SEC Company Response from MORGAN STANLEY GLOBAL DIVIDEND GROWTH SECURITIES (CIK 0000898285) — Jul 29, 2005
MORGAN STANLEY GLOBAL DIVIDEND GROWTH SECURITIES (CIK 0000898285)
Date: July 29, 2005 · CIK: 0000898285 · Accession: 0001047469-05-020305
AI Filing Summary & Sentiment
Show Raw Text
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
<Page>
Morgan Stanley Global Dividend Growth Securities
1221 Avenue of the Americas
New York, NY 10020
July 29, 2005
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Attention: Larry Greene, Division of Investment Management
Mail Stop 0505
RE: MORGAN STANLEY GLOBAL DIVIDEND GROWTH SECURITIES
(FILE NO. 33-59004)
Dear Mr. Greene:
Thank you for your telephonic comments regarding the registration statement on
Form N-1A for Morgan Stanley Global Dividend Growth Securities (the "Fund")
filed with the Securities and Exchange Commission on May 26, 2005. Below, we
describe the changes made to the registration statement in response to the
Staff's comments and provide any responses to or any supplemental explanations
of such comments, as requested. These changes will be reflected in
post-effective amendment number 6 to the Fund's registration statement on Form
N-1A, which will be filed via EDGAR on or about July 29, 2005.
GENERAL COMMENTS TO FORM N-1A
COMMENT 1. PLEASE CONFIRM THAT THE FUND IS COMPLYING WITH THE PRIVACY POLICY
NOTIFICATION REQUIREMENTS OF THE GRAMM-LEACH-BLILEY ACT AND
DISTRIBUTING ITS PRIVACY POLICY TO INVESTORS.
RESPONSE 1. The Fund provides its privacy policy annually in
accordance with the requirements of Regulation S-P.
COMMENT 2. PLEASE CONFIRM THAT THE REGISTRATION STATEMENT INCLUDES THE
ANTI-MONEY LAUNDERING AND CUSTOMER VERIFICATION DISCLOSURE REQUIRED
BY THE U.S. PATRIOT ACT.
RESPONSE 2. The requisite notice of the customer
identification verification policy is disclosed in the
account application form. Anti-money laundering and customer
verification disclosure is also included under the
"Shareholder Information-How to Buy Shares" section of the
Fund's prospectus.
<Page>
COMMENTS TO PROSPECTUS
COMMENT 3. PLEASE NOTE THAT THE FOLLOWING DISCLOSURE IS IN ALL CAPS IN THE
EDGAR FILING WITH THE COMMISSION AND CONFIRM THAT IT IS NOT IN ALL
CAPS AS IT APPEARS IN THE PRINTED PROSPECTUS:
"The Securities and Exchange Commission has not approved or
disapproved these securities or passed upon the adequacy of this
PROSPECTUS. Any representation to the contrary is a criminal
offense."
RESPONSE 3. This sentence appears in bold type, not all
caps.
COMMENT 4. ON PAGE 1 OF THE PROSPECTUS, IT IS STATED THAT "[T]HE FUND WILL
NORMALLY INVEST AT LEAST 80% OF ITS ASSETS IN DIVIDEND PAYING
EQUITY SECURITIES OF COMPANIES LOCATED IN VARIOUS COUNTRIES AROUND
THE WORLD" AND THAT THE FUND'S SUB-ADVISER "SEEKS INVESTMENTS
PRIMARILY IN COMMON STOCKS (INCLUDING DEPOSITORY RECEIPTS) OF
COMPANIES WITH A RECORD OF PAYING DIVIDENDS AND POTENTIAL FOR
INCREASING DIVIDENDS." PLEASE CLARIFY WHETHER THE FUND WILL INVEST
PRIMARILY IN COMMON STOCKS OR EQUITY SECURITIES.
RESPONSE 4. The Fund invests at least 80% of its assets in
dividend-paying equity securities. The Fund's equity
security investments consist primarily of common stocks that
pay dividends. We believe the current disclosure is
sufficient.
