Federal Register / Vol. 62, No. 44 / Thursday, March 6, 1997 / Notices 10299

section 30 and rules 30a–1, 30b1–1, and

30–d to the extent necessary to permit

CSC to file consolidated reports to the

SEC and CSC’s shareholders as provided

in condition number four below.

E. Standards for Relief

1. Section 6(c) of the Act permits the

SEC to exempt any person or transaction

from any provision of the Act, if such

exemption is necessary or appropriate

in the public interest and consistent

with the protection of investors and the

purposes fairly intended by the policy

of the Act. Applicants state that the

operation of CSC as a BDC with a

wholly-owned SBIC subsidiary is

intended to permit CSC to expand the

scope of its operations beyond that

which would be permitted to it as an

SBIC. Applicants further state that the

requested exemptions would permit

CSC and CSVC to operate effectively as

one company even though they will be

divided into two legal entities.

Accordingly, applicants believe that the

requested relief meets the section 6(c)

standards.

2. Section 17(b) of the Act permits the

SEC to exempt a proposed transaction

from section 17(a) if evidence

establishes that (a) the terms of the

proposed 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; (b) the proposed transaction

is consistent with the policy of each

registered investment company

concerned; and (c) the proposed

transaction is consistent with the

general purposes of the Act. Section

57(c) permits the SEC to exempt a

proposed transaction from sections

57(a)(1), (2), and (3) using substantially

the same standard imposed by section

17(b). Applicants believe that the

requested relief from sections 17(a) and

57(a) meets these standards.

3. In passing upon applications filed

pursuant to rule 17d–1, the SEC

considers whether the participation of

the registered investment company in a

joint enterprise or arrangement is

consistent with the provisions, policies

and purposes of the Act and the extent

to which such participation is on a basis

different from or less advantageous than

that of other participants. Applicants

believe that the requested authorization

under sections 57(a)(4) and rule 17d–1

is appropriate.

Applicants’ Conditions

Applicants agree that the order

granting the requested relief will be

conditioned upon the following:

1. CSC will at all times own and hold,

beneficially and of record, all of the

outstanding capital stock of CSVC.

2. CSVC will have fundamental

investment policies not inconsistent

with those of CSC as set forth in CSC’s

registration statement; CSVC will not

engage in any action described in

section 13(a) of the Act, unless such

action shall have been authorized by

CSC after approval of such action by a

vote of a majority (as defined in the Act)

of the outstanding voting securities of

CSC.

3. No person shall serve or act as

investment adviser to CSVC unless the

directors and shareholders of CSC shall

have taken the action with respect

thereto also required to be taken by the

directors and sole shareholder of CSVC.

4. CSC shall (a) file with the SEC, on

behalf of itself and CSVC, all

information and reports required to be

filed with the SEC under the Securities

Exchange Act of 1934 and other

applicable federal securities laws,

including information and financial

statements prepared solely on a

consolidated basis as to CSC and CSVC,

such reports to be in satisfaction of any

separate reporting obligations of CSVC,

and (b) provide to its shareholders such

information and reports required to be

disseminated to CSC’s shareholders,

including information and financial

statements prepared solely on a

consolidated basis as to CSC and CSVC,

such reports to be in satisfaction of any

separate reporting obligations of CSVC.

Notwithstanding anything in this

condition, CSC will not be relieved of

any of its reporting obligations,

including, but not limited to, any

consolidating statement setting forth the

individual statements of CSVC required

by rule 6–03(c) of Regulation S–X.

5. CSC and CSVC may file on a

consolidated basis pursuant to

condition (4) above only so long as the

amount of CSC’s total consolidated

assets invested in assets other than (a)

securities issued by CSVC or (b)

securities similar to those in which

CSVC invests, does not exceed 10%.

6. No person shall serve as a director

of CSVC unless elected as a director of

CSC at its most recent annual meeting,

as contemplated by section 16(a) of the

Act. Vacancies on CSC’s board of

directors will be filled in the manner

provided for in section 16(a).

