64092 Federal Register / Vol. 60, No. 239 / Wednesday, December 13, 1995 / Notices

charge is deducted will contain as an

exhibit an actuarial opinion as to: (i) the

reasonableness of the charge in relation

to MassMutual’s increased federal tax

burden resulting from the application of

Section 848 of the Code; (ii) the

reasonableness of the expected after tax

rate of return that is used in calculating

the charge; and (iii) the appropriateness

of the factors used to determine

MassMutual’s expected after tax rate of

return.

Section 27(a)(3) and Rule 6e–

3(T)(b)(13)(ii)—‘‘Stair Step’’ Exemption

1. Section 27(a)(3) of the 1940 Act

provides that the amount of sales load

which may be deducted from any of the

first twelve monthly payments on a

periodic payment plan certificate may

not exceed proportionately the amount

deducted from any other such payment,

and that the sales load deducted from

any subsequent payment may not

exceed proportionately the amount

deducted from any other subsequent

payment.

2. Rule 6e–3(T)(b)(13)(ii) provides an

exemption from Section 27(a)(3),

provided that the proportionate amount

of sales load deducted from any

payment does not exceed the

proportionate amount deducted from

any prior payment, unless an increase is

caused by reductions in the annual cost

of insurance or in sales load for amounts

transferred to a variable life insurance

policy from another plan of insurance.

3. Under MassMutual’s proposed

sales load structure for Policies issued

in a Case with an Initial Case Premium

of less than $1,000,000, during the first

five Policy years, MassMutual assesses a

front-end sales load of 15% of premium

payments made which are less than or

equal to the minimum planned Policy

premium, and 6% of premium

payments made which exceed the

minimum planned Policy premium.

After the fifth Policy Year, the sales load

percentages for these Policies will

decrease to 6% on all premium

payments. Thus, if during the first four

years of a Policy for which the Initial

Case Premium paid was less than

$1,000,000, a Policy owner makes a

premium payment which exceeds the

minimum planned Policy premium, the

percentage of sales load deducted (in

the next Policy Year) from that portion

of any premium payment which is less

than or equal to the minimum planned

Policy premium would exceed that

deducted from the prior premium

payment. Applicants request an

exemption from the requirements of

Section 27(a)(3) of the 1940 Act and

Rule 6e–3(T)(b0(13)(ii) thereunder

because the sales load structure under

the Policies appears to violate the ‘‘stairstep’’ provisions articulated in Section

27(a)(3) of the 1940 Act. Moreover,

Applicants note, the exemption from

Section 27(a)(3) provided by Rule 6e–

3(T)(b)(13)(ii) does not appear to cover

the case at hand.

4. Applicants represent that

MassMutual has designed the Policies

so that they comply with Rule 6e–3(T)’s

sales load limitations and are ‘‘refund

proof’’: i.e., sales load deductions from

premium payments will not exceed the

sales load limitations specified in Rule

6e–3(T)(b)(13)(i)(A) and will never

require the repayment of any sales

charges pursuant to Rule 6e–

3(T)(b)(13)(v)(A).

5. Applicants further represent that

MassMutual has designed the sales load

structure under the Policies to give

Policy owners significant flexibility

with respect to the timing and amount

of premium payments, while permitting

MassMutual to deduct only those

charges deemed necessary to defray

distribution expenses and support the

benefits under the Policies.

6. Applicants represent that the

proposed sales load design provides a

significant benefit to Policy owners by

passing through to them a portion of

MassMutual’s savings resulting from the

lower distribution costs associated with

Policies having an Initial Case Premium

of $1,000,000 or less and for which

premium payments are made during the

first five Policy Years which exceed the

minimum planned Policy premium set

for that Policy year. Applicants submit

that it would not be in the interest of

Policy owners to require the imposition

of a sales charge on premium payments

in excess of the minimum planned

Policy premium, or subsequent

premium payments that are higher than

Applicants deem necessary.

