[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Notices]
[Pages 67373-67377]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31513]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 21620; 812-9798]
Voyageur Fund Managers, Inc., et al.; Notice of Application
December 22, 1995.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of Application for Exemption under the Investment
Company Act of 1940 (the ``Act'').
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APPLICANTS: Voyageur fund Managers, Inc. (the ``Sponsor''), Voyageur
Unit Investment Trust, Voyageur Equity Trust, Voyageur Tax-Exempt
Trust, and any future unit investment trusts sponsored by the Sponsor
(together with the three above-named unit investment trusts, the
``Trusts'') and their respective series (each, a ``Series'').
Relevant Act Sections: Order requested under section 6(c) granting an
exemption from sections 2(a)(32), 2(a)(35), 14(a), 19(b), 22(d), and
26(a)(2) of the Act and rules 19b-1 and 22c-1 thereunder; under section
11(a) for an exemption from section 11(c); and under sections 6(c) and
17(b) for an exemption from section 17(a).
SUMMARY OF APPLICATION: Applicants request an order: (a) Permitting the
Trusts to impose sales charges on a deferred basis and to waive the
deferred sales charge in certain cases; (b) permitting certain offers
of exchange involving the Trusts; (c) exempting the Sponsor from having
to take for its own account or place with others $100,000 worth of
units in certain Trusts; (d) permitting certain Trusts to distribute
capital gains resulting from redemptions of portfolio securities within
a reasonable time after receipt; and (e) permitting a terminating
Series of the Voyageur Equity trust to sell portfolio securities to a
new Series of that Trust under the circumstances described below.
FILING DATE: The application was filed on October 5, 1995.
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
Applicants 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 16,
1996, and should be accompanied by proof of service on the 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
reasons for the request, and the issues contested. Persons who wish to
be notified of a hearing may request such notification by writing to
the SEC's Secretary.
ADDRESSES: Secretary, SEC, 450 Fifth Street, N.W., Washington, D.C.
20549. Applicants, c/o Voyageur Fund Managers, Inc., 90 South Seventh
Street, Suite 4400, Minneapolis, Minnesota 55402.
FOR FURTHER INFORMATION CONTACT:
H.R. Hallock, Jr., Special Counsel, at (202) 942-0564 or C. David
Messman, 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.
Applicants' Representations
1. Each of the Trusts is or will be a unit investment trust
registered under the Act and sponsored by the Sponsor. The investment
objectives of the Trusts may differ. The principal underwriter for the
Trusts is or will be Voyageur Fund Distributor, Inc. (the
``Distributor''). The Sponsor and Distributor are each indirect wholly-
owned subsidiaries of Dougherty Financial Group, Inc.
2. Each of the Trusts consists or will consist of one or more
separate Series. Each Series is created by a trust indenture among the
Sponsor, a banking institution or trust company as trustee, and an
evaluator. The Sponsor acquires a portfolio of securities which it
deposits with the trustee in exchange for certificates representing
units of fractional undivided interest in the deposited portfolio
(``Units''). The Sponsor will deposit substantially more than $100,000
of debt or equity securities, depending on the objective of the
particular Series, for each Series.
3. The Units are then offered to the public through the Distributor
and dealers at a public offering price which, during the initial
offering period, is based upon the aggregate offering side evaluation
of the underlying securities plus a front-end sales charge. The sales
charge is the maximum amount applicable to a Series and is currently
approximately 4.9% of the public offering price. The Sponsor may reduce
the sales charge under certain circumstances, which will be disclosed
in the prospectus. Any such reduction will be made in accordance with
rule 22d-1.
4. The Distributor maintains a secondary market for Units of
outstanding Series and continually offers to purchase these Units at
prices based upon the bid side evaluation of the underlying securities.
If the Distributor discontinues maintaining such a market at any time
for any Trust, holders of Units (``Unitholders'') of such Trust may
redeem their Units through the trustee.
5. Distribution payments of tax-exempt or taxable income, depending
on the investment objective of a particular Trust, will be made to
Unitholders on an annual, semi-annual, quarterly or monthly basis. The
Trusts generally are permitted to distribute to Unitholders any capital
gains earned in connection with the sale of portfolio shares along with
the Trust's regular distributions in reliance on paragraph (c) of rule
19b-1.
