Federal Register / Vol. 60, No. 241 / Friday, December 15, 1995 / Notices 64459

2The Applicant’s assets consist entirely of

securities of the wholly-owned Subsidiaries, which

in turn hold assets in the form of a Lloyd’s deposit

that is invested in securities. Thus, the Subsidiaries,

and consequently the Applicant itself, would be

deemed investment companies under section

3(a)(3), except for, as discussed below, the

Subsidiaries’ status as foreign insurance companies

under rule 3a–6.

3Rule 3a–6 defines ‘‘foreign insurance company’’

as an insurance company organized under the laws

of another country that is regulated as such by that

country’s government, that is engaged

predominantly in writing or reinsuring insurance

agreements of the type specified in section 3(a)(8)

of the 1933 Act, and that is not operated for

purposes of evading the provisions of the Act.

Applicant intends to rely on an opinion of counsel

to the effect that its Subsidiaries are exempt from

registration under the Act because they are foreign

insurance companies within the meaning of the

rule. Applicant does not request SEC review or

approval of counsel’s opinion, and acknowledges

that the SEC takes no position as to its availability.

4See Investment Company Act Release No. 18381

(Oct. 29, 1991).

6. At the present time, the Applicant’s

shares are beneficially owned by fewer

than one hundred persons in the United

States, and the Applicant is not making,

and does not presently propose to make,

a public offering of its securities in the

United States. The Applicant intends,

however, to raise additional capital,

which may include another offering of

American Depository Shares to

additional United States investors

through a further private placement.

Applicant’s Legal Analysis

1. Section 3(a)(1) defines ‘‘investment

company’’ to mean, as here relevant,

any issuer that holds itself out as being

engaged primarily in the business of

investing or trading in securities.

Because the Applicant is listed on the

LSE as an ‘‘investment company,’’ it

arguably has held itself out as an

investment company within the

meaning of section 3(a)(1).2

2. Applicant requests an exemption

from all provisions of the Act pursuant

to section 6(c). Section 6(c) provides, as

here relevant, that the SEC, by order

upon application, may exempt any

person from any provisions of the Act

or of any rule thereunder, if and to the

extent that such exemption is

appropriate in the public interest and

consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the Act.

3. Applicant submits that the

requested relief meets the exemptive

standards established by section 6(c). It

asserts primarily that it is engaged

through the Subsidiaries in the business

of an insurance company, and does not

operate as an investment company for

purposes of the Act. In this regard, even

though the Applicant’s memorandum of

association gives it the power to carry

on the business of both an investment

company and an insurance business, it

is not treated as an investment company

under the U.K. Companies Act or as an

investment trust for tax purposes.

Similarly, the Applicant is not treated as

a collective investment scheme or an

authorized unit trust scheme under the

U.K. Financial Services Act or as an

undertaking for collective investment in

transferable securities (‘‘UCITS’’) under

directives of the European Union. In

addition, the daily trading price of the

Applicant’s shares on the LSE is quoted

in the Financial Times under the

caption ‘‘Insurance’’ and not

‘‘Investment Trusts.’’ While the 1994

prospectus for the Applicant’s shares

introduced it as an investment

company, the stated purpose of the

offering was to enable investors to

underwrite insurance with limited

liability through Lloyd’s syndicates

managed by Wellington Underwriting

Agencies Limited. Based on the

foregoing, Applicant argues that the

Act’s purpose would not be served by

applying it to the Applicant merely

because it is listed, for reasons of

convenience, as an investment company

on the LSE.

4. Applicant also submits that

exemptive relief would be consistent

with the purposes intended by specific

policies and provisions of the Act.

Section 3(c)(3) of the Act excludes from

the definition of ‘‘investment company’’

domestic insurance companies. Rule

3a–6 provides that foreign insurance

companies are also not subject to the

provisions of the Act. Applicant

represents that its Subsidiaries fall

within the requirements of rule 3a–6.3

Applicant notes that United States

holding companies for insurance

companies are excepted from the

definition of investment company by

section 3(c)(6). Because of its status as

a holding company whose only

operations are the ownership of the

Subsidiaries, the Applicant is a foreign

insurance company holding company.

The SEC, upon adopting rule 3a–6,

made it clear that foreign insurance

company holding companies should be

treated under the Act on the same basis

as United States insurance company

holding companies.4

Applicant’s Conditions

Applicant agrees that any order of the

SEC granting the exemptive relief

requested by the application may be

made subject to the following

conditions:

1. No Subsidiary will be an

‘‘investment company’’ as defined by

the Act.

