Paul Cellupica
Deputy Director and Chief Counsel, Division of Investment Management
Securities and Exchange Commission
100 F Street NE
Washington, DC 20549

Re: Clarification of no-action relief under Rule 17a-7

Dear Paul,

As discussed, here is an outline relating to our request for clarification of no-action relief under Rule 17a-7. We welcome the opportunity to discuss this with you further.

Part I. Requested relief

1. In no-action letters, the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) has agreed that it would not recommend enforcement action to the Commission under Section 17(a) of the Investment Company Act of 1940, as amended (the “ICA”), if registered investment companies engage in cross trades (as defined below) under Rule 17a-7 under the ICA of municipal securities for which market quotations were not readily available using a price provided by an independent pricing service as the “current market price” of the securities, subject to certain conditions.

The no-action letters were issued to United Municipal Bond Fund (pub. avail. July 30, 1992) (the “1992 Letter”) and (pub. avail. Jan. 27, 1995) (the “1995 Letter”) and Federated Municipal Funds (pub. avail. Nov. 20, 2006) (the “2006 Letter” and, together with the 1992 Letter and the 1995 Letter, the “Letters”). We request that the Staff confirm that this no-action relief also allows funds to engage in cross trades of other securities, in addition to municipal securities, using a price provided by an independent pricing service. We believe that this clarification is appropriate for the reasons and subject to the conditions set forth below.

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