Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Notices 10887

1Rule 17a–8 provides relief from the affiliated

transaction prohibition of section 17(a) of the Act

for a merger of investment companies that may be

affiliated persons of each other solely by reason of

having a common investment adviser, common

directors, and/or common officers.

2 Investment Company Act Release Nos. 21952

(May 10, 1996) (notice) and 22006 (June 5, 1996)

(order).

interest. The registration statement was

declared effective on June 4, 1993, and

applicant commenced the initial public

offering of its securities immediately

thereafter. On March 15, 1995, applicant

filed a registration statement on Form

N–2 with respect to an additional

595,821 shares of beneficial interest,

and filed a pre-effective amendment

with respect to 3,167,380 shares of

beneficial interest on September 26,

1995. This registration statement was

declared effective on November 28,

1995.

3. On February 16, 1996, applicant’s

board of trustees (‘‘Trustees’’) approved

by unanimous written consent an

agreement and plan of reorganization

(‘‘Plan’’), providing for the transfer of all

of applicant’s assets in exchange for

shares of common stock of Emerging

Markets Growth Fund, Inc. (‘‘Acquiring

Fund’’), a closed-end investment

company. In approving the Plan, the

Trustees considered: (a) The potential

benefits of the Plan to applicant’s

shareholders, (b) the compatibility of

investment objectives, policies,

restrictions and investment holdings of

applicant and the Acquiring Fund, (c)

the terms and conditions of the Plan

that might affect the price of applicant’s

outstanding shares, and (d) the direct or

indirect costs to be incurred by

applicant or its shareholders. The

Trustees concluded that participation in

the Plan was in the best interests of

applicant and its shareholders.

4. Applicant and the Acquiring Fund

may be deemed affiliated persons of

each other within the meaning of the

Act because they have two common

shareholders, each of whom owned

more than 5% of the outstanding shares

of applicant and the Acquiring Fund.

Because applicant and Acquiring Fund

were unable to rely on the exemption

provided in rule 17a–8,1 applicant, the

Acquiring Fund, and two affiliated

shareholders of both funds received an

order under section 17(b) of the Act

granting an exemption from section

17(a), which permitted the Acquiring

Fund to acquire all of applicant’s

assets.2

5. On May 31, 1996, an information

statement/prospectus was mailed to all

shareholders of record as of April 30,

1996. This information statement

contained a consent solicitation

requesting the vote of each shareholder

on the approval of the Plan, the

distribution of such shares to

applicant’s shareholders in liquidation

of applicant, and applicant’s subsequent

dissolution. A registration statement on

Form N–14 containing the information

statement/prospectus was filed with the

Commission on April 24, 1996.

Approval of the Plan required the

written consent of a majority of the

shares outstanding and entitled to vote;

holders of 12,205,648 shares (100% of

the outstanding shares) provided their

written consent to the Plan.

6. As of June 21, 1996, applicant had

12,663,070 shares outstanding with a

net asset value of $22.03 and an

aggregate net asset value of

$278,920,093.23. To effect the

liquidation of applicant, an open

account was established on the share

records of the Acquiring Fund in the

name of each of applicant’s

shareholders representing the number of

shares of common stock of the

Acquiring Fund with a net asset value

equal to the net asset value of

applicant’s shares owned of record by

the shareholder as of June 21, 1996. The

number of Acquiring Fund shares

issued (including fractional shares) in

exchange for applicant’s assets was

determined by dividing the value of

applicant’s net assets by the per share

not asset value of the Acquiring Fund

on that date.

7. Expenses incurred in connection

with the Plan, including fees for legal

and accounting services, amounted to

$160,226.77. Under the Plan, applicant

and the Acquiring Fund were each

responsible for one half of the costs

incurred.

8. At the time of the application,

applicant had no shareholders, assets, or

liabilities, nor was applicant a party to

any litigation or administrative

proceeding. 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.