7. Applicants assert that Section

27(a)(3) was designed to address abuses

involving periodic payment plans under

which large amounts of front-end sales

load are deducted so early in life of the

plan that an investor redeeming in the

early periods would recoup little of his

or her investment. MassMutual

anticipates that: (i) a substantial number

of the Policies will be sold in

connection with rollover transactions

effectuated pursuant to Section 1035 of

the Code; and (ii) under such a scenario,

there will be a higher occurrence of

premium payments made in the first

Policy year which exceed the minimum

planned premium payment by Policy

owners purchasing Policies having an

Initial Case Premium of less than

$1,000,000. For these reasons,

Applicants submit that the proposed

sales load structure would not present

the type of abuse that Section 27(a)(3)

was designed to prevent.

8. Moreover, Applicants assert that, to

the extent that owners of Policies with

an Initial Case Premium of less than

$1,000,000 make premium payments

during the first Policy year which

exceed the minimum planned Policy

premium, MassMutual’s proposed sales

load structure will cause a greater

proportion of the Policies’ sales charges

to be deducted later than they otherwise

might have been deducted. In this

regard, Applicants note that

MassMutual could have decided to

assess a sales load of 30% on premium

payments less than or equal to the

minimum planned Policy premium

made during the first Policy year, and

7.89% on premium payments made

thereafter. Applicants submit that, by

spreading sales charges more evenly

over the life of a Policy, MassMutual’s

sales load structure furthers the

purposes of Section 27(a)(3) of the 1940

Act.

Conclusion

Applicants submit that, for the

reasons and upon the facts set forth

above, the requested exemptions would

be appropriate in the public interest and

consistent with the protection of

investors and the purposes fairly

intended by the policies and provisions

of the 1940 Act.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–30356 Filed 12–12–95; 8:45 am]

BILLING CODE 8010–01–M

[File No. 1–9973]

Issuer Delisting; Notice of Application

To Withdraw From Listing and

Registration; (The Middleby

Corporation, Common Stock, $0.01 Par

Value)

December 7, 1995.

The Middleby Corporation

(‘‘Company’’) has filed an application

with the Securities and Exchange

Commission (‘‘Commission’’), pursuant

to Section 12(d) of the Securities

Exchange Act of 1934 (‘‘Act’’) and Rule

12d2–2(d) promulgated thereunder, to

withdraw the above specified security

(‘‘Security’’) from listing and

registration on the American Stock

Exchange, Inc. (‘‘Amex’’).

The reasons alleged in the application

for withdrawing the Security from

listing and registration include the

following:
Federal Register / Vol. 60, No. 239 / Wednesday, December 13, 1995 / Notices 64093

According to the Company, its Board

of Directors unanimously approved

resolutions on October 24, 1995 to

withdraw the Security from listing on

the Amex and instead, to list the

Security on the National Association of

Securities Dealers Automated

Quotations National Market System

(‘‘Nasdaq/MMS).

The decision of the Board followed a

thorough study of the matter and was

based upon the belief that listing the

Security on the Nasdaq/NMS will be

more beneficial to the Company’s

stockholders than the present listing on

the Amex for the following reasons.

(1) According to the Company, its

Board of Directors determined that a

listing on Nasdaq/NMS would provide

greater coverage for the Security; and

(2) According to the Company, its

Board of Directors determined that a

listing on the Nasdaq/NMS would

provide improved liquidity to the

Company’s shareholders.

Any interested person may, on or

before December 29, 1995, submit by

letter to the Secretary of the Securities

and Exchange Commission, 450 Fifth

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

facts bearing upon whether the

application has been made in

accordance with the rules of the

exchanges and what terms, if any,

should be imposed by the Commission

for the protection of investors. The

Commission, based on the information

submitted to it, will issue an order

granting the application after the date

mentioned above unless the

Commission determines to order a

hearing on the matter.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 95–30302 Filed 12–12–95; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–21573; 811–7476]

The 231 Funds; Notice of Application

December 6, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Deregistration under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANT: The 231 Funds.

RELEVANT ACT SECTION: Section 8(f).

SUMMARY OF APPLICATION: Applicant

requests an order declaring that it has

ceased to be an investment company.

