82_FR_15795 82 FR 15735 - Transamerica Life Insurance Company, et al.

82 FR 15735 - Transamerica Life Insurance Company, et al.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 60 (March 30, 2017)

Page Range15735-15738
FR Document2017-06245

Federal Register, Volume 82 Issue 60 (Thursday, March 30, 2017) 
[Federal Register Volume 82, Number 60 (Thursday, March 30, 2017)]
[Notices]
[Pages 15735-15738]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-06245]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32572; File No. 812-14488]


Transamerica Life Insurance Company, et al.

March 24, 2017.
AGENCY: Securities and Exchange Commission (``SEC'' or ``Commission'').

ACTION: Notice.

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    Notice of application for an order approving the substitution of 
certain securities pursuant to Section 26(c) of the Investment Company 
Act of 1940, as amended (the ``1940 Act'' or ``Act'').

Applicants: Transamerica Life Insurance Company (``TLIC''), 
Transamerica Financial Life Insurance Company (``TFLIC'') (each a 
``Company'' and together, the ``Companies''), Separate Account VA-2L, 
and Separate Account VA-2LNY (each, an ``Account'' and together, the 
``Accounts''). The Companies and the Accounts collectively are referred 
to herein as the ``Applicants.''

Summary of Application:  Applicants seek an order pursuant to Section 
26(c) of the 1940 Act, approving the substitution of shares issued by 
certain series of Transamerica Series Trust (the ``Replacement Funds'') 
for shares of certain registered investment companies currently held by 
sub-accounts of the Accounts (the ``Existing Funds''), to support 
certain variable annuity contracts (collectively, the ``Contracts'') 
issued by the Companies.

Filing Date:  The application was filed on June 15, 2015, and was 
amended on December 8, 2015, July 1, 2016, and November 14, 2016.

Hearing or Notification of Hearing:  An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Secretary of 
the Commission and serving the Applicants with a copy of the request, 
personally or by mail. Hearing requests should be received by the 
Commission by 5:30 p.m. on April 18, 2017 and should be accompanied by 
proof of service on the Applicants in the form of an affidavit or, for 
lawyers, a certificate of service. Pursuant to Rule 0-5 under the Act, 
hearing requests should state the nature of the writer's interest, any 
facts bearing upon the desirability of a hearing on the matter, the 
reason for the request, and the issues contested. Persons who wish to 
be notified of a hearing may request notification by writing to the 
Commission's Secretary.

ADDRESSES:  Commission: Secretary, SEC, 100 F Street NE., Washington, 
DC 20549-1090. Applicants: Alison C. Ryan, Associate General Counsel, 
Transamerica, 1150 South Olive Street T-27-01, Los Angeles, CA 90015.

FOR FURTHER INFORMATION CONTACT:  Jill Ehrlich, Senior Counsel, at 
(202) 551-6819, or David J. Marcinkus, Branch Chief, at (202) 551-6821 
(Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's Web site by searching for the file number, or for an 
Applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling (202) 551-8090.
    Applicants' Representations:
    1. TLIC is the depositor of Account VA-2L. TFLIC is the depositor 
of Account VA-2LNY. Each Company is an indirect, wholly-owned 
subsidiary of AEGON, N.V.
    2. Each Account is a ``separate account'' as defined by Rule 0-1(e) 
under the 1940 Act, and each is registered under the 1940 Act as a unit 
investment trust. Each Account is divided into sub-accounts, which 
reflect the investment performance of certain registered investment 
companies, including Transamerica Series Trust. The Accounts are 
administered and accounted for as part of the general business of the 
Companies. The application sets forth the registration statement file 
numbers for the security interests under the Contracts and the 
Accounts.
    3. The Contracts are individual and group variable annuity 
contracts. Each of the prospectuses for the Contracts discloses that 
the issuing Company reserves the right, subject to compliance with 
applicable law, to substitute shares of another registered open-end 
management investment company for shares of a registered open-end 
management investment company held by a sub-account of an Account.
    4. Transamerica Series Trust is an open-end management investment 
company of the series type that is registered with the Commission under 
the 1940 Act (File No. 811-04419).\1\ Shares of the series are 
registered under the Securities Act of 1933 (File No. 033-00507) and 
are sold to the separate accounts of life insurance companies to fund 
benefits under variable life policies or variable annuity contracts and 
to certain affiliated asset allocation funds.
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    \1\ Effective May 1, 2008, Transamerica Series Trust changed its 
name from AEGON/Transamerica Series Trust.
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    5. Transamerica Asset Management, Inc. (``TAM''), an investment 
adviser that is registered with the Commission, has overall 
responsibility for the management of each Transamerica Series Trust 
Replacement Fund. TAM delegates to a sub-adviser the responsibility for 
day-to-day management of the investments of each Transamerica Series 
Trust Replacement Fund, subject to TAM's oversight. TAM may, in the 
future, determine to provide the day-to-day management of any

[[Page 15736]]

Transamerica Series Trust Replacement Fund without the use of a sub-
adviser.
    6. Applicants propose, as set forth below, to substitute shares of 
the Replacement Funds for shares of the Existing Funds 
(``Substitutions'') to fund the Contracts:

------------------------------------------------------------------------
             Existing fund                       Replacement fund
------------------------------------------------------------------------
Dreyfus Variable Investment Fund:        Transamerica WMC US Growth VP
 Appreciation Portfolio (Service          (Service Class).
 Shares).
Dreyfus Variable Investment Fund:        Transamerica JPMorgan Core Bond
 Quality Bond Portfolio (Service          VP (Service Class).
 Shares).
Dreyfus Investment Portfolios: Core      Transamerica Barrow Hanley
 Value Portfolio (Service Shares).        Dividend Focused VP (Initial
                                          Class).
The Dreyfus Socially Responsible Growth  Transamerica WMC US Growth VP
 Fund, Inc. (Service Shares).             (Service Class).
------------------------------------------------------------------------

