No-Action Letter under:
Investment Company Act of 1940 -
Sections 2(a)(32), 2(a)(35), 6(c), 11(a), 11(c), 17(a), 17(b), 22(d), 26(a)(2);
Rule 22c-1

ING Mutual Funds Management Co. LLC, et al.

February 9, 2001

RESPONSE OF THE OFFICE OF INVESTMENT COMPANY REGULATION DIVISION OF INVESTMENT MANAGEMENT

Our Ref. No. 01-1-ICR ING Mutual Funds Management Co. LLC ING Funds Distributor, Inc. and Reich & Tang Distributors, Inc

Your letter of February 9, 2001 requests our assurance that we would not recommend that the Commission take any enforcement action under the Investment Company Act of 1940 ("Act") if ING Mutual Funds Management Co. LLC and ING Funds Distributor, Inc. (collectively, "ING") rely on certain exemptive orders issued to Reich & Tang Distributors, Inc. ("Reich & Tang") and various unit investment trusts registered under the Act ("UITs") pending action by the Commission on ING's application for an exemption under sections 6(c), 17(b), 11(a) and 11(c) of the Act. The assurances you request would extend identical, temporary assurances provided to you by the Commission on February 8, 2000 ("Previous Letter").¹

On November 15, 1999, Reich & Tang entered into an agreement with ING, pursuant to which Reich & Tang agreed to transfer its unit investment trust business to ING ("Transfer"). The Transfer was consummated on February 9, 2000, and ING began to serve as sponsor and depositor for the UITs. You state that the personnel administering the UITs is substantially unchanged.

Reich & Tang and certain UITs received exemptive orders (i) under section 6(c) of the Act permitting certain UITs to impose sales charges on a deferred basis and waive the deferred sales charges in certain cases, (ii) under sections 6(c) and 17(b) of the Act permitting certain terminating series of a UIT to sell portfolio securities to certain new series of the UIT, and (iii) pursuant to sections 11(a) and 11(c) of the Act permitting certain offers of exchange between certain UITs at a reduced sales charge ("Exemptive Orders").² ING, as sponsor and depositor, is not covered by the Exemptive Orders. The Previous Letter stated that the Staff would not recommend enforcement action if ING relied on the Exemptive Orders until the earlier of the issuance by the Commission of an order amending the previous orders or one year from the date of the letter. The various UITs and ING filed an application with the Commission on August 7, 2000, in which they requested an exemptive order that would continue the relief previously granted in the Exemptive Orders ("Requested Order"). The Commission has not yet issued the Requested Order.

ING agrees to comply with the terms and conditions of the Exemptive Orders imposed on Reich & Tang as though such terms and conditions were imposed directly on ING. The UITs covered by the Exemptive Orders agree that they would rely on the Requested Order when it is granted, rather than continuing to rely on the Exemptive Orders.

Based on the representations made in your letter, we would not recommend enforcement action if, pending action by the Commission on the Requested Order, ING continues to rely on the Exemptive Orders. This position will be effective until the earlier of the issuance by the Commission of the Requested Order, or one year from the date of this letter.

This response expresses the Division's position on enforcement action only, and does not purport to express any legal conclusions on the questions presented. Facts or conditions different from those presented in your letter might require a different conclusion. In addition, this letter provides no assurance that the Commission will grant the Requested Order, or that the Division will not comment upon or seek modification of any application for the Requested Order.

Laura J. Riegel
Senior Counsel
Office of Investment Company Regulation

Endnotes

1

ING Mutual Funds Management Co. LLC and ING Funds Distributor, Inc. and Reich & Tang Distributors, Inc. (pub. avail. Feb. 8, 2000).

2

Reich & Tang Distributors L.P., et al., Investment Company Act Release Nos. 22840 (Oct. 3, 1997) (notice) and 22866 (Oct. 29, 1997) (order); Reich & Tang Distributors L.P., et al., Investment Company Act Release Nos. 22700 (June 11, 1997) (notice) and 22739 (July 8, 1997) (order); and Reich & Tang Distributors L.P., et al., Investment Company Act Release Nos. 22222 (Sept. 13, 1996) (notice) and 22273 (Oct. 9, 1996) (order).

Incoming Letter

(212) 318-6800
(212) 319-4090

February 8, 2001

VIA FEDERAL EXPRESS

Ms. Nadya B. Roytblat
Office of Investment Company Regulation
Division of Investment Management
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-1004

Re: ING Mutual Funds Management Co. LLC and ING Funds
Distributor, Inc. and Reich & Tang Distributors, Inc.