A. The Deferred Sales Charge
1. Applicants seek an order permitting them to impose a deferred
sales charge (``DSC'') and to reduce or waive the DSC under certain
circumstances. Under Applicants' proposal, the Sponsor will determine
the maximum amount of the sales charge per Unit. The Sponsor and
Distributor will have discretion to defer the collection of all or part
of such sales charge over a period (the ``Collection Period'')
subsequent to the settlement date for the purchase of Units. The
Sponsor will in no event add to the deferred amount of the sales charge
any additional amount for interest or any similar or related charge to
reflect or adjust for such deferral.
2. The Distributor anticipates collecting a portion of the total
sales charge immediately upon purchase of Trust Units. The balance of
the sales charge will be collected in installments
[[Page 67374]]
over the Collection Period for the particular Trust. To the extent that
distribution income is sufficient to pay a DSC installment, such
deductions will be collected from distributions on a holder's Units
(``Distribution Deductions''). If distribution income is insufficient
to pay a DSC installment, the trustee, pursuant to the powers granted
in the trust indenture, will have the ability to sell portfolio
securities in an amount necessary to provide the requisite payments. If
a Unitholder redeems or sells to the Sponsor his or her Units before
the total sales charge has been collected from installment payments,
the Sponsor intends to deduct the remainder of any DSC from sale or
redemption proceeds.
3. For purposes of calculating the amount of the DSC due upon
redemption or sale of Units, it will be assumed that Units on which the
sales charge has been paid in full are liquidated first. Any Units
liquidated over and above such amounts will be subject to the DSC,
which will be applied on the assumption that Units held for the longest
time are redeemed first, unless the investor directs otherwise. The
Sponsor or Distributor may choose in the future to waive the DSC in
connection with redemption or sales of Units under certain
circumstances. Any such waiver will be disclosed in the prospectus for
each Trust affected and will be implemented in accordance with rule
22d-1.
4. The Sponsor believes that the operation and implementation of
the DSC program will be adequately disclosed and explained to potential
investors as well as Unitholders. The prospectus for each Trust will
describe the operation of the DSC, including the amount and date of
each Distribution Deduction and the duration of the Collection Period.
The prospectus will also contain disclosure pertaining to the trustee's
ability to sell Trust securities in the event that income generated by
the Trust portfolio is partially or wholly insufficient to pay for DSC
expenses. The securities confirmation statement for each Unitholder's
purchase transaction will state both the front-end sales charge
imposed, if any, and the amount of the DSC to be imposed. In addition,
each annual report will provide Unitholders with information as to the
amount of annual DSC payments made by the Trust during the previous
fiscal year on both a Series and per Unit basis.
B. The Exchange Option
1. Applicants also seek exemptive relief to allow certain offers of
exchange among the Series of the Trusts (the ``Exchange Option''). The
Exchange Option will extend to all exchanges of Unites, regardless of
whether such Units are subject to a front-end sales charge or a DSC,
and includes exchanges in connection with the termination of a Trust.
An investor who purchases Units under the Exchange Option will pay a
lower aggregate sales charge than that paid by a new investor, subject
to the limited exceptions described below. While Units of an applicable
Trust are normally sold on the secondary market with maximum sales
charges of approximately 5.5% of the public offering price, the sales
charge on Units acquired pursuant to the proposed Exchange Option
generally will be reduced to a flat fee of $25 per Unit ($25 per 100
Units in the case of a Series whose Units initially cost approximately
$10 per Unit, or $25 per 1,000 Units in the case of a Series whose
Units initially cost approximately $1.00 per Unit).
2. An adjustment will be made if Units of any Trust are exchanged
within five months of their acquisition for Units of a Trust with a
higher sales charge (the ``Five Months Adjustment''), or for exchanges
of Units that impose Distribution Deductions for Units of a Trust that
impose a front-end sales charge occurring at any time before the
Distribution Deductions had at least equaled the per Unit sales charge
then applicable (the ``DSC Front-end Adjustment''). In such cases, the
exchange fee will be the greater of (i) $25 per Unit (or its
equivalent) or (ii) an amount that, together with the sales charge
already paid on the Units being exchanged, equals the normal sales
charge on the Units of a Trust being acquired through such exchange
determined as of the date of the exchange.
