00-383. Standish, Ayer & Wood Investment Trust, et al., Notice of Application  

  • [Federal Register Volume 65, Number 5 (Friday, January 7, 2000)]
    [Notices]
    [Pages 1199-1201]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 00-383]
    
    
    -----------------------------------------------------------------------
    
    SECURITIES AND EXCHANGE COMMISSION
    
    [Investment Company Act Release No. 24231; 812-11782
    
    
    Standish, Ayer & Wood Investment Trust, et al., Notice of 
    Application
    
    January 3, 2000.
    agency: Securities and Exchange Commission (``Commission'').
    
    action: Notice of an application under section 17(b) of the Investment 
    Company Act of 1940 (the ``Act'') for an exemption from section 17(a) 
    of the Act.
    
    -----------------------------------------------------------------------
    
    summary of application: Applicants request an order to permit certain 
    limited partnership to transfer all their assets to corresponding new 
    series of a registered open-end management investment company in 
    exchange for shares of the new series.
    
    applicants: Standish, Ayer & Wood Investment Trust (``Trust''), 
    Standish Small Cap Value Fund, Limited Partnership (``Small Cap 
    Partnership''), SIMCO International Small Cap Fund, Limited Partnership 
    (``International Partnership'' and together with the Small Cap 
    Partnership, the ``Partnerships''), Standish, Ayer & Wood Inc. 
    (``Standish''), Standish International Management Company, L.P. 
    (``SIMCO'' and together with Standish, the ``Advisers''), and Standish 
    Investments, Inc. (``SII'').
    
    filing dates: The application was filed on September 20, 1999 and 
    amended on December 22, 1999. Applicants have agreed to file an 
    amendment during the notice period, the substance of which is reflected 
    in this notice.
    
    hearing or notification of hearing: An order granting the application 
    will be issued unless the Commission orders a hearing. Interested 
    persons may request a hearing by writing to the Commission's Secretary 
    and serving applicants with a copy of the request, personally or by 
    mail. Hearing requests should be received by the Commission by 5:30 
    p.m. on January 26, 2000, and should be accompanied by proof of service 
    on applicants, in the form of an affidavit, or for lawyers, a 
    certificate of service. Hearing requests should state the nature of the 
    writer's interest, the reason for the request, and the issues 
    contested. Persons who wish to be notified of a hearing may request 
    notification by writing to the Commission's Secretary.
    
    addresses: Secretary, Commission, 450 Fifth Street, NW., Washington, 
    D.C. 20549-0609; Applicants, c/o Beverly E. Banfield, Standish, Ayer & 
    Wood Inc. One Financial Center, 26th Floor, Boston, MA 02111.
    
    for further information contact: Deepak T. Pai, Senior Counsel, at 
    (202) 942-0574 or George J. Zornada, Branch Chief, at (202) 942-0564, 
    (Division of Investment Management, Office of Investment Company 
    Regulation).
    
    supplementary information: The following is a summary of the 
    application. The complete application may be obtained for a fee at the 
    Commission's Public Reference Branch, 450 Fifth Street, NW., 
    Washington, D.C. 20549-0102 (telephone (202) 942-8090).
    
    Applicants' Representations
    
        1. The Trust, a Massachusetts business trust, is registered under 
    the Act as an open-end management investment company. The Trust 
    currently offers 23 series and proposes to offer two additional series, 
    the Standish Small Cap Value Fund (``Small Cap Fund'') and the Standish 
    International Small Cap Fund (``International Fund'' and together with
    
    [[Page 1200]]
    
    the Small Cap Fund, the ``New Funds''). The investment objective and 
    principal strategies of each New Fund will be essentially identical to 
    those of its corresponding Partnership. The Small Cap Partnership and 
    the International Partnership are Massachusetts limited partnerships 
    organized on January 4, 1999 and January 2, 1996, respectively. The 
    Partnerships are not registered under the Act in reliance on section 
    3(c)(1) of the Act.
        2. Standish is registered under the Investment Advisers Act of 1940 
    (``Advisers Act'') and serves as investment adviser to the Small Cap 
    Partnership and the Small Cap Fund. SIMCO, which is wholly-owned by 
    Standish, is registered under the Advisers Act and serves as investment 
    adviser to the International Partnership and to the International Fund. 
    SII, a wholly-owned subsidiary of Standish, serves as general partner 
    (``General Partner'') of the Partnerships.
        3. Applicants propose that each of the New Funds will acquire all 
    the assets, minus assets sufficient for winding up the Partnership, 
    from its corresponding Partnership in exchange for New Fund shares 
    (``Shares'') (the ``Exchanges''). Each Exchange will be effected 
    pursuant to an Agreement and Plan of Exchange (the ``Plan''). Under the 
    Plan, Shares delivered to each Partnership in an Exchange will have an 
    aggregate net asset value (``NAV'') equivalent to the NAV of the assets 
    transferred by that Partnership to the Trust on behalf of the 
    corresponding New Fund. Each Partnership will subsequently distribute 
    the New Fund Shares it receives to its partners on a pro-rata basis 
    based on the value of the interests held on the effective date of the 
    Exchange by each partner, currently anticipated to be January 28, 2000. 
    Following the Exchange, each Partnership will be liquidated and 
    dissolved. The expenses of the Exchanges will be borne by Standish.
        4. At an October 12, 1999 meeting of the board of trustees of the 
    Trust (the ``Board''), the Board, including a majority of the members 
    who are not ``interested persons,'' as defined in section 2(a)(19) of 
    the Act (``Independent Trustees''), approved the Exchanges. In 
    approving the Exchanges, the Board concluded that: (a) the Exchanges 
    are desirable as a business matter from the point of view of the Trust; 
    (b) the Exchanges are reasonable and fair, do not involve overreaching, 
    and are consistent with the policies of the Funds; and (c) the 
    interests of existing shareholders in the Funds will not be diluted as 
    a result of the Exchanges. These findings, and the basis upon which 
    such findings were made, have been recorded in the minute books of the 
    Trust.
        5. The board of directors of SII, as General Partner of the 
    Partnerships, approved the Exchange by unanimous written consent. SII, 
    as General Partner, will solicit through the delivery of a private 
    placement memorandum written consents from each limited partner to 
    amend the partnership agreements of the Partnerships to allow for the 
    conversion of the Partnerships into a registered investment company. 
    The limited partners who do not consent to the amendment to the 
    partnership agreements, or who do not wish to participate in the 
    conversion of the Partnerships, will have an opportunity to redeem 
    their interests in the Partnerships before the conversion occurs.
        6. The Exchanges will not be effective until: (a) The Commission 
    has issued an order relating to the application; (b) a majority in 
    interest of the limited partners of each Partnership approve an 
    amendment to each Partnership Agreement to allow for the conversion of 
    the Partnerships into a registered investment company; and (c) the 
    Trust and the Partnerships have received an opinion of counsel that no 
    gain or loss will be recognized by the New Funds upon the transfer of 
    the Partnerships' assets.
    
