13406 Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / Notices

4. On May 5, 1995, applicant

transferred its assets and liabilities to

the Acquiring Fund in exchange for

shares of the Acquiring Fund on the

basis of the relative net asset values per

share of applicant and the Acquiring

Fund. Applicant’s net assets on such

date amounted to $76,655,258.68, or

$7.68 per shares. The shares of the

Acquiring Fund received by applicant

were distributed to applicant’s

shareholders based on the relative net

assert values per share of the two funds.

No brokerage fees were paid in

connection with the reorganization.

5. Expenses of approximately

$144,000 incurred in connection with

the reorganization were paid by

applicant. The expenses consisted of

legal fees of approximately $77,500,

printing costs of approximately $43,000,

taxes of approximately $10,000, and

accounting costs of approximately

$13,500. Applicant states that legal and

printing costs similar to those actually

incurred would have been borne by

applicant had the reorganization not

occurred as applicant had a policy that,

under prevailing market conditions,

likely would have required applicant to

seek shareholder consent to convert

applicant into an open-end fund.

6. Applicant states that subsequent to

the filing of the Form N–8F, it will file

articles of dissolution with the State of

Maryland to terminate applicant’s legal

existence.

7. There are no securityholders to

whom distributions in complete

liquidation of their interests have not

been made. Applicant has retained no

assets. Applicant has no debts or other

liabilities that remain outstanding.

Applicant is not a party to any litigation

or administrative proceeding.

8. 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.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–7050 Filed 3–19–97; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–22567; File No. 812–10454]

Citicorp Life Insurance Company, et al.

March 14, 1997.

AGENCY: The Securities and Exchange

Commission (the ‘‘Commission’’).

ACTION: Notice of application for an

order pursuant to the Investment

Company Act of 1940 (‘‘1940 Act’’).

APPLICANTS: Citicorp Life Insurance

Company (‘‘Citicorp Life’’), First

Citicorp Life Insurance Company (‘‘First

Citicorp Life,’’ together with Citicorp

Life, the ‘‘Companies’’), Citicorp Life

Variable Annuity Separate Account

(‘‘Citicorp Life Account’’) and First

Citicorp Life Variable Annuity Separate

Account (‘‘First Citicorp Life Account,’’

together with the Citicorp Life Account,

the ‘‘Accounts’’).

RELEVANT 1940 ACT SECTIONS: Order

requested under Section 26(b).

SUMMARY OF THE APPLICATION:

Applicants seek an order to permit the

substitution of shares of certain

portfolios of the Fidelity Variable

Insurance Products Fund (‘‘Fidelity

VIP’’) and the AIM Variable Insurance

Funds, Inc. for shares of portfolios of the

Landmark VIP Funds currently held by

the Accounts to support individual

flexible premium deferred variable

annuity contracts (collectively, the

‘‘Contracts’’) issued by the Companies.

FILING DATES: The application was filed

on December 5, 1996, and amended on

March 3, 1997.

HEARING OR NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the Commission orders a

hearing. Interested persons may request

a hearing by writing to the Secretary of

the Commission and serving Applicants

with a copy of the request, personally or

by mail. Hearing requests should be

received by the Commission by 5:30

p.m. on April 8, 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 requestor’s interest, the reason for

the request, and the issues contested.

Persons may request notification of a

hearing by writing to the Secretary of

the Commission.

ADDRESSES: Secretary, Securities and

Exchange Commission, 450 Fifth Street,

NW., Washington, DC 20549.

Applicants, c/o Richard M. Zuckerman,

Esq., Citicorp Life Insurance Company,

800 Silver Lake Boulevard, Dover,

Delaware 19901.

FOR FURTHER INFORMATION CONTACT:

Ethan D. Corey, Senior Counsel, or

Kevin M. Kirchoff, Branch Chief, Office

of Insurance Products (Division of

Investment Management), at (202) 942–

0670.

SUPPLEMENTARY INFORMATION: Following

is a summary of the application; the

complete application is available for a

fee from the Public Reference Branch of

the Commission.

Applicants’ Representations

1. Citicorp Life is a stock life

insurance company organized under the

laws of the State of Arizona in 1971.

Citicorp Life is a wholly owned

subsidiary of Citibank Delaware which

is a wholly owned subsidiary of Citicorp

Holdings, Inc. In turn, Citicorp

Holdings, Inc. is a wholly owned

subsidiary of Citicorp. Citicorp Life is

the depositor and sponsor of the

Citicorp Life Account.

