ICI Submits Comment Letter to FTC on Aggregation Rule (pdf)

• • • • • • • • • • A. B. C. D. 1. • • • • • 2. 3. E. 1. 2. 3. F. A. • • • • B. C. Investment Company Institute Submission to FTC re: Proposed HSR Rule Changes Project No. P110014 (February 1, 2021) EXHIBIT A 709 Investment Company Institute 1775 K STREET N. W., WASHINGTON. D C 20006 [2 02) 29 3 7700 November 21, 1975 Honorable Philip A. Hart, Chairman Subcommittee on Antitrust & Monopoly Senate Committee on the Judiciary 127 C Street, N. E. Washington, D. C. 20515 Re: Title V of S. 1284 Dear Senator Hart: On Friday, October 31, 1975, I met with Bernard Nash, Esq., Assistant Counsel to the Subcommittee to discuss various amendments to Title V of S. 1284. Attached hereto are copies of: (1) our proposed amendments; (2) a summary of these proposed amendments; and (3) our suggested language for the Committee report. We believe that if Title V is amended as suggested and if the Committee report sets forth the suggested language, Title V would not adversely affect the investment programs of mutual funds in the capital markets. We greatly appreciate the consideration you and your staff have given this matter. Please do not hesitate to contact us if we may be of further assistance. Very truly yours, Matthew P. Fink Associate Counsel Attachments Investment Company Institute Submission to FTC re: Proposed HSR Rule Changes Project No. P110014 (February 1, 2021) EXHIBIT B 703 HILL, CHRISTOPHER AND PHILLIPS, P. C. 2000 L STREET, N. W WASHINGTON, 0. C.20036 G-I ER CHILLER COUNSEL. JUSEE a. EICUTITELEPHONE 5CC sa-7000 LEE -NSES DEC 2 197F WRITER'S CIRECT DIAL NUMBER (202) 452-7040 BCH W E.C .C _UHU ,J LAW .ca. .November 25, 1975 The Honorable Philip A. Hart Chairman Subcommittee on Antitrust and Monopoly Senate Committee on the Judiciary United States Senate Washington, D. C. 20515 Re: S.1284 Dear Senator Hart: We are writing on behalf of our client, the Association of Closed-End Investment Companies ("Association"), with respect to the provisions of Title V of S.1284. The Association is a group of 23 investment companies with assets of over $3 billion. All of the companies are registered with the Securities and Exchange Commission under the Investment Company Act of 1940. A list of the Apsoci- ation membership is attached hereto. Closed-end investment companies, like open-end invest- ment companies (commonly called "mutual funds"), provide investors with an opportunity to invest in the securities markets through professional management of diversified portfolios. Closed-end companies, however, unlike mutual funds, neither continuously offer nor redeem their shares. Instead, their securities are bought and sold in the various trading markets. Closed-end investment companies, like other insti- tutional investors, also buy and sell securities in the nation's trading markets on a regular basis. Indeed, such portfolio trading operations lie at the heart of the investment company business, and any interference with these activities could seriously affect the public shareholders of these companies. For this reason, the 704 HILL,CHRISTOPHER AND PHILLIPS, PC. To: The Honorable Philip A. Hart November 25, 1975 Page 2 Association has had discussions with Bernard Nash, Esquire, Assistant Counsel to your Subcommittee on Antitrust and Monopoly, concerning the need for certain amendments to Title V of 5.1284. The Association believes amendments are necessary to avoid a drastic and entirely unintended effect of the bill on the routine portfolio trading operations of closed- end investment companies and other institutional investors. Since such investors generally do not invest for the pur- poses of control, their portfolio transactions do not raise the underlying antitrust problems to which Title V is di- rected. Nevertheless, Title V of S.1284, as reported by the Subcommittee to the full Committee, does not contain a statutory exemption for those transactions and requires a number of other clarifying changes. We enclose herewith a draft of proposed amendments which would effect the necessary changes to Title V for these limited purposes. The proposed amendments are similar to those discussed with Mr. Nash, except that we have added to the proposed definition of "voting securities" the phrase: "or, with respect to unincorporated issuers, persons exercising similar functions" We also enclose, for your consideration, a discussion of a problem relating to the determination of ten percent ownership which we believe should be mentioned in the Committee Report as requiring resolution by administrative rule-making. We believe that if Title V of S.1284 were amended as proposed, and the suggested administrative action were taken by the Federal Trade Commission, the bill would not adversely affect the portfolio operations of closed-end investment companies and other institutional investors similarly situated. In that event, the Association of Closed-End Investment Companies would have no objection to Title V of the bill. The Association appreciates the thoughtful consider- ation given by Mr. Nash to the problems raised by Title V 705 HILL, CHRISTOPHER AND PHILLIPs. P.C. TO: The Honorable Philip A. Hart November 25, 1975 Page 3 of