MONY Life Insurance Company, et al.; Notice of Application

The following is a summary of the application. The complete application may be obtained for a fee at the SEC's Public Reference Branch, 450 Fifth Street, N.W., Washington, D.C. 20549-0102 (tel. (202) 942-8090).

Applicants' Representations

1. MONY is a stock life insurance company organized under the laws of New York and registered under the Investment Advisers Act of 1940 (the ``Advisers Act''). MONY Series is an open-end management investment company registered under the Act and organized as a Maryland corporation. MONY Series currently consists of seven Portfolios. MONY America, an Arizona stock life insurance company, is registered under the Advisers Act and serves as investment adviser to the MONY Series. MONY America is a wholly-owned subsidiary of MONY. 2. Enterprise Group is an open-end management investment company registered under the Act and organized as a Maryland corporation .Enterprise Group currently consists of seventeen Portfolios. Enterprise Trust is an open-end management investment company registered under the Act and organized as a Massachusetts business trust. Enterprise Trust currently consists of fourteen Portfolios. Shares of the portfolios of MONY Series and Enterprise Trust currently are sold to MONY America and MONY for allocation among their various accounts to fund benefits under certain life insurance contracts. 3. Enterprise Capital, a wholly-owned subsidiary of MONY, is registered under the Advisers Act and serves as investment adviser to each Enterprise Fund. 1740 Advisers is registered under the Advisers Act and serves as subadviser to the Equity Income Fund of Enterprise Group and the Equity Income Portfolio of Enterprise Trust. 1740 Advisers is a wholly-owned subsidiary of MONY. 4. Goldman Sachs is an international investment banking organization. Goldman Sachs conducts most of its broker-dealer business in the United States through Goldman Sacs & Co., a broker-dealer registered under the Securities Exchange Act of 1934. Goldman, Sachs & Co. acts as a primary dealer in United States government securities and is a member of the major United States securities and commodities exchanges. Goldman Sachs is the sole general partner of certain private investment partnerships and employees' securities companies (the ``Goldman Sachs Affiliates''). Goldman Sachs has an aggregate economic interest in the Goldman Sachs Affiliates of approximately 15.3%. 5. On November 16, 1998, MONY converted from a mutual life insurance company to a stock life insurance company pursuant to a plan of reorganization (the ``demutualization''). Also on that date, the Holding Company, a Delaware corporation, completed a public offering of its common stock. Before the demutualization, the Goldman Sachs Affiliates had purchased warrants (the ``Warrants'') to purchase from the Holding Company 7% of its outstanding common stock. As a result of the demutualization and upon the future exercise of the Warrants by the Goldman Sachs Affiliates, the Goldman Sachs Affiliates could own up to 7% of the outstanding common stock of the Holding Company. 6. Applicants state that the Goldman Sachs Affiliates currently own no shares of Holding Company common stock. Applicants further state that the Goldman Sachs Affiliates have agreed, under the terms of a Determination of Non-Control from the State of New York Insurance Department (the ``NYID Order''), to notify the New York Insurance Department before exercising the Warrants or selling the Warrants or common stock underlying the Warrants. Applicants also state that under the NYID Order, Goldman Sachs is prohibited from acquiring, directly or indirectly, from any person, any additional securities issued by the Holding Company or any of its affiliates, except securities acquired in the ordinary course of Goldman Sachs' business as an underwriter, broker/dealer, investment manager, or investment adviser. Applicants state that Goldman Sachs does not own and will not acquire securities constituting in the aggregate 5% or more of the outstanding voting securities of the Holding Company, other than the securities that the Goldman Sachs Affiliates may acquire upon exercise of the Warrants.

