BOSTON, Sept. 26 /PRNewswire-FirstCall/ -- The John Hancock Funds Board said today that the U. S. Securities and Exchange Commission (SEC) has cleared its application for 19(b) exemptive relief which would allow the Board to implement a managed distribution plan for John Hancock's closed-end funds. The Board is scheduled to vote on the details of the plan in December, after which it would begin to implement the plan for the funds for which it would be beneficial.
Under the plan, each fund will be permitted to make periodic distributions of long-term capital gains with respect to the outstanding common stock as frequently as 12 times a year. Generally, under Section 19(b) of the Investment Company Act of 1940 registered investment companies are permitted to make long-term capital gains distributions once a year.
On December 1, 2006, the SEC announced that it would begin accepting applications for exemptive relief, after a nearly four-year moratorium on such orders. On December 5, 2006, the John Hancock Funds Board approved the filing of an exemptive application with the SEC seeking authority for a managed distribution plan, and an application was made to the SEC on January 18, 2007. This application was believed to be one of the first filed after the lifting of the moratorium.
"John Hancock Funds took the proactive step of applying for exemptive relief as part of its careful review of options available to help enhance shareholder value," said Andrew Arnott, Senior Vice President of John Hancock Funds. "The managed distribution plan is one of many steps that have been taken by the Board and John Hancock Advisers to help address the funds' current discounts."
The 19(b) exemptive relief applies to the following John Hancock closed-end funds: Income Securities Trust (JHS), Investors Trust (JHI), Patriot Premium Dividend II (PDT), Preferred Income (HPI), Preferred Income II (HPF), Preferred Income III (HPS), Tax-Advantaged Dividend Income (HTD), John Hancock Tax-Advantaged Global Shareholder Yield (HTY).
John Hancock Bank & Thrift Opportunity Fund (BTO) has had a 10% managed distribution plan in place since January 2004. The plan offers investors an attractive level of distributions by making quarterly payments of at least 2.5% of the fund's net asset value as of the preceding calendar year-end, or at least 10% annually. To maximize tax efficiency of distributions paid by the fund, it is anticipated that the majority of each distribution will come from net long-term capital gains which for individual investors may qualify for U.S. federal income taxation at a maximum rate of 15%. A portion of the distribution may also come from ordinary income, net short-term gains, and if necessary, a return of capital.
About John Hancock Funds
The Boston-based mutual fund business unit of John Hancock Financial Services, John Hancock Funds manages more than $54.8 billion in open-end funds, closed-end funds, private accounts, retirement plans and related party assets for individual and institutional investors at June 30, 2008. John Hancock Funds are distributed by John Hancock Funds, LLC, member FINRA. For more information, please visit http://www.jhfunds.com/.
John Hancock Financial Services is a unit of Manulife Financial Corporation, a leading Canadian-based financial services group serving millions of customers in 19 countries and territories worldwide. Operating as Manulife Financial in Canada and Asia, and primarily through John Hancock in the United States, the company offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Funds under management by Manulife Financial and its subsidiaries were Cdn$400 billion (US$393 billion) at June 30, 2008. Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '0945' on the SEHK. Manulife Financial may be found on the Internet at http://www.manulife.com/.
