33738 Federal Register / Vol. 63, No. 118 / Friday, June 19, 1998 / Notices

available for downloading or reviewing

on the internet at http://www.nrc.gov/

ACRSACNW.

Dated: June 15, 1998.

Andrew L. Bates,

Advisory Committee Management Officer.

[FR Doc. 98–16379 Filed 6–18–98; 8:45 am]

BILLING CODE 7590–01–P

SECURITIES AND EXCHANGE

COMMISSION

Existing Collection; Comment Request

Upon written request, copies available

from: Securities and Exchange

Commission, Office of Filings and

Information Services, 450 5th Street,

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

Extension:

Rule 45, SEC File No. 270–164, OMB

Control No. 3235–0154

Rule 52, SEC File No. 270–326, OMB

Control No. 3235–0369

Notice is hereby given that pursuant

to the Paperwork Reduction Act of 1995

(44 U.S.C. 3501 et seq.) the Securities

and Exchange Commission

(‘‘Commission’’) is soliciting comments

on the collections of information

summarized below. The Commission

plans to submit these existing

collections of information to the Office

of Management and Budget for

extension and approval.

Rule 45 under the Public Utility

Holding Company Act of 1935 (15

U.S.C. 79A, et seq.) (‘‘Act’’) imposes a

filing requirement of registered holding

companies and their subsidiaries under

section 12(b) of the Act. Under the

requirement, the companies must file a

declaration seeking authority to make

loans or otherwise extend credit to other

companies in the same holding

company system. Among others, the

rule excepts from the filing requirement

the performance of payment obligations

under consolidated tax agreements. The

purpose of the rule is to ensure that

registered holding companies and their

subsidiaries do not engage in activities

that are a detriment to interests the Act

is designed to protect (i.e., crosssubsidization). The Commission

estimates that the total annual reporting

and recordkeeping burden is 46 hours.

(e.g., 14 recordkeepers x approximately

3.3 hours = approximately 46 hours).

Rule 52 under the Act permits public

utility subsidiary companies of

registered holding companies to issue

and sell certain securities without filing

a declaration if certain conditions are

met. The purpose of collecting the

information is to determine the

existence of detriment to interests the

Act was designed to protect. The

Commission estimates that the total

annual reporting and recordkeeping

burden of collections under rule 52 is 33

hours (e.g., 33 responses x one hour =

33 burden hours).

The estimates of average burden hours

are made for the purposes of the

Paperwork Reduction Act and are not

derived from a comprehensive or even

a representative survey or study of the

costs of Commission rules and forms.

Written comments are invited on: (a)

whether the proposed collections of

information are necessary for the proper

performance of the functions of the

agency, including whether the

information will have practical utility;

(b) the accuracy of the agency’s estimate

of the burden of the collection of

information; (c) ways to enhance the

quality, utility, and clarity of the

information collected; and (d) ways to

minimize the burden of the collection of

information on respondents, including

through the use of automated collection

techniques or other forms of information

technology. Consideration will be given

to comments and suggestions submitted

in writing within 60 days of this

publication.

Please direct your written comments

to Michael E. Bartell, Associate

Executive Director, Office of

Information Technology, Securities and

Exchange Commission, 450 Fifth Street,

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

Dated: June 11, 1998.

Jonathan G. Katz,

Secretary.

[FR Doc. 98–16352 Filed 6–18–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Investment Company Act Release No.

23251; 812–11118]

Fountain Square Funds, et al.; Notice

of Application

June 12, 1998.

AGENCY: Securities and Exchange

Commission (‘‘Commission’’).

ACTION: Notice of application for an

order under section 17(b) of the

Investment Company Act of 1940 (the

‘‘Act’’) for an exemption from section

17(a) of the Act.

SUMMARY OF APPLICATION: Applicants

request an order to permit certain series

of the Fountain Square Funds (‘‘FSF’’)

to acquire all of the assets and certain

stated liabilities of certain series of The

Cardinal Group (‘‘Cardinal’’).

APPLICANTS: FSF, Cardinal, Cardinal

Management Corp. (‘‘CMC’’), and Fifth

Third Bank (the ‘‘Bank’’).

FILING DATES: The application was filed

on May 1, 1998. Applicants have agreed

to file an amendment during the notice

period, the substance of which is

reflected in this notice.