Applicants' Legal Analysis

1. Section 17(a) of the Act prohibits an affiliated person of a registered investment company, or an affiliated person of such person (``second-tier affiliate''), acting as principal, from knowingly selling to or purchasing from the company any security or other property. Section 2(a)(3) of the Act defines an ``affiliated person'' of another person to include: (a) any person directly or indirectly owning, controlling, or holding with power to vote 5% or more of the outstanding voting securities of the other person; (b) any person 5% or more of whose outstanding voting securities are directly or indirectly owned; and (c) any person directly or indirectly controlling, controlled by, or under common control with, the other person. 2. Applicants state that each of the Advisers is an indirect wholly-owned subsidiary of the Holding Company, and the Goldman Sachs Affiliates have the right to acquire 7% of the outstanding common stock of the Holding Company. Upon exercise of the Warrants by the Goldman Sachs Affiliates in an amount that would result in Goldman Sachs holding more than 5% of the outstanding voting securities of the Holding Company, Goldman Sachs would become an affiliated person of the Holding Company, which is the parent corporation of MONY, which in turn owns 100 percent of each of the Advisers. Applicants state that, in such event, any principal transactions between a Portfolio and Goldman Sachs may be prohibited by section 17(a) of the Act. 3. Section 17(b) of the Act authorizes the SEC to exempt a transaction from section 17(a) of the Act if evidence

establishes that: (a) the terms of the proposed transaction are reasonable and fair and do not involve overreaching on the part of any person; (b) the proposed transaction is consistent with the policy of each registered investment company concerned; and (c) the proposed transaction is consistent with the general purposes of the Act. Section 6(c) of the Act permits the SEC to exempt any person, security, or transaction from any provision of the Act or any rule under the Act if and to the extent that the exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. 4. Applicants request relief under sections 6(c) and 17(b) to permit the Portfolios to engage in principal transactions with Goldman Sachs. Applicants state that permitting the Portfolios to deal with Goldman Sachs would make it easier for the subadvisers to the Portfolios (``Portfolio Managers'') to achieve best price and execution. Applicants state that the requested exemption would apply only where Goldman Sachs is deemed to be a second-tier affiliate of a Portfolio solely because of the Goldman Sachs Affiliates' ownership interest in the Holding Company as a result of the exercise of the Warrants. Applicants submit that, for the reasons discussed below, the proposed transactions meet the standards set forth in sections 6(c) and 17(b). 5. Applicants submit that the primary purpose of section 17(a) is to prevent persons with the power to control an investment company from using that power to such persons' own pecuniary advantage (i.e., to prevent self-dealing). Applicants submit that the proposed transactions do not give rise to the abuse that section 17(a) was designed to prevent. Applicants state that, as a condition to the requested relief, Goldman Sachs will not control (within the meaning of section 2(a)(9) of the Act), directly or indirectly, the Holding Company, MONY, or the Advisers. Further, Goldman Sachs will not directly or indirectly consult with the Advisers or any other Portfolio Manager concerning the selection of Portfolio Managers or allocation of principal or brokerage transactions for any Portfolio, or in any way seek to influence the choice of broker or dealer for any Portfolio. Additionally, applicants represent that there is or will be no express or implied understanding between Goldman Sachs and the Advisers of any Fund that the Advisers will cause any Fund to enter into transactions with Goldman Sachs or give a preference to Goldman Sachs in effecting the transactions between the Funds and Goldman Sachs. 6. Applicants state that Goldman Sachs' potential influence over the Holding Company is further limited by the terms of the NYID Order. Under the NYID Order, the Goldman Sachs Affiliates have agreed to certain limitations on their rights as shareholders of the Holding Company. The Goldman Sachs Affiliates also may nominate no more than one director to the Holding Company's 13-member board of directors (the ``Board''). In addition, the Goldman Sachs Affiliates have agreed to vote their shares of common stock, in the Holding Company's discretion, either in accordance with the recommendation of the Board or in the same proportion as the holders of common stock who are not affiliated with either the Holding Company or Goldman Sachs. 7. Applicants state that, as a condition to the requested relief, the boards of directors/trustees of the Funds (``Fund Boards''), including a majority of disinterested directors/trustees, will adopt certain procedures to ensure that the terms of the transactions between the Funds and Goldman Sachs are fair and reasonable and do not involve overreaching (the ``Procedures''). Applicants assert that the Procedures will require careful monitoring by the Fund Boards of securities transactions with Goldman Sachs.

