Federal Register / Vol. 60, No. 45 / Wednesday, March 8, 1995 / Notices 12803

10 15 U.S.C. 78f(b)(5) (1988).

11See Exchange Act Release Nos. 34109, supra

note 6, and 34606 supra note 7.

12 Id.

13See Exchange Act Release No. 34606, supra

note 7.

14 15 U.S.C. 78s(b)(2) (1988).

15 17 CFR 200.30–3(a)(12) (1994).

the specialist, the specialist will receive

60% of the contracts and the controlled

account will receive 40% of the

contracts; and where there are two

controlled accounts on parity, the

specialist will receive 40% of the

contracts and each controlled account

will receive 30% of the contracts. In

qualified situations where there are

three or more controlled accounts on

parity with the specialist, the existing

Two-for-One Split will continue to

apply whereby the specialist will be

counted as two crowd participants.

The Exchange believes that in

transactions where there are less than

three controlled accounts on parity with

the specialist, the current Two-for-One

split becomes overly burdensome on

those controlled accounts. For example,

applying the Two-for-One Split to a 100

contract buy order in a trading crowd

consisting of one ROT and the

specialist, will result in the specialist

selling 66 contracts and the ROT selling

34 contracts. Pursuant to the proposed

amendment, in the above example the

specialist’s share will be reduced to 60

contracts and the ROT’s share will

increase to 40 contracts. As another

example, where there are two ROTs on

parity with a specialist, the present

Two-for-One Split will entitle the

specialist to sell 50 contracts and each

ROT to sell 25 contracts. The proposal

will reduce the specialist’s share to 40

contracts and increase each ROT’s share

to 30 contracts. These results, the

Exchange believes, demonstrate that

while the specialist will continue to

receive an enhanced split, the split will

be reduced in small crowds where the

impact on ROTs is more pronounced.

Finally, the Exchange also proposes to

codify the Two-for-One and New Unit

Split provisions, as amended herein,

into new Options Floor Procedure

Advice B–6 for ease of reference on the

trading floor. Similarly, to improve the

organization of Rule 1014, the Phlx also

proposes to reorganize Phlx Rule 1014

by numbering the Two-for-One Split

provisions as Rule 1014(g)(ii) and by

moving the New Unit Split provisions

from Commentary .17 to Rule

1014(g)(iii).

The Commission finds that the

proposed rule change is consistent with

the requirements of the Act and the

rules and regulations thereunder

applicable to a national securities

exchange, and, in particular, the

requirements of Section 6(b)(5)10 in that

the proposal is designed to promote just

and equitable principles of trade, to

prevent fraudulent and manipulative

acts and practices, and to protect

investors and the public interest.

Specifically, as the Commission stated

in approving the New Unit Split and the

Two-for-One Split, enhanced specialist

participation for equity and index

option parity trades may serve to aid the

Exchange in attracting and retaining

well capitalized specialist units to the

Exchange without unreasonably

restraining competition or harming

investors.11

Further, the Commission believes that

it is appropriate to amend the Two-forOne and New Unit Splits to state that

the enhanced participations apply when

an equity or index option specialist is

on parity with controlled accounts and

not just with ROT orders. The

Commission’s main concern in

originally approving the enhanced

specialist participations was ensuring

that customer orders were not

disadvantaged by the application of the

enhanced splits.12 Because the

definition of controlled account

excludes customer accounts, the

protection afforded to customer orders

is not in anyway diminished by this

proposal.

Finally, the only other substantive

amendment in the current proposal is to

alter the Two-for-One Split in situations

where the specialist is on parity with

less than three controlled accounts.

Because the effect of this amendment is

merely to reduce the benefit given to

specialists on parity trades and,

accordingly, to minimize the impact of

the Two-for-One Split on controlled

accounts, the Commission believes that

the proposal does not raise any new

issues that were not adequately

addressed when the Two-for-One Split

was originally approved.13

The Commission believes that the

remaining proposed amendments are

non-substantive and, therefore, do not

raise any material regulatory issues.

Specifically, the proposal to reorganize

the structure of Rule 1014 and to

incorporate the New Unit and Two-forOne Splits, as amended, into a new

Options Floor Procedure Advice, may

reduce potential confusion by providing

easier to use references to the enhanced

participation provisions.

