Seward & Kissel LLP
901 K Street, N.W.
Suite 800
Washington, D.C. 20001
Telephone: (202) 737-8833
Facsimile: (202) 737-5184
www.sewkis.com
May 9, 2016
VIA EDGAR
Mr. Sonny Oh
Division of Investment Management
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: AB Exchange Reserves
Post-Effective Amendment No. 39
File Nos. 33-74230 and 811-08294
and
AB Fixed-Income Shares, Inc.
--AB Government STIF Portfolio
Post-Effective Amendment No. 42
File Nos. 33-34001 and 811-06068
Dear Mr. Oh:
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 statements filed on Form N-1A of AB Government STIF
Portfolio ("Government STIF"), a series of AB Fixed-Income Shares, Inc., and AB
Exchange Reserves ("Exchange Reserves", and together with Government STIF, the
"Funds"), as provided orally to Anna C. Weigand of this office on April 22,
2016. The Staff's comments and our responses are discussed below. As provided by
the Staff, the comments below are based on the Exchange Reserves registration
statement, unless otherwise noted, and apply also to the Government STIF
registration statement unless the comments indicate otherwise.
General
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Comment 1: Please ensure that the facing sheet of the Fund's next
post-effective amendment includes: (1) the approximate date of the
proposed public offering and (2) the title of the securities being
registered and appropriate related disclosure.
Response: The facing sheet of the Fund's next post-effective amendment will
include the approximate date of the proposed public offering and the
title of the securities being registered and appropriate related
disclosure.
Comment 2: Please update the series and class identifiers on EDGAR to
appropriately reflect the Fund's name change. In the case of
Government STIF, please also add class identifiers for the new
classes.
Response: The series and class identifiers, and class identifiers for new
classes as applicable, will be updated and added on EDGAR.
Comment 3: With respect to Government STIF, please provide the exchange ticker
symbols for each new class of the Fund on the cover of the
Prospectus and Statement of Additional Information ("SAI"). Please
also include all missing information in the Prospectus prior to the
effective date of the filing.
Response: The Prospectus and SAI will be revised to include ticker symbols for
the classes that will be offered initially and applicable missing
information. We note that Class A, Class C, Advisor Class, Class R,
Class K, Class I, Class Z and Class 1 will be included in the Fund's
next post-effective amendment to its registration statement, but
will not be offered initially and will not have ticker symbols as a
result. A version of the Prospectus containing Class AB and
Institutional Class, which will be offered initially, will be filed
under Rule 497.
Comment 4: We note that the facing page for Exchange Reserves indicates a
request that the filing go automatically effective 60 days after
filing. However, the bracketed date of the Prospectus reflects a
delayed effective date in July 2016. Please note that the filing
will be considered deficient if current financial information is not
added to the Prospectus before the July date. For example, the
Prospectus should incorporate financial highlights for the year
ended April 30, 2016, the SAI should incorporate by reference the
April 30, 2016 financial statements, and applicable SAI disclosures
should reflect information as of the most recent fiscal period.
Response: The Prospectus will be revised in response to this comment.
Prospectus
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Summary Information
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Comment 5a: Fees and Expenses of the Fund: Please define the term "AB Mutual
Funds" as used in the narrative introduction paragraph.
Alternatively, this term can be defined in the cross-referenced
section on page 11 of the Prospectus.
Response: The Prospectus will be revised in response to this comment.
Comment 5b: Fees and Expenses of the Fund: We note that page 11 of the
Prospectus states: "Your investment will, however, be subject to a
sales charge upon exchange of your Class A shares for the Class A
shares of other AB Mutual Funds with sales charges." We note that
there is no line item for such sales charge in the fee table. Please
add a footnote stating the sales charge that may be imposed upon
exchange into the Class A shares of other AB Mutual Funds.
Response: The Prospectus will be revised to disclose in a footnote that a
sales charge of up to 4.25% may be imposed upon an exchange of Class
A shares for the Class A shares of other AB Mutual Funds with sales
charges.
Comment 6: Principal Strategies: In the first sentence of the third paragraph
in the section "Principal Strategies" please insert the phrase "plus
borrowings for investment purposes" in between the words "assets"
and "in U.S. Government securities". This change should also apply
to the first sentence of the third paragraph under the section
"Investment Objective, Policies and Restrictions" in the SAI and the
second paragraph under the section "Investment Objective, Policies
and Restrictions--Fund Policies" in the SAI. The requested change is
consistent with the Names Rule.
Response: We do not believe that the technical definition of "assets" used in
Rule 35d-1, which includes "borrowings for investment purposes"
needs, or is required, to be disclosed in the 80% policy and will
not revise the Prospectus in response to this comment.
Comment 7a: Bar Chart: With respect to Exchange Reserves, we note that the
introductory sentence to the bar chart states that the annual
returns in the bar chart for Class A shares do not reflect sales
loads. Please add disclosure stating that if sales loads were
reflected, returns shown would be lower.
