RegAlert1997-04-28
Added · Updated
SEC Division of Investment Management staff letter: Merrill Lynch Asset Management
The SEC staff will not recommend enforcement action against registered investment companies advised by Merrill Lynch Asset Management or Fund Asset Management if they purchase newly issued securities in direct placement agency transactions where Merrill Lynch acts as placement agent. This relief is contingent upon the Funds adhering to procedures approved by their boards of directors, including a majority of disinterested directors, which require price comparisons with other firms or representations of fair pricing, and cap Merr Lynch's compensation at one percent of the purchase price. The staff also indicated that such transactions would not trigger enforcement under Section 206(3) of the Advisers Act if the Funds' portfolio managers, acting as authorized agents, provide the necessary written disclosure and consent.
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Our Ref. No. 96-242
REPONSE OF TH OFFCE OF CHI COUNSEL Merr Lynch Asset Management
DMSION OF INESTMEN MANAGEMEN File No. 801-11583 Your letter of Januar 30, 1997 requests our assurace that we would not recommend enforcement action to the Commission under section 10(t) or 17(e)(2) of the Investment Company Act of 1940 (the "Investment Company Act"), or section 206(3) of the Investment Advisers Act of 1940 (the "Advisers Act"), if a registered investment company (each a "Fund") advised now or in the future by Merr Lynch Asset Management, L.P. ("MLAM"), Fund Asset Management, L.P. ("FAM"), or any investment advisory or investment management afilate of or successor to MLAM or FAM, purchases newly issued securities in trsactions in which Merr Lynch, Pierce, Fenner & Smith Incorporated ("Merr Lynch") acts as placement agent. Facts Merr Lynch, a registered broker-deaer, is a wholly owned subsidia of Merr Lynch & Co., Inc. ("ML & Co"). MLAM and FAM (together, the "Advisers"), bbtli registered investment advisers, also are wholly owned by ML & Co. Because Merr Lynch and the Advisers are under the common control of ML & Co., ML & Co. and each Adviser are afilated persons of each other. Because the Advisers are afilated persons of the Funds
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