3. Under the Exchange Option, if DSC Units are exchanged for DSC
Units of another Trust, the reduced sales charge will be collected in
connection with such an exchange. The Distribution Deductions will
continue to be taken from the investment income generated by the newly
acquired Units, or proceeds from the sale of Trust portfolio
securities, as the case may be, until the original balance of the sales
charge owed on the initial investment has been collected. The DSC will
not be collected at the time of exchange, except in the case of any
exchange to a Trust not having a DSC.
C. Purchase and Sale Transactions Between Series
1. Applicants finally seek exemptive relief to permit certain
terminating Series of the Voyageur Equity Trust to sell their portfolio
securities to new Series in the Voyageur Equity Trust. Certain Series
of the Voyageur Equity Trust (referred to herein individually either as
the ``State Trusts'' or the ``Index Trusts'' and, collectively, as the
``Rollover Trusts'') will have the specific characteristics described
below.
2. The State Trusts will contain equity securities of companies
paying the highest dividends located in a particular state or states
that meet certain capital requirements, as specified below. The
investment objective of the State Trusts will be to provide an above-
average total return through a combination of potential capital
appreciation and dividend income by investing in a designated number of
the highest dividend yielding companies (``Eligible Companies''), as of
a specified day which is one of several days before the State Trust is
created which (a) have their principal operations located in a
specified state or states, and (b) have a market capitalization in
excess of $250 million. Applicants anticipate that many of the
securities of Eligible companies will be traded on a national
securities exchange or on the Nasdaq National Market System (``Nasdaq-
NMS'').
3. The Index Trusts will contain a portfolio of equity securities
which represents a portion of a specific published index (and
``Index''). Each Index Trust will consist of a portfolio that contains
equity securities (``Equity Securities'') which are (a) actively traded
(i.e., have had an average daily trading volume in the preceding six
months of at least 500 shares equal in value to at least U.S. $25,000)
on (i) an exchange (an ``Exchange'') which is either a national
securities exchange that meets the qualifications of section 6 of the
Securities Exchange Act of 1934, as amended, or a foreign securities
exchange (a ``Foreign Exchange'') that meets the qualifications set
forth in a proposed amendment to rule 12d3-1(d)(6) under the Act \1\
and which releases daily closing prices, or (ii) the Nasdaq-NMS and (b)
included in an Index. The investment objective of each
[[Page 67375]]
Index Trust will be to seek a greater total return than that achieved
by the stocks constituting the entire Index over the life of the Index
Trust. To achieve this objective, each Index Trust will consist of a
specified number of the highest dividend yielding stocks in such
trusts' respective Index.
\1\ Investment Company Act Release No. 17096 (Aug. 3, 1989)
(proposing amendments to rule 12d3-1). The proposed amended rule
defined a ``Qualified Foreign Exchange'' to mean a stock exchange in
a country other than the United States where: (1) Trading generally
occurred at least four days a week; (2) there were limited
restrictions on the ability of acquiring companies to trade their
holdings on the exchange; (3) the exchange had a trading volume in
stocks for the previous year of at least U.S. $7.5 billion; and (4)
the exchange had a turnover ratio for the preceding year of a least
20% of its market capitalization. The version of the amended rule
that was adopted did not include the part of the proposed amendment
defining the term ``Qualified Foreign Exchange.''
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4. Each Rollover Trust will hold its securities for a specified
period, generally one year. As the Rollover Trust terminates, the
Sponsor intends to create a new Series of the same type (the ``New
Trust'') for the next period. With respect to the Index Trusts, the New
Trust will be based on the same Index, using the same number of current
top dividend yielding stocks in the Index. With respect to the State
Trusts, the New Trust will be based on the same number of current top
dividend yielding companies located in the same state or states and
that meet the minimum capital requirements. Each Rollover Trust has a
specified date upon which Unitholders in the terminating Rollover Trust
may at their option redeem their Units in the terminating trust and
receive in return Units in the New Trust which is created on or about
the date such option may be exercised.
