SEC Company Response from MUNDER SERIES TRUST (CIK 0001214511) — Jan 21, 2005
MUNDER SERIES TRUST (CIK 0001214511)
Date: Jan. 21, 2005 · CIK: 0001214511 · Accession: 0000950124-05-000314
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File numbers found in text: 333-102943
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DECHERT LLP
1775 I STREET, NW
WASHINGTON, DC 20006
VIA EDGAR CORRESPONDENCE
January 21, 2005
Christian Sandoe
Division of Investment Management
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Munder Series Trust, on behalf of the Munder Small Company
Growth Fund, Proxy Statement/Prospectus on Form N-14
SEC File No. 333-102943
Dear Mr. Sandoe:
We are writing on behalf of the Munder Series Trust ("Registrant") in
response to additional comments you provided telephonically to Erin Wagner of
this office on Wednesday, January 19, 2004, with respect to a proxy
statement/prospectus filed on Form N-14 for the Registrant ("Proxy Statement").
The Proxy Statement relates to the proposed reorganization of the Munder Small
Company Growth Fund ("Small Company Fund") with and into the Munder Micro-Cap
Equity Fund ("Micro-Cap Fund"), each a series of the Registrant.
Your comments related to the proposed disclosure concerning the Munder
Funds' policies and procedures concerning frequent purchases and redemptions of
Fund shares. More specifically, you requested that we (1) provide a statement
concerning the risks of frequent purchases and redemptions of Fund shares
specific to the Micro-Cap Fund, (2) state to what extent any of the proposed
measures that the Funds may apply in response to any excessive short-term
trading are discretionary or subjective on the part of the Funds, and (3) state
whether the Funds' policies and procedures are applied uniformly, especially
with respect to trading in Fund shares through financial intermediaries and
omnibus accounts.
Below is revised disclosure to replace in its entirety the disclosure under the
heading in the N-14, "Frequent Purchases and Redemptions of Fund Shares," as
marked to show changes that have been made to incorporate each of your comments.
The Munder Funds are not intended to serve as vehicles for short-term
trading. By realizing profits through short-term trading, investors
that engage in rapid purchases and sales or exchanges of a Fund's
shares may dilute the value of shares held by long-term investors.
Volatility resulting from excessive purchases and sales or exchanges of
a Fund's shares, especially involving large dollar amounts, may disrupt
efficient portfolio management. In particular, a Fund may have
difficulty implementing its long-term investment strategies if it is
forced to maintain a higher level of its assets in cash to
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accommodate significant short-term trading activity resulting from
market timing. Excessive purchases and sales or exchanges of a Fund's
shares may force the Fund to sell portfolio securities at inopportune
times to raise cash to accommodate short-term trading activity, which
could cause the Fund to incur increased brokerage costs and to realize
taxable capital gains without attaining any investment advantage.
Similarly, the Fund may bear increased administrative costs due to
asset level volatility and investment volatility that is associated
with patterns of excessive short-term trading activity. Any
increased costs are borne by all Fund shareholders, including long-term
investors who do not cause such costs to be incurred. All of these
factors may adversely affect Fund performance. Given the Micro-Cap
Fund's investments in smaller capitalization, less liquid securities,
the Fund may be more susceptible to market timing, and the risks
associated with such activity, than funds investing in larger
capitalization companies.
The Board of Trustees of the Munder Funds has adopted policies and
procedures to monitor for, and to discourage and take reasonable steps
to prevent or minimize, investors from engaging in frequent purchases
and redemptions of shares of the Munder Funds, to the extent deemed
reasonable and practicable. The Funds' policies and procedures for
identifying excessive short-term trading and market timing activities
take into account a number of factors, including but not limited to,
the dollar amount and frequency of Fund trades. Pursuant to these
policies and procedures, each Fund reserves the right to refuse any
purchase or exchange request that they believe could adversely affect
the Fund or its operations, including purchase or exchange requests
from any individual, group or account who, in the Fund's view, is
likely to engage in excessive trading, or any order that may be viewed
as market-timing activity. If a Fund refuses a purchase or exchange
request from a shareholder and that shareholder deems it necessary to
redeem his or her account in the Fund, any CDSC that is applicable to
such redemption transaction, as described in the Fund's prospectus,
will be assessed against those redemption proceeds.