COMMENT 5. TO THE EXTENT THAT THE FUND INVESTS IN CONVERTIBLE SECURITIES RATED
BELOW INVESTMENT GRADE, PLEASE INCLUDE THE RELEVANT RISK
DISCLOSURE.
RESPONSE 5. The relevant risk disclosure is included in the
Prospectus section entitled "Principal Risks."
COMMENT 6. ADD LANGUAGE REGARDING THE CIRCUMSTANCES UNDER WHICH THE ADVISER
WILL MOVE TO SELL SECURITIES.
RESPONSE 6. The relevant disclosure has been added.
COMMENT 7. CONSIDER INCLUDING THE ORDER PROCESSING FEE IN THE FEE TABLE OR AS
A FOOTNOTE TO THE FEE TABLE AND IN THE EXAMPLE.
RESPONSE 7. The Order Processing Fee is not a fee imposed by
the Fund. It is a fee that Morgan Stanley DW Inc. charges
its clients. Therefore, it should not be included in the fee
table, as a footnote to the fee table or in the Example.
COMMENT 8. WITH RESPECT TO THE FUND'S TEMPORARY DEFENSIVE STRATEGY DESCRIBED
ON PAGE 6, PLEASE INDICATE THAT THIS STRATEGY MAY BE INCONSISTENT
WITH THE FUND'S PRINCIPAL INVESTMENT STRATEGIES AND DISCLOSE THE
EFFECT OF TAKING SUCH A TEMPORARY DEFENSIVE POSITION - THAT THE
FUND MAY NOT ACHIEVE ITS INVESTMENT OBJECTIVE.
<Page>
RESPONSE 8. We respectfully acknowledge the comment, but
believe the current disclosure is sufficient.
COMMENT 9. IF A DESCRIPTION OF THE FUND'S POLICIES AND PROCEDURES WITH RESPECT
TO THE DISCLOSURE OF THE FUND'S PORTFOLIO SECURITIES IS AVAILABLE
ON THE FUND'S WEBSITE, PLEASE SO STATE IN THE PROSPECTUS.
RESPONSE 9. Such a description does not appear on the Fund's
website.
COMMENT 10. HAVE FUND SHAREHOLDERS APPROVED THE AMENDED AND RESTATED INVESTMENT
ADVISORY AGREEMENT?
RESPONSE 10. The Fund's investment advisory agreement was
amended and restated to remove the administrative services
component from the Management Agreement and to reduce the
investment advisory fee. The administrative services
previously provided to the Fund by the Investment Adviser
are being provided by Morgan Stanley Services Company Inc.
("Administrator") pursuant to a separate administration
agreement entered into by the Fund with the Administrator.
Such change resulted in a reduction in the advisory fee
concurrent with the implementation of an administration fee
equal to the amount of the advisory fee reduction pursuant
to the new administration agreement. Shareholder approval
was not required.
COMMENT 11. CONSIDER ADDING ADDITIONAL DISCLOSURE REGARDING FAIR VALUATION TO
THE SECTION "PRICING FUND SHARES".
RESPONSE 11. We respectfully acknowledge the comment, but
believe the current disclosure is sufficient.
COMMENT 12. SUPPLEMENTALLY DISCUSS WHETHER WRITTEN NOTICE WITH RESPECT TO THE
FUND'S POLICY "TO REJECT, LIMIT OR PROHIBIT EXCHANGES WITHOUT PRIOR
NOTICE, AT ITS SOLE DISCRETION ..." SET FORTH IN THE "LIMITATIONS
ON EXCHANGES" SECTION OF THE PROSPECTUS HAS BEEN ADEQUATELY
PROVIDED TO INVESTORS IN ACCORDANCE WITH RULE 11a-3. CLARIFY THAT
THE FUND WOULD ONLY REJECT THE PURCHASE PORTION OF AN EXCHANGE
REQUEST.
