Pl.L:jLIC 

RESPONSE OF THE OFFICE OF
 Our Ref. No. 96-8-ICR
 

INVESTMNT COMPAN REGULATION Dreyfus Asset Allocation


DIVISION OF INVESTMNT Fund, Inc. (File No.


MAAGEMENT 812 - 9980) 

On April 30, 1996, Dreyfus Asset Allocation Fu~, Inc.
 

("DAAF"), et al. 1 received an order of the Commission under
 section 17 (b) of the Investment Company Act of 1940 ("Actll) exempting applicants from the provisions of section 17 (a) of the 

Act ("Order"). i The Order permits applicants to transfer all of 

the assets of two portfolios of DAAF, the Growth Series .and the 

Income Series ("Acquired Portfolios"), to two corresponding
 

portfolios of Dreyfus LifeTime Portfolios, Inc. ("DLPI"), the
 

Growth Portfolio and the Income Portfolio ("Acquiring
 

Portfolios" ~, in exchange for Investor Class shares of the
 

Acquiring Portfolios ("Exchange").
 

Your letter of May 16, 1996 requests our assurance that we
 

will not recommend that the Commission take any enforcement
 

action if shareholders of the Acquired Portfolios receive shares
 

of the Class R shares of the Acquiring Portfolios, rather than
 

the Investor Class shares. You state that Investor Class and
 

Class R shares are identical in all material respects, except
 

that Investor Class shares are subj ect to a shareholder services
 

plan under which such shares incur an annual fee of .25% of net
 

assets. Class R shares previously were available only to certain
 

institutional investors. Since the Order was issued, DLPI's
 

board of directors determined to offer Class R shares to
 

shareholders of the Acquired Portfolio in connection with the


Exchange. 

You also state that the board of directors of DAAF and DLPI
 

has approved this modification in the terms of the Exchange. In
 

a telephone conversation with the undersigned on June 14, 1996,
 

Mr. David Stephens stated that the directors, including the
 

directors who are not "interested persons" of DAAF or DLPI as
 

defined in the Act, found that the Exèhange was in the best
 

interests of DAAF' sand DLPI' s shareholders and that the
 

interests of existing shareholders of DAAF and DLPI would not be
 diluted. 

You contend that proposed modification in the terms of the
 

Exchange does not impair the rights of shareholders of the
 

Acqui.red Portfolios, and that .such shareholders will benefit from
 

the Exchange because Class R shares are expected to have a lower
 

expense ratio than Investor Class shares.
 

Based on the facts and representations in your letter and in
 

yqur conversation with the undersigned, we would not recommend
 

that the Commission take any enforcement action against
 

Investment Company Act Release Nos. 21873 (Apr. 4, 1996)


(notice) and 21928 (Apr. 30, 1996) (order). 
- 2 ­

applicants if applicants effect the Exchange in reliance on the
 Order, notwithstanding the modification described above. This 

response expresses the Division's position on enforcement only,
 

and does not purport to express any legal conclusio~ concerning
 

the issues presented. Different facts or representations might
 require a different conclusion. __ 

Mercer E. Bullard
 

Staff Attorney
 

Office of Investment
 

Company Regulation
 

June 14, 1996
 
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2128054 Dire~'Oial: 

Fax: 212 B0 60 

Telex: mOO3 STROOCK NY 

1940 Act; Section 17 (a) 

May 16, 1996
 

Office of Investment Company Regulation
 

Division of Investment Management
 

Securities and Exchange Commission
 

450 Fifth Avenue, N. W.
 

Washington, D.C. 20549
 

Re: Dreyfus Asset Allocation Fund, Inc. 

Dreyfus LifeTime Portfolios, Inc.


The Dreyfus Corporation 

Release Nos. 21873 and 21928
 

Ladies and Gentlemen:
 

This is a request for assurance that the Staff of the Division
 

of Investment Management (the "Staff") will not recommend
 

enforcement action if Dreyfus Asset Allocation Fund, Inc.
 

( "DAA" ), Dreyfus LifeTime Portfolios, Inc. (" DLPI ") and The


Dreyfus Corporation ("Dreyfus" and, together with DAA and DLPI,
 

the "Applicants") modify in the manner described in this letter
 

certain facts upon which an exemptive order of the Commission
 

was issued to Applicants regârding the proposed reorganization
 

of two series of DAA into two corresponding series of DLPI.
 