The Funds will suspend or terminate any or all exchange privileges or
terminate or suspend telephone and/or internet redemption privileges on
accounts identified as engaging in excessive short-term trading or
market timing activity in order to limit these types of trading
practices. In addition, if you exchange or redeem shares of certain
Funds within a 60 day period, you will be subject to a short-term
redemption fee. Limited exceptions apply. Please see the section
"POLICIES FOR REDEEMING SHARES ---- Short-Term Trading Fee" for more
information regarding this fee. The Funds (other than a money market
fund) also reserve the right in the future to limit the number of
"round trip" exchanges an investor may make into and out of any Fund in
order to discourage excessive short-term trading activities.
Although the Funds use a variety of methods to detect and deter
excessive trading or market timing, the Funds cannot always know or
reasonably detect such trading, particularly if it is facilitated by
authorized financial intermediaries or done through
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omnibus account arrangements. The Funds' ability to monitor and
discourage market timing and excessive trading generally requires the
cooperation of financial intermediaries, to effectively implement
policies and procedures with respect to accounts for which the Funds do
not have sufficient identifying information. This cooperation cannot
necessarily be assured. To the extent the Funds are able to identify
market timing or excessive trading in these accounts, the Funds will
use their reasonable and best efforts to uniformly apply their policies
and procedures. (However, there is no guarantee that this goal will be
achieved.) Finally, it is important to recognize that "market timing"
and "excessive trading" are not clearly defined terms under applicable
law. Consequently, trading activities that may not be considered by the
management of the Munder Funds to be excessive or market timing could
be interpreted differently by others and vice versa.
* * * * *
You requested that the Registrant make certain representations concerning
the Proxy Statement and the response being made to the comments received.
These representations are included as an exhibit to this letter.
We hope that the foregoing is responsive to the matters discussed with Erin
Wagner on January 19, 2005. Please do not hesitate to contact the undersigned at
(202) 261-3302 or Erin Wagner at (202) 261-3317 if you have any questions
concerning the foregoing.
Sincerely,
/s/ Jane A. Kanter
Jane A. Kanter
cc: Stephen J. Shenkenberg, Esq.
Thomas Lemke, Esq.
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[MUNDER FUNDS LETTERHEAD]
VIA EDGAR CORRESPONDENCE
January 21, 2005
Christian Sandoe
Division of Investment Management
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Munder Series Trust, on behalf of the Munder Small Company Growth
Fund, Proxy Statement/Prospectus on Form N-14 SEC File No. 333-102943
Dear Mr. Sandoe:
In connection with a response being made on behalf of the Munder Series Trust
("Registrant") to comments you provided with respect to a proxy
statement/prospectus filed on Form N-14 for the Registrant on December 12, 2004
("Proxy Statement"), the Registrant hereby acknowledges that:
o the Registrant is responsible for the adequacy and the accuracy of the
disclosure in the Proxy Statement;
o comments of the staff of the Securities and Exchange Commission ("SEC
Staff") or changes to disclosure in response to SEC Staff comments in
Proxy Statement reviewed by the staff do not foreclose the Securities
and Exchange Commission from taking any action with respect to the
Proxy Statement; and
o the Registrant may not assert SEC Staff comments as a defense in any
proceeding initiated by the Securities and Exchange Commission or any
person under the federal securities laws.
We hope that the foregoing is responsive to your request made on January 19,
2005. Please do not hesitate to contact the undersigned at (248) 647-9201 if you
have any questions concerning the foregoing.
Sincerely,
/s/ Stephen J. Shenkenberg
Stephen J. Shenkenberg
cc: Jane A. Kanter, Esq.
Thomas Lemke, Esq.
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