The Commission finds good cause for

approving Amendment No. 2 to the

proposed rule change prior to the

thirtieth day after the date of

publication of notice of filing thereof in

the Federal Register. Specifically,

Amendment No. 2 merely clarifies the

manner in which the Two-for-One Split

will be applied and corrects an

erroneous cross-reference, neither of

which raise any new regulatory issues

that were not addressed in the original

proposal. Accordingly, the Commission

believes it is consistent with Section

6(b)(5) of the Act to approve

Amendment No. 2 to the Phlx’s

proposal on an accelerated basis.

Interested persons are invited to

submit written data, views and

arguments concerning Amendment No.

2. Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street NW.,

Washington, DC 20549. Copies of the

submission, all subsequent

amendments, all written statements

with respect to the proposed rule

change that are filed with the

Commission, and all written

communications relating to the

proposed rule change between the

Commission and any person, other than

those that may be withheld from the

public in accordance with the

provisions of 5 U.S.C. 552, will be

available for inspection and copying in

the Commission’s Public Reference

Section, 450 Fifth Street NW.,

Washington, DC. Copies of such filing

will also be available for inspection and

copying at the principal office of the

Phlx. All submissions should refer to

the File No. SR–Phlx–94–59 and should

be submitted by March 29, 1995.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,14 that the

proposed rule change (SR–Phlx–94–59),

as amended is hereby approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.15

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–5580 Filed 3–7–95; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–20931; 812–8630]

Dean Witter Reynolds Inc., et al.,

Notice of Application

March 1, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption Under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Dean Witter Reynolds Inc.

(the ‘‘Sponsor’’); and Dean Witter Select

Municipal Trust, Dean Witter Select
12804 Federal Register / Vol. 60, No. 45 / Wednesday, March 8, 1995 / Notices

1 Dean Witter Reynolds Inc., et al. Investment

Company Act Release Nos. 14934 (Feb. 12, 1986)

(notice) and 14987 (March 13, 1986) (order).

Corporate Trust, Dean Witter Select

Investment Trust, Dean Witter Select

Equity Trust, and Dean Witter Select

Government Trust (the ‘‘Trusts’’).

RELEVANT ACT SECTIONS: Order requested

pursuant to section 6(c) for exemptions

for sections 2(a)(32), 2(a)(35), 22(c),

22(d), and 26(a)(2)(C) of the Act and rule

22c–1 thereunder, and pursuant to

section 11(a) to amend a prior order (the

‘‘Prior Order’’) granting relief from

section 11(c).1

SUMMARY OF APPLICATION: Applicants

seek to impose sales charges on a

deferred basis and waive the deferred

sales charge in certain cases, exchange

Trust units having deferred sales

charges, and exchange units of a

terminating series of a Trust for units of

the next available series of that Trust.

FILING DATES: The application was filed

on October 8, 1993 and amended on

October 31, 1994, January 30, 1995, and

February 17, 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

March 27, 1995, 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 who wish to be notified of the

date of a hearing may request

notification by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street NW., Washington, DC 20549.

Applicants, Two World Trade Center,

New York, NY 10048.

FOR FURTHER INFORMATION CONTACT: Fran

Pollack-Matz, Senior Attorney, at (202)

942–0570 or C. David Messman, 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.

Applicant’s Representations

1. Each of the Trusts is a unit

investment trust sponsored by the

Sponsor. The Trusts are made up of one

or more separate series (‘‘Series’’). Over

seven hundred Series of the Trusts are

currently outstanding.

2. Each Series is created by a trust

indenture among the Sponsor, a banking

institution or trust company as trustee,

and an evaluator. The Sponsor acquires

a portfolio of securities and deposits

them with a trustee in exchange for

certificates representing fractional

undivided interests in the portfolio of

securities (‘‘Units’’). Units currently are

offered to the public through the

Sponsor and other underwriters and

dealers at a price based upon the

aggregate offering side evaluation of the

underlying securities plus an up-front

sales charge. The sales charge currently

ranges from 1.50% to 5.50% of the

public offering price. The Sponsor may

offer a discounted sales charge to

unitholders within a Series based on the

quantity of Units purchased. The sales

charge may also vary among Series

depending on the terms of the

underlying securities.

3. Applicants seek an order under

section 6(c) exempting them from

sections 2(a)(32), 2(a)(35), 22(c), 22(d),

and 26(a)(2)(C) and rule 22c–1

thereunder to let them impose sales

charges on Units on a deferred basis and

waive the deferred sales charge in

certain cases. Under applicants’

proposal, the Sponsor will continue to

determine the amount of sales charge

per Unit at the time portfolio securities

are deposited in a Series. The Sponsor

will have the discretion to defer

collection of all or part of this sales

charge over a period (‘‘Collection

Period’’) following the settlement date

for the purchase of Units. The Sponsor

will in no event add to the deferred

amount initially determined any

additional amount for interest or any

similar or related charge to reflect or

adjust for such deferral.

