Wells Fargo Funds Trust, et al.; Notice of Application

AGENCY:

Securities and Exchange Commission (“SEC” or the “Commission”).

ACTION:

Notice of application under section 6(c) of the Investment Company Act of 1940 (the “Act”) for an exemption from section 15(f)(1)(A) of the Act.

Summary of Application: The requested order would permit certain investment companies advised by Wells Fargo Bank, N.A. (“Wells Fargo”) not to reconstitute their respective boards of trustees to meet the 75 percent non-interested director requirement of section 15(f)(1)(A) of the Act in order for Wells Fargo to rely upon the safe harbor provisions of section 15(f).

Applicants: Wells Fargo Fund Trust (“Funds Trust”), Wells Fargo Core Trust (“Core Trust”), and Wells Fargo.

Filing Date: The application was filed on August 3, 2000.

Hearing or Notification of Hearing: An order granting the requested relief will be issued unless the SEC orders a hearing. Interested persons may request a hearing by writing to the SEC's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the SEC's by 5:30 p.m. on August 28, 2000, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, 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 SEC's Secretary.

ADDRESSES:

Secretary, SEC, 450 5th Street, NW., Washington, DC 20549-0609. Applicants, 525 Market Street, San Francisco, California 94105.

FOR FURTHER INFORMATION CONTACT:

J. Amanda Machen, Senior Counsel, (202) 942-7120, or Mary Kay Frech, Branch Chief, (202) 942-0564 (Office of Investment Company Regulation, Division of Investment Management).

SUPPLEMENTARY INFORMATION:

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 5th Street, NW., Washington, DC 20549-0102 (tel. 202-942-8090).

Applicants' Representations

1. Funds Trust and Core Trust are open-end management investment companies registered under the Act. Funds Trust consists of sixty-four series and Core Trust has fourteen portfolios. Wells Fargo, a bank and a wholly owned subsidiary of Wells Fargo & Company (“Wells”), currently serves as investment adviser to each of Funds Trust and Core Trust. Wells Fargo is not registered under the Investment Advisers Act of 1940 (“Advisers Act”) in reliance on section 202(a)(11) of the Advisers Act.

2. Great Plains Funds (“GP Funds”) is an open-end management investment company registered under the Act and consists of five series. First Commerce Investors, Inc. (“FCI”), a wholly-owned subsidiary of First Commerce Bancshares, Inc. (“First Commerce”), serves as investment adviser to each of the series of the GP Funds and is registered under the Advisers Act.

3. On or about June 15, 2000, Wells acquired First Commerce in a transaction in which First Commerce shareholders received Wells common stock and First Commerce became a wholly-owned subsidiary of Wells (the “Acquisition”). Following the Acquisition, it is proposed that one new series and three existing series of Fund Trust (the “Acquiring Funds Trust Series”) will acquire the assets of four series of GP Funds (the “Great Plains Series”) (the “Reorganization”) (the Acquisition and Reorganization are collectively referred to as the “Transaction”). Two of the Acquiring Funds Trust Series invest substantially all of their assets in various portfolios of Core Trust (“Core Trust Portfolios”).

4. Applicants state that the Acquisition resulted in a change in control of FCI within the meaning of section 2(a)(9) of the Act, and in an assignment of the current advisory contract between FCI and the GP Funds within the meaning of section 2(a)(4) of the Act. As required by section 15(a)(4) of the Act, the advisory contract automatically terminated in accordance with its terms.

5. On May 9, 2000, the boards of trustees (each a “Board”) of GP Funds and of Funds Trust unanimously approved the Reorganization. In addition, in reliance on rule 15a-4 under the Act, the Board of GP Funds unanimously approved an interim advisory agreement (“Interim Agreement”) between FCI and each of the Great Plains Series covering the time period between the date of the Acquisition and the closing date of the Reorganization. The Reorganization and the Interim Agreement will require approval by a majority of the outstanding shares of the Great Plains Series voting on the proposals. Applicants states that the Board of GP Funds has scheduled a special meeting of the Great Plains Series' shareholders for August 23, 2000. Proxy materials for the special meeting were mailed to shareholders on July 13, 2000.

6. In connection with the Transaction, applicants have determined to seek to comply with the “safe harbor” provisions of section 15(f) of the Act. Applicants state that, absent exemptive relief, following consummation of the Transaction, more than 25 percent of the Boards of Funds Trust and Core Trust, which have identical membership, would be “interested persons” for purposes of section 15(f)(1)(A) of the Act.

Applicants' Legal Analysis

1. Section 15(f) of the Act is a safe harbor that permits an investment adviser to a registered investment company (or an affiliated person of the investment adviser) to realize a profit on the sale of its business if certain conditions are met. One of the conditions is set forth in section 15(f)(1)(A). This condition provides that, for a period of three years after the sale, at least 75 percent of the board of directors of the investment company may not be “interested persons” with respect to either the predecessor or successor adviser of the investment company. Applicants state that, without the requested exemption, following the Transaction, each of Funds Trust and Core Trust would have to reconstitute its Board to meet the 75% non-interested director requirement of section 15(f)(1)(A).

2. Section 15(f)(3)(B) of the Act provides that if the assignment of an investment advisory contract results from the merger of, or sale of substantially all of the assets by, a registered investment company with or to another registered investment company with assets substantially greater in amount, such discrepancy in size shall be considered by the SEC in determining whether, or to what extent, to grant exemptive relief under section 6(c) from section 15(f)(1)(A).

3. Section 6(c) of the Act permits the SEC to exempt any person or transaction from any provision of the Act, or any rule or regulation under the Act, if 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 an exemption under section 6(c) of the Act from section 15(f)(1)(A) of the Act. Applicants state that, as of April 30, 2000, Funds Trust had approximately $61 billion in aggregate net assets. Applicants also state that, as of April 30, 2000, the aggregate net assets of the GP Funds were less than $450 million. Applicants thus assert that GP Funds' assets would represent less than 1% of the aggregate net assets of Funds Trust.

5. Applicants state that four of the ten trustees (“Trustees”) who serve on the Boards of Funds Trust and Core Trust are “interested persons,” within the meaning of section 2(a)(19) of the Act, of Wells Fargo. Applicants also state that two of the Trustees who are not interested persons on each Board are expected to retire at the end of 2000, but that no other changes to the Boards are anticipated. Applicants state that none of the Trustees who serve on the Board of GP Funds is an interested person of GP Funds, FCI, or Wells Fargo.

6. Applicants state that to comply with section 15(f)(1)(A) of the Act, Funds Trust and Core Trust would have to alter the composition of their Boards, either by asking experienced Trustees to resign or adding new Trustees. Applicants further state that adding new Trustees could require a shareholder vote not only of shareholders of the four Acquiring Funds Trust Series, but also the shareholders of Funds Trust series and Core Trust portfolios not otherwise affected by the Reorganization. Applicants assert that adding a substantial number of additional non-interested Trustees to each Board could entail a lengthy process and increase the ongoing costs of Funds Trust and Core Trust.

7. For the reasons stated above, applicants submit that the requested relief is necessary and 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.