Response: The introductory sentence will be revised to remove the reference to
sales loads, as sales loads are not imposed on purchases of Class A
shares of the Fund.
Comment 7b: Bar Chart and Performance Information: Please provide the entire
introductory narrative required by Item 4(b)(2)(i) of Form N-1A
relating to comparison to a broad measure of market performance.
Response: The Staff has stated that a money market fund need not compare its
performance to a broad-based securities market index (see Letter to
Craig S. Tyle, Esq., General Counsel, Investment Company Institute,
from Barry D. Miller, Associate Director, Division of Investment
Management, Securities and Exchange Commission (October 2, 1998)).
The Prospectus will not be revised in response to this comment.
Comment 7c: Bar Chart and Performance Information: Please include in the
performance table the returns of an appropriate broad-based
securities market index as provided in Item 4(b)(2)(iii).
Response: Please see response to Comment 7b.
Comment 7d: Bar Chart and Performance Information: Please remove the reference
to "after taxes" in the second paragraph in the section "Bar Chart
and Performance Information".
Response: The Prospectus will be revised in response to this comment.
Investing in the Portfolio
--------------------------
Comment 8: With respect to Government STIF, in the section "How to Buy
Shares--Other Purchase Information" the prospectus states,
"[p]urchase of the Portfolio's shares will be made only in full
shares." Please disclose what happens to any amounts received in
purchases, exchanges or reinvestments of dividends that are in
excess of the full share amount. If the Fund keeps these excess
amounts, please explain the legal basis for doing so.
Response: The Prospectus will be revised to remove the disclosure quoted in
Comment 8. Purchases of the Portfolio's shares may be made in full
or fractional shares.
Comment 9: The section "How to Sell or Redeem Shares--By Telephone" states that
"[r]edemption requests by electronic funds transfer or check may not
exceed $100,000 per Fund account per day." Please briefly disclose
how a shareholder could redeem more than $100,000 in this situation
when restricted to a $100,000 redemption by telephone.
Response: A shareholder may redeem more than $100,000 per Fund account per day
if the shareholder provides a signed letter of instruction or a
redemption authorization form, accompanied by a signature guarantee
from a bank, a member firm of a national stock exchange or another
eligible guarantor institution. This process is described under
"Investing in the Fund--How to Sell or Redeem Shares--Selling Shares
Directly to the Fund by Mail". The Prospectus will not be revised in
response to this comment.
Comment 10: Please clearly disclose whether the adopted policies and procedures
on frequent purchases and redemptions of Fund shares apply to the
Fund or if they do not apply to money market funds. If they do not
apply to the Fund, please make this clear in the disclosure.
Response: The policies on frequent purchases and redemptions of fund shares
apply to money market funds, such as the Fund. Consequently, a short
form description of the policies has been included in the Prospectus
and a more detailed description has been included in the SAI. The
Prospectus will not be revised in response to this comment.
SAI
---
Comment 11: Fundamental and Non-Fundamental Investment Policies: Please provide
additional disclosure relating to the Investment Company Act of 1940
and applicable laws that describes the limitations on the Fund's
investments in greater detail.
Response: The Fund believes the disclosure appropriately reflects the Fund's
fundamental and non-fundamental investment policies as approved by
the Fund's Board of Directors/Trustees and the SAI will not be
revised in response to this comment.
Comment 12: Please reconcile the detailed disclosure on "Frequent Purchases and
Sales of Fund Shares" in the SAI with the short disclosure on this
topic in the Prospectus.
Response: Please see response to Comment 10. The SAI will not be revised in
response to this Comment.
Comment 13: Please confirm that the taxation section is accurate and current.
Response: The taxation section is accurate and current as of the date hereof.
Comment 14: Please revise the Proxy Voting Policy Statement attached as Appendix
A to provide more details on the actual policies used by the Adviser
in accordance with the requirements of Item 17(f) of Form N-1A.
Response: Item 17(f) of Form N-1A requires that a fund "describe the policies
and procedures that the fund uses to determine how to vote proxies
relating to portfolio securities . . . " The item permits (but does
not require) a fund to satisfy this requirement by including a copy
of the policies. We note that this requirement applies also to
shareholder reports. We believe the description provided in the SAI
meets the requirements of Item 17(f) of Form N-1A.
Other
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Comment 15: Please provide Tandy representations and a response letter in the
form of Edgar correspondence prior to the effective date of the
filing.
Response: The Tandy representations are provided herein.
* * *
We have been authorized on behalf of each Fund to acknowledge that (i)
the Fund is responsible for the adequacy and accuracy of the disclosures in its
filing; (ii) Staff comments or changes to disclosure in response to Staff
comments in each 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 Paul M.
Miller or the undersigned at (202) 737-8833.
Sincerely,
/s/ Anna C. Weigand
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Anna C. Weigand
cc: Emilie D. Wrapp, Esq.
Nancy Hay, Esq.
Paul M. Miller, Esq.