[Federal Register Volume 64, Number 158 (Tuesday, August 17, 1999)]
[Notices]
[Pages 44766-44767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-21274]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 23942; 812-11704]
Anchor Resource and Commodity Trust, et al.; Notice of
Application
August 11, 1999.
AGENCY: Securities and Exchange Commission (``SEC'').
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.
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SUMMARY OF APPLICATION: Applicants request an order to permit Anchor
Resource and Commodity Trust to acquire the assets and liabilities of
Anchor Strategic Assets Trust (the ``Reorganization''). Because of
certain affiliations, applicants may not rely on rule 17a-8 under the
Act.
APPLICANTS: Anchor Resource and Commodity Trust (``ARCT''), Anchor
Strategic Assets Trust (``ASAT,'' ARCT and ASAT each a ``Trust,'' and
together the ``Trusts'') an Anchor Investment Management Corporation
(``Adviser'').
FILING DATES: The application was filed on June 25, 1999. Applicants
have agreed to file an amendment to the application during the notice
period, the substance of which is reflected in this notice.
HEARING OR NOTIFICATION OF HEARING: An order granting the requested
relief 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
September 1, 1999, 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 SEC's Secretary.
ADDRESSES: Secretary, SEC, 450 Fifth Street, N.W., Washington, D.C.
20549-0609. Applicants, 579 Pleasant Street, Suite 4, Paxton,
Massachusetts 01612.
FOR FURTHER INFORMATION CONTACT: Susan K. Pascocello, Senior Counsel,
at (202) 942-0674, or Michael W. Mundt, Branch Chief, at (202) 942-0564
(Office of Investment Company Regulation, Division of Investment
Management).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee at the
SEC's Public Reference Branch, 450 Fifth Street, N.W., Washington, D.C.
20549-0102 (tel. 202-942-8090).
Applicants' Representations
1. The Trusts, both Massachusetts business trusts, are registered
under the Act as open-end management investment companies. The Adviser,
a Massachusetts corporation, serves as the investment adviser to the
Trusts and is registered as an investment adviser under the Investment
Advisers Act of 1940. The Adviser is under common control with Societe
D'Etudes et de Gestion Financieres Meeschaert, S.A. (``Societe
D'Etudes''), which owned in excess of 99% of the outstanding shares of
ARCT and in excess of 60% of the outstanding shares of ASAT as of June
1999.
2. On June 21, 1999, the boards of trustees of each Trust
(together, the ``Boards''), including all of the trustees who are not
``interested persons,'' as defined in section 2(a)(19) of the Act
(``Independent Trustees''), unanimously approved an agreement and plan
of reorganization (``Reorganization Agreement'') under which ARCT will
acquire the assets and liabilities of ASAT in exchange for ARCT shares.
The number of ARCT shares to be issued to ASAT will be determined on
the basis of the relative net asset value per share and aggregate net
assets of ARCT and ASAT as of the close of business on the closing date
of the Reorganization (``Closing Date''), currently anticipated to
occur in early September 1999. Portfolio securities of ARCT and ASAT
will be valued in accordance with the valuation practices of each
Trust, which are described in each Trust's current prospectus and
statement of additional information. As soon as practicable after the
Closing Date, ASAT will liquidate and distribute pro rata to its
shareholders the ARCT shares. No sales charges will be imposed upon
ASAT shareholders in connection with the Reorganization.
3. Applicants state that the investment objectives, restrictions
and limitations of ARCT are similar to those of ASAT. Neither ASAT nor
ARCT impose any sales charges or distribution related fees.
4. The Boards, including all of the Independent Trustees,
determined that the Reorganization is in the best interests of each
Trust, and that the interests of the existing shareholders of each
Trust would not be diluted by the Reorganization. In assessing the
Reorganization, the Boards considered various factors, including: (a)
the compatibility of each Trust's investment objective, policies and
restrictions, and shareholder services; (b) the terms and conditions of
the Reorganization; (c) the expense ratios of each Trust; (d) the tax-
free nature of the Reorganization; and (e) the estimated costs of the
Reorganization. All Reorganization expenses will be borne by ARCT, as
determined by its Board.
5. The Reorganization is subject to a number of conditions,
including that: (a) the Reorganization is approved by each Board and
the shareholders of ASAT; (b) the Trusts receive opinions of counsel
that the Reorganization will be tax-free; and (c) applicants receive
exemptive relief from the SEC as requested in the application. The
Reoganization Agreement may be terminated by ASAT by resolution of its
Board if the Board determines that circumstances have changed to make
the Reorganization inadvisable. Applicants agree not to make any
material changes to the Reorganization Agreement without prior SEC
approval.
6. A registration statement on Form N-14 was filed with the SEC on
June 23, 1999, and became effective on July 29, 1999. Definitive proxy
solicitation materials have been filed with the SEC and were mailed to
ASAT shareholders on July 29, 1999. A special meeting of ASAT
shareholders is scheduled for August 20, 1999.
Applicants' Legal Analysis
1. Section 17(a) of the Act generally prohibits an affiliated
person of a registered investment company, or an affiliated person of
such a person, acting as principal, from selling any security to, or
purchasing any security from, the company. Section 2(a)(3) of the Act
defines an ``affiliated person'' of another person to include (a) 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; (b) any person 5% or more of whose securities are
directly or indirectly owned, controlled, or held with power to vote by
the other person; (c) any person directly or indirectly controlling,
controlled by or under common control with the other person; and (d) if
the other person is an investment company, any investment adviser of
that company.
[[Page 44767]]
2. Rule 17a-8 under the Act exempts from the prohibitions of
section 17(a) mergers, consolidations, or purchases or sales of
substantially all of the assets of registered investment companies that
are affiliated persons, or affiliated persons of an affiliated person,
solely by reason of having a common investment adviser, common
directors, and/or common officers, provided that certain conditions set
forth in the rule are satisfied.
3. Applicants believe that they may not rely on rule 17a-8 in
connection with the Reorganization because the Trusts may be deemed to
be affiliated by reasons other than having a common investment adviser.
Applicants state that Societe D'Etudes, affiliate of the Adviser, owns
more than 25% of the outstanding voting securities of each of the
Trusts.
4. Section 17(b) of the Act provides that the SEC may exempt a
transaction from the provisions of section 17(a) if the evidence
establishes that the terms of the proposed transaction, including the
consideration to be paid, are reasonable and fair and do not involve
overreaching on the part of any person concerned, and that the proposed
transaction is consistent with the policy of each registered investment
company concerned and with the general purposes of the Act.
5. Applicants request an order under section 17(b) of the Act
exempting them from section 17(a) to the extent necessary to complete
the Reoganization. Applicants submit that the Reorganization satisfies
the standards of section 17(b) of the Act. Applicants believe that the
terms of Reorganization are fair and reasonable and do not involve
overreaching. Applicants state that the Reorganization will be based on
the Trusts' relative net asset values. In addition, applicants state
that the Boards, including all of the Independent Trustees, have
determined that the participation of each Trust in the Reorganization
is in the best interests of each Trust and that such participation will
not dilute the interests of shareholders of each Trust.
For the SEC, by the Division of Investment Management, under
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-21274 Filed 8-16-99; 8:45 am]
BILLING CODE 8010-01-M