    7. The Applicants believe that the Replacement Funds have 
investment objectives, policies and risk profiles, as described in 
their prospectuses, that are substantially the same as, or sufficiently 
similar to, the corresponding Existing Funds to make those Replacement 
Funds appropriate candidates as substitutes. Applicants also state that 
the investment objectives and investment strategies of each Replacement 
Fund are similar to the corresponding Existing Fund, or each 
Replacement Fund's underlying portfolio construction and investment 
results are similar to those of the Existing Fund, and therefore the 
fundamental objectives, risk, and performance expectations of those 
Contract owners with interests in sub-accounts of the Existing Funds 
will continue to be met after the Substitutions.
    8. The investment objectives of each Existing Fund and its 
corresponding Replacement Fund are set forth below. Additional 
information for each Existing Fund and Replacement Fund, including 
principal investment strategies, principal risks, and comparative 
performance history, can be found in the application.

------------------------------------------------------------------------
             Existing fund                       Replacement fund
------------------------------------------------------------------------
Dreyfus Variable Investment Fund:        Transamerica WMC US Growth VP
 Appreciation Portfolio seeks long-term   seeks to maximize long-term
 capital growth consistent with the       growth.
 preservation of capital.
Dreyfus Variable Investment Fund:        Transamerica JPMorgan Core Bond
 Quality Bond Portfolio seeks to          VP seeks total return,
 maximize total return, consisting of     consisting of current income
 capital appreciation and current         and capital appreciation.
 income.
Dreyfus Investment Portfolios: Core      Transamerica Barrow Hanley
 Value Portfolio seeks long-term growth   Dividend Focused VP seeks
 of capital, with current income as a     total return gained from the
 secondary objective.                     combination of dividend yield,
                                          growth of dividends and
                                          capital appreciation.
The Dreyfus Socially Responsible Growth  Transamerica WMC US Growth VP
 Fund, Inc. seeks to provide capital      seeks to maximize long-term
 growth, with current income as a         growth.
 secondary goal.
------------------------------------------------------------------------

    9. Applicants state that the Substitutions are designed to allow 
Contract owners to continue their investment in similar or better 
investment options without interruption and at no additional cost to 
them. Contract owners with sub-account balances invested through the 
Accounts in shares of the Replacement Funds will have the same or lower 
total expense ratios taking into account fund expenses (including Rule 
12b-1 fees, if any). With respect to all of the proposed Substitutions, 
the combined management fee and Rule 12b-1 fees paid by the Replacement 
Fund are the same or lower than those of the corresponding Existing 
Fund. The application sets forth the fees and expenses of each Existing 
Fund and its corresponding Replacement Fund in greater detail.
    10. Applicants represent that as of the effective date of the 
Substitutions (``Effective Date'') shares of the Existing Funds will be 
redeemed for cash. The Companies, on behalf of each Existing Fund sub-
account of each relevant Account, will simultaneously place a 
redemption request with each Existing Fund and a purchase order with 
the corresponding Replacement Fund so that the purchase of Replacement 
Fund shares will be for the exact amount of the redemption proceeds. 
Thus, Contract values will remain fully invested at all times.
    11. The Substitutions will take place at relative net asset value 
(in accordance with Rule 22c-1 under the 1940 Act) with no change in 
the amount of any affected Contract owner's contract value, cash value, 
accumulation value, account value or death benefit or in dollar value 
of his or her investment in the applicable Accounts. \2\ No brokerage 
commissions or other fees will be paid by either the Existing Funds or 
the Replacement Funds or by the affected Contract owners in connection 
with the Substitutions.
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    \2\ Applicants state that, because the Substitutions will occur 
at relative net asset value, and the fees and charges under the 
Contracts will not change as a result of the Substitutions, the 
benefits offered by the guarantees under the Contracts will be the 
same immediately before and after the Substitutions. Applicants also 
state that what effect the Substitutions may have on the value of 
the benefits offered by the Contract guarantees would depend, among 
other things, on the relative future performance of the Existing 
Funds and Replacement Funds, which Applicants cannot predict. 
Nevertheless, Applicants note that at the time of the Substitutions, 
the Contracts will offer a comparable variety of investment options 
with as broad a range of risk/return characteristics.
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    12. The affected Contract owners will not incur any fees or charges 
as a result of the Substitutions nor will their rights or the 
Companies' obligations under the Contracts be altered in any way. The 
Companies or their affiliates will pay all expenses and transaction 
costs of the Substitutions, including brokerage, legal, accounting, and 
other fees and expenses. The Substitutions will not cause the Contract 
fees and charges currently being paid by affected Contract owners to be 
greater after the Substitutions than before the Substitutions. 
Moreover, the Substitutions will not impose any tax liability on 
affected Contract owners.
    13. As described in the application, after notification of the 
Substitution and for 30 days after the Effective Date, affected 
Contract owners may reallocate the sub-account value of an Existing 
Fund to any other investment option available under their Contract 
without incurring any transfer charges.