S.1284. If you or your staff have any questions con- cerning this matter please do not hesitate to call upon us. Sincerely yours, Richard M. Phillips Enclosures 706 64 1 material as the Federal Trade Commission shall by general 2 regulation prescribe, after consultation with the Assistant 3 Attorney General, and after notice and submission of views, 4 pursuant to section 553 of title 5, United States Code. 5 "(4) (A) The Federal. Trade Commission, after con- 6 sultation with the Assistant Attorney General, is authorized 7 and directed to define the terms used in this section, prescribe 8 the content and form of reports, by general regulation except 9 classes of persons and transactions from the notification 10 requirements thereunder, and to promulgate rules of general 11 or special applicability as may be necessary or proper to the 12 administration of this section, insofar as such action is not 13 inconsistent with the purposes of this section, after notice and .14 submission of views, pursuant to section 553 of title 5, United 15 States Code. following 16 "(B) The /regulations--arcepting classes of -ersons-nd are exempt from the notification requirements of 17 transactions/shl-inlude,--b-eed-nt-be-limd-to-he this section: 18 following-esceptionu-- 19 "(A) goods or realty transferred in the ordinary 20 course of business; 21 "(B) bonds, mortgages, deeds of trust, or other which are not voting secuiities; 22 obligations/with4avetin4aqight 23 "(C) interests in a corporation at least 50 per 24 centum of the stock of which is already owned by the 25 acquiring person or a wholly-owned subsidiary thereof; 707 65 1 "(D) transfers to or from a Federal agency or a 2 State or political subdivision thereof; 3 " (E) transactions exempted from collateral attack 4 under section 7 of this Act if approved by a Federal 5 administrative or regulatory agency: Provided, That 6 duplicate originals of the information and documentary 7 material filed with such agency shall be contemporaneous- 8 ly filed with the Federal Trade Commission and the As- 9 sistant Attorney General; 10 "(F) transactions which require agency approval 11 under section 18(c) of the Federal Deposit Insurance 12 Act (12 U.S.C. 1828(c)), as amended, or section 3 of 13 the Bank Holding Company Act of 1956 (12 U.S.C. 14 1842), as amended; 15 "(0) acquisitions, solely for the purpose of invest- voting securities, if at the time of such acquisition the 16 ment, of steek-who.-the-ock acquired or held dolt not securiti outstanding voting securities of the issuer; 17 exceed 10 per centum of thehoIvting--ights; voting securities if, at the time of such acquisition, 18 "(H) acquisitions offatele-tmbr the Wtook-acquired do ecurities 19 -loes/ not increase, directly or indirectly, the acquiring outstanding voting .securities of the issuer; 20 person's-r-p&rsons' share of poligx .gaanL.. 21 "(1) acquisitions, solely for the purpose of invest- voting securities pursuant to a plan of reo ganization or dissolut 22 ment, of/ assets, other than voting, sa"k or other voting securities 23 share capital, by any bank, banking association, trust investment company 24 company,/or insurance company, in the ordinary course 25 of its business. "(C) For the purpose of subsection (b)(4)(B) of this section 'voting security' means any security presently entitling the owner or holder thereof to vote for the election of directors of a companygy W 44 - IL4v £"A%.prMrftd #'CrerS, fLV4ceiset -"ecC.Wc,S* 708 AMERICAN LIFE INSURANCE ASSOCIATION 1730 PENNSYLVANIA AVENUE, N.W. WASHINGTON, D.C. 20006 WILLIAM B. HARMAN, JR. (202) 872- 8750 ex1cTive VIce massesNT December 3, 1975 DC51975 The Honorable Philip A. Hart Chairman, Subcommittee on Antitrust and Monopoly Committee on the Judiciary United States Senate Washington DC 20510 Dear Mr. Chairman: In accordance with your request, we have reviewed the exemptive amendments to Title V of S. 1284 included in the bill as reported on July 28 by the Antitrust and Monopoly Subcommittee. We also have reviewed the additional exemptive provisions proposed by the Investment Company Institute on behalf of the mutual fund industry and by an association of closed-end funds. Our Association represents 379 companies, with assets of $254 billion, including at year-end 1974 $96. 6 billion in corporate debt securities and $21. 9 billion in corporate equity securities. On behalf of our member- ship, we very much appreciate the consideration and cooperation afforded by the Subcommittee and its staff in evaluating our concerns about the im- pact of Title V on capital formation by industry in general and, specifically, on our investment function. We are satisfied that inclusion in Title V of the exemptions reported by the Subcommittee coupled with those proposed by the mutual fund industry will assure that Title V does not adversely af- fect the capital markets or the ability of the life insurance industry to continue its investment function in the capital markets. Again, our appreciation for the Subcommittee's effort in under- standing our concerns. Sincerely yours, William B. Harman, Jr. WBH:ecn Investment Company Institute Submission to FTC re: Proposed HSR Rule Changes Project No. P110014 (February 1, 2021) EXHIBIT C