SUPPLEMENT DATED OCTOBER 11, 2006
TO THE CURRENT PROSPECTUSES OF
ING CORPORATE LEADERS TRUST, ING EQUITY TRUST, ING FUNDS TRUST, ING
INVESTMENT FUNDS, INC., ING INVESTORS TRUST (TO ONLY ING AMERICAN FUNDS
PORTFOLIOS, ING LIFESTYLE PORTFOLIOS, ING MARKETPRO PORTFOLIO, ING MARKETSTYLE
PORTFOLIOS, ING DISCIPLINED SMALL CAP VALUE PORTFOLIO, ING EQUITIESPLUS
PORTFOLIO, ING GLOBAL REAL ESTATE PORTFOLIO AND ING VP INDEX PLUS INTERNATIONAL
EQUITY PORTFOLIO), ING MAYFLOWER TRUST, ING MUTUAL FUNDS, ING PRIME RATE TRUST,
ING SENIOR INCOME FUND, ING VARIABLE INSURANCE TRUST, ING VARIABLE PRODUCTS
TRUST, AND ING VP NATURAL RESOURCES TRUST (THE "REGISTRANTS")
The Prospectuses for the Registrants are hereby supplemented with the following
information relating to "Information Regarding Trading of ING's U.S. Mutual
Funds."
INFORMATION REGARDING TRADING OF ING'S U.S. MUTUAL FUNDS
As discussed in earlier supplements, ING Investments, LLC ("Investments"), the
adviser to the ING Funds, has reported to the Boards of Directors/Trustees (the
"Boards") of the ING Funds that, like many U.S. financial services companies,
Investments and certain of its U.S. affiliates have received informal and formal
requests for information since September 2003 from various governmental and
self-regulatory agencies in connection with investigations related to mutual
funds and variable insurance products. Investments has advised the Boards that
it and its affiliates have cooperated fully with each request.
In addition to responding to regulatory and governmental requests, Investments
reported that management of U.S. affiliates of ING Groep N.V., including
Investments (collectively, "ING"), on their own initiative, have conducted,
through independent special counsel and a national accounting firm, an extensive
internal review of trading in ING insurance, retirement, and mutual fund
products. The goal of this review was to identify any instances of inappropriate
trading in those products by third parties or by ING investment professionals
and other ING personnel. ING's internal review related to mutual fund trading is
now substantially completed. ING has reported that, of the millions of customer
relationships that ING maintains, the internal review identified several
isolated arrangements allowing third parties to engage in frequent trading of
mutual funds within ING's variable insurance and mutual fund products, and
identified other circumstances where frequent trading occurred, despite measures
taken by ING intended to combat market timing. ING further reported that each of
these arrangements has been terminated and fully disclosed to regulators. The
results of the internal review were also reported to the independent members of
the Boards.
Investments has advised the Boards that most of the identified arrangements were
initiated prior to ING's acquisition of the businesses in question in the U.S.
Investments
further reported that the companies in question did not receive special benefits
in return for any of these arrangements, which have all been terminated.
Based on the internal review, Investments has advised the Boards that the
identified arrangements do not represent a systemic problem in any of the
companies that were involved.
In September 2005, ING Funds Distributor, LLC ("IFD"), the distributor of
certain ING Funds, settled an administrative proceeding with the NASD regarding
three arrangements, dating from 1995, 1996 and 1998, under which the
administrator to the then-Pilgrim Funds, which subsequently became part of the
ING Funds, entered into formal and informal arrangements that permitted frequent
trading. Under the terms of the Letter of Acceptance, Waiver and Consent ("AWC")
with the NASD, under which IFD neither admitted nor denied the allegations or
findings, IFD consented to the following sanctions: (i) a censure; (ii) a fine
of $1.5 million; (iii) restitution of approximately $1.44 million to certain ING
Funds for losses attributable to excessive trading described in the AWC; and
(iv) agreement to make certification to NASD regarding the review and
establishment of certain procedures.
In addition to the arrangements discussed above, Investments reported to the
Boards that, at this time, these instances include the following, in addition to
the arrangements subject to the AWC discussed above:
- Aeltus Investment Management, Inc. (a predecessor entity to ING
Investment Management Co.) identified two investment professionals who
engaged in extensive frequent trading in certain ING Funds. One was
subsequently terminated for cause and incurred substantial financial
penalties in connection with this conduct and the second has been
disciplined.
- ReliaStar Life Insurance Company ("ReliaStar") entered into agreements
seven years ago permitting the owner of policies issued by the insurer to
engage in frequent trading and to submit orders until 4pm Central Time.
In 2001 ReliaStar also entered into a selling agreement with a
broker-dealer that engaged in frequent trading. Employees of ING
affiliates were terminated and/or disciplined in connection with these
matters.
- In 1998, Golden American Life Insurance Company entered into arrangements
permitting a broker-dealer to frequently trade up to certain specific
limits in a fund available in an ING variable annuity product. No
employee responsible for this arrangement remains at the company.
For additional information regarding these matters, you may consult the Form 8-K
and Form 8-K/A for each of four life insurance companies, ING USA Annuity and
Life Insurance Company, ING Life Insurance and Annuity Company, ING Insurance
Company of America, and ReliaStar Life Insurance Company of New York, each filed
with the Securities and Exchange Commission (the "SEC") on October 29, 2004 and
September 8, 2004. These Forms 8-K and Forms 8-K/A can be accessed through the
SEC's Web site at http://www.sec.gov. Despite the extensive internal review
conducted
2
through independent special counsel and a national accounting firm, there can be
no assurance that the instances of inappropriate trading reported to the Boards
are the only instances of such trading respecting the ING Funds.