Applicants' Conditions

Applicants agree that the order granting the requested relief will be subject to the following conditions: 1. Goldman Sachs will not control the Holding Company, MONY, or the Advisers, directly or indirectly, within the meaning of section 2(a)(9) of the Act. 2. Goldman Sachs will not directly or indirectly consult with the Advisers or any other Portfolio Manager concerning the selection of Portfolio Managers or allocation of principal or brokerage transactions for any Portfolio, or in any way seek to influence the choice of broker or dealer for any Portfolio. 3. The Fund Boards, including a majority of disinterested directors/trustees, will approve procedures permitting principal transactions between the Funds and Goldman Sachs and will no less frequently than quarterly: (a) review any transactions effected with Goldman Sachs on a principal basis, including the terms of each transaction, and (b) compare the volume of transactions effected with Goldman Sachs with the volume of transactions effected with Goldman Sachs prior to Goldman Sachs' becoming an affiliated person of the Holding Company. Such procedures will provide: (a) for an internal approach reasonably designed to ensure that the consideration paid or received by a Portfolio in principal transactions with Goldman Sachs will be reasonable and fair and that the conditions of the order requested herein will be met; and (b) on a quarterly basis, that each Adviser will provide to each Fund Board a report listing principal transactions entered into on behalf of a Portfolio with Goldman Sachs, including the name and amount of the security, the price, the identity of other dealers, if any, with whom the transaction could have been effected, and a brief explanation of why the transaction was effected with Goldman Sachs. The Fund Boards, including a majority of the disinterested directors/trustees, as frequently as will appear appropriate and no less frequently than annually, will review the procedures to ascertain their continued appropriateness. In approving and reapproving the procedures, the Fund Boards, including a majority of the disinterested directors/trustees, must determine that the procedures are fair and reasonable and in the best interest of each Fund and its shareholders. 4. Each Fund will: (a) maintain and preserve permanently in an easily accessible place a written copy of the procedures and conditions followed in connection with principal transactions with Goldman Sachs as principal; and (b) maintain and preserve for a period not less than six years from the end of the fiscal year in which any such transactions occurred, the first two years in an easily accessible place, a written record of each such transaction setting forth a description of the security purchased or sold, that the entity on the other side of the transaction was Goldman Sachs and the terms of the transaction, and the information or materials upon which the determination was made that each principal transaction was made in accordance with the procedures and conditions set forth in the application. 5. The legal departments of the Advisers will prepare guidelines for personnel of the Advisers to make certain that transactions effected pursuant to this order comply with the conditions to this order, and that Goldman Sachs and the Advisers generally maintain an arm's length relationship. The legal departments of the Advisers will periodically monitor the activities of the Advisers to make certain that the conditions to this order are adhered to.

6. The requested order will remain in effect only so long as the NYID Order remains in effect. If the NYID Order is amended or modified, applicants will not rely on the requested order without seeking assurance from the staff of the Division of Investment Management that the requested order will remain in effect. 7. No existing or future registered investment company will rely on the requested order until the company's board of directors/trustees, including a majority of the disinterested directors/trustees, has approved the company's participation in the transactions permitted under the order and has determined that such participation by the company is in the best interests of the company and its shareholders. The minutes of the meeting of the company's board of directors/trustees at which this determination is made will reflect the reasons for the director's/trustees' determination.

For the SEC, by the Division of Investment Management, under delegated authority. Margaret H. McFarland, Deputy Secretary. [FR Doc. 99-26672 Filed 10-12-99; 8:45 am] BILLING CODE 8010-01-M