5. In connection with its termination, each Rollover Trust will
sell all of its portfolio securities as quickly as practicable, but
over a period of time so as to minimize any adverse impact on the
market price. Similarly, a New Trust will acquire its portfolio
securities in purchase transactions. Because there normally will be
some overlap between the portfolios of each Rollover Trust and the
corresponding New Trust, this procedure will result in substantial
brokerage commissions on portfolio securities of the same issue that
are borne by the Rollover Trust and the New Trust and, consequently,
the Unitholders of both the Rollover Trust and the New Trust. In light
of these costs, Applicants request an exemptive order to allow any
Index Trust to sell Equity Securities, and the State Trusts to sell
securities of the Eligible companies, that are listed on an Exchange or
Nasdaq-NMS and actively traded (as described above), to their
respective New Trusts and to permit the New Trusts to purchase such
securities at the closing sale prices of the securities on the
applicable Exchange or on Nasdaq-NMS on the sale date. As required by
Condition C.3. and 4., below, these transactions must be effected in
compliance with rule 17a-7, except for certain provisions of paragraph
(e) thereof.
6. To minimize overreaching, the Sponsor will certify to the
trustee, within five days of each sale from a Rollover Trust to a New
Trust, (a) that the transaction is consistent with the policy of both
the Rollover Trust and the New Trust, as recited in their respective
registration statements and reports filed under the Act, (b) the date
of such transaction and (c) the closing sales price on the Exchange or
Nasdaq-NMS for the sale date of the securities subject to such sale.
The trustee will countersign the certificate, unless the trustee
disagrees with the price listed on the certificate, in which event the
trustee will immediately inform the Sponsor and return the certificate
to the Sponsor with corrections duly noted. If the Sponsor can verify
the corrected price, the Sponsor will ensure that the price of Units of
the New Trust, and distribution to Unitholders of the Rollover Trust,
accurately reflect the corrected price. If the Sponsor disagrees with
the trustee's corrected price, the Sponsor and the trustee will jointly
determine the correct sales price by reference to a mutually agreeable,
indepenently published list of closing sales prices for the date of the
transaction.
Applicants' Legal Analysis
1. Applicants request an exemption under section 6(c) granting
relief from sections 2(a)(32), 2(a)(35), 22(d) and 26(a)(2) and rule
22c-1 to permit Applicants to assess a DSC, and to waive the DSC under
certain circumstances. Applicants also request an exemption under
section 11(a) for relief from section 11(c) to enable them to implement
the Exchange Option. In addition, Applicants request an exemption
pursuant to sections 6(c) and 17(b) granting relief from section 17(a)
to permit Rollover Trusts to sell portfolio securities to a New Trust
and to permit the New Trusts to purchase such securities. Finally,
Applicants seek an exemption under section 6(c) granting relief from
sections 14(a) and 19(b) and rule 19b-1 to the extent described below.
2. Section 2(a)(32) defines a ``redeemable security'' as a security
that, upon its presentation to the issuer, entitles the holder to
receive approximately his or her proportionate share of the issuer's
current net assets, or the cash equivalent of those assets. Because the
imposition of a DSC may cause a redeeming Unitholder to receive an
amount less than the net asset value of the redeemed Units, Applicants
seek an exemption from section 2(a)(32) so that Units subject to a DSC
are considered redeemable securities for purposes of the Act.\2\
\2\ Without an exemption, a Trust selling Units subject to a DSC
could not meet the definition of a unit investment trust under
section 4(2) of the Act. As here relevant, section 4(2) defines a
unit investment trust as an investment company that issues only
``redeemable securities.''
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3. Section 2(a)(35), in relevant part, defines the term ``sales
load'' to be the difference between the public selling price of a
security and that portion of the sale proceeds invested or held for
investment by the depositor or trustee. Because a DSC is not charged at
the time of purchase, Applicants request an exemption from section
2(a)(35).
4. Rule 22c-1 requires that the price of a redeemable security
issued by an investment company for purposes of sale, redemption, and
repurchase be based on the security's current net asset value. Because
the imposition of a DSC may cause a redeeming Unitholder to receive an
amount less than the net asset value of the redeemed Units, Applicants
seek an exemption from this rule.
5. Section 22(d) requires an investment company and its principal
underwriter and dealer to sell securities only at a current public
offering price described in the investment company's prospectus.
Because sales charges traditionally have been a component of the public
offering price, section 22(d) historically required that all investors
be charged the same load. Rule 22d-1 was adopted to permit the sale of
redeemable securities ``at prices which reflect scheduled variations
in, or elimination of, the sales load.'' Because rule 22d-1 does not
extend to scheduled variations in DSCs, Applicants seek relief from
section 22(d) to permit them to waive or reduce their DSC in certain
instances.
