53038 Federal Register / Vol. 62, No. 197 / Friday, October 10, 1997 / Notices

redemption, applicants request relief

from section 2(a)(32) and rule 22c–1.

2. Section 22(d) and rule 22d-1

require 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, with

the exeception of sales of redeemable

securities at prices which reflect

scheduled variations in the ‘‘sales load.’’

Section 2(a)(35) defines the term sales

load as the difference between the sales

price and the portion of the proceeds

invested by the depositor or trustee.

Applicants request relief from sections

2(a)(35) and 22(d) to the extent that the

DSC may be paid in installements rather

than upon purchase.

3. Applicants believe that the

provisions of section 22(d), rule 22d-1

and section 2(a)(35), taken together, are

intended to prevent (1) riskless trading

in investment company securities due to

backward pricing, (2) disruption of

orderly distribution by dealers selling

shares at a discount, and (3)

discrimination among investors

resulting from different prices charged

to different investors. Applicants

believe the proposed DSC program will

present none of these abuses.

Applicants contend that the deduction

of the Installment Payments is

consistent with the policy of forward

pricing. Applicants also contend that

the amount, computation and timing of

the DSC will promote fair treatment of

all unithholders, while permitting the

Trusts to offer unitholders the advantage

of having a larger portion of their

purchase amount invested immediately.

Applicants further note that the DSC

program will be disclosed in the

prospectus of each Series and available

on the same terms to all investors.

Finally, applicants state that any waiver

of the DSC will be disclosed in the

prospectus of each Series and

implemented in accordance with rule

22d–1.

4. 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

the trust’s depositor or principal

underwriter. Because the trustee’s

payment of the DSC to the Sponsor may

be deemed to be an expense under

section 26(a)(2)(C), applicants request

relief from that section to the extent

necessary to permit the trustee to collect

DSC payments and disburse them to the

Sponsor. Applicants believe that the

relief is appropriate because the DSC is

more properly characterized as a sales

load than as an ‘‘expense.’’

5. Section 6(c) authorizes the SEC to

exempt any person or transaction from

any provision of the Act or any rule

under the Act to the extent that the

exemption is necessary or appropriate

in the public interest and consistent

with the protection of investors and the

purposes fairly intended by the policy

and provisions of the Act. Applicants

believe that their proposal meets this

standard.

Applicants’ Conditions

Applicants agree that any order

granting the requested relief will be

subject to the following conditions:

1. Any DSC imposed on Units issued

by a Series will comply with the

requirements of rule 6c–10(a) (1)

through (3) under the Act.

2. Each Series offering Units subject to

a DSC will include in its prospectus the

disclosure required in Form N–1A

relating to deferred sales charges,

modified as appropriate to reflect the

differences between unit investment

trusts and open-end investment

companies.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–26904 Filed 10–9–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–22839; 812–10672]

TCW International Equity Limited

Partnership, et al.; Notice of

Application

October 3, 1997.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for an

order under section 17(b) of the

Investment Company Act of 1940 (the

‘‘Act’’) granting an exemption from

section 17(a) of the Act.

SUMMARY OF APPLICATION: Applicants

request an order to permit certain

limited partnerships to transfer all of

their assets to corresponding series of a

registered investment company in

exchange for the series’ shares, which

then will be distributed pro rata to

partners of the partnerships.

APPLICANTS: TCW International Equity

Limited Partnership, TCW Japan

Limited Partnership, TCW Value

Opportunities Fund (collectively, the

‘‘Partnerships’’), TCW Galileo Funds,

Inc. (the ‘‘Company’’), TCW Asset

Management Company (‘‘TAMCO’’),

and TCW Funds Management, Inc. (the

‘‘Adviser’’).

FILING DATES: The application was filed

on May 16, 1997, and amendments to

the application were filed on August 15,

1997, and October 2, 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 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

October 28, 1997, 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 5th

Street, N.W., Washington, DC 20549.

Applicants, 865 South Figueroa Street,

Suite 1800, Los Angeles, California

90017.

