[Federal Register Volume 61, Number 241 (Friday, December 13, 1996)]
[Notices]
[Pages 65613-65614]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31722]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 22381; 811-5668]
The Hanover Funds, Inc.; Notice of Application
December 9, 1996.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of application for deregulation under the Investment
Company Act of 1940 (the ``Act'').
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APPLICANT: The Hanover Funds, Inc.
RELEVANT ACT SECTION: Order requested under Section 8(f).
SUMMARY OF APPLICATION: Applicant requests an order declaring that it
has ceased to be an investment company.
FILING DATE: The application was filed on September 12, 1996 and
amended on November 25, 1996.
HEARING OR NOTIFICATION OF HEARING: An order granting the application
will be issued unless the SEC orders a hearing. Interested persons may
request a hearing by writing to the SEC's Secretary and serving
applicant with a copy of the request, personally or by mail. Hearing
requests should be received by the SEC by 5:30 p.m. on January 6, 1997,
and should be accompanied by proof of service on the applicant, 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 reasons
for the request, and the issues contested. Persons may request
notification of a hearing by writing to the SEC's Secretary.
ADDRESSES: Secretary, SEC, 450 Fifth Street, N.W., Washington, D.C.
20549. Applicant, 237 Park Avenue, New York, N.Y. 10017.
FOR FURTHER INFORMATION CONTACT: Kathleen L. Knisely, Law Clerk, at
(202) 942-0517, or Mary Kay Frech, 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 from
the SEC's Public Reference Branch.
Applicant's Representations
1. Applicant is an open-end management investment company
[[Page 65614]]
organized as a Maryland corporation and consisting of six portfolios:
The 100% U.S. Treasury Securities Money Market Fund, The U.S. Treasury
Money Market Fund, The Cash Management Fund, The Tax Free Money Market
Fund, The New York Tax Free Money Market Fund, and The Government Money
Market Fund. All of the portfolios are diversified except for The New
York Tax Free Money Market Fund, which is non-diversified.
2. On October 6, 1988, applicant filed a Notification of
Registration on Form N-8A pursuant to section 8(a) under the Act and a
registration statement on Form N-1A under the Securities Act of 1933.
The registration statement became effective on December 12, 1988.
3. On December 13, 1995, applicant's board of directors approved an
Agreement and Plan of Reorganization and Liquidation (the ``Plan'')
whereby applicant would exchange its net assets for shares of Mutual
Fund Trust (``MFT''), a Massachusetts business trust registered under
the Act as an open-end management investment company, in exchange for
shares of MFT.
4. In approving the Plan, the directors identified certain
potential benefits likely to result from the reorganization, including,
(a) that shareholders of the U.S. Treasury Money Market Fund, the Tax
Free Money Market Fund, and the New York Tax Free Money Market Fund
would be able to pursue substantially the same investment goals in
respective larger funds, which would enhance the ability of portfolio
managers to effect their portfolio transactions on more favorable terms
and give portfolio managers greater investment flexibility and the
ability to select a larger number of portfolio securities, with the
attendant benefits of increased diversification, (b) that shareholders
of each of applicant's portfolios would receive the combined investment
advisory services of The chase Manhattan Bank, N.A. (including Chemical
Bank as its successor, renamed The Chase Manhattan Bank) and Chase
Asset Management or Texas Commerce Bank National Association, as the
case may be, which the directors found to be experienced and qualified
investment managers, (c) that shareholders of applicant's portfolios
would become shareholders in a larger combined fund family consisting
of a wide range of stock, bond, and money market funds, including both
domestic and international portfolios, and (d) that shareholders of
applicant's portfolios would benefit from a more focused marketing and
distribution effort, thereby reducing potential investor confusion and
promoting asset growth in such portfolios.
