June 16 meeting, the Board approved the Adviser's request to extend the termination date of the LO1 from June 24 to December 31,2008. As you requested, on June 18,2908, you received an e-mail communication from independent trustee counsel on behalf of the Fund's independent trustees in regards to their consideration of the extension request. US Alisirh Bost'bn Cbailgite Hartford MewYork Newport Beach Phiiadelphb Princeton 'San Francisw Silicon Valley Washingtan DC EUROPE.@rwgelsLondon Luxembourg Munich Paris ASM Hong.Kong

Dechert L L P
Mr. Robert E., Plaze
Securities and Exchange Co'mmission
June 24,2008
Additionally,, as you requested in a telephonic discussion on June 23, 2008, the LO1 will be revised to refleet that the Fund will have the option to exercise .the LO1 should the indemnity amount as specified in .the LO1 become .fully utilized. A revised LO1 will be sent to you separateIy.. .At this time,. on behalf'of the Fund, we would like to request .an extension of the termination date of the LO1 from June 24,200.8 to December 3 1,2008. Should you have any questions, please do nut hesitate to contact me at
202.261.3385 or Cynthia B. Baugh at 202.261 -3371.
Very truIy yours, h'di-s.&cn;? &,
David J. Harris