Notwithstanding the foregoing, the

board of directors of CSVC will be

elected by CSC as the sole shareholder

of CSVC, and such board will be

composed of the same persons that

serve as directors of CSC.

7. CSC will not itself issue, and CSC

will not cause or permit CSVC to issue,

any senior security or sell any senior

security of which CSC or CSVC is the

issuer, unless immediately after the

issuance or sale of any such senior

securities, CSC and CSVC on a

consolidated basis, and CSC

individually, shall have the asset

coverage that would be required by

section 18(a) if CSC and CSVC had each

elected to become a BDC pursuant to

section 54 of the Act (except that, in

determining whether CSC and CSVC, on

a consolidated basis, have the asset

coverage required by section 18(a), any

borrowings by CSVC pursuant to section

18(k) of the Act shall not be considered

senior securities and, for purposes of the

definition of asset coverage in section

18(h), shall not be treated as

indebtedness not represented by senior

securities).

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–5524 Filed 3–5–97; 8:45 am]

BILLING CODE 8010–01–M

[Investment Company Act Release No.

22532; 811–5855]

Conestoga Family of Funds; Notice of

Application

February 27, 1997.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Deregistration under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANT: Conestoga Family of Funds.

RELEVANT ACT SECTION: Section 8(f).

SUMMARY OF APPLICATION: Application

requests an order declaring that it has

ceased to be an investment company.

FILING DATE: The application was filed

on November 12, 1996.

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 24, 1997, and should be

accompanied by proof of service on the

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 may request notification of a

hearing by writing to the SEC’s

Secretary.
10300 Federal Register / Vol. 62, No. 44 / Thursday, March 6, 1997 / Notices

ADDRESSESS: Secretary, SEC, 450 Fifth

Street, N.W., Washington, D.C. 20549.

Applicant, 680 East Swedesford Road,

Wayne, Pennsylvania 19087–1658.

FOR FURTHER INFORMATION CONTACT:

Diane L. Titus, Paralegal Specialist, at

(202) 942–0584, or Mary Kay Frech,

Branch Chief, at (202) 942–0564

(Division of Investment Management,

Office of Investment Company

Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee from the SEC’s

Public Reference Branch.

Applicant’s Representations

1. Applicant is an open-end

management investment company

organized as a Massachusetts business

trust. Applicant’s Pennsylvania TaxFree Bond Fund is a non-diversified

investment company, and all other

funds of applicant are diversified

investment companies. On August 9,

1989, applicant registered under section

8(a) of the Act and filed a registration

statement on Form N–1A pursuant to

section 8(b) of the Act and the Securities

Act of 1933, covering an indefinite

number of shares of common stock. The

registration statement was declared

effective on November 20, 1989, and the

initial public offering of applicant’s

funds commenced thereafter.

2. On December 21, 1995, applicant’s

board of trustees considered and

approved an Agreement and Plan of

Reorganization (the ‘‘Reorganization

Agreement’’) between applicant and

CoreFunds, Inc. (‘‘CoreFunds’’).

Pursuant to the Reorganization

Agreement, the holders of each class of

shares of applicant’s Cash Management

Fund, Tax-Free Fund, U.S. Treasury

Securities Funds, Equity Fund,

Intermediate Income Fund,

Pennsylvania Tax-Free Bond Fund,

Balanced Fund, and International

Equity Fund (collectively, the

‘‘Reorganizing Portfolios’’) would

receive the class of shares of the

corresponding existing portfolios of

CoreFunds (the ‘‘CoreFunds

Portfolios’’). Also pursuant to the

Reorganization Agreement, the holders

of each class of shares of applicant’s

Special Equity Fund, Bond Fund, and

Short-Term Income Fund (collectively,

the ‘‘Continuing Portfolios’’) would

receive the class of shares of the

corresponding new portfolios of

CoreFunds (the ‘‘New CoreFunds

Portfolios’’).

3. In approving the Reorganization

Agreement, the trustees identified

certain potential benefits likely to result

from the reorganization, including, (a) a

broader array of investment

opportunities available to shareholders,

(b) existing purchase and redemption

features will remain in place, and (c) the

potential for economies of scale in

portfolio management resulting from the

larger asset size.