RESPONSE 12. The Fund's ability to reject, limit or prohibit
exchanges is designed to offer the Fund flexibility to
address market timing abuses as they occur. The Release
adopting the rules requiring enhanced market timing
disclosure specifically authorizes such a policy provided it
is disclosed in the Fund's prospectus. Further, written
notice of the policy, as disclosed in the Fund's prospectus,
is consistent with the provisions of Rule 11a-3(b)(6)(ii).
Exchange requests consist of a redemption of Fund shares and
a simultaneous purchase of another fund's shares. The Fund
reserves the right to reject any exchange request for any
reason. The Fund would not reject a valid redemption
request.
<Page>
COMMENT 13. IN THE "HOW TO EXCHANGE SHARES - EXCHANGE PROCEDURES" SECTION,
PLEASE REPLACE THE WORD "ACCEPTED" WITH "RECEIVED" OR ANOTHER TERM
TO THAT EFFECT, IN ACCORDANCE WITH RULE 22c-1, WITH RESPECT TO THE
FOLLOWING SENTENCE: "AN EXCHANGE TO ANY MORGAN STANLEY FUND (EXCEPT
A MONEY MARKET FUND) IS MADE ON THE BASIS OF THE NEXT CALCULATED
NET ASSET VALUES OF THE FUNDS INVOLVED AFTER THE EXCHANGE
INSTRUCTIONS ARE ACCEPTED." [EMPHASIS ADDED]
RESPONSE 13. The disclosure has been so revised.
COMMENT 14. CONSIDER ADDING ADDITIONAL DISCLOSURE REGARDING REVENUE SHARING TO
THE SECTION "ADDITIONAL INFORMATION".
RESPONSE 14. We respectfully acknowledge the comment, but
believe the current disclosure is sufficient.
COMMENT 15. CONFIRM THAT THE ANNUAL DISTRIBUTION AND SHAREHOLDER SERVICES
(12b-1) FEES PAYABLE BY THE FUND'S CLASSES WILL NOT EXCEED THE
LIMITATIONS UNDER THE RULES OF THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS (NASD) RELATING TO "SERVICE FEES" AND
"ASSET-BASED SALES CHARGES."
RESPONSE 15. The Fund complies with the limitations under
the NASD Rules relating to "service fees" and "asset-based
sales charges."
COMMENT 16. EXPLAIN SUPPLEMENTALLY WHETHER THE FOLLOWING SENTENCE INCLUDED
UNDER "FUND - FUND MANAGEMENT" IS CONSISTENT WITH ITEM 5(a)(2) AND
ITEM 15(a) OF FORM N-1A: "THE COMPOSITION OF THE TEAM MAY CHANGE
WITHOUT NOTICE FROM TIME TO TIME."
RESPONSE 16. Item 5(a)(2) requires disclosure of the persons
"primarily responsible for the day-to-day management of the
Fund's portfolio ("Portfolio Manager")," and Item 15(a)
requires certain disclosure regarding such persons'
management of other accounts. The Fund is managed by a team
of investment professionals. The team may be comprised both
of persons "primarily responsible for the day-to-day
management of the Fund's portfolio" (any such persons are
disclosed under Item 5(a)(2) and Item 15 (a)) and persons
who are not. The referenced disclosure states that the
composition of the team may change without notice from time
to time. We note supplementally that, notwithstanding this
disclosure, to the extent that a team member with primary
responsibility for the day-to-day management of the Fund's
portfolio changes, the Fund intends to supplement its
Prospectus and its Statement of Additional Information with
the information required by Item 5(a)(2) and Item 15(a) for
such team member.
<Page>
COMMENTS TO SAI
COMMENT 17. PLEASE CONFIRM THAT THE REGISTRATION STATEMENT INCLUDES APPLICABLE
DISCLOSURE REGARDING "SEGREGATING ASSETS" IN CONNECTION WITH THE
FUND'S USE OF DERIVATIVES.
RESPONSE 17. The applicable disclosure is included in the
Fund's SAI.