Investments reported to the Boards that ING is committed to conducting its
business with the highest standards of ethical conduct with zero tolerance
for noncompliance. Accordingly, Investments advised the Boards that ING
management was disappointed that its voluntary internal review identified
these situations. Viewed in the context of the breadth and magnitude of its
placecountry-regionU.S. business as a whole, ING management does not believe
that ING's acquired companies had systemic ethical or compliance issues in
these areas. Nonetheless, Investments reported that given ING's refusal to
tolerate any lapses, it has taken the steps noted below, and will continue to
seek opportunities to further strengthen the internal controls of its
affiliates.
- ING has agreed with the ING Funds to indemnify and hold harmless the ING
Funds from all damages resulting from wrongful conduct by ING or its
employees or from ING's internal investigation, any investigations
conducted by any governmental or self-regulatory agencies, litigation or
other formal proceedings, including any proceedings by the SEC.
Investments reported to the Boards that ING management believes that the
total amount of any indemnification obligations will not be material to
ING or its placecountry-region U.S. business.
- ING updated its Code of Conduct for employees reinforcing its employees'
obligation to conduct personal trading activity consistent with the law,
disclosed limits, and other requirements.
- The ING Funds, upon a recommendation from ING, updated their respective
Codes of Ethics applicable to investment professionals with ING entities
and certain other fund personnel, requiring such personnel to pre-clear
any purchases or sales of ING Funds that are not systematic in nature
(i.e., dividend reinvestment), and imposing minimum holding periods for
shares of ING Funds.
- ING instituted excessive trading policies for all customers in its
variable insurance and retirement products and for shareholders of the
ING Funds sold to the public through financial intermediaries. ING does
not make exceptions to these policies.
- ING reorganized and expanded its U.S. Compliance Department, and created
an Enterprise Compliance team to enhance controls and consistency in
regulatory compliance.
OTHER REGULATORY MATTERS.
The New York Attorney General (the "NYAG") and other federal and state
regulators are also conducting broad inquiries and investigations involving the
insurance industry. These initiatives currently focus on, among other things,
compensation and other sales incentives; potential conflicts of interest;
potential anti-competitive activity; reinsurance; marketing practices (including
suitability); specific product types (including group annuities and indexed
annuities); fund selection for investment products and brokerage sales; and
disclosure. It is likely that the scope of these industry investigations will
further broaden before they conclude. ING has received formal and informal
requests in connection with such investigations, and is cooperating fully with
each request. In connection with one such investigation, affiliates of
Investments were named in a petition for relief and cease and desist order filed
by the New Hampshire Bureau of Securities Regulation (the "NH Bureau")
3
concerning their administration of the New Hampshire state employees deferred
compensation plan.
On October 10, 2006, an affiliate of Investments entered into an assurance of
discontinuance with the NYAG (the "NYAG Agreement") regarding the endorsement of
its products by the New York State United Teachers Union Member Benefits Trust
("NYSUT") and the sale of their products to NYSUT members. Under the terms of
the NYAG Agreement, the affiliate of Investments, without admitting or denying
the NYAG's findings, will distribute $30 million to NYSUT members, and/or former
NYSUT members, who participated in the NYSUT-endorsed products at any point
between January 1, 2001 and June 30, 2006. The affiliate also agreed with the
NYAG's office to develop a one-page disclosure that will further improve
transparency and disclosure regarding retirement product fees (the "One-Page
Disclosure"). Pursuant to the terms of the NYAG Agreement, the affiliate has
agreed for a five year period to provide its retirement product customers with
the One-Page Disclosure.
In addition, on the same date, affiliates of Investments entered into a
consent agreement with the NH Bureau (the "NH Agreement") to resolve the
petition for relief and cease and desist order. Under the terms of the NH
Agreement, these affiliates of Investments, without admitting or denying the
NH Bureau's claims, have agreed to pay $3 million to resolve the matter, and
for a five year period to provide their retirement product customers with the
One-Page Disclosure described above.
Other federal and state regulators could initiate similar actions in this or
other areas of ING's businesses.
These regulatory initiatives may result in new legislation and regulation that
could significantly affect the financial services industry, including businesses
in which ING is engaged.
In light of these and other developments, ING continuously reviews whether
modifications to its business practices are appropriate.
At this time, in light of the current regulatory factors, ING
country-regionplaceU.S. is actively engaged in reviewing whether any
modifications in our practices are appropriate for the future.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares, or other adverse consequences to ING Funds.
4
This supplement supersedes the supplement dated February 28, 2006 with respect
to the ING Global Equity and International Equity Funds; the supplement dated
June 28, 2006 with respect to ING Investors Trust (to only ING American Funds
Portfolios, ING Lifestyle Portfolios, ING MarketPro Portfolio, ING MarketStyle
Portfolios, ING Disciplined Small Cap Value Portfolio, ING EquitiesPlus
Portfolio, ING Global Real Estate Portfolio and ING VP Index Plus International
Equity Portfolio) ING Variable Insurance Trust, ING Variable Products Trust, ING
VP Natural Resources Trust; the supplement dated June 30, 2006 with respect to
ING Senior Income Fund, ING Prime Rate Trust; the supplement date July 29, 2006
with respect to the ING Fixed-Income Funds and ING Institutional Prime Money
Market Fund; and the supplement dated September 30, 2006 with respect to ING
Domestic Equity Funds
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
5