    Applicants' Legal Analysis
    
        1. Section 17(a) of the Act prohibits any affiliated person of a 
    registered investment company, or any affiliated person of that person, 
    acting as principal, from selling to or purchasing from the registered 
    investment company any security or other property. Section 2(a)(3) of 
    the Act defines an `affiliated person'' as, among other things, any 
    person directly or indirectly owning, controlling, or holding with 
    power to vote 5% or more of the outstanding voting securities of the 
    other person; any person controlling, controlled by, or under common 
    control with, the other person; any officer, director, partner, 
    copartner or employee of the other person; and, if the other person is 
    an investment company, its investment adviser.
        2. Applicants state that each Partnership could be deemed to be an 
    affiliated person of an affiliated person of each Fund. Applicants 
    state that because SII (as General Partner of the Partnerships) and 
    SIMCO (as investment adviser to the International Partnership) are 
    under common control with Standish (the investment adviser to the Small 
    Cap Partnership), Standish could be deemed to control the Partnerships. 
    Each Partnership would be an affiliated person of Standish and an 
    affiliated person of an affiliated person of each New Fund based on 
    Standish and SIMCO begin the investment advisers to the New Funds. In 
    addition, several limited partners who are directors or officers of 
    Standish own greater than 5% of the Small Cap Partnership, which would 
    make these limited partners affiliated persons of the Small Cap 
    Partnership. These limited partners are also affiliated persons of the 
    New Funds by reason of their positions with Standish. Accordingly, the 
    Small Cap Partnership could also be deemed an affiliated person of an 
    affiliated person of the Small Cap Fund. Thus, applicants state that 
    the proposed Exchanges may be prohibited under section 17(a).
        3. Rule 17a-7 exempts certain purchase and sale transactions 
    otherwise prohibited by section 17(a) if an affiliation exists solely 
    by reason of having a common investment adviser, common directors, and/
    or common officers or directors, provided, among other requirements, 
    that the transaction involves a cash payment against prompt delivery of 
    a security. Applicants state that the relief provided by rule 17a-7 may 
    not be available for the Exchanges because the Exchanges will be 
    effected on a basis other than cash. Applicants also state that because 
    several limited partners who are officers or directors of Standish may 
    be deemed affiliated persons of the Small Cap Partnership because they 
    own 5% or more of the Partnership, the New Funds and the Partnerships 
    may be affiliated in a manner other than allowed under rule 17a-7.
        4. Section 17(b) of the Act authorizes the Commission to exempt a 
    transaction from the provisions of section 17(a) if the terms of the 
    transaction, including the consideration to be paid or received, are 
    reasonable and fair and do not involve overreaching on the part of any 
    person concerned and the proposed transaction is consistent with the 
    policy of each registered investment company concerned and the general 
    purposes of the Act.
        5. Applicants submit that the terms of the Exchanges are consistent 
    with the requirements of section 17(b) of the Act. Applicants state 
    that the Shares issued by each New Fund will have an aggregate NAV 
    equal to the value of the assets acquired from its corresponding 
    Partnership and that because Shares will be issued at their NAV, Fund 
    shareholders will not be diluted. Applicants also state that the 
    investment objective and policies of each New Fund are substantially 
    similar to its corresponding Partnership.
    
    [[Page 1201]]
    
    Applicants further state that the Board, including the Independent 
    Trustees, have approved the Exchanges, and that each Exchange will 
    comply with rule 17a-7 (b) through (f).
    
    Applicants' Condition
    
        Applicants agree that any order granting the requested relief will 
    be subject to the following condition:
        1. The Exchanges will comply with the terms of Rule 17a-7 (b) 
    through (f).
    
        For the Commission, by the Division of Investment Management 
    under delegated authority.
    Margaret H. McFarland,
    Deputy Secretary.
    [FR Doc. 00-383 Filed 1-6-00; 8:45 am]
    BILLING CODE 8010-01-M
    
    
    

Document Information

Published:
01/07/2000
Department:
Securities and Exchange Commission
Entry Type:
Notice
Action:
Notice of an application under section 17(b) of the Investment Company Act of 1940 (the ``Act'') for an exemption from section 17(a) of the Act.
Document Number:
00-383
Dates:
The application was filed on September 20, 1999 and amended on December 22, 1999. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in this notice.
Pages:
1199-1201 (3 pages)
PDF File:
00-383.pdf