FOR FURTHER INFORMATION CONTACT:

Brian T. Hourihan, Senior Counsel, at

(202) 942–0526, or Mary Kay Frech,

Branch Chief, (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

(tel. (202) 942–8090).

Applicants’ Representations

1. TCW International Equity Limited

Partnership was organized as a

California limited partnership on

August 19, 1993: TCW Japan Limited

Partnership was organized as a

Delaware limited partnership on May 2,

1995; and TCW Value Opportunities

Fund was organized as a California

limited partnership on May 16, 1996.

The Partnerships permit investors to

purchase and redeem Partnership

interests (‘‘Units’’) at net asset value on

a monthly basis. The Partnerships are

not registered under the Act in reliance

on section 3(c)(1) of the Act. The

offerings of the Units were structured as

private placements under section 4(2) of

the Securities Act of 1933 (the

‘‘Securities Act’’), and Regulation D

promulgated under the Securities Act.

Units are sold to institutional investors

and high net worth individuals.

2. TAMCO, a wholly owned

subsidiary of the TCW Group, Inc.,

serves as the sole general partner of the
Federal Register / Vol. 62, No. 197 / Friday, October 10, 1997 / Notices 53039

Partnerships and has exclusive

responsibility for their overall

management, control, and

administration. TAMCO, an investment

adviser registered under the Investment

Advisers Act of 1940, also serves as

investment manager with respect to the

Partnerships’ assets.

3. The Company, a Maryland

corporation, is an open-end investment

company registered under the Act.

Currently, the Company offers thirteen

series (the ‘‘Existing Funds’’). The

Company proposes to offer three

additional series (the ‘‘New Funds’’),

each of which will correspond to a

Partnership in terms of investment

objective and policies.

4. The Company has entered into an

advisory agreement with the Adviser, a

wholly-owned subsidiary of the TCW

Group, Inc., pursuant to which the

Adviser, an investment adviser

registered under the Investment

Advisers Act of 1940, will render

advisory services to the New Funds. The

Adviser will provide services that are

substantially the same as those TAMCO

currently renders to the corresponding

Partnership. The officers of TAMCO

serving as portfolio managers of the

Partnerships also serve as officers of the

Adviser and will serve as portfolio

managers of the corresponding New

Funds.

5. Applicants propose that, pursuant

to an Agreement and Plan of Exchange

(the ‘‘Plan’’), each of the New Funds

will acquire assets from its

corresponding Partnership in exchange

for New Fund shares (the ‘‘Exchanges’’).

New Fund shares delivered to the

Partnerships in the Exchanges will have

an aggregate net asset value equivalent

to the net asset value of the assets

transferred by the Partnerships to the

Company (except for the effect of certain

organizational expenses paid by each

New Fund, as discussed below). Upon

consummation of the Exchanges, each

Partnership will distribute the New

Fund shares to its respective partners,

with each partner receiving shares

having an aggregate net asset value

equivalent to the net asset value of the

Units held by the partner prior to the

Exchange (except for the effect of certain

organizational expenses paid by the

New Funds and the effect of any assets

retained by a Partnership to pay accrued

expenses). Each Plan permits the

Partnership to retain sufficient assets to

pay any Partnership-accrued expenses

and retain any assets that a New Fund

is not permitted to purchase or that are

reasonably determined to be unsuitable

for it. No liabilities of a Partnership will

be transferred to its corresponding New

Fund; all known liabilities, other than

accrued expenses discussed above, will

be paid by each Partnership prior to the

transfer of its assets to the

corresponding New Fund. The general

partner, TAMCO, will be responsible for

any unknown liabilities of each

Partnership. Assets retained by each

Partnership that are not needed to pay

expenses will be distributed pro rata to

the partners. After payment of any

accrued expenses from retained assets,

each Partnership will be liquidated and

dissolved.

6. The expenses of the Exchanges will

be borne by TAMCO. Organizational

expenses, up to a maximum of $50,000

per New Fund, will be paid by the New

Funds and amortized over five years.