4. On February 15, 1996, proxy

materials soliciting shareholder

approval of the reorganization were sent

to applicant’s shareholders. The

Reorganization Agreement was

approved by applicant’s shareholders at

a special meeting held on March 22,

1996.

5. On April 15, 1996: (1) all of the

assets of Conestoga Cash Management

Fund were transferred to CoreFunds

Cash Reserve in exchange for shares of

CoreFunds Cash Reserve based on net

asset value; (2) all of the assets of

Conestoga Tax-Free Fund were

transferred to CoreFunds Tax-Free

Reserve in exchange for shares of

CoreFunds Tax-Free Reserve based on

net asset value; (3) all of the assets of

Conestoga U.S. Treasury Securities

Fund were transferred to CoreFunds

Treasury Reserve in exchange for shares

of CoreFunds Treasury Reserve based on

net asset value; (4) all of the assets of

Conestoga Equity Fund were transferred

to CoreFunds Value Equity Fund based

on net asset value; (5) all of the assets

of Conestoga Intermediate Income Fund

were transferred to CoreFunds

Intermediate Bond Fund in exchange for

shares of CoreFunds Intermediate Bond

Fund based on net asset value; (6) all of

the assets of Conestoga Pennsylvania

Tax-Free Bond Fund were transferred to

CoreFunds Pennsylvania Municipal

Bond Fund in exchange for shares of

CoreFunds Pennsylvania Municipal

Bond Fund based on net asset value; (7)

all of the assets of Conestoga Balanced

Fund were transferred to CoreFunds

Balanced Fund in exchange for shares of

CoreFunds Balanced Fund based on net

asset value; and (8) all of the assets of

Conestoga International Equity Fund

were transferred to CoreFunds

International Growth Fund in exchange

for shares of CoreFunds International

Growth Fund based on net asset value.

The aggregate net asset value of the

shares of the corresponding existing

CoreFunds Portfolios received by each

Reorganizing Portfolio was equal to the

aggregate net asset value of each such

Reorganizing Portfolio. Thereafter,

applicant’s Reorganizing Portfolios

made liquidating distributions to their

shareholders so that a holder of a class

of shares in a Reorganizing Portfolio

received a class of shares of the

corresponding existing CoreFunds

Portfolio with the same aggregate net

asset value as the shareholder had in the

Reorganizing Portfolio immediately

before the transaction.

6. On April 22, 1996, all of the assets

of the Continuing Portfolios were

transferred to corresponding New

CoreFunds Portfolios in exchange for

shares of the New CoreFunds Portfolios.

The New CoreFunds Portfolios had only

nominal assets and liabilities

immediately prior to the transaction,

and the number of shares of each class

of shares of the New CoreFunds

Portfolios issued in the transaction

equalled the number of shares of each

corresponding class of shares of the

Continuing Portfolios that were issued

and outstanding immediately prior to

the transaction. Applicant thereafter

made a liquidating distribution to

shareholders of the Continuing

Portfolios of a like number of full and

fractional shares of the New CoreFunds

Portfolios.

7. In connection with the

reorganization, certain expenses were

incurred and consisted primarily of

professional fees, printing expenses,

expenses associated with the special

meeting of shareholders, and expenses

associated with the winding up of

applicant’s affairs. The Reorganization

Agreement provides that these expenses

will be borne by Meridian Bancorp, Inc.

and/or CoreStates Financial Corp., the

bank holding companies that control the

investment advisers.

8. Applicant has retained no assets.

Applicant has no outstanding debts or

liabilities. As of the date of the

application, applicant has no security

holders.

9. Applicant is not a party to any

litigation or administrative proceeding.

Applicant is not now engaged, nor does

it propose to engage, in any business

activities other than those necessary for

the winding up of its affairs.

10. Applicant intends to file the

necessary documentation with the

Commonwealth of Massachusetts to

effect its dissolution as a Massachusetts

business trust.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–5469 Filed 3–5–97; 8:45 am]

BILLING CODE 8010–01–M