[Federal Register Volume 63, Number 91 (Tuesday, May 12, 1998)]
[Notices]
[Pages 26223-26225]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12455]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 23172; 812-11074]


Oppenheimer Series Fund, Inc., et al.; Notice of Application

May 5, 1998.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 17(b) of the Investment 
Company Act of 1940 (the ``Act'') for an exemption from section 17(a) 
of the Act.

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SUMMARY OF THE APPLICATION: Applicants seek an order to allow certain 
series of Oppenheimer Series Fund, Inc. and Oppenheimer Integrity 
Funds, both registered open-end management investment companies, to 
acquire the assets and liabilities of certain series of Oppenheimer 
Series Fund, Inc. Because of certain affiliations, applicants may not 
rely on rule 17a-8 under the Act.

APPLICANTS: Oppenheimer Series Fund, Inc. (the ``Company''), 
Oppenheimer Integrity Funds (the ``Trust''), and Oppenheimer Funds, 
Inc. (``OFI'').

FILING DATES: The application was filed on March 18, 1998. Applicants 
have agreed to file an amendment to the application, the substance of 
which is

[[Page 26224]]

included in this notice, during the notice period.

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 Commission's Secretary 
and serving the 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 June 1, 1998, and should be accompanied by proof of service on 
the 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 who wish to be notified of a hearing may request 
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 450 Fifth 
Street, NW., Washington, DC 20549. Applicants: Oppenheimer Series Fund, 
Inc., Oppenheimer Integrity Funds, and OppenheimerFunds, Inc., c/o 
Denis R. Molleur, Esq., Two World Trade Center, 34th Floor, New York, 
New York 10048-0203.

FOR FURTHER INFORMATION CONTACT:
Emerson S. Davis, Senior Counsel, at (202) 942-0714, or George J. 
Zornada, 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 Commission's Public Reference Branch, 450 Fifth Street, NW., 
Washington, DC 20549 (telephone (202) 942-8090).

Applicants' Representations

    1. The Company, a Maryland corporation, is registered under the Act 
as an open-end management investment company and is organized as a 
series company. The Company offers five portfolios, Oppenheimer 
Disciplined Value Fund and Oppenheimer Disciplined Allocation Fund 
(each an ``Acquiring fund''), and Oppenheimer LifeSpan Growth Fund, 
Oppenheimer LifeSpan Balanced Fund and Oppenheimer LifeSpan Income Fund 
(collectively, the ``Acquired Funds'').
    2. The Trust, a Massachusetts business trust, is registered under 
the Act as an open-end management investment company and is organized 
as a series company. Oppenheimer Bond Fund is the only portfolio of the 
Trust (together with Oppenheimer Disciplined Value Fund and Oppenheimer 
Disciplined Allocation Fund, the ``Acquiring Funds'').
    3. OFI is an investment adviser registered under the Investment 
Advisers Act of 1940 (the ``Advisers Act''), and is the adviser to the 
Acquired Funds and the Acquiring Funds. It is a subsidiary of 
Oppenheimer Acquisition Corp., a holding company controlled by 
Massachusetts Mutual Life Insurance Company (``MassMutual''). As of 
March 2, 1998, MassMutual held of record of 21% of the outstanding 
shares of the Disciplined Value Fund; 63% of the LifeSpan Growth Fund; 
70% of the LifeSpan Balanced Fund; and 86% of the LifeSpan Income Fund. 
MassMutual also is an investment adviser registered under the Advisers 
Act.
    4. Each Acquired Fund currently has Class A, B, and C shares. Class 
A shares are subject to a front-end sales charge, except for certain 
large purchases that are subject to a 1% contingent deferred sales 
charge (``CDSC'') if redeemed within one year. Class B and C shares may 
be subject to a CDSC depending on the length of time held, and are 
subject to a .75% asset-based sales charge. Each Acquiring Fund has 
identical Class A, B, and C shares.
    5. On December 11, 1997, the board of directors of the Company (the 
``Board''), including a majority of the distinterested directors, 
approved proposed plans of reorganization (each a ``Plan'' and 
collectively, the ``Plans''). Under the Plans, each Acquiring Fund will 
acquire all of the assets, less cash reserves,\1\ and liabilities, as 
set out in the Plans, of the corresponding Acquired Fund in exchange 
for Class A, B, and C shares of the Acquiring Fund equal in value as 
computed at 4:00 p.m. New York, NY time (``Valuation Time'') on the 
date of the transaction (the ``Exchange Date'') to the net value of the 
assets of the corresponding Acquired Fund at the Valuation Time on the 
Exchange Date.\2\ Each Acquired Fund will distribute pro rata to its 
shareholders as of the close of business on the Exchange Date the 
Acquiring Fund Class A, B, and C shares that were issued in exchange 
for the Acquired Fund's assets. All issued and outstanding 
corresponding Class A, B, and C shares of the Acquired Fund will 
simultaneously be canceled and the Acquired Fund subsequently will 
liquidate.
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    \1\ Assets will be retained by the Acquired Funds deemed 
sufficient in the discretion of the Board for the payment of the 
expenses of liquidation and liabilities not assumed by the Acquiring 
Fund.
    \2\ The Acquiring Funds and the corresponding Acquired Funds 
are:
    (i) Disciplined Value Fund and LIfeSpan Growth Fund
    (ii) Disciplined Allocation Fund and LifeSpan Balanced Fund
    (iii) Oppenheimer Bond Fund and LifeSpan Income Fund.
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    6. Shareholders of the Acquired Funds will not incur any sales 
charges in connection with the reorganization. Any CDSC, however, that 
currently applies to Acquired Fund shares will continue to apply to 
Acquiring Fund shares received in the transaction. Each Acquiring Fund 
and Acquired Fund will bear its own expenses incurred in connection 
with the reorganization. The investment objectives of each Acquired 
Fund and its corresponding Acquiring Fund are similar.
    7. In approving the reorganization, the Board considered the terms 
and conditions of the Plans, including (a) that the exchange of 
Acquired Fund assets for Acquiring Fund shares will take place on a net 
asset value basis; (b) that no sales charge will be incurred by 
Acquired Fund shareholders in connection with their acquisition of 
Acquiring Fund shares; (c) the allocation of the expenses to each Fund; 
(d) the tax-free status of the reorganization; (e) the advantages that 
may be realized by the Acquired funds and the Acquiring Funds, 
including economies of scale which will result in reduced expense 
ratios; and (f) the comparability of the investment objectives, 
policies and restrictions of each Acquiring Fund with those of the 
corresponding Acquired fund. The Board and the Trustees of the Trust, 
including the disinterested members of each, also found that the Plans 
were fair and in the best interests of the shareholders of the Acquired 
Funds and the Acquiring Funds, and that the interests of existing 
shareholders will not be diluted as a result of the reorganization.
    8. Amendments on Form N-14 to the Company's and Trust's 
registration statements under the Securities Act of 1933 were filed 
with the Commission on February 27, 1998 to register shares to be 
issued in the proposed reorganization. A special meeting for 
shareholder consideration of the Plans is scheduled for June 9, 1998.
    9. Each Acquiring or Acquired Fund may abandon and terminate the 
Plan at any time prior to the Exchange Date without liability if a 
material breach of the terms of the Plan occurs or if a material legal, 
administrative, or other proceeding is instituted. In addition, each 
Acquiring or Acquired fund may, at its election, terminate the Plan in 
the event that any condition for the Plan to close has not been met or 
waived and if the transactions have not become effective on or before 
July 30, 1998.