2. First Citicorp Life is a stock life

insurance company organized under the

laws of the State of New York in 1978.

First Citicorp Life is a wholly owned

subsidiary of Citicorp Life. First Citicorp

Life is the depositor and sponsor of the

First Citicorp Life Accounts.

3. The board of directors of Citicorp

Life established the Citicorp Life

Account on July 6, 1994. The Citicorp

Life Account is registered under the

1940 Act as a unit investment trust (File

No. 811–8628). Initially, the Citicorp

Life Account invested exclusively in

shares of the following portfolios: (1)

The U.S. Government, Equity, Balanced

and International Equity Funds of the

Landmark VIP Funds; (2) the Growth

Portfolio of the Variable Insurance

Products Fund; (3) the AIM V.I. Capital

Appreciation Fund of AIM Variable

Insurance Funds, Inc.; and (4) the World

Government and Money Market Series

of the MFS Variable Insurance Trust.

4. The board of directors of First

Citicorp Life established the First

Citicorp Life Account on July 6, 1994.

The First Citicorp Life Account is

registered under the 1940 Act as a unit

investment trust (File No. 811–8732).

Since inception, the First Citicorp Life

Account invested in the same

investment portfolios as those initially

available under the Citicorp Life

Account.

5. The Landmark VIP Funds was

organized as a Massachusetts business

trust on August 22, 1991. It is registered

under the 1940 Act as an open-end

management investment company (File

No. 811–6401). The Landmark VIP

Funds is a series investment company

that is currently comprised of four

investment portfolios: the Landmark

VIP U.S. Government Fund, the

Landmark VIP Balanced Fund, the

Landmark VIP Equity Fund and the

Landmark VIP International Equity

Fund (collectively, the ‘‘Removed

Funds’’). Citibank, N.A., a whollyowned subsidiary of Citicorp, is the

investment adviser to the Landmark VIP

Funds.

6. The Landmark VIP U.S.

Government Fund seeks to earn current

income and preserve capital by
Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / Notices 13407

investing primarily in U.S. government

securities and repurchase agreements

involving U.S. government securities.

The Landmark VIP Balance Fund seeks

to earn high current income by investing

in a broad range of securities, to

preserve capital, and to provide growth

potential with reduced risk. The

Landmark VIP Equity Fund seeks longterm capital growth; dividend income, if

any, is incidental to this investment

objective. The fund seeks to achieve its

objective by investing primarily in

common stocks of domestic issuers,

with emphasis on established

companies. The Landmark VIP

International Equity Fund seeks longterm capital growth; dividend income, if

any, is incidental to this investment

objective. The fund seeks to achieve its

objective by investing primarily in

common stocks of non-U.S. issuers,

including issuers in developing

countries, with an emphasis on

established companies.

7. Citibank, N.A. currently reimburses

the expenses of each Landmark VIP

Fund to maintain the following expense

ratios: U.S. Government Fund, 0.60%;

Equity Fund, 0.75%; Balanced Fund,

0.70%; and International Equity Fund,

1.20%. The expense reimbursement

arrangements, however, are voluntary

and may be discontinued by Citibank

N.A. at any time.

8. Applicants state that the Removed

Funds as individual investment options

have not generated substantial Contract

owner interest since their inception.

Each Removed Fund is relatively small

when compared with many other

similar investment portfolios of openend management investment companies

available as investment vehicles for

variable annuity products. As a result,

the annual expense ratios of these

funds, absent any expense

reimbursement, have been higher than

the ratios of most similar but larger

portfolios. Furthermore, the

performance of the Removed Funds

since their inception, although not poor,

has been unremarkable given overall

performance during that period. The

following charts provide size, expense

and performance information for the

Landmark VIP Funds.

Landmark VIP funds

Net assets at

yearend (in

millions) 1

Expense

ratio 2

(percent)

U.S. Government Fund:

1995 ........................... $1.292 9.07

1996 ........................... 1,400 7.55

Equity Fund:

1995 ........................... 1.894 7.83

1996 ........................... 2.675 4.88

Balanced Fund:

1995 ........................... 1.827 7.32

1996 ........................... 2.488 4.76

International Equity

Fund:

1995 ........................... 4.515 4.84

1996 ........................... 5.057 4.83

1 Net assets for 1996 are as of September

30, 1996. 2Expense ratios for 1996 are for the ninemonth period ended September 30, 1996 and

have been annualized.