[[Page 15737]]

    14. All Contract owners affected by the Substitutions will be 
notified of this application by means of supplements to the Contract 
prospectuses at least 30 days prior to the Effective Date. The notice 
will advise Contract owners that from the date of the notice until the 
Effective Date, owners are permitted to make one transfer of Contract 
value out of the Existing Fund sub-account to one or more other sub-
accounts without the transfer (or exchange) being treated as one of a 
limited number of transfers (or exchanges) permitted without a transfer 
charge. Among other information, the notice will inform affected 
Contract owners that the Companies will not exercise any rights 
reserved under any Contract to impose additional restrictions on 
transfers until at least 30 days after the Effective Date.
    15. If affected Contract owners reallocate account value during 
this 60 day period, there will be no charge for the reallocation of 
accumulated value from the Existing Fund sub-accounts and the 
reallocation will not count as a transfer when imposing any applicable 
restriction or limit under the Contract on transfers. Additionally, all 
affected Contract owners will be sent prospectuses of the applicable 
Replacement Funds at least 30 days before the Effective Date.
    16. Within five (5) business days after the Effective Date, 
affected Contract owners will be sent a written confirmation, which 
will include confirmation that the Substitutions were carried out as 
previously notified, a restatement of the information set forth in the 
pre-Substitution notice and values of the Contract owner's position in 
the Existing Fund before the Substitution and the Replacement Fund 
after the Substitution.

Applicants' Legal Analysis

    1. Applicants request that the Commission issue an order pursuant 
to Section 26(c) of the 1940 Act approving the Substitutions. Section 
26(c) requires the depositor of a registered unit investment trust 
holding the securities of a single issuer to obtain Commission approval 
before substituting the securities held by the trust. Section 26(c) 
requires the Commission to issue such an order if the evidence 
establishes that the substitution is consistent with the protection of 
investors and the purposes fairly intended by the policy and provisions 
of the 1940 Act.
    2. Applicants submit that the terms and conditions of the 
Substitutions meet the standards set forth in Section 26(c) and assert 
that the replacement of an Existing Fund with the corresponding 
Replacement Fund is consistent with the protection of investors and the 
purposes fairly intended by the policy and provisions of the 1940 Act. 
As described in the application, for a period of two years following 
the Effective Date, the Companies or their affiliates will reimburse 
any Contract owner affected by the proposed Substitutions involving 
Transamerica Series Trust Replacement Funds and whose sub-account 
invests in the Replacement Fund to the extent a Replacement Fund's net 
annual operating expenses exceeds the net annual operating expenses of 
the corresponding Existing Fund. Applicants further assert that each 
Replacement Fund has similar investment objectives and investment 
strategies as the corresponding Existing Fund, or each Replacement 
Fund's underlying portfolio construction and investment results are 
similar to those of the corresponding Existing Fund. Accordingly, 
Applicants believe that the fundamental investment objectives, risk and 
performance expectations of the Contract owners will continue to be met 
after the Substitutions.
    3. Applicants also maintain that it is in the best interests of the 
Contract owners to substitute the Replacement Fund for its 
corresponding Existing Fund. Applicants anticipate that the 
substitution of an Existing Fund with the corresponding Replacement 
Fund will result in a Contract that is administered and managed more 
efficiently, and one that is more competitive with other variable 
products. The rights of affected Contract owners and the obligations of 
the Companies under the Contracts will not be altered by the 
Substitutions. Affected Contract owners will not incur any additional 
tax liability or any additional fees and expenses as a result of the 
Substitutions.
    4. Each of the prospectuses for the Contracts discloses that the 
issuing Company reserves the right, subject to compliance with 
applicable law, to substitute shares of another registered open-end 
management investment company for shares of an open-end management 
investment company held by a sub-account of an Account.
    5. Applicants also assert that none of the proposed Substitutions 
is of the type that Section 26(c) was designed to prevent. Unlike a 
traditional unit investment trust where a depositor could only 
substitute an investment security in a manner which permanently 
affected all the investors in the trust, the Contracts provide each 
Contract owner with the right to exercise his or her own judgment and 
transfer account values into other sub-accounts. Moreover, the 
Contracts will offer affected Contract owners the opportunity to 
transfer amounts out of the affected sub-accounts into any of the 
remaining sub-accounts without cost or other disadvantage. The 
Substitution, therefore, will not result in the type of costly forced 
redemptions that Section 26(c) was designed to prevent. Applicants also 
maintain that the Substitutions are unlike the type of substitutions 
which Section 26(c) was designed to prevent in that by purchasing a 
Contract, Contract owners select much more than a particular registered 
management open-end investment company in which to invest their account 
values. They also select the specific type of insurance coverage 
offered by the Companies under their Contracts as well as other rights 
and privileges set forth in the Contracts.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. The proposed Substitutions will not be effected unless the 
Companies determine that: (a) The Contracts allow the substitution of 
shares of registered open-end investment companies in the manner 
contemplated by the application; (b) the Substitutions can be 
consummated as described in the application under applicable insurance 
laws; and (c) any regulatory requirements in each jurisdiction where 
the Contracts are qualified for sale have been complied with to the 
extent necessary to complete the Substitutions.
    2. The Companies or their affiliates will pay all expenses and 
transaction costs of the Substitutions, including legal and accounting 
expenses, any applicable brokerage expenses and other fees and 
expenses. No fees or charges will be assessed to the Contract owners to 
effect the Substitutions.
    3. The proposed Substitutions will be effected at the relative net 
asset values of the respective shares in conformity with Section 22(c) 
of the 1940 Act and Rule 22c-1 thereunder without the imposition of any 
transfer or similar charges by Applicants. The Substitutions will be 
effected without change in the amount or value of any Contracts held by 
affected Contract owners.
    4. The proposed Substitutions will in no way alter the tax 
treatment of affected Contract owners in connection with their 
Contracts, and no tax liability will arise for affected Contract owners 
as a result of the Substitutions.
    5. The rights or obligations of the Companies under the Contracts 
of