FILING DATE: The application was filed

on November 7, 1995.

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

January 2, 1996, 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 5th

Street, NW., Washington, DC 20549.

Applicant, 125 West 55th Street, New

York, New York 10019.

FOR FURTHER INFORMATION CONTACT:

Deepak T. Pai, Staff Attorney, at (202)

942–0574, or Alison E. Baur, 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 SEC’s

Public Reference Branch.

Applicant’s Representations

1. Applicant is an open-end,

management investment company

organized as a Massachusetts business

trust. On February 10, 1993, applicant

registered under the Act as an

investment company, and filed a

registration statement under the

Securities Act of 1933 registering an

indefinite number of shares. The

registration statement was declared

effective on August 20, 1993. Applicant

issued shares in two portfolios, the

Prime Fund (‘‘231 Prime Fund’’) and the

Treasury Fund (‘‘231 Treasury Fund’’),

each of which issued two classes of

shares (Institutional Shares and Service

Shares). Institutional Shares were first

issued on September 1, 1993 for both

portfolios and Service Shares were first

issued on March 1, 1994 for the 231

Prime Fund and April 5, 1994 for the

231 Treasury Fund.

2. At a meeting held on June 13, 1995,

applicant’s Board of Trustees approved

on Agreement and Plan of

Reorganization (the ‘‘Reorganization

Agreement’’) between applicant and

Pacific Horizon Funds, Inc. (‘‘Pacific

Horizon’’) whereby Pacific Horizon’s

Prime Fund (‘‘PH Prime Fund’’) and

Treasury Fund (‘‘PH Treasury Fund’’)

would acquire all of the assets and

liabilities of 231 Prime Fund and 231

Treasury Fund, respectively, in

exchange for Horizon Shares and

Horizon Service Shares of PH Prime

Fund and PH Treasury Fund.

Applicant’s Board of Trustees

determined that the interests of

applicant’s shareholders would best be

served by approving the Reorganization

Agreement. In reaching this

determination, the Board of Trustees

considered the anticipated loss of

applicant’s assets as a result of the sale

of the institutional trust business of

Bank of America Illinois, applicant’s

investment adviser (‘‘Adviser’’). The

Board of Trustees concluded that,

among other advantages, the

reorganization would be likely to

provide shareholders with an interest in

a larger and more diversified portfolio

while reducing the total expense ratio

that would exist absent voluntary

reimbursements.

3. Proxy materials were filed with the

SEC and were distributed to applicant’s

shareholders on or about July 21, 1995.

At a special meeting held on August 24,

1995, shareholders of the 231 Prime

Fund and the 231 Treasury Fund

approved the reorganization.

4. On August 25, 1995, the assets and

liabilities of the 231 Prime Fund and

231 Treasury Fund were transferred to

and assumed by PH Prime Fund and PH

Treasury Fund in exchange for full and

fractional Horizon Shares and Horizon

Service Shares of the PH Prime Fund

and PH Treasury Fund. The shares

exchanged were equal in number and

value to the number of full and

fractional Institutional Shares and

Service Shares of the 231 Prime Fund

and 231 Treasury Fund. Following the

transfer, applicant distributed the

Horizon Shares and Horizon Service

Shares to the holders of Institutional

Shares and Service Shares of applicant

in liquidation of the 231 Prime Fund

and 231 Treasury Fund. Applicant did

not incur any brokerage commission in

connection with disposition of its

portfolio securities and other assets.

5. Aggregate expenses of $50,000 were

incurred by applicant in connection

with the reorganization. Applicant,

Concord Financial Services, Inc. (Pacific

Horizon’s transfer agent), and the

Adviser shall each pay one-third of

these expenses. Pacific Horizon,

Concord, and the Adviser shall each pay

one-third of the expenses incurred by

Pacific Horizon in connection with the

reorganization.

6. At the time of the filing of the

application, applicant had no assets or

liabilities, was not a party to any

litigation or administrative proceeding,

and had no shareholders. Applicant is