9. Upon issuance of the order

requested, applicant will file a

termination of trust with the

Massachusetts Secretary of State,

deregistering applicant as a

Massachusetts business trust.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–5836 Filed 3–7–97; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–22538; 811–6410]

Strong Insured Municipal Bond Fund,

Inc.; Notice of Application

March 4, 1997.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption Under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANT: Strong Insured Municipal

Bond Fund, Inc.

RELEVANT ACT SECTION: 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 November 20, 1996 and amended on

February 25, 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

March 31, 1997, and should be

accompanied by proof of service on

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 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.

Applicant, 100 Heritage Reserve,

Menomonee Falls, Wisconsin 53051.

FOR FURTHER INFORMATION CONTACT:

Suzanne Krudys, Senior Counsel, at

(202) 942–0641, or Mercer E. Bullard,

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.

Applicant’s Representations

1. Applicant, a registered open-end

investment company, was organized as

a Wisconsin corporation on December

12, 1990. On September 13, 1991,

applicant registered under the Act and

filed a registration statement under

section 8(b) of the Act and the Securities

Act of 1933. The registration statement

was declared effective on November 25,

1991 and applicant’s initial public

offering commenced that same day.
10888 Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Notices

1Section 17(a) of the Act generally prohibits sales

or purchases of securities between registered

investment companies and any affiliated person of

that company. Rule 17a–8 provides an exemption

from section 17(a) for certain reorganizations among

registered investment companies that may be

affiliated persons, or affiliated persons of an

affiliated person, solely by reason of having a

common investment adviser, common directors,

and/or common officers.

1 15 U.S.C. § 78s(b)(1)(1988).

2 17 CFR 240.19b–4.

3The CBOE has clarified that the name of the

Index will be the Morgan Stanley Multinational

Company Index. See letter from Scott Lyden,

Research & Product Development, CBOE, to

Stephen M. Youhn, Division of Market Regulation

(‘‘Division’’), Commission, dated February 5, 1997

(‘‘Amendment No. 2’’).

4See Securities Exchange Act Release No. 37790

(October 4, 1996), 61 FR 53774 (October 15, 1996).

5See letter from William M. Speth, Senior

Research Analyst, Product Development, Research

Department, CBOE, to Stephen M. Youhn, Division,

Commission, dated December 23, 1996

(‘‘Amendment No. 1’’). In Amendment No. 1, the

CBOE emended its rule filing regarding, among

other things, its maintenance procedures. See infra

notes 8 and 9, and accompanying text.

Applicant initially registered under the

name Strong B Fund, Inc. and changed

its name to Strong Insured Municipal

Bond Fund, Inc. on November 4, 1991.

2. At a meeting held on April 24,

1996, the board of directors of applicant

unanimously approved the Agreement

and Plan of Reorganization

(‘‘Reorganization Agreement’’) whereby

applicant would exchange its assets for

shares of Strong Municipal Bond Fund,

Inc. (‘‘Bond Fund’’). The Reorganization

Agreement provided: (i) for the transfer

of all of applicant’s assets to the Bond

Fund less a reserve for liabilities in

exchange for shares of Bond fund

(‘‘Bond Fund Shares’’) equal in value to

applicant’s net assets; (ii) the pro rata

distribution of the Bond Fund Shares to

applicant’s shareholders in liquidation

of applicant; (iii) the cancellation of

applicant’s shares; and (iv)

deregistration of applicant as an

investment company under the Act.

3. At the April 24 meeting, applicant’s

directors, (i) in reliance on rule 17a–8

under the Act,1 found that participation

in the reorganization was in the best

interest of applicant and its

shareholders and that the interests of

applicant’s shareholders would not be

diluted as a result of the reorganization,

(ii) authorized the preparation and filing

of proxy solicitations, and (iii) called a

shareholders meeting. In making its

determination that the reorganization

was in the best interest of applicant’s

shareholders, the board noted that the

relatively small size of applicant had

prevented it from realizing significant

economies of scale or reducing its

expense ratio, and had been a factor in

causing its performance to lag its

competitors in recent periods. The

board also considered that, because of

heightened competition in the insurance

industry, most municipal securities are

now insurable. As a result, the board

recognized that applicant, which sought

to keep its assets in insured municipal

securities, was no longer unique and

therefore was less attractive to investors.