Facts 

Applicants filed an application for exemptive order on February
 

6, 1996, which was amended on March 29, 1996 and April 2, 1996
 

(the "Application"), to permit DAA and DLPI to engage in the


transactions necessary to consumate the proposed
 

reorganization, which transactions would be exempted from the'
 

prohibi tions of Section 17 ( a) of the Investment Company Act of
 

1940, as amended (the "1940 Act"), by virtue of.Rule 17a-8
 

thereundèr except for the fact that affiliates of Dreyfus
 

beneficially ,oWn more than 5% of the outstanding shares of the
 

relevant seri~s of DAA and DLPI. An order (the "Order") was
 

. 40817493 

Washington, D.C. 200362 Los Angeles, CA 90067-3086 Miami, FL 33131-2385 H-108 Budapest, Hungar 1150 Seventeenth Street N.W.
 2029 Century Par East 200 South Biscayne Boulevard Rák6czi ut 1-3 

202 452 9250 3105565800 305 358 9900 361 26 9520
 
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Office of Investment Company Regulation
 

May 16, 1996
 

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granted by the Commission on April 30, 1996. See Dreyfus Asset
 

Allocation Fund, Inc., et al., Investment Company Act Release
 

Nos. 21873 (April 3, 1996) (Notice of Application) and 21928
 

(April 30, 1996) (Order).
 

DAA and DLPI are Maryland corporations registered under the 

1940 Act as open-end, management 
 investment companies. DAA currently offers three series of shares, including the Growth
 

Series (the "Growth Series") and the Income Series (the "Income


Series" and, together with the Growth Series, the "Series"). 1 

Each Series offers one class of shares~ DLPI currently offers
 

three. series of shares, including the Growth Portfolio (the
 

"Growth Portfolio") and the Income Portfolio (the "Income
 

Portfolio" and, together with the Growth Portfolio, the
 "Portfolios" ) . 2 Each Portfolio offers two classes of. shares,

thE,.investor Class and Class R...,.J:,n:V~S,t9~~\Ciaas.i:.liarea:¡\,ançt;~Class

:.R':~~,li.ai.~13 . are ide:r 'l~cë:Ü..!,~.~.(.~,rl,.l-~;t;a;çla;l;;;,:respects,. exc7Pt".th.a:t' 

Cl~i: s.R. shares . are:: n.()t\,;Sl\ßj.~"q~¿J;'Q.~::,ê..Sha:tehplder. Servi.G~i:,;.J~Uan 

(.tli~ "Plan'!..).. and .¡."therefO:re"';';'ar.e:~:~~g§qt.~!Í.,tohave a lower e~p~:msa:ura:tio~i"than,":'Investê)r:,-~dClâs'§"!"shar'es.Under the.P lan, . DLPI.' 

'payš;¡:~;Premlér!i'Mutual:;,ò'Fund¡;"se'r'ice~¡.:.'Iiic., the Fund's distributor, fór........thê.ddp:tdV.tSiÓI1.:tÒ£:'.êêrtâiih'~'services.',t0'" each. Portfolio.'.s,'
 

InV'eS-tor~ Cla.ss shares eiféê"'at..,.'the~"annual'rate of". 25%. of' 
 the 

valiiê!:Ô:È'(th~"'âverage dailynet."a:sf?'~t.sSö,~:.',the.' Portfolio'.s
 

Invest~'~hÇ.lelssi:hê:ç.~s ..;)~:a~g.ij~~~t~ê:s"'~t~~sh'å:rês.are subjsqt"tó ca',;. .:, 

ShãrèhÒlder' 'Sèriiêèi: PlaÌi'wh.fêlí"'is" identical to the Plan.
 

The investment objective of. the Growth Series and Growth
 

Portfolio is capital appreciation. The investment objectives of
 

the Income Series and Income Portfolio are to maximize current
 

income and capital appreciation. The management policies of
 

each Series and its corresponding Portfolio are substantially
 

similar. Dreyfus, a wholly-owned subsidiary of Mellon Bank,
 

N .A., which is a wholly-owned subsidiary of Mellon Bank
 

Corporation ("Mellon ii), serves as the investment adviser to each
 

Series and Portfolio. Mellon Equity Associates, an indirect
 

DAA also .offers the Growth and Income Series.
 

'"
 

2 DLPI also offers the Growth and Income Portfolio.
 

40817493 
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Office of Investment Company Regulation
 

May 16, 1996
 

Page 3
 

" 

wholly-owned subsidiary of Mellon, and, thus, an affiliate of
 

Dreyfus, serves as the sub-adviser to the Portfolios.
 