Landmark VIP funds

Standard total return 1

Inception of funds

through 9/30/96

(percent)

1996

(percent) 1995 (percent)

U.S. Government Fund ................................................................ 4.17 ¥1.72 10.51

Equity Fund .................................................................................. 18.50 12.08 20.47

Balanced Fund ............................................................................. 12.12 6.36 15.53

International Equity Fund ............................................................. 4.96 3.30 5.47

1Total returns for 1995 are for the period from March 10, 1995 through December 31, 1995 and have been annualized. Total returns for 1996

are for the nine-month period ended September 30, 1996 and have not been annualized.

Total returns for the period from inception through September 30, 1996 for the Landmark VIP Funds have been annualized.

9. Fidelity VIP was organized as a

Massachusetts business trust on

November 13, 1981, and is registered

under the 1940 Act as an open-end

management investment company (File

No. 811–3329). Fidelity VIP is a series

investment company that is currently

comprised of five investment portfolios:

Money Market Portfolio, High Income

Portfolio, Equity-Income Portfolio,

Growth Portfolio and Overseas Portfolio.

Fidelity Management & Research

Company is the investment adviser of

Fidelity VIP. The Fidelity VIP Growth

Portfolio seeks capital appreciation by

investing primarily in common stocks

but may also invest in other types of

securities, including bonds and

preferred stocks. The Fidelity VIP

Equity-Income Portfolio seeks

reasonable income by investing, under

normal circumstances, at least 65% of

its assets in income producing equity

securities. The fund may also invest in

debt securities convertible into common

stock.

10. AIM Variable Insurance Funds,

Inc. was organized as a Maryland

corporation on January 22, 1993 and is

registered under the 1940 Act as an

open-end management investment

company (File No. 811–07451). AIM

Variable Insurance Funds, Inc. is a

series investment company that is

currently composed of nine investment

portfolios: AIM V.I. Capital

Appreciation Fund, AIM V.I. Diversified

Income Fund, AIM V.I. Global Utilities

Fund, AIM V.I. Government Securities

Fund, AIM V.I. Growth Fund, AIM V.I.

Growth and Income Fund, AIM V.I.

International Equity Fund, AIM V.I.

Money Market Fund and AIM V.I. Value

Fund. AIM Advisors, Inc. is the

investment adviser of AIM Variable

Insurance Funds, Inc.

11. The AIM V.I. Government

Securities Fund seeks a high level of

current income consistent with

reasonable concern for safety of

principal by investing in debt securities

issued, guaranteed or otherwise backed

by the United States government. The

AIM V.I. International Equity Fund

seeks long-term growth of capital by

investing in a diversified portfolio of

international equity securities the

issuers of which are considered by AIM

Advisors, Inc. to have strong earnings

momentum.

12. The following charts provide size,

expense and performance information

for the AIM V.I. Government Securities

Fund, the Fidelity VIP Growth Portfolio,

the Fidelity VIP Equity-Income Portfolio

and the AIM V.I. International Equity

Fund (collectively, the ‘‘Substitute

Funds’’).

Substitute funds

Net assets at

yearend (in

millions) 1

Expense

ratio

(percent) 2

AIM V.I Government Securities Fund:

1995 ........................... $19.50 1.19
13408 Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / Notices

1 Fidelity VIP also pays a group fee rate based on

the average net assets of all mutual funds advised

by Fidelity Management & Research Company. The

management fee rate presented for the Fidelity VIP

Growth Portfolio and Fidelity VIP Equity-Income

Portfolio includes the group fee rate.

Substitute funds

Net assets at

yearend (in

millions) 1

Expense

ratio

(percent) 2

1996 ........................... 22.90 0.90

Fidelity VIP Growth

Portfolio:

1995 ........................... 4,158.80 0.70

1996 ........................... 5,777.40 0.67

Substitute funds

Net assets at

yearend (in

millions) 1

Expense

ratio

(percent) 2

Fidelity VIP Equity-Income Portfolio:

1995 ........................... 4,869.80 0.61

1996 ........................... 6,352 0.55

AIM V.I. International

Equity Fund:

1995 ........................... 82.30 1.15

Substitute funds

Net assets at

yearend (in

millions) 1

Expense

ratio

(percent) 2

1996 ........................... 143.30 0.97

1 Net assets for 1996 are as of September

30, 1996. 2Expense ratios for 1996 are for the ninemonth period ended September 30, 1996 and

have been annualized. The expense ratios for

1996 are unaudited.