2. Applicant will continue to operate,

either directly or indirectly, only in the

business of insurance.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–30527 Filed 12–14–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 35–26427]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

December 8, 1995.

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 thereunder. 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 thereto 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

January 2, 1996, to the Secretary,

Securities and Exchange Commission,

Washington, DC 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 shall

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 said date, the application(s) and/

or declaration(s), as filed or as amended,

may be granted and/or permitted to

become effective.

The Southern Company (70–8733)

The Southern Company (‘‘Southern’’),

270 Peachtree Street, N.W., Atlanta,

Georgia 30346, a registered holding

company, and its subsidiaries, Mobile

Energy Services Holdings, Inc. (‘‘Mobile

Energy’’), Southern Electric

International, Inc. (‘‘Southern Electric’’),

SEI Holdings, Inc. (‘‘Holdings’’),

Southern Electric Wholesale Generators,

Inc. (‘‘Domestic Holdings’’), and SEI
64460 Federal Register / Vol. 60, No. 241 / Friday, December 15, 1995 / Notices

1The authorization of the transactions proposed

in this file would supercede Southern’s current

authorization to organize Project Parents to hold

investments in EWGs and FUCOs. Holding Co. Act

Release Nos. 26096 (Aug. 3, 1994) and 26338 (July

25, 1995) (‘‘Orders’’).

2Southern Electric engages in preliminary project

development activities and the sale of operating,

construction, project management, administrative

and other services to associates and nonassociates,

pursuant to Holding Co. Act Release No. 26212

(Dec. 30, 1994) (‘‘December 1994 Order’’). After the

proposed reorganization, Southern Electric would

continue to engage in these activities, and any

additional investment in Southern Electric would

be made indirectly through Holdings.

3The sales price for the shares will equal

Southern Electric’s investment in the two

companies, which currently is less than $50,000 in

the aggregate.

4Southern Electric will distribute the stock of this

subsidiary to Holdings, and Holdings will

concurrently transfer the stock to Foreign Holdings

5The purpose of these transactions is to direct

some or all of the cash flow and income from

Mobile Energy to support the operations and future

financing by Holdings and Domestic Holdings.

Mobile Energy holds a 99% interest in Mobile

Energy Services Company, L.L.C., an Alabama

limited liability company that owns a cogeneration

complex in Mobile.

6The applicants state that Southern will make

additional investments in Holdings from time to

time, to finance the business of Holdings and its

subsidiaries, pursuant to the exemptions in rules 52

and 45(b)(4), provided that (a) any additional

investment in Holdings to enable Holdings to

acquire directly or indirectly an interest in an

Exempt Project will be subject to the limitations of

rule 53 and any other applicable rules, and (b) the

aggregate amount of financing provided to Holdings

by Southern that will be invested directly or

indirectly in energy-related companies will not

exceed $300 million or such greater amount as may

be permitted under a rule subsequently adopted by

the Commission.

7The Commission has proposed a rule that would

exempt from the requirement of prior Commission

approval under the Act acquisitions of securities of

companies that derive all or substantially all of

their revenues from specified activities closely

related to the core utility business of a registered

holding company system. See Holding Co. Act

Release No. 26313 (June 20, 1995), 60 FR 33642

(June 28, 1995).

8The activities of such special purpose

subsidiaries would be subject to all terms,

conditions and limitations in the December 1994

Order that are applicable to Southern Electric.

9Holding Co. Act Release No. 26349 (Aug. 3,

1995), authorizing guaranties of the securities of

Exempt Projects from time to time through

December 31, 1999, in an aggregate amount at any

one time outstanding not to exceed $1.2 billion,

subject to certain conditions and limitations.

10 In a separate proceeding in File No. 70–8725,

Southern has requested authorization to increase

this limit to 100% of its ‘‘consolidated retained

earnings’’. The issuance of an order in that filing

would amend Southern’s guaranty authority as in

effect at the date of issuance of such order.

Europe, Inc. (‘‘Foreign Holdings’’), each

of 900 Ashwood Parkway, Atlanta,

Georgia 30338, have filed an

application-declaration under sections

6(a), 7, 9(a), 10, 12(b), 12(f), 13, 32 and

33 of the Act and rules 43, 45, 53, and

54 thereunder.