[[Page 26225]]

    10. The consummation of the reorganization will be subject to the 
following conditions: (a) the shareholders of each Acquired Fund will 
have approved the Plan; (b) applicants will have received the exemptive 
relief which is the subject of the application; and (c) applicants will 
have received an opinion of counsel or independent auditors with 
respect to the federal income tax aspects of the reorganization. 
Applicants agree not to make any material changes to the proposed Plans 
that affect the application without prior Commission approval.

Applicants' Legal Analysis

    1. Section 17(a) of the Act prohibits an affiliated person of a 
registered investment company, or any affiliated person of such person, 
acting as principal, from selling any security to, or purchasing any 
security from, such registered company. Section 2(a)(3) of the Act 
defines an ``affiliated person'' of another person to include (a) any 
person that owns 5% or more of the outstanding voting securities of 
such other person, (b) any person 5% or more of whose outstanding 
voting securities are directly or indirectly owned, controlled, or held 
with power to vote by such other person, (c) any person directly or 
indirectly controlling, controlled by, or under common control with 
such other person, and (d) if such other person is an investment 
company, any investment adviser of that investment company.
    2. Rule 17a-8 under the Act exempts from the prohibitions of 
section 17(a) mergers, consolidations, or purchases or sales of 
substantially all of the assets of registered investment companies that 
are affiliated persons solely by reasons of having a common investment 
adviser, common directors/trustees, and/or common officers, provided 
that certain conditions set forth in the rule are satisfied.
    3. Applicants believe that they may not rely upon rule 17a-8 
because they may be affiliated for reasons other than those set forth 
in the rule. The Acquiring and Acquired Funds have a common investment 
adviser, OFI. Mass Mutual indirectly owns more than 5% of OFI. Mass 
Mutual also holds of record 5% or more of the outstanding voting 
securities of one Acquiring Fund, the Oppenheimer Disciplined Value 
Fund, and controls each of the Acquired Funds. Because of this 
ownership, each Acquiring Fund and OFI may be deemed affiliated persons 
of an affiliated person of the Acquired Funds. Therefore, the proposed 
reorganization may not meet the ``solely by reason of'' requirement of 
rule 17a-8. Applicants request an order pursuant to section 17(b) of 
the Act exempting them from section 17(a) to the extent necessary to 
consummate the proposed reorganization.
    4. Section 17(b) of the Act provides that the Commission may exempt 
a transaction from the provisions of section 17(a) if 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; the proposed transaction is 
consistent with the policy of each registered investment company 
concerned; and the proposed transaction is consistent with the general 
purposes of the Act.
    5. Applicants submit that the terms of the Plans satisfy the 
standards set forth in section 17(b) in that the terms are fair and 
reasonable and do not involve overreaching on the part of any person. 
Applicants note that the Board and the Trustees of the Trust, including 
the disinterested directors and trustees, have reviewed the terms of 
the Plans, including the consideration paid or received, and have found 
that the participation in the reorganization is in the best interests 
of each Acquiring and Acquired fund and that the interests of the 
existing shareholders will not be diluted as a result of the 
reorganization. Applicants also note that the exchange of the Acquired 
Funds' assets and liabilities for the shares of the Acquiring Funds 
will be based on the Funds' relative net asset values.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-12455 Filed 5-11-98; 8:45 am]
BILLING CODE 8010-01-M