[[Page 15738]]

affected Contract owners will not be altered in any way.
    6. Affected Contract owners will be permitted to make at least one 
transfer of Contract value from the sub-account investing in the 
Existing Fund (before the Effective Date) or the Replacement Fund 
(after the Effective Date) to any other available investment option 
under the Contract without charge for a period beginning at least 30 
days before the Effective Date through at least 30 days following the 
Effective Date. Except as described in any market timing/short-term 
trading provisions of the relevant prospectus, the Company will not 
exercise any right it may have under the Contract to impose 
restrictions on transfers between the sub-accounts under the Contracts, 
including limitations on the future number of transfers, for a period 
beginning at least 30 days before the Effective Date through at least 
30 days following the Effective Date.
    7. All affected Contract owners will be notified, at least 30 days 
before the Effective Date about: (a) The intended substitution of 
Existing Funds with the Replacement Funds; (b) the intended Effective 
Date; and (c) information with respect to transfers as set forth in 
Condition 6 above. In addition, the Companies will deliver to all 
affected Contract owners, at least 30 days before the Effective Date, a 
prospectus for each applicable Replacement Fund.
    8. The Companies will deliver to each affected Contract owner 
within five (5) business days of the Effective Date a written 
confirmation which will include: (a) A confirmation that the 
Substitutions were carried out as previously notified; (b) a 
restatement of the information set forth in the pre-Substitution 
notice; and (c) values of the Contract owner's positions in the 
Existing Fund before the Substitution and the Replacement Fund after 
the Substitution.
    9. After the Effective Date the Applicants agree not to change a 
Replacement Fund's sub- adviser without first obtaining shareholder 
approval of either (a) the sub-adviser change or (b) the parties' 
continued ability to rely on their manager-of-managers exemptive order.
    10. For two years following the Effective Date the net annual 
expenses of each Replacement Fund that is a Transamerica Series Trust 
Fund will not exceed the net annual expenses of the corresponding 
Existing Fund as of the fund's most recent fiscal year. To achieve this 
limitation, the Replacement Fund's investment adviser will waive fees 
or reimburse the Replacement Fund in certain amounts to maintain 
expenses at or below the limit. Any adjustments will be made at least 
on a quarterly basis. In addition, the Companies will not increase the 
Contract fees and charges, including asset based charges such as 
mortality expense risk charges deducted from the sub-accounts that 
would otherwise be assessed under the terms of the Contracts for a 
period of at least two years following the Effective Date.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-06245 Filed 3-29-17; 8:45 am]
 BILLING CODE 8011-01-P