The board determined that the

reorganization offered the greatest

likelihood of addressing the asset size

and growth problem while reorganizing

applicant into an investment company

with an identical investment objective

and similar investment policies and

restrictions. The board further noted

that the reorganization would result in

continuity of investment services

(advisory, transfer agent and distributor

services) and no sales or other charges

would be imposed on any shares of the

Bond Fund acquired by shareholders in

the reorganization.

4. On May 24, 1996, the

Reorganization Agreement was entered

into by applicant, the Bond Fund, and

with respect to certain matters, Strong

Capital Management, Inc., the

investment adviser of both applicant

and the Bond Fund. Proxy materials

relating to the merger (which were

contained in the Bond Fund’s

registration statement on Form N–14)

were filed with the SEC on May 24,

1996, and mailed to applicant’s

shareholders on July 3, 1996. The

Reorganization Agreement was

approved by applicant’s shareholders on

August 27, 1996.

5. As of August 30, 1996, the date of

the transfer of assets, there was an

aggregate of 2,885,713.293 shares of

outstanding common stock of applicant

having an aggregate net asset value of

$29,090,061.39 and a per share value of

$10.08. In accordance with the

Reorganization Agreement, applicant

transferred its assets to the Bond Fund

in exchange for 3,235,825.05 shares of

the Bond Fund. Such shares were equal

in value to applicant’s net asset value.

Such Bond Fund Shares received by

applicant were then distributed pro rata

to applicant’s shareholders in complete

liquidation of applicant. No brokerage

commissions were paid in the exchange.

6. The total expenses incurred in

connection with the Reorganization,

consisting of legal, accounting, proxy

solicitation, liquidation, and other

related administrative fees and

expenses, were approximately $92,903.

The applicant and Bond Fund each paid

for their own expenses in connection

with entering into and carrying out the

transactions contemplated by the

Reorganization Agreement. The adviser

waived all of applicant’s unamortized

organizational expenses of $3,600.

7. The applicant has no shareholders,

assets, debts or liabilities. Applicant is

not a party to any litigation or

administrative proceeding. 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. 97–5838 Filed 3–7–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38353; File No. SR–CBOE–

96–59]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change and

Notice of Filing and Order Granting

Accelerated Approval to Amendment

Nos. 1 and 2 to Proposed Rule Change

by the Chicago Board Options

Exchange, Inc., Relating to the Listing

and Trading of Options on the Morgan

Stanley Multinational Company Index

February 28, 1997.

I. Introduction

On October 1, 1996, the Chicago

Board Options Exchange, Inc. (‘‘CBOE’’

or ‘‘Exchange’’) submitted to the

Securities and Exchange Commission

(‘‘Commission’’), pursuant to Section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’) 1 and Rule 19b–4

thereunder,2 a proposed rule change to

list and trade cash-settled, Europeanstyle stock index options on the Morgan

Stanley Multinational Company Index

(‘‘Index’’),3 a broad-based,

capitalization-weighted index

comprised of 50 large domestic

companies, as more fully described

below.

The proposed rule change appeared in

the Federal Register on October 15,

1996.4 No comments were received on

the proposed rule change. The Exchange

subsequently filed Amendment Nos. 1

and 2 to the proposed rule change on

December 23, 1996 and on February 5,

1997, respectively.5 This order approves

the CBOE’s proposal, as amended, and

solicits comments on Amendment Nos.

1 and 2.

II. Description

The Exchange is proposing to list and

trade cash-settled, European-style stock

index options on the Morgan Stanley

Multinational Company Index, a broadbased, capitalization-weighted index

composed of 50 high-capitalization