13200 Federal Register / Vol. 62, No. 53 / Wednesday, March 19, 1997 / Notices

1 It is common practice in the South African

equity markets for placing my issuers to be offered

to large institutional holders of their shares at a

discount to the market price.

the Fund. Applicant received shares of

common stock of the Fund with a net

asset value equal to the net value of the

assets and liabilities of applicant

transferred to the Fund. The shares of

the Fund received by applicant were

distributed to the shareholders of

applicant, pro rata. As of April 22, 1994,

there were 2,774,788 shares of applicant

outstanding with a net asset value of

$42,673,139.53 and a per share value of

$15.38.

6. The expenses incurred in

connection with the liquidation and

dissolution of applicant, including legal

and accounting fees, custodian and

transfer agent commissions, and taxes,

totaled approximately $285,576, all of

which were borne by applicant’s

investment adviser, Bank of America

National Trust and Savings Association.

No brokerage fees were paid in

connection with the reorganization.

7. Applicant was liquidated and

dissolved under the laws of the State of

Maryland on April 12, 1994.

8. 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.

9. 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.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–6834 Filed 3–18–97; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–22557; International Series Rel.

No. 1063; 812–10338]

Old Mutual South Africa Equity Trust,

et al.; Notice of Application

March 12, 1997.

AGENCY: Securities and Exchange

Commission (the ‘‘SEC’’ or the

‘‘Commission’’).

ACTION: Notice of application for

exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Old Mutual South Africa

Equity Trust (the ‘‘Trust’’) and Old

Mutual Global Assets Fund Limited

(‘‘Old Global’’).

RELEVANT ACT SECTIONS: Order requested

under section 17(b) of the Act to exempt

applicants from the provisions of

section 17(a).

SUMMARY OF APPLICATION: Applicants

seek an order to permit Old Global to

sell certain shares of Investec Bank Ltd.

(‘‘Investec’’) to the Trust.

FILING DATES: The application was filed

on September 11, 1996, and amended

on December 18, 1996, and March 7,

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

April 7, 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 may request notification of a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 5th

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

Applicants, Clarendon House, 2 Church

Street, Hamilton, Bermuda.

FOR FURTHER INFORMATION CONTACT:

Elaine M. Boggs, Senior Counsel, at

(202) 942–0572, or Elizabeth G.

Osterman, Assistant Director, 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 at the SEC’s

Public Reference Branch.

Applicants’ Representations

1. The Trust is a registered open-end

management investment company

organized as a trust under

Massachusetts law. The investment

objective of the Trust is long-term total

return in excess of that of the

Johannesburg Stock Exchange (the

‘‘JSE’’) Actuaries All share Index

through investment in equity securities

of South African issuers that are listed

on a securities exchange. Beneficial

interests in the Trust are issued solely

in private placement transactions to

investment companies, common or

commingled trust funds, or similar

entities which are ‘‘accredited

investors’’ within the meaning of

Regulation D under the Securities Act of

19332, as well as to certain investment

funds organized outside the United

States. As of December 4, 1996, 91.21%

of the voting securities of the Trust was

owned by a wholly-owned subsidiary of

the south African Mutual Life

Assurance Society (‘‘Old Mutual’’).

2. The Global Fund is a mutual fund

organized under the laws of Bermuda

that invests in a portfolio of South

African and international securities. A

wholly-owned subsidiary of Old Mutual

is the sole shareholder of the Global

Fund. The Global Fund is not required

to be registered under the Act because

its securities are not owned by United

States residents. The Trust and the

Global Fund are managed by Old

Mutual Asset Managers (Bermuda)

Limited (the ‘‘Adviser’’), a whollyowned subsidiary of Old Mutual.

3. Investec is a South African

registered bank. Its ordinary shares and

convertible debentures are listed on the

JSE. In July of 1996 Investec conducted

a private placement of its ordinary

shares for the purpose of funding two

acquisitions. Old Mutual received an

offer from Investec to purchase 1.6

million Investec ordinary shares at

U.S.$19.52. Consistent with practice in

South Africa,1 the price was a 9.46%

discount to the shares’ closing market

price on the trade date. Old Mutual

allocated the 1.6 million shares among

various portfolios and funds managed

by Old Mutual and its affiliates. The

Adviser originally wanted the Trust to

participate in the Investec placement

and informed Old Mutual that it wished

to purchase 685,000 shares of Investec

for the Trust. However, the Trust was

not allocated shares because such an

allocation might have violated section

17(a) of the Act and instead the shares

were allocated to the Global Trust (the

‘‘Investec Shares’’).

4. The purchase of the Investec Shares

by the Global Fund was originally

scheduled to close on July 23, 1996 at

a purchase price of U.S.$19.52 per share

(the ‘‘July Price’’). Investec agreed to

defer the settlement date to December 2,

1996 (the ‘‘Initial Purchase Settlement

Date’’). In consideration of Investec’s

agreement to defer the settlement date,

the Global Fund agreed to purchase the

Investec Shares from Investec on the

Initial Purchase Settlement Date at the

July Price, which represented a 16.20%

discount from the market price per

share, plus carrying costs of $.40 per

share. The carrying costs were

calculated at a rate of overnight dollar

LIBOR from July 23, 1996 through

September 30, 1996, and thereafter at a
Federal Register / Vol. 62, No. 53 / Wednesday, March 19, 1997 / Notices 13201

2Section 2(a)(9) defines ‘‘control’’ as the power to

exercise a controlling influence over the

management or policies of a company. The section

creates a presumption that owners of 25% or more

of a company’s voting securities control such

company.