4. The deferred sales charge (‘‘DSC’’)

may be (a) deducted from the proceeds

of a sale, exchange, or redemption of

units or termination of the Series

(‘‘Disposition Amount’’); or (b) deducted

from (i) amounts received on the sale of

portfolio securities, (ii) amounts

received on the maturity of portfolio

securities, (iii) income distributions on

the Units, or (iv) a combination thereof

(‘‘Distribution Deductions’’).

Alternatively, the trustee may advance

the DSC on behalf of the Series on a

periodic basis, in which case the trustee

will be reimbursed from the principal

account of the Series upon the receipt

of proceeds from the maturity or sale of

portfolio securities or from the income

account of the Series. The total of all

these amounts will not exceed the

aggregate DSC per unit. The DSC may be

paid out of the principal or income

accounts of the Series and securities

may be sold in order to pay any portion

of the DSC due on a certain date.

5. For purposes of calculating the

amount of the DSC due upon

redemption or sale of Units, it will be

assumed that Units on which the

balance of the sales charge has been

collected from installment payments are

liquidated first. Any Units disposed of

over such amounts will be redeemed in

the order of their purchase, so that Units

held for the longest time are redeemed

first.

6. The Sponsor may adopt a

procedure of waiving the DSC payable

out of net sales, exchange, or

redemption proceeds, if necessary, so as

not to jeopardize the tax-exempt nature

of various investors such as Individual

Retirement Accounts and employee

benefits plans, if otherwise required for

tax purposes, or for such other reasons

as disclosed in the prospectus.

7. The Collection Period and the

manner in which the Disposition

Amount and/or Distribution deductions

are calculated shall be stated in the

prospectus, including the amount and

date of each Distribution Deduction, if

any. The prospectus for a Series will

include disclosure that portfolio

securities may be sold to pay the DSC

if amounts in the income account are

insufficient to pay the DSC or proceeds

from portfolio securities are intended to

pay the DSC. The confirmation received

by a holder on the purchase, sale,

exchange, or redemption of a Unit will

indicate the sales charge as required by

National Association of Securities

Dealers, Inc. rules. The account

statement of a holder will reflect a value

of a Unit. The account statement,

however, will not reflect the amount a

holder paid for the up-front sales

charge. At the end of every year, the

Trust’s annual report will reflect the

aggregate amount of Distribution

Deductions, both on a Series and per

Unit basis.

8. The Prior Order permits applicants

to allow unitholders to exchange Units

of one Series for Units of another Series

subject to a sales charge of up to 2.5%

per Unit (generally 2.0% per Unit for

equity Series and 2.5% per Unit for

municipal bond series). When Units

held for less than five months are

exchanged for Units with a higher

regular sales charge, the sales charge

will be the greater of (a) the reduced

sales charge or (b) the difference

between the sales charge paid in

acquiring the Units being exchanged

and the regular sales charge for the

quantity of Units being acquired,
Federal Register / Vol. 60, No. 45 / Wednesday, March 8, 1995 / Notices 12805

2Without an exemption, a trust selling units

subject to a deferred sales charge could not meet the

definition of a unit investment trust under section

4(2) of the Act. Section 4(2) defines a unit

investment trust as an investment company that

issues only ‘‘redeemable securities.’’

determined as of the date of the

exchange.

9. Applicants seek to amend the Prior

Order to permit offers of exchange of

Units subject to a DSC. The DSC,

including Distribution Deductions

uncollected at the time of the exchange,

would be imposed at the time of the

exchange. The sales charge imposed

will be fixed at the time of the exchange,

will be equal to the greater of a fixed

dollar amount or the amount of the DSC

remaining on the Units acquired, and

may be comprised of an upfront and/or

deferred amount, which deferred

amount, if applicable, would include

any portion of the sales charge not

collected at the time of exchange. In the

case where a Unit subject to a DSC is

being exchanged, the proceeds due to

the exchanging investor will be net of

the DSC due upon the sale of a Unit at

such time. Such net proceeds will be

used to purchase the acquired Units.

Those Units may be subject to the

greater of a sales load of a fixed dollar

amount or the amount of the DSC

remaining on the Units acquired in the

exchange.

