7.10.2008 T. Rowe Price Associates, Inc. ("TRPA") or an entity controlling, controlled by, or under common control with, TRPA ("TRP Entity") serves as investment adviser to a number of investment companies within the T. Rowe Price Group of Funds ("Price Funds") and sub-adviser to a number of investment companies outside the T. Rowe Price Group of Funds (the "Sub-advised Funds").

The Price Funds may purchase shares of another Price Fund in reliance on a prior SEC exemptive order issued under Section 12(d)(1)(J) of the 1940 Act. The Sub-advised Funds may also invest in another Price Fund within the limits of Sections 12(d)(1)(A) and (B) of the 1940 Act.

Section 17(a)(1) of the 1940 Act, in relevant part, prohibits any affiliated person of a registered investment company or an affiliated person of the affiliated person ("second-tier affiliate") from knowingly selling securities or other property to the registered investment company, unless, among other things, the sale involves solely securities of which the buyer is the issuer.

Section 17(a)(2) of the 1940 Act prohibits any affiliated person or second-tier affiliate of a registered investment company from knowingly purchasing from the registered investment company any securities or other property, except securities of which the seller is the issuer.

The incoming letter stated that each Price Fund is an affiliated person of TRPA because it may be deemed to be controlled by TRPA as its investment adviser. TRPA is an affiliated person of each Sub-advised Fund by virtue of being its investment adviser. Each Price Fund therefore is a second-tier affiliate of each Sub-advised Fund.

The incoming letter further noted that from the perspective of a Price Fund as the registered investment company and the Sub-advised Fund as its affiliated person, under Section 17(a)(2), a purchase for cash of the Price Fund's shares by the Sub-advised Fund is permitted because it is a purchase of shares of which the seller is the issuer. Likewise, under Section 17(a)(1), from the same perspective, a redemption of the Price Fund's shares for cash by a Sub-advised Fund is permitted because it is a sale of shares of which the buyer is the issuer.

From the perspective of a Sub-advised Fund as the registered investment company and a Price Fund as its affiliated person, however, the sale for cash of the Price Fund's shares to the Sub-advised Fund may be prohibited by Section 17(a)(1) ("Sale Transaction"). Section 17(a)(2) also may be viewed as prohibiting a cash redemption of the Price Fund's shares by the Sub-advised Fund ("Redemption Transaction").

In the no-action letter, T. Rowe Price obtained relief from Section 17 of the 1940 Act to allow certain Sub-advised Funds to purchase and redeem shares of the Price Funds for cash at a price based on the Price Fund's net asset value. The SEC staff apparently agreed with the incoming letter’s argument that the Sale Transactions and the Redemption Transactions do not raise the concerns underlying Sections 17(a)(1) and (2) of the 1940 Act. The SEC staff noted that shares of a Price Fund will be sold to, and redeemed by, the Sub-advised Funds at the Price Fund's NAV calculated in accordance with Rule 22c-1 under the 1940 Act and the pricing policies and procedures described in the Price Fund's registration statement, which is the price at which any other investor in the Price Fund will transact with the Price Fund.

Click http://www.sec.gov/divisions/investment/noaction/2008/troweprice071008-17a.pdf for a copy of the no-action letter.