Organizational expenses in excess of

$50,000 per New Fund will be paid by

the Adviser. Any unamortized

organizational expenses associated with

the organization of the New Funds at

the time the Adviser withdraws its

initial investment in the Company will

be borne by the Adviser, not the New

Funds. Through October 31, 1998, the

Adviser will place a limit on the annual

expenses of each New fund. This limit

is generally intended to cap New Fund

expense ratios at levels projected to be

incurred during 1997 and 1998 by the

Partnerships.

7. The board of directors of the

Company (the ‘‘Board’’) and TAMCO

have considered the desirability of the

Exchanges from the respective points of

view of the Company and the

Partnerships, and all members of the

Board (including all of the independent

directors) and TAMCO have approved

the Exchanges and concluded that: (i)

the terms of the Exchanges have been

designed to meet the criteria contained

in section 17(b) of the Act; (ii) the

Exchanges are desirable as a business

matter from the respective points of

view of the Company and the

Partnerships; (iii) the Exchanges are in

the best interests of the Company and

the Partnerships; (iv) the Exchanges are

reasonable and fair, do not involve

overreaching, and are consistent with

the policies of the Act: (v) the

Exchanges are consistent with the

policies of the Company and the

Partnerships; and (vi) the interests of

existing shareholders in the Company

and existing partners in the Partnerships

will not be diluted as a result of the

exchanges. These findings, and the basis

upon which the findings were made,

have been fully recorded in the minute

books of the Company and TAMCO.

8. The Exchanges will not be effected

until(i) the Company’s registration

statement has been filed; (ii) the

Company and the Partnerships have

received a favorable opinion of counsel

with respect to the tax consequences of

the Exchanges; and (iii) the SEC has

issued the requested order.

Applicants’ Legal Analysis

1. Section 17(a) of the Act prohibits

any affiliated person of a registered

investment company, or any affiliated

person of such a person, acting as

principal from selling to or purchasing

from the registered investment company

any security or other property. Section

2(a)(3) of the Act defines an affiliated

person as, among other things, any

person directly or indirectly controlling,

controlled by, or under common control

with, such other person; any officer,

director, partner, copartner or employee

of such other person; or, if such other

person is an investment company, any

investment adviser of the investment

company. Each Partnership is an

affiliated person of an affiliated person

of the Company because TAMCO, the

general partner of the Partnerships, and

the Adviser are under common control.

Thus, the proposed Exchanges may be

deemed to be prohibited under section

17(a) of the Act.

2. Section 17(b) of the Act authorizes

the SEC to exempt any person from one

or more of the provisions of section

17(a) if the terms of the transaction,

including the consideration to be paid

or received, are reasonable and fair and

do not involve overreaching on the part

of any person concerned and the

proposed transaction is consistent with

the policy of each registered investment

company concerned and the general

purposes of the Act.

3. Applicants believe that the

proposed Exchanges satisfy the

requirements of section 17(b).

Applicants state that Shares issued by

each New Fund will have an aggregate

net asset value equal to the value of the

assets acquired from its corresponding

Partnership. Applicants also state that

because Shares will be issued at their

net asset value and only nominal Shares

will be outstanding when the Exchanges

are effected, the Company shareholders

will not be diluted. In addition,

applicants state that the investment

objective and policies of each New Fund

are substantially similar to its

corresponding Partnership and that after

the Exchanges, the limited partners will

hold substantially the same assets as

Company shareholders as they held as

limited partners. In this sense,

applicants submit that the Exchanges

can be viewed as a change in the form

in which assets are held, rather than a

disposition giving rise to section 17(a)

concerns.
53040 Federal Register / Vol. 62, No. 197 / Friday, October 10, 1997 / Notices

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 19264

(November 22, 1982), 47 FR 53981 (November 30,

1982).

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–26903 Filed 10–9–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

Sunshine Act Agency Meeting

Notice is hereby given, pursuant to

the provisions of the Government in the

Sunshine Act, Pub. L. 94–409, that the

Securities and Exchange Commission

will hold the following meeting during

the week of October 13, 1997.

A closed meeting will be held on

Tuesday, October 14, 1997, at 10:30 a.m.

