Unassociated Document
[logo – American
Funds®]
Capital
Research and Management Company
333 South Hope
Street
Los Angeles,
California 90071-1406
Phone (213)
486-9200
Fax (213)
615-0430
August 5,
2009
Ms. Laura Hatch,
Staff Accountant
U.S. Securities and
Exchange Commission
100 F Street,
NE
Washington, DC
20549
Re: American
Funds - Preliminary Proxy Statement
Dear Ms.
Hatch:
This letter is in response to an oral comment
we received from Ms. Rebecca Marquigny on August 3, 2009 to the American Fund
Insurance Series Preliminary Proxy Statement filed on July 27,
2009. We are responding to you, as the comment is also applicable to
the Joint Proxy Statement filed by the American Funds on July 13,
2009.
Comment: Please
“un-bundle” Sub-Proposal 3I so that each fundamental policy proposed to be
eliminated will be set out as a separate proposal.
Response: Sub-Proposal
3I requests a shareholder vote on the elimination of the Funds’ fundamental
investment policies that are not required by the Investment Company Act of 1940
(“the 1940 Act”). We believe that requiring shareholders to vote
separately on those fundamental investment policies mandated by the 1940 Act and
allowing shareholders to consider the elimination of other fundamental
investment policies as one proposal is consistent with the requirements of the
1940 Act. Shareholders will have a chance to vote on the elimination
of the fundamental policies and we have clearly identified in the Joint Proxy
Statement each fundamental investment policy that is proposed to be
eliminated. To further clarify, we will add disclosure to the
Definitive Proxy Statement stating that if a shareholder wants to vote to keep
one or more of the policies proposed to be eliminated he or she may vote against
the proposal.
Many of the fundamental investment policies
proposed to be eliminated were adopted to satisfy state regulatory
requirements. These requirements were preempted by the National
Securities Markets Improvement Act of 1996 and are thus no longer applicable to
the Funds. Other fundamental investment policies reflect the Funds’
policies on diversification. With respect to this type of policy, the
Funds will remain subject to the 1940 Act diversification
requirements. The elimination of these fundamental investment
policies is intended to streamline and simplify the Funds’
operations. The Funds currently comply with these restrictions and
their elimination will not have any practical day-to-day impact on the
management of the Funds’ assets or increase the Funds’ risk
profile.
In addition, based on conversations with the
proxy solicitors hired to assist in the American Funds’ shareholder vote effort,
presenting the elimination of each investment fundamental policy as a separate
proposal would materially increase the costs to the Funds associated with the
effort. This increase in costs would directly and adversely impact
shareholders. Furthermore, we are proposing the elimination of these
fundamental investment policies in conjunction with the other proposals in the
Joint Proxy Statement (reorganization to Delaware statutory trust, manager of
managers relief, adoption of a common slate of fundamental policies) in an
effort to streamline and standardize the American Funds
operations. If approved, we believe that the implementation of the
proposals in the Joint Proxy Statement would make these operations more
efficient, thereby reducing costs of the Funds. We believe that, in
addition to being consistent with the 1940 Act, the proposal to eliminate
certain fundamental investment policies presents the shareholder with a clear
and concise discussion of the issue.
For all of these reasons, we respectfully
disagree with the Staff’s position of the necessity of un-bundling Sub-Proposal
3I.
Thank you for your
consideration of our response to your comments. As previously
mentioned, we intend to file the Funds’ Definitive Proxy Statement with the SEC
on, or about, August 28, 2009.
If
you have any questions please do not hesitate to contact me at (213) 615-4024 or
Herb Poon at (213) 615-0432.
Sincerely,
/s/ Michael J.
Triessl
Michael J.
Triessl
Counsel
Capital Research
and Management Company
cc: Frank
Dalton, U.S. Securities and Exchange Commission