Consolidation of Ownership of Exempt

Projects

Southern proposes to consolidate all

of its direct and indirect ownership

interests in all exempt wholesale

generators (‘‘EWGs’’) and foreign utility

companies (‘‘FUCOs’’, and, together

with EWGs, ‘‘Exempt Projects’’) (each as

defined in the Act), various

intermediate subsidiaries through which

it holds investments in EWGs and

FUCOs (‘‘Project Parents’’), and

activities and functions related to these

projects, under one of its subsidiaries,

Holdings.1

Pursuant to the Orders and

preliminary to the proposed

reorganization, Southern organized and

contributed to Holdings all of the

outstanding stock of Domestic Holdings,

an EWG that holds Southern’s

ownership interests in other domestic

EWGs, and of Foreign Holdings, a

Project Parent that holds Southern’s

interest in a FUCO in England. Southern

will then contribute to Foreign Holdings

its interests in other existing FUCOs,

foreign EWGs, and Project Parents.

In this proceeding, Southern proposes

to take the following additional steps to

effect the proposed reorganization: (1)

Southern will contribute to Holdings the

common stock of Southern Electric 2,

and Southern Electric will become a

subsidiary of Holdings; (2) Southern

Electric will sell to Foreign Holdings or

its subsidiaries the securities of

Southern Electric International-Asia,

Inc., and Southern Electric international

GmbH, two Southern electric

subsidiaries that conduct preliminary

project development activities in foreign

countries3; (3) Southern Electric will

transfer to Foreign Holdings all of the

common stock of SEI Operadora de

Argentina S.A., a FUCO4; and (4) Mobile

Energy will create a new class of

nonvoting preferred stock and distribute

all outstanding shares of such stock to

Southern; Southern will transfer such

stock to Holdings, which, in turn, will

transfer such stock to Domestic

Holdings, as a capital contribution.5

After the reorganization, Southern

expects that future investments in

power projects will be made through

Holdings and its subsidiaries, and that

Holdings and its subsidiaries will

conduct all other related project

activities. Holdings will use available

funds, including the proceeds of

financing by Southern and third-party

borrowings that are guaranteed by

Southern6, together with internally

generated funds and proceeds of

securities sold to third parties, to make

these investments and to finance the

costs of other authorized and permitted

activities.

Acquisition of Energy-Related

Companies

Holdings also requests authority to

acquire, directly or indirectly through

subsidiaries, in one or more transactions

from time to time through December 31,

2000, the securities of or other interests

in one or more companies that derive or

will derive substantially all of their

revenues from the ownership and/or

operation of one or more of the

following categories of energy-related

businesses: (a) ‘‘Qualifying facilities’’, as

defined under the Public Utility

Regulatory Policies Act of 1978, as

amended, and ownership and operation

of incidental facilities; (b) production,

conversion and distribution of thermal

energy products; (c) brokering and

marketing of energy commodities; and

(d) other energy-related businesses to

the extent that acquisition of interests in

such businesses are exempt under a rule

subsequently adopted by the

Commission.7

Formation of New Subsidiaries

Holdings, Domestic Holdings and

Foreign Holdings propose to organize

one or more intermediate subsidiaries to

make investments in Exempt Projects,

other power projects, and energy-related

companies and to provide project

development and management services

to projects and companies held by them

(‘‘Intermediate Subsidiaries’’), and to

organize one or more special purpose

subsidiaries to engage in any of the

activities in which Southern Electric is

currently authorized to engage (‘‘Special

Purpose Subsidiaries’’).8

Financial Guaranties

Southern has existing authorization

with respect to guaranties of subsidiary

obligations.9 Southern now requests an

order that would supersede this

guaranty authorization. Southern

proposes to guaranty the securities of

Holdings or any of its direct or indirect

subsidiaries, from time to time through

December 31, 2000, in an aggregate

principal amount at any one time

outstanding of not more than $1.2

billion, provided that the aggregate

outstanding principal amount of such

guaranties, when added to Southern’s

‘‘aggregate investment’’, as defined in

rule 53(a), in all Exempt Projects, shall

not exceed 50% of Southern’s

‘‘consolidated retained earnings,’’ as so

defined.10

Holdings, Domestic Holdings, Foreign

Holdings and any Intermediate

Subsidiary also propose to guaranty the

securities issued by any of their direct

or indirect subsidiaries (provided that

the issue and sale of such securities are
Federal Register / Vol. 60, No. 241 / Friday, December 15, 1995 / Notices 64461

11The aggregate amount of such guarantees and

indemnification of sureties is reduced by similar

undertakings made or incurred by Southern in

connection with activities of certain other

subsidiaries.

exempt from the requirement of prior

Commission approval under section 6(a)

of the Act), from time to time through

December 31, 2000, in an aggregate

amount not to exceed $1.2 billion at any

one time outstanding.

Guaranties may take the form of direct

guaranties, standby equity funding

commitments, obligations under capital

maintenance agreements or

reimbursement agreements in respect of

bank letters of credit, or other similar

financial instruments or undertakings.