6. Section 26(a)(2), in relevant part, prohibits a trustee or
custodian of a unit investment trust from collecting from the Trust as
an expense any payment to a depositor or principal underwriter thereof.
Because of this prohibition, Applicants need an exemption to permit the
trustee to collect the DSC installments from Distribution Deductions or
Trust assets and disburse them to the Sponsor.
7. Section 6(c) provides, in relevant part, that the SEC, by order
upon application, may conditionally or uconditionally exempt any person
or transaction, or any class or classes of persons or transactions,
from any provision or provisions of the Act or of any rule thereunder,
if and to the extent that such exemption is appropriate in the public
interest and consistent with the protection of investors and the
[[Page 67376]]
purposes fairly intended by the policy and provisions of the Act.
Applicants believe that implementation of the deferred sales charge
program in the manner described above would be fair and in the best
interests of the Unitholders of the Trusts. Thus, granting the
requested relief from sections 2(a)(32), 2(a)(35), 22(d), and 26(a)(2)
and rule 22c-1 would meet the requirements for an exemption established
by section 6(c).
8. Section 11(c) prohibits any offers of exchange of the securities
of a registered unit investment trust for the securities of any other
investment company, unless the terms of the offer have been approved by
the SEC under section 11(a). Applicants assert that the reduced sales
charge imposed at the time of exchange is a reasonable and justifiable
expense to be allocated for the professional assistance and operational
expenses incurred in connection with the Exchange Option.
9. Section 17(a) makes it unlawful for an affiliated person of a
registered investment company to sell securities to, or purchase
securities from, the company. Investment companies under common control
may be considered affiliated persons of one another. Each Series will
have an identical or common Sponsor, Voyageur Fund Managers, Inc. Since
the Sponsor of each Series may be considered to control each Series, it
is likely that each Series would be considered an affiliated person of
the others.
10. Section 17(b) provides that the SEC shall exempt a proposed
transaction from section 17(a) if evidence establishes that: (a) The
terms of the proposed transaction are reasonable and fair and do not
involve overreaching; (b) the proposed transaction is consistent with
the policies of the registered investment company involved; and (c) the
proposed transaction is consistent with the general provisions of the
Act. As noted above, section 6(c) authorizes the SEC to exempt classes
of transactions. Applicants believe the proposed sales of portfolio
securities from a Rollover Trust to a New Trust satisfy the exemptive
requirements set forth in sections 6(c) and 17(b).
11. Rule 17a-7 under the Act permits registered investment
companies that might be deemed affiliates solely by reason of common
investment advisers, directors, and/or officers, to purchase securities
from, or sell securities to, one another at an independently determined
price, provided certain conditions are met. Paragraph (e) of the rule
requires an investment company's board of directors to adopt and
monitor the procedures for these transactions to assure compliance with
the rule. A unit investment trust does not have a board of directors
and, therefore, may not rely on the rule. Applicants represent that
they will comply with all of the provisions of rule 17a-7, other than
paragraph (e).
12. Applicants represent that purchases and sales between Series
will be consistent with the policy of each Series, as only securities
that otherwise would be bought and sold on the open market pursuant to
the policy of each Series will be involved in the proposed
transactions. Further, Applicants submit that requiring the Series to
buy and sell on the open market leads to unnecessary brokerage fees and
is therefore contrary to the general purposes of the Act.
13. Section 14(a) requires in substance that investment companies
have $100,000 of net worth prior to making a public offering. As noted
previously, the Sponsor will deposit substantially more than $100,000
of debt or equity securities for each Series. As the Sponsor intends to
sell all of a Trust Series' Units to the public, however, representing
the entire beneficial ownership of the Trust, Applicants request
exemptive relief from the net worth requirement of section 14(a).
Applicants will comply in all respects with rule 14a-3, which provides
an exemption from section 14(a), except that the Voyageur Equity Trust
and certain future Trusts (the ``Equity Trusts'') will not restrict
their portfolio investments to ``eligible trust securities'' as
required by the rule.
14. Section 19(b) and rule 19b-1 make it unlawful, except under
limited circumstances, for a registered investment company to
distribute long-term capital gains more than once every twelve months.
