EFFECTIVE JANUARY 19, 2022, THIS LETTER IS WITHDRAWN.
Please consult the following web page for more information: https://www.sec.gov/divisions/investment/im-modified-withdrawn-staff-statements.

No-Action Letter under
Investment Company Act of 1940 - Section 17(a)

The AAL Mutual Funds, et al.

December 12, 2002

Response of the Office of Investment Company Regulation
Division of Investment Management
Our Ref. No. 2002-5-ICR
The AAL Mutual Funds, et al.

Your letter of December 11, 2002 requests our assurance that we would not recommend that the Securities and Exchange Commission (the "Commission") take any enforcement action under section 12(d)(1)(A) or (B), section 17(a) or section 17(d) of the Investment Company Act of 1940 (the "Act") if certain registered open-end management investment companies or series thereof that comply with rule 2a-7 under the Act and for which Thrivent Investment Management Inc. ("Thrivent") or an entity controlling, controlled by, or under common control with Thrivent (together with Thrivent, a "Thrivent Entity") serves as investment adviser ("Covered Money Market Funds") rely on exemptive orders issued to The AAL Mutual Funds, AAL Variable Product Series Fund, and AAL CMC under sections 6(c), 12(d)(1)(J) and 17(b) of the Act and rule 17d-1 under the Act (the "Existing Orders").¹

You state that the Existing Orders permit the currently existing and future series of The AAL Mutual Funds and the AAL Variable Products Series Fund, Inc. (together, the "AAL Funds") and all future registered open-end management investment companies and series thereof for which a Thrivent Entity serves as investment adviser (the "Funds") to engage in certain transactions. Specifically, you state that the Existing Orders permit (1) Funds that are not money-market funds ("Investing Funds") to use uninvested cash to purchase shares of either The AAL Money Market Fund, a money market series of The AAL Mutual Funds, or the AAL Money Market Portfolio, a money market series of the AAL Variable Product Series Fund, Inc. (together, the "AAL Money Market Funds"), and (2) the AAL Money Market Funds to redeem their shares from the Investing Funds. You state that the Existing Orders do not permit the Investing Funds to invest their uninvested cash in the Covered Money Market Funds. You state that allowing the Investing Funds and the Covered Money Market Funds to rely on the Existing Orders would be 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. You further state that allowing the Investing Funds and the Covered Money Market Funds to engage in the proposed transactions, subject to the terms and conditions of the Existing Orders, satisfies the standards of sections 12(d)(1)(J) and 17(b) of the Act and rule 17d-1 under the Act.

Based on the facts and representations made in your letter, we would not recommend enforcement action to the Commission if, relying on the Existing Orders, (1) the Investing Funds use uninvested cash to purchase shares of the Covered Money Market Funds, and (2) the Covered Money Market Funds redeem their shares from the Investing Funds, provided that such transactions comply with the terms and conditions of the Existing Orders. This response expresses the Division's position on enforcement action only, and does not purport to express any legal conclusions concerning the issues presented. Facts or representations different from those presented in your letter might require a different conclusion.

Incoming Letter

December 11, 2002

Dear Mr. Sullivan:

On behalf of The AAL Mutual Funds, the AAL Variable Products Series Fund, Inc. (together, the "AAL Funds") and Thrivent Investment Management Inc. (f/k/a AAL Capital Management Corporation) ("Thrivent"), we respectfully request that the staff of the Division of Investment Management (the "Staff") of the U.S. Securities and Exchange Commission (the "Commission") advise us that it will not recommend to the Commission that it take any enforcement action under the Investment Company Act of 1940 (the "1940 Act") in the circumstances described below.

I. Background

On December 4, 2001, the existing and future series of the AAL Funds and all future registered open-end management investment companies and any series thereof for which Thrivent or a person controlling, controlled by or under common control with Thrivent (together with Thrivent, a "Thrivent Entity") serves as investment adviser (the "Funds" and together with a Thrivent Entity, the "Original Parties") received exemptive orders (the "Existing Orders")² from the Commission. The Existing Orders were issued under Section 12(d)(1)(J) of the 1940 Act, exempting the Original Parties from Sections 12(d)(1)(A) and (B) of the 1940 Act, under Sections 6(c) and 17(b) of the 1940 Act, exempting the Original Parties from Section 17(a)(1) and (2) of the 1940 Act, and under Section 17(d) of the 1940 Act and Rule 17d-1 thereunder. The Existing Orders permit (i) a Fund that is not a money-market fund (an "Investing Fund") to use its uninvested cash reserves held from time to time that are not invested in portfolio securities to purchase shares of either The AAL Money Market Fund, a money market series of The AAL Mutual Funds, or the AAL Money Market Portfolio, a money market series of the AAL Variable Product Series Fund, Inc. (together, the "AAL Money Market Funds"), and (ii) the AAL Money Market Funds to redeem their shares from the Investing Funds.