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

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 July 7, 1998, and should

be accomplished 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 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,

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

Square Funds and Fifth Third Bank, 38

Fountain Square Plaza, Cincinnati, Ohio

45263. The Cardinal Group and

Cardinal Management Corp., 155 East

Broad Street, Columbus, Ohio 43215.

FOR FURTHER INFORMATION CONTACT:

Kathleen L. Knisely, Staff Attorney, at

(202) 942–0517, 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 at the

Commission’s Public Reference Branch,

450 Fifth Street, N.W., Washington, D.C.

20549 (tel. 202–942–8090).

Applicants’ Representations

1. FSF is a Massachusetts business

trust registered under the Act as an

open-end management investment

company. FSF currently has sixteen

separate series, five of which are the

acquiring funds (‘‘Acquiring Funds’’).

The Bank, an Ohio state-chartered bank,

serves as the investment adviser to FSF.

The Bank is not required to register

under the Investment Advisers Act of

1940 (‘‘Advisers Act’’). The Bank is a

subsidiary of Fifth Third Bancorp

(‘‘Fifth Third’’), a bank holding

company.

2. Cardinal is an Ohio business trust

registered under the Act as an open-end

management investment company.
Federal Register / Vol. 63, No. 118 / Friday, June 19, 1998 / Notices 33739

1The sixth series also is an acquired fund but no

relief is being sought for this series because it may

rely on rule 17a–8.

2The Acquired Funds and the corresponding

Acquiring Funds are: (i) The Cardinal Fund and

Fountain Square Cardinal Fund; (ii) Cardinal

Aggressive Growth Fund and Fountain Square Mid

Cap Fund; (iii) Cardinal Balanced Fund and

Fountain Square Balanced Fund; (iv) Cardinal

Government Securities Money Market Fund and

Fountain Square Government Cash Reserves Fund;

(v) Cardinal Tax Exempt Money Market Fund and

Fountain Square Tax Exempt Money Market Fund.

Cardinal currently has six separate

series, five of which are termed the

‘‘Acquired Funds’’ for purposes of this

application (the Acquired Funds

together with the Acquiring Funds, the

‘‘Funds’’).1 CMC serves as the

investment adviser to Cardinal and is

registered under the Advisers Act. CMC

is a subsidiary of The Ohio Company.

The Ohio Company, as a fiduciary for its

customers, owns more than 5% of each

of the Acquired Funds.

3. On or about July 12, 1998, The

Ohio Company will merge with a

subsidiary of Fifth Third (‘‘The Ohio

Company Merger’’). As a result of the

Ohio Company Merger, CMC will

become an indirect subsidiary of Fifth

Third.

4. On March 12, 1998, the board of

trustees of Cardinal, including a

majority of its trustees who are not

‘‘interested persons’’ under section

2(a)(19) of the Act, approved and

authorized an Agreement and Plan of

Reorganization and Liquidation (the

‘‘Reorganization Agreement’’) pursuant

to which the Acquiring Funds will

acquire a corresponding series of the

Acquired Funds having similar

investment objectives. Pursuant to the

Reorganization Agreement, as soon as

practicable after July 13, 1998 or such

later date as the parties may mutually

agree (‘‘Closing Date’’), each Acquiring

Fund will acquire all of the assets and

certain stated liabilities of the

corresponding Acquired Fund in

exchange for shares of the Acquiring

Fund equal in value to the Acquired

Fund’s aggregate net asset value,

computed as of the close of business on

the last day preceding the Closing Date

(the ‘‘Reorganizations’’).2 As soon as

practicable after the Closing Date, each

Acquired Fund will liquidate and

distribute pro rata to the Acquired

Fund’s shareholders of record,

determined as of the close of business

on the Closing Date, the Acquiring

Fund’s shares received by the Acquired

Fund.

5. The Acquired Funds, except for the

Cardinal money market funds, offer two

classes of shares, Investor Y

(‘‘Institutional’’) Shares and Investor A

(‘‘Investor’’) Shares. The Acquiring

Fund currently offer two classes of

shares, Investment A Shares and

Investment C Shares, but will begin

offering Institutional Shares in

connection with the Reorganizations.

6. In the Reorganizations, holders of

Institutional Shares of an Acquired

Fund will receive Institutional Shares of

the corresponding Acquiring Fund and

holders of Investor Shares of an

Acquired Fund will receive Investment

A Shares of the corresponding

Acquiring Fund. Holders of the Cardinal

money market funds who are eligible to

purchase Institutional Shares will

receive Institutional Shares of the

corresponding Acquiring Fund. Holders

of the Cardinal money market funds

who are not eligible to purchase

Institutional Shares will receive

Investment A Shares of the

corresponding Acquiring Fund. No sales

charges will be imposed in connection

with the Reorganizations.