Dear Ms. Roytblat:

On behalf of ING Mutual Funds Management Co. LLC and ING Funds Distributor, Inc. (collectively, "ING"), we request that the Staff of the Division of Investment Management of the Securities and Exchange Commission (the "Commission") advise us that it will not recommend that the Commission take any enforcement action under the Investment Company Act of 1940, as amended (the "1940 Act"), under the circumstances described below. On November 15, 1999 Reich & Tang Distributors, Inc., the successor to Reich & Tang Distributors L.P. (either entity referred to as "Reich & Tang") entered into an agreement with ING, pursuant to which Reich & Tang agreed to transfer its unit investment trust business to ING (the transfer of such business referred to herein as the "Transfer"). The Transfer was consummated on February 9, 2000.

Reich & Tang, and certain unit investment trusts for which Reich & Tang acted as sponsor, engaged in certain transactions in reliance on several exemptive orders. ING, which is not covered by the exemptive orders, wished to engage in transactions similar to those which were the subject of the exemptive orders obtained by Reich & Tang. On February 8, 2000, the Staff issued a no-action letter stating that it would not recommend enforcement action if ING relied on the exemptive orders until the earlier of the issuance by the Commission of an order amending the previous orders or one year from the date of the letter. ING is seeking an extension of the no-action position, which expires on February 8, 2001, as it would pertain to the following three exemptive orders (the "Exemptive Orders"):

Investment Company Act Release No. 22866

Reich & Tang, Equity Securities Trust, Mortgage Securities Trust, Municipal Securities Trust, New York Municipal Trust, A Corporate Trust, and Schwab Trusts filed an application on March 7, 1997, and amendments to the application on August 26, 1997, and September 30, 1997, requesting an order under section 6(c) of the 1940 Act for an exemption from sections 2(a)(32), 2(a)(35), 22(d) and 26(a)(2) of the Act and rule 22c-1 under the Act. The order permits certain unit investment trusts to impose sales charges on a deferred basis and waive the deferred sales charge in certain cases.

Investment Company Act Release No. 22739

Reich & Tang and Equity Securities Trust ("EST") (Series 1 and Signature Series), on behalf of themselves and all subsequently issued series (collectively with Series 1 and Signature Series, the "Series") containing certain types of securities and sponsored by Reich & Tang or any entity controlling, controlled by, or under common control (within the meaning of section 2(a)(9) of the 1940 Act) with Reich & Tang, filed an application on December 31, 1996, and an amendment thereto on April 21, 1997, requesting an order under sections 6(c) and 17(b) of the 1940 Act for an exemption from section 17(a) of the Act. The order permits certain terminating Series of EST, a unit investment trust, to sell portfolio securities to certain new Series of EST.

Investment Company Act Release No. 22273

Reich & Tang; Equity Securities Trust (Series 1, Signature Series, and subsequent series); Mortgage Securities Trust (CMO Series 1 and subsequent series); Municipal Securities Trust (Series 1 and subsequent series) (including Insured Municipal Securities Trust, Series 1 (and subsequent series) and 5th Discount Series (and subsequent series)); New York Municipal Trust (Series 1 and subsequent series) and A Corporate Trust (Series 1 and subsequent series) filed an application on April 29, 1996, and amendments thereto on July 19, 1996, and September 6, 1996 requesting an order under sections 11(a) and (c) of the 1940 Act permitting certain offers of exchange between the trusts at a reduced sales charge. The order supersedes three prior orders issued on May 23, 1980 (Investment Company Act Release No. 11184), amended on April 29, 1981 (Investment Company Act Release No. 11754) and subsequently amended on August 28, 1991 (Investment Company Act Release No. 18290).

Statement of Facts

On February 9, 2000, Reich & Tang entered into an asset assignment agreement and consummated a transaction pursuant to which it agreed to assign, convey and transfer all of its right, title and interest in and to its unit investment trust business to ING. The primary owners and chief executive officers of Reich & Tang were not associated with ING. However, substantially all personnel involved in Reich & Tang's unit investment trust business were offered and accepted similar positions with ING. In fact, the employee of Reich & Tang who was in charge of the unit investment trust business accepted a position with ING as a senior vice president of ING whose principal responsibility is overseeing the ING unit investment trust business. Upon consummation of the Transfer, ING commenced acting as depositor and sponsor for both existing unit investment trusts (i.e., existing trusts for which Reich & Tang acted as sponsor and depositor) (the "Trusts") and subsequent unit investment trusts under the various names of the Trusts. ING has been appointed as successor depositor under the Indentures with respect to existing Trusts.