10. The Sponsor may offer certain

Series that have intermediate or shortterm stated maturities. Upon

termination of such Series, the Sponsor

may create a new Series with the same

investment objective, the same type of

portfolio securities as the terminating

Series, and in certain instances some of

the same portfolio securities. Applicants

wish to make Units of the new Series

available to the unitholders of the new

Units plus a reduced sales charge on an

up-front and/or deferred basis (the

‘‘Rollover Option’’). Although

applicants believe that the Prior Order

already permits the Rollover Option,

they request that the Prior Order be

amended to cover the Rollover Option

explicitly.

Applicants’ Legal Analysis

1. Under section 6(c), the SEC may

exempt any person or transaction from

any provision of the Act or any rule

thereunder to the extent that such

exemption is necessary or 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.

2. Section 2(a)(32) defines a

‘‘redeemable security’’ as a security that,

upon its presentation to the issuer,

entitles the holder to receive

approximately his or her proportionate

share of the issuer’s current net assets,

or the cash equivalent of those assets.

Because the imposition of the DSC

defers the deduction of a portion of the

sales charge, applicants seek an

exemption from section 2(a)(32) so that

Units subject to a deferred sales charge

are considered redeemable securities for

purposes of the Act.2

3. Section 2(a)(35) defines the term

‘‘sales load’’ to be the difference

between the sales price and the

proceeds to the issuer, less any expenses

not properly chargeable to sales or

promotional expenses. Because a

deferred sales charge is not charged at

the time of purchase, an exemption from

section 2(a)(35) is necessary.

4. Section 22(c) and rule 22c–1

require that the price of a redeemable

security issued by an investment

company for purposes of sale,

redemption, and repurchase be based on

the investment company’s current net

asset value. Because the imposition of a

deferred sales charge may cause a

redeeming unitholder to receive an

amount less than the net asset value of

the redeemed Units, applicants seek an

exemption from this section and rule.

5. Section 22(d) requires an

investment company and its principal

underwriter and dealer to sell securities

only at a current public offering price

described in the investment company’s

prospectus. Because sales charges

traditionally have been a component of

the public offering price, section 22(d)

historically required that all investors be

charged the same load. Rule 22d–1 was

adopted to permit the sale of

redeemable securities ‘‘at prices that

reflect scheduled variations in, or

elimination of, the sales load.’’ Because

rule 22d–1 may not be interpreted to

extend to scheduled variations in

deferred sales charges, applicants seek

relief from section 22(d) to permit each

Series to waive or reduce the DSC in

certain circumstances. Any waiver or

reduction will comply with the

conditions in paragraphs (a) through (d)

of rule 22d–1 under the Act.

6. Section 26(a)(2) in relevant part

prohibits a trustee or custodian of a unit

investment trust from collecting from

the trust as an expense any payment to

a depositor or principal underwriter

thereof. Because of this prohibition,

applicants need an exemption to permit

the trustee to collect the DSC

installments from Distribution

Deductions or the principal account.

7. Applicants believe that

implementation of the DSC program in

the manner described above would be

fair and in the best interests of the

unitholders of the Trusts. Thus, granting

the requested order would be

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.

8. Section 11(c) prohibits any offers of

exchange of the securities of a registered

until investment trust for the securities

of any other investment company,

unless the terms of the offer have been

approved by the SEC. Applicants assert

that the reduced sales charge imposed at

the time of exchange is justified by cost

savings because that shareholder would

require less explanation concerning the

procedures and operations of the Trusts.

Applicants’ Conditions

Applicants agree that any order

granting the requested relief will be

subject to the following conditions: 1. Whenever the exchange option is to

be terminated or its terms are to be

amended materially, any holder of a

security subject to that privilege will be

given prominent notice of the

impending termination or amendment

at least 60 days prior to the date of

termination or the effective date of the

amendment, provided that: (a) no such

notice need be given if the only material

effect of an amendment is to reduce or

eliminate the sales charge payable at the

time of an exchange, to add one or more

new Series eligible for the exchange

option, or to delete a Series which has

terminated; and (b) no notice need be

given if, under extraordinary

circumstances, either (i) there is a

suspension of the redemption of Units

of the Trust under section 22(e) and the

rules and regulations promulgated

thereunder, or (ii) a Trust temporarily

delays or ceases the sale of its Units

because it is unable to invest amounts

effectively in accordance with

applicable investment objectives,

policies, and restrictions. 2. The amount of the sales charge per

Unit collected from a holder at the time

of any exchange or conversion of a Unit

will be lower than the sales charge

collected on the initial purchase of the

same Unit at such time.