7. Institutional Shares of the Acquired

and the Acquiring Funds are not subject

to any asset-based distribution fees.

Institutional Shares of the Acquired

Funds are subject to an administrative

service fee of .15% of average net assets.

Institutional Shares of the Acquiring

Funds are not subject to administrative

service fees. Investor Shares and

Investment A Shares are both subject to

a 4.5% front-end sales charge. Investor

Shares and Investment A shares also are

subject to asset-based distribution fees

of up to .25% of the average net assets.

After the Reorganizations the Acquiring

Funds will begin paying asset-based

distribution fees, with the exception of

the Fountain Square Tax Exempt Money

Market Fund for which these fees will

be waived. None of the classes of the

Acquiring and the Acquired Funds are

subject to any redemption fees.

8. The investment objectives of each

Acquired Fund and its corresponding

Acquiring Fund are substantially

similar. The investment policies and

restrictions of each Acquired Fund and

its corresponding Acquiring Fund also

are substantially similar, but in some

cases involve differences that reflect the

differences in the general investment

strategies used by the Acquiring Funds.

9. The board of directors of the

Acquiring and the Acquired Funds

(collectively, ‘‘Boards’’) approved the

Reorganizations as in the best interests

of the existing shareholders and

determined that the interests of the

existing shareholders will not be diluted

as a result of the Reorganizations. The

Boards, including a majority of the

disinterested trustees (the ‘‘Independent

Trustees’’), considered various factors in

approving the Reorganizations,

including that: (i) the investment

objectives and policies of the Acquiring

and the Acquired Funds are

substantially similar; (ii) no sales

charges will be imposed in connection

with the Reorganizations; (iii) the

Reorganizations will be free from federal

income taxes; (iv) the conditions and

policies of rule of 17a–8 under the Act

will be followed: (v) the Reorganizations

will be based on net asset values

calculated by the Bank, as custodian of

the Acquiring Funds, in accordance

with the stated policies and procedures

of both the Acquiring and Acquired

Funds; (vi) the Reorganizations will be

submitted to shareholders of the

Acquired Funds in a combined proxy

statement/prospectus; and (vii) no

overreaching of any person is occurring.

Expenses incurred in connection with

the Reorganizations will be borne by the

Bank.

10. The Reorganization Agreement

may be terminated at any time prior to

the Closing Date (a) by mutual written

consent of the Acquiring and Acquired

Funds or (b) by either an Acquiring or

an Acquired Fund by written notice to

the other, without liability on the part

of either party, if circumstances develop

that, in the opinion of the Board of

either Fund, make proceeding with the

Reorganizations not in the best interests

of the Fund’s shareholders.

11. A registration statement on Form

N–14 was filed with the Commission on

April 6, 1998 and became effective on

May 27, 1998. Applicants mailed a

prospectus/proxy statement to

shareholders of the Acquired Funds on

or about June 1, 1998. A special meeting

of the Acquired Funds’ shareholders

will be held on July 10, 1998 to vote on

the Reorganizations.

12. The consummation of the

Reorganizations is subject to the

following conditions, as set forth in the

Reorganization Agreement: (i) the N–14

Registration Statement will have

become effective; (ii) the Acquired

Funds’ shareholders will have approved

the Reorganization Agreement; (iii)

applicants will have received exemptive

relief from the Commission with respect

to the issues in the application; (iv) the

Acquiring and the Acquired Funds will

have received an opinion of counsel

concerning the federal income tax

aspects of the Reorganizations; and (v)

each Acquired Fund will have declared

a dividend or dividends to distribute

substantially all of its investment

company taxable income and net gain,

if any, to its shareholders. Applicants

agree not to make any material changes

to the Reorganization Agreement that

affect the application without prior

Commission approval.
33740 Federal Register / Vol. 63, No. 118 / Friday, June 19, 1998 / Notices

Applicants’ Legal Analysis

1. Section 17(a) of the Act generally

prohibits an affiliated person of a

registered investment company, or an

affiliated person of that person, acting as

principal, from selling any security to,

or purchasing any security from, the

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

defines an ‘‘affiliated person’’ of another

person to include (a) any person that

directly or indirectly owns, controls, or

holds with power to vote 5% or more

of the outstanding voting securities of

the 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 the other person; (c) any

person directly or indirectly controlling,

controlled by, or under common control

with the other person; and (d) if the

other person is an investment company,

any investment adviser of that 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 reason 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 on rule 17a-8 under the Act

because the Funds may be affiliated for

reasons other than those set forth in the

rule. Because the Ohio Company owns

5% or more of each of the Acquired

Funds, each Acquired Fund may be

deemed an ‘‘affilaited person of an

affiliated person’’ of each Acquiring

Fund.