Pledge of Securities

Southern proposes to pledge the

shares of Holdings, and Holdings,

Domestic Holdings, Foreign Holdings

and any Intermediate Subsidiary

propose to pledge the shares of their

respective subsidiaries, as security in

connection with the sale of debt

securities by Holdings and such

subsidiaries.

Performance Guaranties

Southern is currently authorized by

the December 1994 Order to guaranty

performance by or act as indemnitor or

surety with respect to contractual

obligations of Southern Electric, any

subsidiary of Southern Electric or any

project entity in which Southern

directly or indirectly holds an interest,

in an aggregate amount not to exceed

$800 million at any one time

outstanding through December 31,

2003 11. Southern requests that this

authorization be modified so that it may

provide such performance guaranties on

behalf of Holdings and any direct or

indirect subsidiary of Holdings,

including Southern Electric, any

Exempt Project, other power project,

energy-related company or Intermediate

Subsidiary.

Holdings, Domestic Holdings, Foreign

Holdings and any Intermediate

Subsidiary also propose to provide

performance guaranties on behalf of any

of their direct and indirect subsidiaries.

The amount of these guaranties will be

included in calculating the above

maximum amount of performance

guaranties provided by Southern only if

they are supported by an agreement or

undertaking of Southern.

Services and Goods

The applicants propose that Special

Purpose Subsidiaries of Holdings,

Domestic Holdings or Foreign Holdings

may render services or sell goods to

associate companies. Such services will

be rendered and goods will be sold at

cost, in compliance with the Act and the

rules thereunder, unless the Special

Purpose Subsidiary complies with the

conditions specified in the December

1994 Order with respect to Southern

Electric, in which case services or goods

may be sold at market prices.

Reporting

The applicants propose that a single

consolidated quarterly report be filed by

Southern and Holdings pursuant to rule

24 with respect to all activities of

Holdings and its subsidiaries authorized

in this file. This report would replace

the combined report currently being

filed pursuant to the December 1994

Order and the Orders with respect to the

activities of Southern Electric and the

Project Parents.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–30528 Filed 12–14–95; 8:45 am]

BILLING CODE 8010–01–M

[Investment Company Act Release No.

21590; 812–9534]

Managed Accounts Services Portfolio

Trust and Mitchell Hutchins Asset

Management Inc.; Notice of

Application

December 11, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Managed Accounts Services

Portfolio Trust (the ‘‘Trust’’) and

Mitchell Hutchins Asset Management

Inc. (‘‘Mitchell Hutchins’’).

RELEVANT ACT SECTIONS: Applicants

request an exemption under section 6(c)

of the Act from section 15(a) of the Act

and rule 18f–2 thereunder.

SUMMARY OF APPLICATION: The Trust is a

registered investment company advised

by Mitchell Hutchins. Mitchell

Hutchins oversees the selection of other

investment advisers for the Trust’s

series, monitors such investment

advisers, and allocates assets among

them. The order would permit an

investment adviser other than Mitchell

Hutchins to serve as an investment

adviser to one or more series of the

Trust without receiving prior

shareholder approval.

FILING DATE: The application was filed

on March 16, 1995, and amended on

August 9, and December 8, 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 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

January 5, 1996, and should be

accompanied by proof of service on

applicants, in the form of an addidavit,

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 NW., Washington, D.C. 20549.

Applicants, 1285 Avenue of the

Americas, 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 is

available for a fee from the SEC’s Public

Reference Branch.

Applicants’ Representations

1. The Trust is a registered open-end

management investment company

organized as a Delaware business trust.

The Trust is currently composed of

twelve separate investment portfolios

(each a ‘‘Portfolio,’’ and collectively, the

‘‘Portfolios’’). The Trust was organized

by Mitchell Hutchins and its parent,

PaineWebber Incorproated

(‘‘PaineWebber’’), to provide to

participants in the PaineWebber PACE

Program (the ‘‘PACE Program’’) a costeffective investment method (i.e., a

series of pooled investment funds) to

invest their assets in a variety of

different asset classes managed by

investment advisers selected and

monitored by Mitchell Hutchins.

2. Mitchell Hutchins, a Delaware

corporation that is registered as an

investment adviser, acts as the

investment manager and administrator

to the Trust pursuant to an Investment

Management and Administration

Agreement with the Trust (the

‘‘Management Agreement’’) and is

responsible for the selection or

termination of investment advisers

(‘‘Sub-Advisers’’) for each of the

Portfolios. Mitchell Hutchins also serves

as the adviser to the PACE Money

Market Investment Portfolio, one of the