Division Of Investment Management
Informal Procedures Regarding Shareholder Proposals

The Division of Investment Management believes that its responsibility with respect to matters arising under Rule 14a-8 [17 CFR 240.14a-8], as with other matters under the proxy rules, is to aid those who must comply with the rule by offering informal advice and suggestions and to determine, initially, whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission. In connection with a shareholder proposal under Rule 14a-8, the Division’s staff considers the information furnished to it by an investment company in support of its intention to exclude the proposals from the investment company’s proxy material, as well as any information furnished by the proponent or the proponent’s representative.

The staff will always consider information concerning alleged violations of the statutes administered by the Commission, including arguments as to whether or not activities proposed to be taken would be violative of the statute or rule involved. The receipt by the staff of such information, however, should not be construed as changing the staff’s informal procedures and proxy review into a formal or adversary procedure.

The determination reached by the staff in connection with a shareholder proposal submitted to the Division under Rule 14a-8 does not and cannot purport to “adjudicate” the merits of an investment company’s position with respect to the proposal. Only a court, such as a U.S. District Court, can decide whether an investment company is obligated to include shareholder proposals in its proxy material. Accordingly a discretionary determination not to recommend or take Commission enforcement action does not preclude a proponent, or any shareholder of an investment company, from pursuing any rights he or she may have against the investment company in court should management omit the proposal from the investment company’s proxy material.