Major Trading Corporation, a wholly-owned subsidiary of Mellon
 

and, thus, an affiliate of Dreyfus, owns in excess of 59% of the
 

outstanding shares of the Growth Series and in excess of 65% of
 

the outstanding shares of the Income 'Series. Allomon
 

Corporation, a wholly-owned subsidiary of Mellon and, thus, an
 

affiliate of Dreyfus, owns in excess of 98% of the outstanding
 

Investor Class shares and Class R shares of the Growth Portfolio
 

and in excess of 99% and 92%, respectively, of the outstanding
 

Investor Class shares and Class R shares of the Income
 Portfolio. 

The Boards of DAA and DLPI previously approved a plan of 

reorganization, subject to shareholder approval, providing for
 

the transfer of all of the assets of each Series to the
 

corresponding Portfolio, in exchan~e (the "Exchange") for the
 

Portfolio's Investor Class shares. In connection with the
 

Exchange, the Portfolios will assume the liabilities of the
 

respective Series. The numer of shares to be issued to each
 Portfolio will be determned on the basis of the relative net 

asset values per share and aggregate net assets of the Series
 

and the Portfolios. Each Series will liquidate and distribute
 

pro rata shares of the Portfolio to its shareholders at or as
 

soon as practicable after the closing, after which the Series
 

will be terminated as a series of DAA and its shares canceled.
 

3	 On February 26, 1996, DLPI filed a registration statement 

on Form N-14 (the "Registration Statement") relating to the 

Exchange, which became effective on March 27, 1996. The 

Prospectus/Proxy Statement forming a part of the

Registr~tion Statement has not been mailed to Series' shareholders. 

40817493 
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May 16, 1996
 

Page 4
 

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Proposed Modification To the Exchanqe
 

. Applicants' now,' prdp~~e,~",1:d,i;~ffect;~,tb~.."EX,gnang.s;py::;;traIls ferring
 

.the . Portfo~;.qs~t4'Ä,çlas,~!~¡,R?l:shares;í);:,;&nsteacl:;~'a~tit;nV~~T~~~S¡!Ö~~gla.S,,~;:,.;,
 

sharesii':::irif"d'e~'clïange¡,;:for_ aii,. of.. .the.. corresp6iidliig:~'dS'er:tèS'.,:c:'''áš SèeSc~;:;
 

subj e'ct "'tt)"":i.t'S,:'.l.l.apJ..lities ."d""As, a.,.,consequence~,.ccurrent. halders 

ofèach"'Serl~'s' shares will. 
 benefit .as describedbelów~ '. 

~ '._..7Ú._,.:.,:~ .';..:," . '¡he Boards of 'DAA andDLPI have approved this.,mddi.fLcation, and 

DLPI intends to file a post-effective amendment to the
 

Registration Statement to reflect such modification. In all
 

other respects, the Exchange will remain unchanged. Applicants
 

represent that, except as described herein, the Exchange will be
 

effected in conformity in all respects to the Order, including
 the conditions thereto. 4 

, Discussion 

Until this time, the Portfolios' Class R shares were offered
 

only to insti tutionalinvestors acting for:theïnsé:lLy:aa#9r:~in a
 

fiduciary, advisory, agency, custodial or similar capacity, for


qualified or non-qualified employee benefit plans',',.;:,whi.le 

Investor Class shares were offered to any investo:r~ Since the
 

Order was granted, DLPI' s Board has determined to offer Class R
 

shares to Series' shareholders in connection with the Exchange.
 

Applicants believe that the proposed modification does not
 

change the legal analysis underlying the Application and the
 

Order. The proposed modification does not negatively affect or
 

in any way impair the rights of Series' shareholders. In fact,
 

Series' sharehqlders:.' will benefit from the 
 proposed modification 

in that Class R shares are not subject to payments under the
 

Plan and, thus, are expected to have a lower expense ratio than
 Investor Class shares. 

4 The Ordèr; as granted, stated that the Portfolios would 

transfer~ Investor Class shares in exchange for all of the
 

corresponding Series' assets, subject to its liabilities.
 

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Office of Investment Company Regulation
 

May 16, 1996
 

Page 5
 

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Requested Relief
 

Applicants believe that the proposed modification as described
 

above is a minor operational change that can only benefit
 Series' shareholders. Therefore, Applicants request the Staff's 

concurrence that it would not recommend enforcement action if
 

the Applicants modify the terms of the Exchange as described in
 

this letter and consumate the Exchange in reliance on the


Order. 

Please feel free to telephone Stuart H. Coleman at (212) 806­

6049 or Richard Horowitz at (212) 806-5513 with any questions or
 

comments you may have.
 

JL 

cc: Office of Chief Counsel
 

Division of Investment Management
 

.\ 

40817493