Seward & Kissel LLP
1200 G Street, N.W.
Washington, D.C. 20005
Telephone: (202) 737-8833
Facsimile: (202) 737-5184
www.sewkis.com
April 25, 2011
VIA EDGAR
Ms. Linda Stirling
Division of Investment Management
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: AllianceBernstein Corporate Shares - AllianceBernstein
Tax-Aware Real Return Income Shares
Post-Effective Amendment No. 9
File Nos. 333-112207 and 811-21497
Dear Ms. Stirling:
This letter responds to comments of the staff (the "Staff") of the
Securities and Exchange Commission (the "SEC") to the post-effective amendments
to the registration statement filed on Form N-1A of AllianceBernstein Corporate
Shares on behalf of its series, AllianceBernstein Tax-Aware Real Return Income
Shares (the "Fund"), as provided orally to Young Seo of this office on March 24,
2011. The Staff's comments and our responses are discussed below.
Prospectus
----------
Comment 1 Fees and Expenses of the Fund: Please confirm that the Fund pays no
acquired fund fees and expenses.
Response: The Fund has not commenced operations.
Comment 2 Principal Strategies: The first sentence of the second paragraph
states that "[t]he Fund pursues its objective by investing
principally in municipal securities that pay interest exempt from
federal taxation." A disclosure similar to the one in the Statement
of Additional Information should be included in the Principal
Strategies section of the Prospectus also. The first sentence in the
"Alternative Minimum Tax" section under "Information About the Fund
and Its Investments" of the SAI states that "[a]s a matter of
fundamental policy, the Fund invests, under normal circumstances, at
least 80% of its net assets in municipal securities that pay
interest that is exempt from federal income tax."
Response: The disclosure in the SAI has been deleted. The Fund does not have a
policy to invest 80% of its assets in municipal securities.
Comment 3 Principal Strategies: The first sentence of the fifth paragraph
states that the Fund may make significant use of derivatives. As
reflected in the Staff letter to ICI regarding derivatives (the "ICI
Letter"), disclosure of the Fund's use of derivatives should include
the extent of the Fund's use of derivatives. Furthermore, as
explained in the ICI Letter, the disclosure should provide an
explanation of the purpose of the use of derivatives. The second
sentence of the fifth paragraph states that "[t]o provide inflation
protection, the Fund will enter into various kinds of inflation swap
agreements." If there are any other purposes for which derivatives
are used, other than the one currently disclosed, those purposes
should also be disclosed.
Response: We believe the disclosure appropriately describes the Fund's use of
derivatives and have not revised the disclosure in response to this
comment.
Comment 4 Principal Strategies: In the sixth paragraph, the last bullet point
("derivatives, such as options, futures, forwards and swaps") may be
deleted since the Fund's use of derivatives has already been
discussed in the preceding paragraph.
Response: We have revised the disclosure in response to this comment.
Comment 5 Principal Strategies: The first sentence of the last paragraph
states that "[t]he Fund may make short sales of securities or
maintain a short position". Any short sale expenses should be
disclosed in the fee table under the heading "Other Expenses".
Response: The Fund has not commenced operations and does not have short sale
expenses to disclose in the Fee Table.
Comment 6 Principal Risks - Credit Risk: The last sentence states that
"[i]nvestments in fixed-income securities with lower ratings tend to
have a higher probability that an issuer will default or fail to
meet its payment obligations." Please include a disclosure that
these fixed-income securities are commonly known as "junk bonds" and
that they are considered "speculative".
Response: We have revised the disclosure in response to this comment to note
that the fixed-income securities are commonly known as "junk bonds"
but we have not described them as speculative. We believe that
disclosing the risks of these fixed-income securities is appropriate
and that the use of the term "speculative" does not impart any
additional information necessary for investor understanding of these
securities' risks.
Comment 7 Principal Risks - Derivatives Risk: Disclosure regarding derivatives
risk should be tailored to the specific purpose for which the Fund
intends to use derivatives for.
Response: We have revised the disclosure in response to this comment.
Comment 8 Purchase and Sale of Fund Shares: The second sentence of the first
paragraph states that "[s]hares of the Fund are offered exclusively
through registered investment advisers approved by the Adviser." The
second paragraph, however, states that "[y]ou may sell (redeem) your
shares through your broker-dealer". Please confirm whether the
disclosure regarding redemption should also state "registered
investment advisers" in lieu of "broker-dealer".
Response: We have revised the disclosure in response to this comment.
Comment 9 Additional Information About the Fund's Risks and Investments -
Derivatives: Disclosure regarding derivatives should be tailored to
the Fund's anticipated use of derivatives.
Response: We believe that the disclosure appropriately describes derivatives
in which the Fund may invest and have not revised the disclosure in
response to this comment.
Comment 10 Additional Information About the Fund's Risks and Investments -
Investments In Below Investment Grade Fixed-Income Securities:
Please include a disclosure that these fixed-income securities are
considered "speculative".
Response: We do not believe that the addition of the word "speculative" is
necessary for investor understanding of the risks of investments in
below-investment grade securities as disclosed in the Prospectus and
have not revised the disclosure in response to this comment.
Comment 11 Management of the Fund - Investment Adviser: A statement that the
Adviser is responsible for all expenses should be included, as
required to be included in the SAI.
Response: Item 10(a)(iii) requires disclosure about the aggregate fee payable
to the investment adviser. It does not require disclosure about who
pays fund expenses or the allocation of those expenses. In addition,
disclosure about the Adviser's responsibility for the Fund's
expenses is included in the introduction to the Fee Table in the
Summary Information at the beginning of the Prospectus. We have not
revised the disclosure in response to this comment.