COMMENT 18. IN THE SECTION ENTITLED "FUND MANAGEMENT - PORTFOLIO MANAGER
COMPENSATION STRUCTURE," INCLUDE ONLY THE DISCRETIONARY
COMPENSATION RECEIVED BY THE PORTFOLIO MANAGERS OF THE FUND DURING
THE LAST YEAR.
RESPONSE 18. We believe the current disclosure is in
compliance with SEC Release 2004-89. The Release requires
that the SAI include disclosure regarding the structure of,
and the method used to determine, the compensation of its
portfolio managers. The Release notes that the purpose of
this disclosure is to help investors better understand a
portfolio manager's incentives in managing a fund and shed
light on possible conflicts of interest that could arise
when a portfolio manager manages other accounts. Therefore,
in order to achieve this purpose, the disclosure, in our
view, should include all possible forms of compensation that
are available to the portfolio manager in connection with
managing the portfolio and other accounts.
COMMENT 19. PLEASE REVISE THE "DISCLOSURE OF PORTFOLIO HOLDINGS" SECTION TO (i)
CLARIFY WHAT TIME LAG THERE IS WITH RESPECT TO DISSEMINATION OF
PUBLIC PORTFOLIO HOLDINGS INFORMATION, (ii) CLARIFY WHICH
EXEMPTIONS AND EXCEPTIONS TO THE POLICY EXIST AND (iii) INCLUDE AN
EXHAUSTIVE LIST OF THOSE PERSONS WHO MAY RECEIVE NON-PUBLIC
PORTFOLIO HOLDINGS INFORMATION WITHOUT ENTERING INTO A
NON-DISCLOSURE AGREEMENT. PLEASE SUPPLEMENTALLY DISCUSS WHY PERSONS
WHO OWE A DUTY OF TRUST OR CONFIDENCE TO THE FUND MAY RECEIVE
NON-PUBLIC PORTFOLIO HOLDINGS INFORMATION WITHOUT ENTERING INTO A
NON-DISCLOSURE AGREEMENT. PLEASE PROVIDE A LIST OF ALL ONGOING
ARRANGEMENTS.
RESPONSE 19. With respect to clause (i), we respectfully
acknowledge the comment, but believe the current disclosure
is sufficient. With respect to clauses (ii) and (iii), the
disclosure has been so revised. Persons who owe a duty of
trust or confidence to the Fund (such as lawyers and
accountants) have non-disclosure obligations with respect to
many kinds of information concerning the Fund, including
non-public portfolio holdings information. Requiring such
persons to enter into a non-disclosure agreement would be
redundant. A current list of all ongoing arrangements has
been added to the definitive SAI.
COMMENT 20. PROVIDE FURTHER FUND SPECIFIC DISCLOSURE PURSUANT TO ITEM 12(b)(10)
OF FORM N-1A.
<Page>
RESPONSE 20. Additional disclosure has been added to the SAI
in compliance with Item 12(b)(10) of Form N-1A.
COMMENT 21. IN THE SECTION ENTITLED "MANAGEMENT OF THE FUND - MANAGEMENT
INFORMATION" IN THE PARAGRAPH THAT BEGINS "THE FUND DOES NOT HAVE A
SEPARATE NOMINATING COMMITTEE....," THE LAST SENTENCE OF SUCH
PARAGRAPH STATES "NOMINATIONS FROM SHAREHOLDERS SHOULD BE IN
WRITING AND SENT TO THE INDEPENDENT TRUSTEES AS DESCRIBED BELOW."
PLEASE REVISE THE DISCLOSURE TO MAKE CLEAR WHAT IS MEANT BY "AS
DESCRIBED BELOW."
RESPONSE 21. The disclosure has been revised to read as
follows: Nominations from shareholders should be in writing
and sent to the Independent Trustees as described below
under the caption "Shareholder Communications."
As you have requested and consistent with SEC Press Release 2004-89, the Fund
hereby acknowledges that:
- the Fund is responsible for the adequacy and accuracy of the disclosure
in the filings;
- the Staff's comments or changes to disclosure in response to Staff
comments in the filings reviewed by