Commissioners, Counsel to the

Commissioners, the Secretary to the

Commission, and recording secretaries

will attend the closed meeting. Certain

staff members who have an interest in

the matters may also be present.

The General Counsel of the

Commission, or his designee, has

certified that, in his opinion, one or

more of the exemptions set forth in 5

U.S.C. 552b(c) (4), (8), (9)(A) and (10)

and 17 CFR 200.402(a) (4), (8), (9)(i) and

(10), permit consideration of the

scheduled matters at the closed meeting.

Commissioner Hunt, as duty officer,

voted to consider the items listed for the

closed meeting in a closed session.

The subject matter of the closed

meeting scheduled for Tuesday, October

14, 1997, at 10:30 a.m., will be:

Institution of injunctive actions.

Institution and settlement of

administrative proceedings of an

enforcement nature.

At times, changes in Commission

priorities require alterations in the

scheduling of meeting items. For further

information and to ascertain what, if

any, matters have been added, deleted

or postponed, please contact:

The Office of the Secretary at (202)

942–7070.

Dated: October 7, 1997.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–27097 Filed 10–8–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[File No. 500–1]

United States Properties, Inc.; Order of

Suspension of Trading

October 7, 1997.

It appears to the Securities and

Exchange Commission that there is a

lack of current and accurate information

concerning the securities of United

States Properties, Inc. (‘‘USPI’’).

Questions have been raised regarding

the accuracy of assertions by USPI, and

by others, in documents sent to and

statements made to market-makers of

the stock of USPI, other broker-dealers,

and to investors concerning, among

other things: (1) the identity of the

persons in control of the operations and

management of the company; (2) the

purported members of USPI’s advisory

board; and (3) the trading and true value

of the common stock of USPI.

The Commission is of the opinion that

the public interest and the protection of

investors require a suspension of trading

in the securities of the above-listed

company.

Therefore, it is ordered, pursuant to

Section 12(k) of the Securities Exchange

Act of 1934, that trading in the above

listed company is suspended for the

period from 9:30 a.m. EDT, October 8,

1997 through 11:59 p.m. EDT, on

October 21, 1997.

By the Commission.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–27096 Filed 10–8–97; 11:30 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39192; File No. SR–CBOE–

97–48]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Board Options Exchange,

Incorporated Relating to a Reduction

in the Value of the Standard & Poor’s

100 Stock Index

October 3, 1997.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on

September 19, 1997, the Chicago Board

Options Exchange, Incorporated

(‘‘CBOE’’ or the ‘‘Exchange’’) filed with

the Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’)

the proposed rule change as described

in Items I, II and III below, which Items

have been prepared by the CBOE. The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The CBOE is filing this rule change to

inform the Commission that Standard &

Poor’s (‘‘S&P’’) intends to reduce the

value of its S&P 100 Stock Index

(‘‘Index’’) option (‘‘OEX’’) to one-half of

its present value by doubling the divisor

used in calculating the Index. In

connection with this change, the

Exchange proposes doubling the current

OEX position and exercise limits. The

text of the proposed rule change is

available at the Office of the Secretary,

the CBOE, and at the Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

CBOE included statements concerning

the purpose of and basis for the

proposed rule change and discussed any

comments it received on the proposed

rule change. The text of these statements

may be examined at the places specified

in Item IV below. The CBOE has

prepared summaries, set forth in

sections A, B, and C below, of the most

significant aspects of such statements.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, Proposed Rule

Change

1. Purpose

The CBOE began trading OEX options

in March 1983.3 OEX options are

American-style, cash-settled options on

the S&P 100 Stock Index. The Exchange

notes that, on the strength of a sustained

bull market, the value of the OEX has

doubled in value since mid-1995, such

that the value of the index stood at

928.20 as of August 7, 1997. As a result

of the significant increase in the value

of the underlying index, the premium

for OEX options has also increased. This

has caused OEX options to trade at a

level that may be uncomfortably high

for retail investors, a large and

important part of the market for OEX.

As a result, at the request of the

CBOE, S&P, the reporting authority for

the Index, has agreed to a ‘‘two-for-one