Rule 19b-1(c), under certain circumstances, excepts a unit investment
trust investing in ``eligible trust securities'' (as defined in rule
14a-3) from the requirements of rule 19b-1. Because the Equity Trusts,
as noted above, will not restrict their portfolio to ``eligible trust
securities,'' the Equity Trusts will not qualify for the exemption in
paragraph (c) of rule 19b-1. Applicants therefore request an exemption
from section 19(b) and 19b-1 to the extent necessary to permit any
capital gains earned in connection with the sale of portfolios shares
to be distributed to Unitholders along with the Equity Trust's regular
distributions. In all other respects, Applicants will comply with
section 19(b) and rule 19b-1.
15. Applicants submit that the dangers which section 19(b) and rule
19b-1 are designed to prevent do not exist in the Equity Trusts. Any
gains from the redemption of portfolio securities would be triggered by
the need to meet Trust expenses, deferred sales charge installments, or
by requests to redeem Units, events over which the Sponsor and the
Equity Trusts have no control. Moreover, since principal distributions
must be clearly indicated in accompanying reports to Unitholders as a
return of principal and will be relatively small in comparison to
normal dividend distributions, there is little danger of confusion from
failure to differentiate among distributions.
Applicants' Conditions
The Applicants agree that any order granting the application will
be made subject to the following conditions:
A. Conditions With Respect to DSC Relief and Exchange Option
1. Whenever the Exchange Option is to be terminated or its terms
are to be amended materially, any holder of a security subject to that
privilege will be given prominent notice of the impending termination
or amendment at least 60 days prior to the date of termination or the
effective date of the amendment, provided that: (a) No such notice need
be given if the only material effect of an amendment is to reduce or
eliminate the sales charge payable at the time of an exchange, to add
one or more new Series eligible for the Exchange Option, or to delete a
Series which has terminated; and (b) no notice need be given if, under
extraordinary circumstances, either (i) there is a suspension of the
redemption of Units of the Trust under section 22(e) of the Act and the
rules and regulations promulgated thereunder, or (ii) a Trust
temporarily delays or ceases the sale of its Units because it is unable
to invest amounts effectively in accordance with applicable investment
objectives, policies and restrictions.
2. An investor who purchases Units under the Exchange Option will
pay a lower aggregate sales charge than that which would be paid for
the Units by a new investor, unless the Five Months or DSC Front-end
Exchange Adjustments apply.
3. The prospectus of each Trust offering exchanges and any sales
literature or advertising that mentions the existence of the Exchange
Option will disclose that the Exchange Option is subject to
modification, termination or suspension, without notice except in
certain limited cases.
4. Each Series offering Units subject to a deferred sales charge
will include in its prospectus the table required by item 2 of Form N-
1A (modified as
[[Page 67377]]
appropriate to reflect the differences between unit investment trusts
and open-end management investment companies) and a schedule setting
forth the number and date of each installment payment.
B. Condition for Exemption From Section 14(a)
Applicants will comply in all respects with the requirements of
rule 14a-3, except that the Equity Trusts will not restrict their
portfolio investments to ``eligible trust securities.''
C. Conditions for Exemption From Section 17(a)
1. Each sale of Equity Securities by an Index Trust, or Eligible
Companies' securities by a State Trust, to a New Trust will be effected
at the closing price of the securities sold on the applicable Exchange
or the Nasdaq-NMS on the sale date, without any brokerage charges or
other remuneration except customary transfer fees, if any.
2. The nature and conditions of such transactions will be fully
disclosed to investors in the appropriate prospectus of each future
Rollover Trust and new Trust.
3. The trustee of each Rollover Trust and New Trust will (a) review
the procedures discussed in the application relating to the sale of
securities from a Rollover Trust and the purchase of those securities
for deposit in a New Trust and (b) make such changes to the procedures
as the trustee deems necessary that are reasonably designed to comply
with paragraphs (a) through (d) of rule 17a-7.
4. A written copy of these procedures and a written record of each
transaction pursuant to any order granting the application will be
maintained as provided in rule 17a-7(f).
For the Commission, by the Division of Investment Management,
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-31513 Filed 12-28-95; 8:45 am]
BILLING CODE 8010-01-M
