[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