Federal Register / Vol. 82, No. 60 / Thursday, March 30, 2017 / Notices 15735 substantive obligations to the Clearing the Investment Company Act of 1940, as may be obtained via the Commission’s House. Also, as noted above, amended (the ‘‘1940 Act’’ or ‘‘Act’’). Web site by searching for the file Amendment Nos. 1 and 2 are technical APPLICANTS: Transamerica Life number, or for an Applicant using the amendments to ICE Clear Europe’s filing Insurance Company (‘‘TLIC’’), Company name box, at http:// with respect to comments on the Transamerica Financial Life Insurance www.sec.gov/search/search.htm, or by proposed rule change received by ICE Company (‘‘TFLIC’’) (each a ‘‘Company’’ calling (202) 551–8090. Clear Europe. and together, the ‘‘Companies’’), Applicants’ Representations: Thus, the proposed rule change is Separate Account VA–2L, and Separate 1. TLIC is the depositor of Account intended to comply with restrictions on Account VA–2LNY (each, an ‘‘Account’’ VA–2L. TFLIC is the depositor of ICE Clear Europe’s exercise of its default and together, the ‘‘Accounts’’). The Account VA–2LNY. Each Company is remedies provided by applicable laws in Companies and the Accounts an indirect, wholly-owned subsidiary of other jurisdictions. Moreover, ICE Clear collectively are referred to herein as the AEGON, N.V. Europe represents that the proposed ‘‘Applicants.’’ 2. Each Account is a ‘‘separate rule change has been filed at the request SUMMARY OF APPLICATION: Applicants account’’ as defined by Rule 0–1(e) of regulatory authorities in the United seek an order pursuant to Section 26(c) under the 1940 Act, and each is Kingdom and the European Union. of the 1940 Act, approving the registered under the 1940 Act as a unit Finally, the Commission finds that substitution of shares issued by certain investment trust. Each Account is implementation of the proposed rule series of Transamerica Series Trust (the divided into sub-accounts, which reflect change will not substantially affect the ‘‘Replacement Funds’’) for shares of the investment performance of certain rights of members of the Clearing House certain registered investment companies registered investment companies, as a practical matter because the currently held by sub-accounts of the including Transamerica Series Trust. proposed rule change clarifies Accounts (the ‘‘Existing Funds’’), to The Accounts are administered and restrictions that are already imposed on support certain variable annuity accounted for as part of the general the Clearing House by applicable law in contracts (collectively, the ‘‘Contracts’’) business of the Companies. The other jurisdictions. Accordingly, the issued by the Companies. application sets forth the registration Commission finds good cause for statement file numbers for the security FILING DATE: The application was filed approving the proposed rule change, as interests under the Contracts and the on June 15, 2015, and was amended on modified by Amendment Nos. 1 and 2, Accounts. December 8, 2015, July 1, 2016, and on an accelerated basis pursuant to 3. The Contracts are individual and November 14, 2016. section 19(b)(2) of the Act. group variable annuity contracts. Each HEARING OR NOTIFICATION OF HEARING: VI. Conclusion An order granting the requested relief of the prospectuses for the Contracts will be issued unless the Commission discloses that the issuing Company It is therefore ordered pursuant to orders a hearing. Interested persons may reserves the right, subject to compliance Section 19(b)(2) of the Act that the request a hearing by writing to the with applicable law, to substitute shares proposed rule change (SR–ICEEU–2017– Secretary of the Commission and of another registered open-end 002), as modified by Amendment Nos. serving the Applicants with a copy of management investment company for 1 and 2, be, and hereby is, approved on the request, personally or by mail. shares of a registered open-end an accelerated basis.11 Hearing requests should be received by management investment company held For the Commission by the Division of by a sub-account of an Account. Trading and Markets, pursuant to delegated the Commission by 5:30 p.m. on April 18, 2017 and should be accompanied by 4. Transamerica Series Trust is an authority.12 proof of service on the Applicants in the open-end management investment Eduardo A. Aleman, company of the series type that is form of an affidavit or, for lawyers, a Assistant Secretary. registered with the Commission under certificate of service. Pursuant to Rule [FR Doc. 2017–06242 Filed 3–29–17; 8:45 am] 0–5 under the Act, hearing requests the 1940 Act (File No. 811–04419).1 BILLING CODE 8011–01–P should state the nature of the writer’s Shares of the series are registered under interest, any facts bearing upon the the Securities Act of 1933 (File No. 033– desirability of a hearing on the matter, 00507) and are sold to the separate SECURITIES AND EXCHANGE accounts of life insurance companies to the reason for the request, and the issues COMMISSION fund benefits under variable life policies contested. Persons who wish to be [Investment Company Act Release No. notified of a hearing may request or variable annuity contracts and to 32572; File No. 812–14488] notification by writing to the certain affiliated asset allocation funds. Commission’s Secretary. 5. Transamerica Asset Management, Transamerica Life Insurance Company, Inc. (‘‘TAM’’), an investment adviser ADDRESSES: Commission: Secretary, et al. that is registered with the Commission, SEC, 100 F Street NE., Washington, DC 20549–1090. Applicants: Alison C. has overall responsibility for the March 24, 2017. Ryan, Associate General Counsel, management of each Transamerica AGENCY: Securities and Exchange Transamerica, 1150 South Olive Street Series Trust Replacement Fund. TAM Commission (‘‘SEC’’ or ‘‘Commission’’). T–27–01, Los Angeles, CA 90015. delegates to a sub-adviser the ACTION: Notice. responsibility for day-to-day FOR FURTHER INFORMATION CONTACT: Jill asabaliauskas on DSK3SPTVN1PROD with NOTICES management of the investments of each Notice of application for an order Ehrlich, Senior Counsel, at (202) 551– Transamerica Series Trust Replacement approving the substitution of certain 6819, or David J. Marcinkus, Branch Fund, subject to TAM’s oversight. TAM securities pursuant to Section 26(c) of Chief, at (202) 551–6821 (Division of may, in the future, determine to provide Investment Management, Chief the day-to-day management of any 11 In approving the proposed rule change, the Counsel’s Office). Commission considered the proposal’s impact on efficiency, competition, and capital formation. 15 SUPPLEMENTARY INFORMATION: The 1 Effective May 1, 2008, Transamerica Series U.S.C. 78c(f). following is a summary of the Trust changed its name from AEGON/Transamerica 12 17 CFR 200.30–3(a)(12). application. The complete application Series Trust. VerDate Sep<11>2014 19:09 Mar 29, 2017 Jkt 241001 PO 00000 Frm 00051 Fmt 4703 Sfmt 4703 E:\FR\FM\30MRN1.SGM 30MRN1