On January 1, 2002, Lutheran Brotherhood merged with and into Aid Association for Lutherans (the "Merger"). Prior to the Merger, both organizations sponsored mutual fund families. On May 21, 2002, the surviving entity changed its name to Thrivent Financial for Lutherans. As a result of the Merger, a Thrivent Entity not only advises the AAL Funds but also the registered investment companies of The Lutheran Brotherhood Family of Funds and the LB Series Fund, Inc. (together, the "LB Funds"). Each of the LB Funds is a registered open-end management investment company, and each presently has established one money market portfolio that complies with Rule 2a-7 under the 1940 Act (each, an "LB Money Market Fund") and several other non-money market portfolios. By their terms, the Existing Orders permit the non-money market portfolios of the LB Funds to invest their uninvested cash in the AAL Money Market Funds. The Existing Orders, however, do not permit (i) the Investing Funds to invest their uninvested cash in the LB Money Market Funds or another registered open-end management investment company or series thereof that complies with Rule 2a-7 under the 1940 Act and that is advised by a Thrivent Entity (together with the LB Money Market Funds, the "Covered Money Market Funds"), or (ii) the Covered Money Market Funds to redeem their shares from the Investing Funds.

II. Request for No-Action Position

We respectfully request that the Staff confirm that it will not recommend enforcement action if the Original Parties and the Covered Money Market Funds rely on the Existing Orders, subject to the terms and conditions thereof, in order to permit (i) the Investing Funds to use their uninvested cash to purchase shares of the Covered Money Market Funds, and (ii) the Covered Money Market Funds to redeem their shares from the Investing Funds.

III. Rationale for Request

The reasons for, and the factors supporting, this request are the same as those set forth in the Applications in support of the Original Parties' request for the Existing Orders, which reasons and factors apply equally in the context of the Covered Money Market Funds. Because the Investing Funds and the Covered Money Market Funds will engage in the transactions contemplated by the Existing Orders only in compliance with all terms, representations and conditions set forth in the Applications and the Existing Orders, the standards set forth in Sections 6(c), 12(d)(1)(J) and 17(b) of the 1940 Act and Rule 17d-1 under the 1940 Act would be met.

In compliance with the procedures set forth in Release Nos. 6269 (December 5, 1980) and 5127 (January 25, 1971) under the Securities Act of 1933, seven copies of this letter are submitted herewith, and the specific subsections of the particular statutes to which this letter relates are indicated in the upper right hand corner of the first page of this letter and each copy. If, for any reason, the Staff does not concur with our conclusions, we respectfully request a conference with the Staff before any adverse written response to this letter is issued.

Should you or any member of the Staff have any questions concerning the foregoing request or require any additional information or clarification, please contact the undersigned at (920) 628-3643 or, in my absence or unavailability, Fredrick G. Lautz of Quarles & Brady LLP, at (414) 277-5309. We greatly appreciate the assistance received from your office in this matter.

Very Truly Yours,

Brett L. Agnew
Attorney
Securities Law

Endnotes

¹ The AAL Mutual Funds, et al., Investment Company Act Release Nos. 25254 (Nov. 6, 2001) (notice) and 25309 (Dec. 4, 2001) (order) and AAL Variable Product Series Fund, Inc., Investment Company Act Release Nos. 25253 (Nov. 6, 2001) (notice) and 25307 (Dec. 4, 2001) (order).

² See Investment Company Act Release Nos. 25253 (Nov. 6, 2001) (notice), 25307 (Dec. 4, 2001) (order) and Investment Company Act Release Nos. 25254 (Nov. 6, 2001), 25309 (Dec. 4, 2001) (order).

http://www.sec.gov/divisions/investment/noaction/aalmutualfunds121202.htm