Substitute funds

Standard total return

Inception of fund

through 9/30/961

(percent)

19962

(percent)

19953

(percent)

AIM V.I. Government Securities Fund ......................................... 4.18 –0.20 15.56

Fidelity VIP Growth Portfolio ........................................................ 14.98 5.93 35.36

Fidelity VIP Equity-Income Portfolio ............................................. 13.05 3.12 35.09

AIM V.I. International Equity Fund ............................................... 13.80 13.25 17.24

1Total returns for the period from inception through September 30, 1996 for the Substitute Funds have been annualized.

2Total returns for 1996 are for the nine-month period ended September 30, 1996 and have not been annualized.

3Total returns for 1995 are for the twelve-month period ended December 31, 1995.

13. Each Substitute Fund is

substantially larger than its counterparts

among the Removed Funds and also has

lower expense ratios and has either

outperformed or performed comparably

relaitve to the corresponding Removed

Fund.

14. The management fees of each

Substitute Fund are comparable to those

of each Removed Fund. Each Removed

Fund pays a monthly management fee

based on its average daily net assets at

the following annual rates: U.S.

Government Fund, 0.40%; Equity Fund,

0.50%; Balanced Fund, 0.40%; and

International Equity Fund, 1.00%. By

contrast, each Substitute Fund pays a

monthly management fee based on its

average daily net assets at the following

annual rates as of December 31, 1995, as

follows: AIM V.I. Government Securities

Fund, 0.50%; Fidelity VIP Growth

Portfolio, 0.61%; Fidelity VIP EquityIncome Portfolio, 0.51%; and AIM V.I.

Internaitonal Equity Fund, 0.75%.1

15. Citicorp Life and First Citicorp

Life have both determined that the small

size and high expense ratio of the

Removed Funds compared to the

Substitute Funds cause the Removed

Funds to be good candidates for

consolidaiton with the Substitute Fudss.

16. Applicants propose that Citicorp

Life and First Citicorp Life substitute:

(1) shares of the AIM V.I. Government

Securities Fund for shares of the

Landmark VIP U.S. Government Fund:

(2) shares of the Fidelity VIP Growth

Portfolio for shares of the Landmark VIP

Equity Fund; (3) shares of the Fidelity

VIP Equity-Income Portfolio for shares

of the Landmark VIP Balanced Fund;

and (4) shares of the AIM V.I.

International Equity Fund for shares of

the Landmark VIP International Equity

Fund held by corresponding

subaccounts of the Accounts (the

‘‘Proposed Substitution’’). Applicants

propose to have Citicorp Life and First

Citicorp Life redeem shares of each

Removed Fund in cash and purchase

with the proceeds shares of the

Substitute Fund identified above.

17. The Proposed Substitution will

take place at relative net asset value

with no change in the amount of any

Contract owner’s cash value or death

benefit or in the dollar value of his or

her investment in any of the Accounts.

Contract owners will not incur any fees

or charges as a result of the Proposed

Substitution nor will their rights or

Citicorp Life’s or First Citicorp Life’s

obligations under the Contracts be

altered in any way. All expenses

incurred in connection with the

Proposed Substitution, including legal,

accounting and other fees and expenses,

will be paid by Citicorp Life or First

Citicorp Life. In addition, the Proposed

Substitution will not result in the

impositions of any tax liability on

Contract owners. The Proposed

Substitution will not cause the Contract

fees and charges currently being paid by

existing Contract owners to be greater

after the Proposed Substitution than

before the Proposed Substitution. The

Proposed Substitution will not be

treated as a transfer for the purpose of

assessing transfer charges or for

determining the number of remaining

permissible transfers in a Contract Year.

Citicorp Life and First Citicorp Life will

not exercise any right either may have

under the Contracts to impose

additional restrictions on transfers

under any of the Contracts for a period

of at least 30 days following the

Proposed Substitution.

18. By supplements to the

prospectuses for the Contracts and the

Accounts dated December 5, 1996, all

owners and prospective owners of the

Contracts were notified of Citicorp Life’s

and First Citicorp Life’s intention to

take the necessary actions, including

seeking the order requested by the

Applicants.

19. In addition to the prospectus

supplements distributed to owners and

prospective owners of Contracts, within

5 days after the Proposed Substitution,

any owners who were affected by the

substitution will be sent a written notice

informing them that the substitutions

were carried out and that they may

make one transfer of all cash value
Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / Notices 13409

1Rule 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.

under a Contract invested in any one of

the affected subaccounts to another

subaccount(s) until 30 days after the

substitution without that transfer

counting as one of a limited number of

transfers permitted in a Contract year

free of charge.