15736 Federal Register / Vol. 82, No. 60 / Thursday, March 30, 2017 / Notices Transamerica Series Trust Replacement 6. Applicants propose, as set forth Existing Funds (‘‘Substitutions’’) to fund Fund without the use of a sub-adviser. below, to substitute shares of the the Contracts: Replacement Funds for shares of the Existing fund Replacement fund Dreyfus Variable Investment Fund: Appreciation Portfolio (Service Transamerica WMC US Growth VP (Service Class). Shares). Dreyfus Variable Investment Fund: Quality Bond Portfolio (Service Transamerica JPMorgan Core Bond VP (Service Class). Shares). Dreyfus Investment Portfolios: Core Value Portfolio (Service Shares) ... Transamerica Barrow Hanley Dividend Focused VP (Initial Class). The Dreyfus Socially Responsible Growth Fund, Inc. (Service Shares) Transamerica WMC US Growth VP (Service Class). 7. The Applicants believe that the Replacement Fund are similar to the continue to be met after the Replacement Funds have investment corresponding Existing Fund, or each Substitutions. objectives, policies and risk profiles, as Replacement Fund’s underlying 8. The investment objectives of each described in their prospectuses, that are portfolio construction and investment Existing Fund and its corresponding substantially the same as, or sufficiently results are similar to those of the Replacement Fund are set forth below. similar to, the corresponding Existing Existing Fund, and therefore the Additional information for each Existing Funds to make those Replacement fundamental objectives, risk, and Fund and Replacement Fund, including Funds appropriate candidates as performance expectations of those principal investment strategies, substitutes. Applicants also state that Contract owners with interests in sub- principal risks, and comparative the investment objectives and accounts of the Existing Funds will performance history, can be found in investment strategies of each the application. Existing fund Replacement fund Dreyfus Variable Investment Fund: Appreciation Portfolio seeks long- Transamerica WMC US Growth VP seeks to maximize long-term term capital growth consistent with the preservation of capital. growth. Dreyfus Variable Investment Fund: Quality Bond Portfolio seeks to Transamerica JPMorgan Core Bond VP seeks total return, consisting maximize total return, consisting of capital appreciation and current of current income and capital appreciation. income. Dreyfus Investment Portfolios: Core Value Portfolio seeks long-term Transamerica Barrow Hanley Dividend Focused VP seeks total return growth of capital, with current income as a secondary objective. gained from the combination of dividend yield, growth of dividends and capital appreciation. The Dreyfus Socially Responsible Growth Fund, Inc. seeks to provide Transamerica WMC US Growth VP seeks to maximize long-term capital growth, with current income as a secondary goal. growth. 9. Applicants state that the Fund and a purchase order with the commissions or other fees will be paid Substitutions are designed to allow corresponding Replacement Fund so by either the Existing Funds or the Contract owners to continue their that the purchase of Replacement Fund Replacement Funds or by the affected investment in similar or better shares will be for the exact amount of Contract owners in connection with the investment options without interruption the redemption proceeds. Thus, Substitutions. and at no additional cost to them. Contract values will remain fully 12. The affected Contract owners will Contract owners with sub-account invested at all times. not incur any fees or charges as a result balances invested through the Accounts 11. The Substitutions will take place of the Substitutions nor will their rights in shares of the Replacement Funds will at relative net asset value (in accordance or the Companies’ obligations under the have the same or lower total expense with Rule 22c–1 under the 1940 Act) Contracts be altered in any way. The ratios taking into account fund expenses with no change in the amount of any Companies or their affiliates will pay all (including Rule 12b–1 fees, if any). With affected Contract owner’s contract expenses and transaction costs of the respect to all of the proposed value, cash value, accumulation value, Substitutions, including brokerage, Substitutions, the combined account value or death benefit or in legal, accounting, and other fees and management fee and Rule 12b–1 fees dollar value of his or her investment in expenses. The Substitutions will not paid by the Replacement Fund are the the applicable Accounts. 2 No brokerage cause the Contract fees and charges same or lower than those of the currently being paid by affected corresponding Existing Fund. The 2 Applicants state that, because the Substitutions Contract owners to be greater after the application sets forth the fees and will occur at relative net asset value, and the fees Substitutions than before the and charges under the Contracts will not change as expenses of each Existing Fund and its a result of the Substitutions, the benefits offered by Substitutions. Moreover, the corresponding Replacement Fund in the guarantees under the Contracts will be the same Substitutions will not impose any tax greater detail. liability on affected Contract owners. asabaliauskas on DSK3SPTVN1PROD with NOTICES immediately before and after the Substitutions. 10. Applicants represent that as of the Applicants also state that what effect the 13. As described in the application, Substitutions may have on the value of the benefits effective date of the Substitutions offered by the Contract guarantees would depend, after notification of the Substitution and (‘‘Effective Date’’) shares of the Existing among other things, on the relative future for 30 days after the Effective Date, Funds will be redeemed for cash. The performance of the Existing Funds and affected Contract owners may reallocate Companies, on behalf of each Existing Replacement Funds, which Applicants cannot the sub-account value of an Existing predict. Nevertheless, Applicants note that at the Fund sub-account of each relevant time of the Substitutions, the Contracts will offer a Fund to any other investment option Account, will simultaneously place a comparable variety of investment options with as available under their Contract without redemption request with each Existing broad a range of risk/return characteristics. incurring any transfer charges. VerDate Sep<11>2014 19:09 Mar 29, 2017 Jkt 241001 PO 00000 Frm 00052 Fmt 4703 Sfmt 4703 E:\FR\FM\30MRN1.SGM 30MRN1