4. Section 17(b) of the Act provides

that the Commission may exempt a

transaction from the provisions of

section 17(a) if the 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 each registered investment

company concerned and with the

general purposes of the Act.

5. Applicants request an order under

section 17(b) of the Act exempting them

from section 17(a) of the Act to the

extent necessary to consummate the

Reorganizations. Applicants submit that

the terms of the Reorganizations satisfy

the standards set forth in section 17(b)

of the Act. Applicants also note that the

Boards of the Acquiring and the

Acquired Funds, including the

Independent Trustees, have determined

that the Reorganizations are in the best

interests of their shareholders and that

the interests of the existing shareholders

of the Funds will not be diluted as a

result of the Reorganizations. In

addition, applicants state that the

exchange of the Acquired Funds’ shares

for shares of the Acquiring Funds will

be based on the Funds’ relative net asset

values.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 98–16346 Filed 6–18–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 35–26885]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

June 12, 1998.

Notice is hereby given that the

following filing(s) has/have been made

with the Commission pursuant to

provisions of the Act and rules

promulgated under the Act. All

interested persons are referred to the

application(s) and/or declaration(s) for

complete statements of the proposed

transaction(s) summarized below. The

application(s) and/or declaration(s) and

any amendments is/are available for

public inspection through the

Commission’s Office of Public

Reference.

Interested persons wishing to

comment or request a hearing on the

application(s) and/or declaration(s)

should submit their views in writing by

July 6, 1998, to the Secretary, Securities

and Exchange Commission,

Washington, D.C. 20549, and serve a

copy on the relevant applicant(s) and/or

declarant(s) at the address(es) specified

below. Proof of service (by affidavit or,

in case of an attorney at law, by

certificate) should be filed with the

request. Any request for hearing should

identify specifically the issues of fact or

law that are disputed. A person who so

requests will be notified of any hearing,

if ordered, and will receive a copy of

any notice or order issued in the matter.

After July 6, 1998, the application(s)

and/or declaration(s), as filed or as

amended, may be granted and/or

permitted to become effective.

Eastern Utilities Associates (70–9205)

Notice of Proposal to Amend

Declaration of Trust to Eliminate

Requirement of Shareholder Approval

For the Sale By Eastern Utility

Associates of Any of Its Majority-Owned

Subsidiaries; Order Authorizing

Solicitation of Proxies

Eastern Utilities Associates, (‘‘EUA’’),

P.O. Box 2333, Boston, Massachusetts

02107, a registered holding company,

has filed a declaration with the

Commission under section 6(a)(2), 7,

and 12(e) of the Public Utility Holding

Company Act of 1935, as amended

(‘‘Act’’), and rules 62 and 65 under the

Act.

EUA’s declaration of trust

(‘‘Declaration of Trust’’) currently

provides that a two thirds majority of

the holders of its outstanding common

shares entitled to vote must approve the

sale by EUA of any of its majorityowned subsidiaries. EUA seeks

authority to amend its Declaration of

Trust to eliminate this requirement

(‘‘Proposed Amendment’’).

EUA proposes to solicit proxies from

its common shareholders

(‘‘Shareholders’’) to approve the

Proposed Amendment at a special

meeting scheduled for July 20, 1998

(‘‘Special Meeting’’). Accordingly, EUA

requests that an order authorizing the

solicitation of proxies be issued as soon

as practicable under rule 62(d).

It is ordered, under rule 62 under the

Act, that the declaration regarding the

proposed solicitation of proxies can

become effective immediately, subject to

the terms and conditions contained in

rule 24 under the Act.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 98–16347 Filed 6–18–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 35–26886]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

June 12, 1998.

Notice is hereby given that the

following filing(s) has/have been made

with the Commission pursuant to

provisions of the Act and rules

promulgated under the Act. All

interested persons are referred to the

application(s) and/or declaration(s) for

complete statements of the proposed

transaction(s) summarized below. The

application(s) and/or declaration(s) and

any amendments is/are available for