Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices 5501

imposition of any transfer or similar

charge; (e) OpCap Advisors will assume

any expenses and transaction costs

relating to the Substitution, including

legal and accounting fees and any

brokerage commissions; (f) the

Substitution will not alter the insurance

benefits or contractual obligations of the

Companies to ValueMaster

Contractowners, or the tax benefits and

consequences to ValueMaster

Contractowners; and (g) the Substitution

is expected to confer certain modest

economic benefits to ValueMaster

Contractowners by virtue of the possible

enhanced asset size of the U.S.

Government Portfolio, and to avoid the

detriments associated with investment

in the Bond Portfolio, whose assets are

declining. In this regard, Applicants

also note that, within five days after the

Substitution, the Companies will send

to ValueMaster Contractowners written

notice of the Substitution stating that

shares of the Bond Portfolio have been

eliminated and that shares of the U.S.

Government Portfolio have been

substituted therefor. The Companies

will include in such mailing a second

supplement to the prospectuses of the

Accounts which discloses that the

Substitution has occurred. For the

reason cited above, Applicants also

contend that the terms of the proposed

Substitution meet the standards of

Section 17(b).

6. Applicants assert that the

decreasing asset base of the Bond

Portfolio, the impending redemption of

Bond Portfolio shares by the

unregistered account, and the mediocre

performance results of the Bond

Portfolio have made it difficult for that

Portfolio to retain current investors and

attract new investors. Moreover,

Oppenheimer Life Agency’s limited

effort in selling the ValueMaster

Contract, coupled with a constant

amount of fixed costs incurred by the

Bond Portfolio, can reasonably be

expected to lead to an increase in the

actual expenses of the Bond Portfolio in

the future. In contrast, the actual

expenses of the U.S. Government

Portfolio can reasonably be expected to

decrease in the future: net sales of U.S.

Government Portfolio shares from its

inception to date suggest that the asset

base of that Portfolio will continue to

grow; superior performance results

should assist the U.S. Government

Portfolio in retaining existing investors

and attracting new investors; and the

use of the U.S. Government Portfolio in

various variable products should

increase distribution capabilities.

7. Applicants also note that the

continuous accumulation of assets of

the U.S. Government Portfolio and

positive reaction of investors of that

Portfolio has persuaded OpCap

Advisors to extend its voluntary

agreement to limit the operating

expenses of the U.S. Government

Portfolio to 1.00 percent of its average

daily net assets past April 30, 1997, to

at least April 30, 1998. OpCap Advisors

has not assured the Companies that it

will do the same for the Bond Portfolio.

Therefore, the total expense ratio of the

Bond Portfolio may increase after April

30, 1997, whereas, through April 30,

1998, the total expenses of the U.S.

Government Portfolio are guaranteed

not to exceed 1.00 percent of its average

daily net assets.

8. Applicants contend that the

relatively small asset size of the Bond

Portfolio hampers the ability to

maintain optimal diversification of its

investments. In contrast, increasing

asset size will permit the U.S.

Government Portfolio to purchase

attractive portfolio securities.

Consequently the U.S. Government

Portfolio can be expected to achieve

greater portfolio diversification and to

react more readily to changes in market

conditions. Applicants assert that

ValueMaster Contractowners will

benefit through the more effective

management of a potentially larger asset

base with more diversified portfolio

securities, such as that available through

the U.S. Government Portfolio.

9. Applicants submit that the

ValueMaster Contracts reserve to the

Companies the right to replace the

shares of the Portfolios held by the

Accounts with shares of another

portfolio, such as the U.S. Government

Portfolio, if: (a) shares of a Portfolio

should no longer be available for

investment by the Accounts; or (b) in

the judgment of the Companies, further

investment in a Portfolio should become

inappropriate in view of the purpose of

the ValueMaster Contracts. Any such

substitution must be approved by the

Commission and must comply with

applicable rules and regulations. The

Companies believe that further

investment in shares of the Bond

Portfolio is no longer appropriate in

view of the purposes of the ValueMaster

Contracts.

Conclusion

Applicants assert that for the reasons

and upon the facts set forth above, the

proposed Substitution meets the

standards set forth in Sections 26(b) and

17(b) of the 1940 Act.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–2782 Filed 2–4–97; 8:45 am]

BILLING CODE 8010–01–M

Sunshine Act; Meeting

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 February 3, 1997.

A closed meeting will be held on

Wednesday, February 5, 1997, at 10:00

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 Johnson, 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 Wednesday,

February 5, 1997, at 10:00 a.m., will be:

Injunction and settlement of injunctive

actions.

Institution and settlement of administrative

proceedings of an enforcement nature.

Commissioner Johnson, as duty

officer, determined that no earlier notice

thereof was possible.

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: January 31, 1997.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–2992 Filed 2–3–97; 2:07 pm]

BILLING CODE 8010–01–M