Federal Register / Vol. 82, No. 60 / Thursday, March 30, 2017 / Notices 15737 14. All Contract owners affected by the protection of investors and the accounts. Moreover, the Contracts will the Substitutions will be notified of this purposes fairly intended by the policy offer affected Contract owners the application by means of supplements to and provisions of the 1940 Act. As opportunity to transfer amounts out of the Contract prospectuses at least 30 described in the application, for a the affected sub-accounts into any of the days prior to the Effective Date. The period of two years following the remaining sub-accounts without cost or notice will advise Contract owners that Effective Date, the Companies or their other disadvantage. The Substitution, from the date of the notice until the affiliates will reimburse any Contract therefore, will not result in the type of Effective Date, owners are permitted to owner affected by the proposed costly forced redemptions that Section make one transfer of Contract value out Substitutions involving Transamerica 26(c) was designed to prevent. of the Existing Fund sub-account to one Series Trust Replacement Funds and Applicants also maintain that the or more other sub-accounts without the whose sub-account invests in the Substitutions are unlike the type of transfer (or exchange) being treated as Replacement Fund to the extent a substitutions which Section 26(c) was one of a limited number of transfers (or Replacement Fund’s net annual designed to prevent in that by exchanges) permitted without a transfer operating expenses exceeds the net purchasing a Contract, Contract owners charge. Among other information, the annual operating expenses of the select much more than a particular notice will inform affected Contract corresponding Existing Fund. registered management open-end owners that the Companies will not Applicants further assert that each investment company in which to invest exercise any rights reserved under any Replacement Fund has similar their account values. They also select Contract to impose additional investment objectives and investment the specific type of insurance coverage restrictions on transfers until at least 30 strategies as the corresponding Existing offered by the Companies under their days after the Effective Date. Fund, or each Replacement Fund’s Contracts as well as other rights and 15. If affected Contract owners underlying portfolio construction and privileges set forth in the Contracts. reallocate account value during this 60 investment results are similar to those of day period, there will be no charge for the corresponding Existing Fund. Applicants’ Conditions the reallocation of accumulated value Accordingly, Applicants believe that the Applicants agree that any order from the Existing Fund sub-accounts fundamental investment objectives, risk granting the requested relief will be and the reallocation will not count as a and performance expectations of the subject to the following conditions: transfer when imposing any applicable Contract owners will continue to be met 1. The proposed Substitutions will restriction or limit under the Contract after the Substitutions. not be effected unless the Companies on transfers. Additionally, all affected 3. Applicants also maintain that it is determine that: (a) The Contracts allow Contract owners will be sent in the best interests of the Contract the substitution of shares of registered prospectuses of the applicable owners to substitute the Replacement open-end investment companies in the Replacement Funds at least 30 days Fund for its corresponding Existing manner contemplated by the before the Effective Date. Fund. Applicants anticipate that the application; (b) the Substitutions can be 16. Within five (5) business days after substitution of an Existing Fund with consummated as described in the the Effective Date, affected Contract the corresponding Replacement Fund application under applicable insurance owners will be sent a written will result in a Contract that is laws; and (c) any regulatory confirmation, which will include administered and managed more requirements in each jurisdiction where confirmation that the Substitutions were efficiently, and one that is more the Contracts are qualified for sale have carried out as previously notified, a competitive with other variable been complied with to the extent restatement of the information set forth products. The rights of affected Contract necessary to complete the Substitutions. in the pre-Substitution notice and owners and the obligations of the values of the Contract owner’s position 2. The Companies or their affiliates Companies under the Contracts will not in the Existing Fund before the will pay all expenses and transaction be altered by the Substitutions. Affected Substitution and the Replacement Fund Contract owners will not incur any costs of the Substitutions, including after the Substitution. additional tax liability or any additional legal and accounting expenses, any fees and expenses as a result of the applicable brokerage expenses and other Applicants’ Legal Analysis fees and expenses. No fees or charges Substitutions. 1. Applicants request that the 4. Each of the prospectuses for the will be assessed to the Contract owners Commission issue an order pursuant to Contracts discloses that the issuing to effect the Substitutions. Section 26(c) of the 1940 Act approving Company reserves the right, subject to 3. The proposed Substitutions will be the Substitutions. Section 26(c) requires compliance with applicable law, to effected at the relative net asset values the depositor of a registered unit substitute shares of another registered of the respective shares in conformity investment trust holding the securities open-end management investment with Section 22(c) of the 1940 Act and of a single issuer to obtain Commission company for shares of an open-end Rule 22c–1 thereunder without the approval before substituting the management investment company held imposition of any transfer or similar securities held by the trust. Section by a sub-account of an Account. charges by Applicants. The 26(c) requires the Commission to issue 5. Applicants also assert that none of Substitutions will be effected without such an order if the evidence establishes the proposed Substitutions is of the type change in the amount or value of any that the substitution is consistent with that Section 26(c) was designed to Contracts held by affected Contract the protection of investors and the prevent. Unlike a traditional unit owners. asabaliauskas on DSK3SPTVN1PROD with NOTICES purposes fairly intended by the policy investment trust where a depositor 4. The proposed Substitutions will in and provisions of the 1940 Act. could only substitute an investment no way alter the tax treatment of 2. Applicants submit that the terms security in a manner which affected Contract owners in connection and conditions of the Substitutions meet permanently affected all the investors in with their Contracts, and no tax liability the standards set forth in Section 26(c) the trust, the Contracts provide each will arise for affected Contract owners and assert that the replacement of an Contract owner with the right to as a result of the Substitutions. Existing Fund with the corresponding exercise his or her own judgment and 5. The rights or obligations of the Replacement Fund is consistent with transfer account values into other sub- Companies under the Contracts of VerDate Sep<11>2014 19:09 Mar 29, 2017 Jkt 241001 PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 E:\FR\FM\30MRN1.SGM 30MRN1