Rationale

Upon consummation of the Transfer, there was no change in the investment objectives of the existing Trusts or the fees and charges in connection therewith. While a new entity acts as depositor and sponsor of the Trusts, the personnel administering such Trusts is substantially unchanged. ING has complied and will continue to comply with all representations, conditions and agreements contained in each applicable Exemptive Order in order to engage in the transactions contemplated by such Order.

The primary change effected by the Transfer was a change in the identity and ownership of the depositor and sponsor of the Trusts. The relevant facts set forth in the applications that provided the basis for granting the Exemptive Orders, other than the identity of the sponsor/depositor, have not changed since the Exemptive Orders were granted and have not changed as a result of the Transfer.

On August 5, 2000 the Trusts and ING filed an application with the Commission in which they requested an exemptive order ("Renewal Order") that would effectively continue the relief previously granted in the Exemptive Orders. The Commission has not yet issued the Renewal Order.

The Trusts and ING propose that, pending receipt of the Renewal Order, the Trusts that are covered by the Exemptive Orders and ING would continue to rely on the Exemptive Orders and would be subject to those Orders' terms and conditions.^* ING specifically agrees that, pending receipt of the Renewal Order, it will comply with the terms and conditions in the Exemptive Orders imposed on Reich & Tang (or one of its predecessors or affiliates) as though such terms and conditions were imposed directly on ING. The various Trusts agree that they will rely on the Renewal Order when it is granted, rather than continuing to rely on the Exemptive Orders in accordance with any Staff no-action letter issued in response to this request. The various Trusts and ING further agree that such Staff no-action position shall continue to remain in effect only until the earlier of (i) the date on which the Renewal Order is issued or (ii) one year from the date of the Staff's letter extending its no-action position.

We believe that the Trusts covered by the Exemptive Orders should be permitted to continue relying on the Exemptive Orders because the factors supporting the issuance of the Exemptive Orders are still applicable to the Trusts even though the Trusts have had a different depositor and sponsor after the Transfer. Moreover, since, as described above, Reich & Tang's entire unit investment trust business has been transferred to ING for valid business reasons, we do not believe that a question can be raised that the Transfer was occasioned by a desire on the part of ING to only acquire use of the Exemptive Orders.

The Staff has previously granted no-action relief in similar situations involving various parties who, as a result of changes in circumstances similar to those involved here, have temporarily sought to rely on exemptive orders. See, e.g., Equity Income Fund - Index Series, SEC No-Action Letter (December 19, 1996); Ranson & Assocs., Inc., SEC No-Action Letter (November 25, 1996); Reich & Tang Distributors L.P., SEC No-Action Letter (March 13, 1996); The Chase Manhattan Bank, N.A., SEC No-Action Letter (July 25, 1995); Shearson Lehman Brothers Inc.; Smith Barney Upham & Co. Incorporated, SEC No-Action Letter (June 8, 1993); The PNC Fund, SEC No-Action Letter (April 2, 1993); Cigna Funds Group, SEC No-Action Letter (July 13, 1992); Merrill Lynch Federal Securities, SEC No-Action Letter (September 26, 1991); First Boston Corporation, SEC No-Action Letter (July 3, 1991); Fiduciary Capital Partners, L.P., SEC No-Action Letter (January 24, 1990); and Federated Investors, Inc., SEC No-Action Letter (September 22, 1989).

Accordingly, since ING has agreed to satisfy all of the representations, conditions and agreements set forth in the Exemptive Orders in order to engage in the contemplated transactions after the Transfer, the original benefits and protections required by the standards set forth in Sections 6(c), 17(b), 11(a) and 11(c)of the 1940 Act, pursuant to which the Exemptive Orders were granted, would continue.

Summary and Conclusion

ING has agreed to comply with the terms and conditions of the existing Exemptive Orders referenced above in order to engage in the transactions described in those Orders.

Based upon the facts and representations discussed herein, it is respectfully requested that the Staff advise ING, Reich & Tang and the existing and future Trusts covered by the Exemptive Orders that the Staff will not recommend that the Commission take enforcement action against such persons if such persons continue to act in reliance on these Exemptive Orders until the earlier of the date the Renewal Order is issued or one year from the date the Staff's letter extending its no-action position is issued.

Should you have any questions regarding this request, please contact the undersigned (212/318-6800) or Gary Rawitz (212/318-6877) of this office.

Very truly yours,

PAUL, HASTINGS, JANOFSKY & WALKER LLP

Michael R. Rosella

http://www.sec.gov/divisions/investment/noaction/ing020901.htm