Applicants’ Legal Analysis

1. Section 26(b) of the 1940 Act

requires the depositor of a registered

unit investment trust holding the

securities of a single issuer to obtain

Commission approval before

substituting the securities held by the

trust. Specifically, Section 26(b) states:

It shall be unlawful or any depositor or

trustee of a registered unit investment trust

holding the security of a single issuer to

substitute another security for such security

unless the Commission shall have approved

such substitution. The Commission shall

issue an order approving such substitution if

the evidence establishes that it is consistent

with the protection of investors and the

purposes fairly intended by the policy and

provisions of this title.

2. Applicants state that the Proposed

Substitution appears to involve a

substitution of securities within the

meaning of Section 26(b) of the 1940

Act and request that the Commission

issue an order pursuant to Section 26(b)

of the 1940 Act approving the Proposed

Substitution.

3. The Contracts all provide to

Citicorp Life or First Citicorp Life the

right, subject to Commission approval,

to substitute shares of another open-end

management investment company for

shares of an open-end management

investment company held by a

subaccount of the relevant Account.

Applicants assert that the prospectuses

for the Contracts and the Accounts

contain appropriate disclosure of this

right.

4. The Proposed Substitution would

effectively consolidate the assets of each

Substitute Fund with those of the

corresponding Removed Fund resulting,

in all cases, in a fund with lower future

expense ratios than the past expense

ratios of the Removed Fund.

Each of the Substitute Funds is

substantially larger than the Removed

Fund that is would replace. Each

Substitute Fund has also had more

favorable expense ratios over the last

two years than the Removed Fund it

would replace. Moreover, as of January

31, 1997, the Removed Funds were no

longer available or new investment, and

most likely will experience the net

redemption of their shares. Applicants

assert that, therefore, it is highly likely

that in the near future each Removed

Fund’s asset base will decrease and,

accordingly, each Removed Fund’s

expense ratio will increase.

5. Each Substitute Fund has

performed favorably over the past two

years and since its inception in

comparison to the Removed Fund that

it would replace. Applicants therefore

anticipate that, after the Proposed

Substitution, the Substitute Funds will

provide Contract owners with more

favorable or comparable overall

investment results than would be the

case if the Proposed Substitution do not

take place.

6. Each of the Substitute Funds is a

suitable and appropriate investment

vehicle for Contract owners. Each of the

Substitute Funds has substantially

identical investment objectives to the

Removed Fund that it would replace.

7. Applicants generally submit that

the Proposed Substitution meet the

standards that the Commission and its

staff have applied to substitutions that

have been approved in the past.

Conclusion

Applicants submit that, for the

reasons summarized above, the

Proposed Substitution are consistent

with the protection of investors and the

purposes fairly intended by the policy

and provisions of the 1940 Act.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–7044 Filed 3–19–97; 8:45 am]

BILLING CODE 8010–01–M

[Investment Company Act Release No.

22565; 811–8156]

The Global Privatization Fund, Inc.;

Notice of Application

March 14, 1997.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for an

order under the Investment Company

Act of 1940 (the ‘‘Act’’).

APPLICANT: The Global Privatization

Fund, Inc.

RELEVANT ACT SECTION: Section 8(f).

SUMMARY OF APPLICATION: Applicant

seeks an order declaring that it has

ceased to be an investment company.

FILING DATES: The application was filed

on July 26, 1996 and was amended on

February 6, 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

April 8, 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 may request notification of a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

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

Applicant, 1345 Avenue of the

Americas, New York, New York 10105.

FOR FURTHER INFORMATION CONTACT:

Elaine M. Boggs, Senior Counsel, at

(202) 942–0572 (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 a closed-end

management investment company that

is organized as a corporation under the

laws of Maryland. Applicant registered

under the Act and filed a registration

statement on Form N–2 on November

16, 1993. Applicant’s registration

statement was declared effective on

February 18, 1994, and applicant

commenced a public offering of its

shares shortly thereafter.

2. On June 27, 1995, applicant’s board

of directors considered and approved a

sale of substantially all of the assets and

liabilities of applicant to the Alliance

Worldwide Privatization Fund, Inc. (the

‘‘Acquiring Fund’’), a registered openend investment company. The board of

directors made the findings required by

rule 17a–8 under the Act, i.e., that the

reorganization was in the best interest of

applicant and that there would be no

dilution, by virtue of the proposed

exchange, in the value of shares held at

that time by applicant’s shareholders.1

In determining that applicant should

enter into the reorganization, the

directors considered, among other

things, the investment objectives and

policies of applicant and the Acquiring

Fund.