15738 Federal Register / Vol. 82, No. 60 / Thursday, March 30, 2017 / Notices affected Contract owners will not be at or below the limit. Any adjustments will be issued unless the Commission altered in any way. will be made at least on a quarterly orders a hearing. Interested persons may 6. Affected Contract owners will be basis. In addition, the Companies will request a hearing by writing to the permitted to make at least one transfer not increase the Contract fees and Secretary of the Commission and of Contract value from the sub-account charges, including asset based charges serving the Applicants with a copy of investing in the Existing Fund (before such as mortality expense risk charges the request, personally or by mail. the Effective Date) or the Replacement deducted from the sub-accounts that Hearing requests should be received by Fund (after the Effective Date) to any would otherwise be assessed under the the Commission by 5:30 p.m. on April other available investment option under terms of the Contracts for a period of at 18, 2017, and should be accompanied the Contract without charge for a period least two years following the Effective by proof of service on Applicants, in the beginning at least 30 days before the Date. form of an affidavit or, for lawyers, a Effective Date through at least 30 days For the Commission, by the Division of certificate of service. Pursuant to Rule following the Effective Date. Except as Investment Management, under delegated 0–5 under the Act, hearing requests described in any market timing/short- authority. should state the nature of the writer’s term trading provisions of the relevant Eduardo A. Aleman, interest, any facts bearing upon the prospectus, the Company will not Assistant Secretary. desirability of a hearing on the matter, exercise any right it may have under the the reason for the request, and the issues [FR Doc. 2017–06245 Filed 3–29–17; 8:45 am] Contract to impose restrictions on contested. Persons who wish to be BILLING CODE 8011–01–P transfers between the sub-accounts notified of a hearing may request under the Contracts, including notification by writing to the limitations on the future number of SECURITIES AND EXCHANGE Commission’s Secretary. transfers, for a period beginning at least COMMISSION 30 days before the Effective Date ADDRESSES: Commission: Secretary, through at least 30 days following the [Release No. IC–32571; File No. 812–14487] SEC, 100 F Street NE., Washington, DC Effective Date. 20549–1090. Applicants: Alison C. 7. All affected Contract owners will be Transamerica Financial Life Insurance Ryan, Associate General Counsel, notified, at least 30 days before the Company, et al. Transamerica, 1150 South Olive Street, Effective Date about: (a) The intended T–27–01, Los Angeles, CA 90015. March 24, 2017. substitution of Existing Funds with the AGENCY: Securities and Exchange FOR FURTHER INFORMATION CONTACT: Replacement Funds; (b) the intended Commission (‘‘SEC’’ or ‘‘Commission’’). Bruce R. MacNeil, Senior Counsel, at Effective Date; and (c) information with (202) 551–6817, or David J. Marcinkus, ACTION: Notice. respect to transfers as set forth in Branch Chief, at (202) 551–6821 Condition 6 above. In addition, the Notice of application for an order (Division of Investment Management, Companies will deliver to all affected approving the substitution of certain Chief Counsel’s Office). Contract owners, at least 30 days before securities pursuant to Section 26(c) of SUPPLEMENTARY INFORMATION: The the Effective Date, a prospectus for each the Investment Company Act of 1940, as following is a summary of the applicable Replacement Fund. amended (the ‘‘1940 Act’’ or ‘‘Act’’). 8. The Companies will deliver to each application. The complete application APPLICANTS: Transamerica Financial may be obtained via the Commission’s affected Contract owner within five (5) Life Insurance Company (‘‘TFLIC’’), business days of the Effective Date a Web site by searching for the file Transamerica Advisors Life Insurance number, or an applicant using the written confirmation which will Company (‘‘TALIC’’) (each a Company name box, at http:// include: (a) A confirmation that the ‘‘Company’’ and together, the www.sec.gov/search/search.htm or by Substitutions were carried out as ‘‘Companies’’), Merrill Lynch Life calling (202) 551–8090. previously notified; (b) a restatement of Variable Annuity Separate Account D, the information set forth in the pre- Applicants’ Representations and ML of New York Variable Annuity Substitution notice; and (c) values of the Separate Account D (each an ‘‘Account’’ 1. TALIC is the depositor of Merrill Contract owner’s positions in the and together, the ‘‘Accounts’’). The Lynch Variable Annuity Separate Existing Fund before the Substitution Companies and the Accounts Account D. TFLIC is the depositor of and the Replacement Fund after the collectively are referred to herein as the ML of New York Variable Annuity Substitution. 9. After the Effective Date the ‘‘Applicants.’’ Separate Account D. Each Company is Applicants agree not to change a SUMMARY OF APPLICATION: Applicants an indirect wholly-owned subsidiary of Replacement Fund’s sub- adviser seeks an order pursuant to Section 26(c) AEGON N.V. without first obtaining shareholder of the 1940 Act, approving the 2. Each Account is a ‘‘separate approval of either (a) the sub-adviser substitution of shares issued by certain account’’ as defined by rule 0–1(e) change or (b) the parties’ continued series of Transamerica Series Trust (the under the 1940 Act and each is ability to rely on their manager-of- ‘‘Replacement Funds’’) for shares of registered under the 1940 Act as a unit managers exemptive order. certain registered investment companies investment trust. Each Account is 10. For two years following the currently held by sub-accounts of the divided into sub-accounts, which reflect Effective Date the net annual expenses Accounts (the ‘‘Existing Funds’’), to the investment performance of certain of each Replacement Fund that is a support certain variable annuity registered investment companies, asabaliauskas on DSK3SPTVN1PROD with NOTICES Transamerica Series Trust Fund will not contracts (collectively, the ‘‘Contracts’’) including Transamerica Series Trust. exceed the net annual expenses of the issued by the Companies. The Accounts are administered and corresponding Existing Fund as of the FILING DATE: The application was filed accounted for as part of the general fund’s most recent fiscal year. To on June 15, 2015, and amended on business of the Companies. The achieve this limitation, the Replacement December 8, 2015, July 1, 2016, and application sets forth the registration Fund’s investment adviser will waive November 14, 2016. statement file numbers for the security fees or reimburse the Replacement Fund HEARING OR NOTIFICATION OF HEARING: interests under the Contracts and the in certain amounts to maintain expenses An order granting the requested relief Accounts. VerDate Sep<11>2014 19:09 Mar 29, 2017 Jkt 241001 PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 E:\FR\FM\30MRN1.SGM 30MRN1


Document Created: 2017-03-30 01:35:42
Document Modified: 2017-03-30 01:35:42
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice.
DatesThe application was filed on June 15, 2015, and was amended on December 8, 2015, July 1, 2016, and November 14, 2016.
ContactJill Ehrlich, Senior Counsel, at (202) 551-6819, or David J. Marcinkus, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
FR Citation82 FR 15735 
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