5. The investment advisers of applicant and MFT came under the
common control of Chemical Banking Corporation (renamed The Chase
Manhattan Corporation) as a result of the merger of The Chase Manhattan
Corporation into Chemical Banking Corporation. Consequently, applicant
and MFT may be deemed to be affiliated persons by reason of being under
the control of investment advisers that are themselves under common
control. Applicant therefore relied on the exemption provided by rule
17a-8 to effect the transaction.\1\ Pursuant to rule 17a-8 under the
Act, applicant board of directors determined that the proposed
reorganization was in the best interest of applicant and that the
interests of the existing shareholders would not be diluted as a result
of the proposed reorganization.
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\1\ Rule 17a-8 provides relief from the affiliated transaction
prohibition of section 17(a) of the Act for a merger of investment
companies that may be affiliated persons of each other solely by
reason of having a common investment adviser, common directors, and/
or common officers. The staff of the Division of Investment
Management has stated that it would not recommend that the
Commission take enforcement action under section 17(a) of the Act if
investment companies that are affiliated persons solely by reason of
having investment advisers that are under common control rely on
rule 17a-8. See, e.g., Capitol Mutual Funds and Nations Fund Trust
(pub. avail. Feb. 24, 1994).
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6. On December 29, 1995, applicant filed a proxy statement with the
SEC that was declared effective on February 8, 1996. On February 15,
1996, proxy materials were distributed to applicant's shareholders.
Applicant's shareholders approved the Plan at special meetings held on
April 2, 1996 and April 16, 1996.
7. On May 3, 1996 (the ``Closing Date''), the capitalization of
applicant was as follows: The 100% U.S. Treasury Securities Money
Market Fund had 1,779,110,820.74 shares outstanding, with aggregate net
assets of $1,779,033,262 and a net asset value per share outstanding of
$1.00; The U.S. Treasury Money Market Fund had 1,658,435,519.07 shares
outstanding, with aggregate net assets of $1,658,335,329 and a net
asset value per share outstanding of $1.00; The Cash Management Fund
had 1,521,305,012.28 shares outstanding, with aggregate net assets of
$1,521,280,125 and a net asset value per share outstanding of $1.00;
The Tax Free Money Market Fund had 351,365,963.70 shares outstanding,
with aggregate net assets of $350,999,109 and a net asset value per
share outstanding of $1.00; The New York Tax Free Money Market Fund had
321,245,415.71 shares outstanding, with aggregate net assets of
$321,162,382 and a net asset value per share outstanding of $1.00; and
The Government Money Market Fund had 1,551,339,231.25 shares
outstanding, with aggregate net assets of $1,551,222,906 and a net
asset value per share outstanding of $1.00.
8. Pursuant to the Plan, on the Closing Date, applicant transferred
all of the assets and liabilities of each of its six portfolios in
exchange for shares of a corresponding portfolio of MFT. The number of
shares issued to applicant was determined by dividing the net asset
value per share of applicant's portfolio shares by the net asset value
of a share of MFT portfolio shares of the corresponding MFT portfolio.
Following this exchange, applicant distributed the shares of the
corresponding MFT portfolio received in connection with the
reorganization to its shareholders on a pro rata basis.
9. Expenses incurred in connection with the reorganization are
estimated to be approximately $4,390,128, which includes legal fees,
printing fees, audit fees and expenses, and proxy solicitation
expenses. The expenses resulting from the reorganization were borne by
The Chase Manhattan Corporation (including its affiliates). The Chase
Manhattan Corporation is the ultimate parent of the investment advisers
to MFT and applicant.
10. As of the date of the application, applicant had no
shareholders and no securities outstanding. Applicant has no debts or
other liabilities outstanding. Applicant is not a party to any
litigation or administrative proceeding. Applicant is neither engaged
nor proposes to engage in any business activities other than those
necessary for the winding up of its affairs.
11. Applicant filed Articles of Transfer with the State of Maryland
on May 6, 1996, and intends to file Articles of Dissolution with the
State of Maryland.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-31722 Filed 12-12-96; 8:45 am]
BILLING CODE 8010-01-M