3Rule 17a–7 permits certain purchase and sale

transactions between an investment company and

certain of its affiliated persons provided that certain

conditions are met, including that the transaction

be effected at the current market price of the

security.

1The Commission notes that the majority of other

ITS Participants (the American Stock Exchange,

Boston Stock Exchange, Chicago Stock Exchange,

Cincinnati Stock Exchange, National Association of

Securities Dealers, New York Stock Exchange,

Pacific Stock Exchange) have filed essentially the

same proposals to amend each of their rules

concerning the Pre-Opening Application. See

Securities Exchange Act Release No. 38285

(February 13, 1997), 62 FR 8065 (February 21,

1997).

rate of overnight dollar LIBOR plus

0.5%.

5. Applicants propose that the Global

Fund sell the Investec Shares to the

Trust. The purchase price to be paid by

the Trust will be the July Price plus

carrying costs relating to such

investment. These carrying costs will

consist of (a) reimbursement of the

carrying costs actually paid by the

Global Fund to Investec in

consideration of the deferral of the

Global Fund’s purchase of the Investec

Shares and (b) reimbursement of the

Global Fund of its cost of funds (the

overnight LIBOR plus 0.5%) from the

Initial Purchase Settlement Date through

the date on which the Trust purchases

the Investec Shares (the ‘‘Trust Purchase

Date’’).

Applicants’ Legal Analysis

1. Section 17(a) of the Act provides,

in pertinent part, that it is unlawful for

any affiliated person of a registered

investment company, or any affiliated

person of such an affiliated person,

acting as principal, knowingly to sell or

purchase securities to or from such

registered company.

2. Section 2(a)(3) of the Act defines

the term ‘‘affiliated person’’ of another

person to include, in pertinent part (a)

any person directly or indirectly

owning, controlling, or holding with

power to vote 5% or more of the

outstanding voting securities of such

other person, (b) any person directly or

indirectly controlling, controlled by, or

under common control with such other

person or (c) if such other person is an

investment company, any investment

adviser thereof.

3. The Trust and the Global Fund are

both subject to control, as defined in

section 2(a)(9) of the Act,2 by Old

Mutual. Also, the Trust and the Global

Fund share a common investment

adviser. Thus, the Trust and the Global

Fund are ‘‘affiliated persons’’ within the

meaning of section 2(a)(3). As a result,

sales of securities on a principal basis

by the Global Fund to the Trust are

prohibited by section 17(a) of the Act.

4. Section 17(b) of the Act provides

that the SEC may exempt a transaction

from the prohibitions of section 17(a) if

evidence establishes that the terms of

the proposed transaction, including the

consideration to be paid, are reasonable

and fair and do not involve

overreaching on the part of any person

concerned, and that the proposed

transaction is consistent with the policy

of the registered investment company

concerned and with the general

purposes of the Act.

5. Applicants believe that the

requested relief meets the standards set

forth in section 17(b). Applicants

believe that the proposed transaction is

consistent with the objective and

policies of the Trust and that the

proposed transaction is consistent with

the general purposes of the Act. In

addition, the terms of the transaction

were presented to the board of trustees

of the Trust and at a meeting on

February 14, 1997, the board of trustees

of the Trust, including a majority of the

independent trustees, approved the

purchase of the Investec Shares. In

evaluating the terms of the transaction,

the trustees of the Trust considered the

fact that the proposed purchase price to

be paid by the Trust will include

reimbursement of Global Fund for its

payment of Investec’s carrying costs and

for its own carrying costs.

6. Applicants state that the proposal

does not involve dumping. Further,

applicants state that the transaction is

consistent with the requirements of rule

17a–7,3 except that the purchase price

will be below market price and the

Trust and the Global Fund are not

affiliated persons solely by reason of

having a common investment adviser or

investment advisers which are affiliated

persons of each other, common

directors, and/or common officers.

7. Applicants state that if the Trust

were not able to purchase the Investec

Shares from the Global Fund on the

basis proposed, it would be

disadvantaged relative to other

portfolios and funds managed by Old

Mutual and its affiliates because, unlike

those other portfolios and funds that

have been allocated shares of the

placing, the Trust would, in order to

increase its investment in Investec, have

to purchase shares on the open market

without the benefit of the discount

negotiated by Old Mutual. Applicants

state that the Trust is not obligated to

purchase the Investec Shares if the

market price of the shares falls below

the proposed purchase price. Thus, the

Global Fund bears the investment risk of

holding the Investec Shares. Applicants

state that the Global Fund has in effect

granted an option to the Trust and the

Trust has not paid, and is not required

to pay, any fee to the Global Fund or

any other party for this option.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–6837 Filed 3–18–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38393; File No. SR–CBOE–

97–12]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Board Options Exchange,

Inc. To Amend the Exchange’s Rule

Concerning the Pre-Opening

Application of the Intermarket Trading

System

March 12, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on February 26, 1997,

the Chicago Board Options Exchange,

Inc. (‘‘CBOE’’ or ‘‘Exchange’’) filed with

the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I, II and III below, which Items

have been prepared by the selfregulatory organization. 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 proposes to amend CBOE

Rule 30.72, Pre-Opening Application

Rule, with respect to the Pre-Opening

Application in the Intermarket Trading

System (‘‘ITS’’). The proposed

amendment is to enhance the operation

of the Pre-Opening Application by

effectively including circuit breakers as

a trading halt situation that will trigger

the Pre-Opening Application.1

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

self-regulatory organization included

statements concerning the purpose of

and basis for the proposed rule change

and discussed any comments it received