Comment 12 Management of the Fund - Portfolio Managers: As required under Item
10(a)(2) of Form N-1A, a disclosure regarding the following should
be included in the description of the portfolio managers: a brief
description of the person's role on the team (e.g., lead member),
including a description of any limitations on the person's role and
the relationship between the person's role and the roles of other
persons who have responsibility for the day-to-day management of the
Fund's portfolio.
Response: The disclosure lists the members of the portfolio management team
with the most significant responsibility for day-to-day management
of the Fund's portfolio and describes those individuals as being
jointly and primarily responsible for the Fund's portfolio. There is
no difference in their roles so that additional disclosure about
limitations or relationships is not relevant. We have not revised
the disclosure in response to this comment.
Comment 13 Appendix B - Hypothetical Investment and Expense Information: The
third paragraph states that "[t]he chart does not reflect the fees,
including the "wrap fee," paid by you to your sponsoring investment
adviser" and "[t]he chart also does not reflect the sub-advisory fee
paid by your sponsoring investment adviser to AllianceBernstein
L.P." This disclosure does not make it clear who the "sponsoring
investment adviser" is. Also, it is not clear which expenses are
included in the calculation of hypothetical expenses if the
hypothetical expenses do not include management fee.
Response: The Hypothetical Investment and Expense Information is included as
an Appendix to the Prospectus because it is required as a condition
of a settlement agreement between the Adviser and the Office of the
New York Attorney General dated September 1, 2004. It is not
required by Form N-1A and we are surprised that the Staff is now
commenting on it, particularly since this same disclosure has
appeared in prospectuses, which have been reviewed by the Staff, for
AllianceBernstein funds offered in wrap fee programs for several
years. In any case, we believe the first paragraph of introduction
to the investment and expense information describes who the
sponsoring investment adviser is. We believe that it is also clear
that the information includes a hypothetical annual expense ratio
notwithstanding that the Adviser has agreed irrevocably to waive all
fees and pay or reimburse all expenses, except extraordinary
expenses. We have not revised the disclosure in response to this
comment.
Comment 14 Appendix B - Hypothetical Investment and Expense Information: The
last sentence of the second paragraph states that "[t]he annual
expense ratio is hypothetical because AllianceBernstein L.P. has
agreed irrevocably to waive all fees and pay or reimburse all
expenses, except extraordinary expenses, incurred by the Fund." The
use of the word, "irrevocably", appears to imply that the waiver
will be in place for perpetuity, when one would think that the
Adviser is agreeing to pay expenses only through the term of the
current investment advisory contract. Please clarify what is meant
by "irrevocably".
Response: We reiterate our response to Comment 13 regarding the Staff's
comments on Appendix B. "Irrevocably" in this context means that the
Adviser has contractually agreed to waive all fees and reimburse
expenses as long as the Investment Advisory Agreement is in effect.
Comment 15 Back Cover: The back cover page states that "[t]he Fund's SAI,
the independent registered public accounting firm's report and
financial statements in the Fund's most recent annual report to
shareholders are incorporated by reference into (and are legally
part of) this Prospectus." Under Rule 411(a) and General Instruction
D.1.(b) of Form N-1A, the only information permitted to be
incorporated into the Prospectus by reference are financial
highlights information and the SAI.
Response: We have revised the disclosure in response to this comment.
SAI
---
Comment 16 Information About the Fund and Its Investments: The first sentence
under "Alternative Minimum Tax" section states that "[a]s a matter
of fundamental policy, the Fund invests, under normal circumstances,
at least 80% of its net assets in municipal securities that pay
interest that is exempt from federal income tax." Since this is a
fundamental policy, a disclosure that it may not be changed without
a shareholder vote should be included. Please include this
disclosure or, alternatively, move this section to the "Fundamental
Investment Policies" section.
Response: As noted above in response to Comment 2, this disclosure has been
deleted.
Comment 17 Management of the Fund - The Adviser: The seventh paragraph states
that the Adviser is responsible for certain expenses incurred by the
Fund and the eight paragraph states that the Fund has assumed the
obligation for payment of certain of its other expenses. Please
provide disclosure regarding any exclusions to which expenses the
Adviser is going to pay. For example, since the Fund may short
securities, a disclosure should be provided regarding whether the
Adviser is responsible for the short-sale expenses. If the Adviser
is not responsible for those expenses, they should be included in
the fee table.
Response: We believe that the disclosure clearly describes expense that are
paid by the Adviser and the expenses paid by the Fund. We have not
revised the disclosure in response to this comment.
Part C
------
Comment 18 Exhibits: Please file the amended Advisory Agreement.
Response: We will file the amended Advisory Agreement with the 485(b) filing.
* * *
We hereby acknowledge that (i) the Fund is responsible for the adequacy
and accuracy of the disclosures in the filing; (ii) Staff comments or changes to
disclosure in response to Staff comments in the filing reviewed by the Staff do
not foreclose the SEC from taking any action with respect to the filing; and
(iii) the Fund may not assert Staff comments as a defense in any proceedings
initiated by the SEC or any person under the federal securities laws of the
United States.
If you have any additional comments or questions, please contact Kathleen
Clarke or the undersigned at (202) 737-8833.
Sincerely,
/s/ Young Seo
-------------
Young Seo
cc: Emilie D. Wrapp, Esq.
Stephen J. Laffey, Esq.
Kathleen K. Clarke, Esq.
SK 00250 0454 1182971v2