[Federal Register Volume 62, Number 83 (Wednesday, April 30, 1997)]
[Notices]
[Pages 23509-23510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11090]
[[Page 23509]]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 22630; 811-975]
United Periodic Investment Plans to Acquire Shares of United
Science Fund, a Class of Shares Issued by United Funds, Inc.; Notice of
Application
April 23, 1997.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of application for deregistration under the Investment
Company Act of 1940 (the ``Act'').
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APPLICANT: United Periodic Investment Plans to Acquire Shares of United
Science Fund, a Class of Shares Issued by United 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 DATES: The application was filed on July 26, 1996, and amended
on November 26, 1996, and March 12, 1997.
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 May 19, 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 reason
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, 6300 Lamar Avenue, P.O. Box 29217, Shawnee Mission,
KS 66201-9217.
FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior
Counsel, (202) 942-0581, or Mercer E. Bullard, 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 a unit investment trust that has variously offered
Periodic Investment Plans to Acquire United Science Fund Shares of
United Funds, Inc. and Periodic Investment Plans with Insurance to
Acquire United Science Fund Shares of Untied Funds, Inc. (collectively,
the ``Plans''). Applicant was created under the laws of Missouri
pursuant to a trust agreement (``Trust Agreement'') dated August 29,
1960. Waddell & Reed, Inc. (the ``Sponsor'') and State Street Bank and
Trust Company (the ``Custodian'') serve as applicant's Sponsor and
Custodian, respectively.
2. According to SEC records, on August 24, 1960, applicant filed a
notification of registration on Form N-8A under section 8(a) of the
Act. On August 29, 1960, applicant filed a registration statement on
Form N-8B-2 under section 8(b) of the Act to register the Plans, which
became effective in 1960. The initial public offering of the Plans
commenced on or soon after such date.
3. Before February 29, 1996, the Sponsor ceased to offer and sell
any new Plan. The Custodian subsequently informed the Sponsor that it
intended to resign as custodian. Accordingly, and in light of changes
since the inception of the Plans in the ways of investing in United
Funds, Inc. Science and Technology Fund (the ``Fund''),\1\ the Fund
which underlies the Plans, the Sponsor determined not to continue the
Plans.
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\1\ United Science Fund of United Funds, Inc. is now known as
United Science and Technology Fund, a series of Untied Funds, Inc.
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4. The Trust Agreement provides that the Plans may be changed by
agreement of the Sponsor and the Custodian without the consent of the
Plan holders, provided that the change does not adversely affect the
substantive rights of the Plan holders. The Sponsor determined that:
(1) The amendment of the certificates of each Plan to permit the
termination of that Plan by the Sponsor did not adversely affect the
substantive rights of the Plan holders; and (b) overall, as direct
shareholders of the Fund, Plan holders on the Termination Date, as
defined below, would be in a position at least as favorable, if not
more favorable, than if their Plans had not terminated. Effective March
11, 1996, the Sponsor and the Custodian amended the certificates of the
Plans to permit the termination of each plan by the Sponsor in
accordance with the terms of the notice sent to Plan holders as
described below.
5. On or about February 29, 1996, applicant sent to all holders of
record of an interest in applicant notice that, as of May 30, 1996 (the
``Termination Date''), applicant would be terminated and the Sponsor
would arrange for each holder of a Plan to receive the number of Class
A shares of the Fund held by applicant corresponding to the value of
such holder's interest in the Plan and thus representing an in-kind
distribution of the holder's pro rata interest in the assets of
applicant.
6. As of May 29, 1996, there was $43,115,292 face amount of Plans
outstanding, representing beneficial interests in applicant having an
aggregate value of $87,227,151 based on 3,309,072.514 Fund shares owned
by applicant for outstanding Plans at $26.36 per Fund share.\2\
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\2\ The dollar value of the face amount of Plans is the total
amount of payments to be made under the Plans purchased by Plan
holders. The aggregate value of Plans outstanding is the net asset
value of the shares of the Fund attributable to such Plans
outstanding, which may be greater or less than the face amount
depending on the number of payments made and changes in the value of
the Fund shares.
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7. On the Termination Date, applicant distributed all of its net
assets, consisting of shares of the Fund, to Plan holders of record on
that date. Each such Plan holder received, at no acquisition fee, the
number of Class A shares of the Fund corresponding to the value of his
or her Plan interest. The distribution to and receipt by each Plan
holder of record was effected by the establishment, on the books of the
Fund, of an account in the name of that individual with the requisite
number of Class A shares of the Fund. Distributions of 3,309,072.514
Fund shares held by applicant in the total amount of $88,352,236 to
9,590 holders or record represented approximately 100% of the net
assets of applicant. Each Plan holder received his or her proportionate
share of such liquidation distribution in Class A shares of the Fund.
8. Any holder of an uncompleted Plan on the Termination Date with a
face amount of less than $12,000, may purchase Class A shares of Fund
at net asset value (``NAV''), plus a maximum sales charge of 2%, up to
the amount representing the unpaid balance of his or her Plan, if the
purchase order is so designated. Any holder of an uncompleted Plan on
the Termination Date with a face amount of $12,000 or more, may
purchase Class A shares of the Fund at NAV, up to the amount
representing the unpaid balance of the Plan, if the purchase order is
so designated. In addition, any person who was a Plan holder on the
Termination
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Date may purchase Class A shares of the Fund at NAV up to the amount
representing partial Plan withdrawals outstanding on the Termination
Date, provided the purchase order is so designated.\3\
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\3\ The terms of the Plans allowed Plan holders who had made 18
minimum monthly payments to make partial withdrawals of cash or Fund
shares from their Plans, subject to certain restrictions. After 90
days from the time of making a withdrawal and before the Plan's
termination or exchange, Plan holders could redeposit cash or Fund
shares (depending on what had been withdrawn) to their Plans without
a sales charge. Despite the 90-day provision, Plan holders were
permitted to make partial withdrawals up to the Termination Date,
and redeposits at any time subsequent to the conversion.
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9. Applicant states that, in order to ensure that holders of
uncompleted Plans received full credit for sales commissions previously
paid, the Sponsor analyzed the maximum commission rate that would have
been applicable to subsequent payments under the Plan. Applicant
further states that, for each of the foregoing categories of holders of
uncompleted Plans, the sales charge, if any, for purchases of Class A
shares of the Fund reflecting the unpaid balance of the face amount of
the Plan is less than the sales charge that would have been applicable
if such purchases had been made under continuation of the Plan.
Termination of the Plans did not result in any Plan holder paying a
sales charge in excess of that permitted under section 27 of the Act or
provided under the terms of the Plan.
10. Expenses incurred in connection with the liquidation consist
primarily of legal, printing, mailing, and miscellaneous administrative
expenses. The expenses are expected to total approximately $14,430, and
have been or will be paid by the Sponsor.
11. Applicant has no assets or securityholders, and is not a party
to any litigation or administrative proceeding. The only known debts or
other liabilities of applicant that remain outstanding are legal fees
of approximately $325, which will be paid by the Sponsor. Applicant is
not engaged, nor does it propose to engage, in any business activities
other than those necessary for the winding-up of its affairs.
For the SEC, by the Division of Investment Management, under
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-11090 Filed 4-29-97; 8:45 am]
BILLING CODE 8010-01-M