3. The prospectus of each Trust

offering exchanges and any sales

literature or advertising that mentions

the existence of the exchange option

will disclose that the exchange option is

subject to modification, termination, or

suspension, without notice except in

certain limited cases.

4. Each Series offering Units subject to

a deferred sales charge will include in

its prospectus the table required by item

2 of From N–1A (modified as

appropriate to reflect the differences

between unit investment trusts and

open-end management investment
12806 Federal Register / Vol. 60, No. 45 / Wednesday, March 8, 1995 / Notices

companies) and a schedule setting forth

the number and date of each installment

payment.

For the Commission, by the Division of

Investment, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–5583 Filed 3–7–95; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–20932; 812–9454]

Dean Witter Select Equity Trust, et al.

March 1, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Dean Witter Select Equity

Trust and Dean Witter Reynolds Inc.

(‘‘Dean Witter’’).

RELEVANT ACT SECTIONS: Order requested

under sections 6(c) and 17(b) of the Act

that would exempt applicants from

section 17(a) of the Act.

SUMMARY OF APPLICATION: Applicants

request an order to permit a terminating

series of a unit investment trust to sell

portfolio securities to a new series of the

trust.

FILING DATE: The application was filed

on January 26, 1995 and amended on

February 16, 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

March 27, 1995 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 may request notification of a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 5th

Street NW., Washington, DC 20549.

Applicants, c/o Dean Witter Reynolds

Inc., Unit Trust Department, Two World

Trade Center, New York, NY 10048,

Attn.: Thomas Hines.

FOR FURTHER INFORMATION CONTACT:

Sarah A. Buescher, Staff Attorney, at

(202) 942–0573, or Robert A. Robertson,

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 SEC’s

Public Reference Branch.

Applicants’ Representations

1. Dean Witter Select Equity Trust, a

unit investment trust registered under

the Act, consists of several series (each

a ‘‘Series’’). All of the Series currently

outstanding are Select 10 Series (‘‘Select

10 Series’’). Dean Witter is the Series’

sponsor. Applicants request that the

relief sought herein apply to future

Series for which Dean Witter serves as

sponsor.

2. The investment objective of each

Selection 10 Series is to seek a greater

total return than the stocks comprising

the entire related index (e.g., the Dow

Jones Industrial Average, the Hang Seng

Index, or the Financial Times Ordinary

Share Index) (each an ‘‘Index’’). Each

Select 10 Series acquires approximately

equal values of the tens stocks in the

Index having the highest dividend

yields as of a specified date, and holds

those stocks for approximately one year.

Dean Witter intends that, as each Select

10 Series terminates, a new Series based

on the appropriate Index will be offered

for the next year.

3. Each Series has a contemplated

date (a ‘‘Rollover Date’’) on which

holders of units in that Series (a

‘‘Rollover Series’’) may at their option

redeem their units in the Rollover Series

and receive in return units of a

subsequent Series of the same type (a

‘‘New Series’’) which is created on or

about the Rollover Date, and has a

portfolio which contains securities

(‘‘Qualified Securities’’) which are (i)

actively traded (i.e., have had an average

daily trading volume in the preceding

six months of at least 500 shares equal

in value to at least 25,000 United States

dollars) on an exchange (a ‘‘Qualified

Exchange’’) which is either (a) a

national securities exchange which

meets the qualifications of section 6 of

the Securities Exchange Act of 1934 or

(b) a foreign securities exchange which

meets the qualifications set out in the

proposed amendment to rule 12d3–

1(d)(6) under the Act as proposed by the

SEC and which releases daily closing

prices, and (ii) included in an Index.

4. There is normally some overlap

from one year to the next in the stocks

having the highest dividend yields in an

Index and, therefore, between the

portfolio of a Rollover Series and the

New Series. In the case of the Select 10

Industrial Portfolio 94–1 as compared to

the Select 10 Industrial Portfolio 95–1,

eight of the ten securities were identical.

In connection with its termination,

Series 94–1 sold all of its securities on

the New York Stock Exchange as

quickly as practicable. Likewise, the

portfolio of Series 95–1 was acquired in

purchase transactions on the New York

Stock Exchange. This procedure creates

brokerage commissions on portfolio

securities of the same issue that are

borne by the holders of units of both the

Rollover Series and the New Series.

Applicants, therefore, request an

exemptive order to permit any Rollover

Series to sell portfolio securities to a

New Series and a New Series to

purchase those securities.

5. In order to minimize overreaching,

applicants agree that Dean Witter will

certify in writing to the trustee, within

five days of each sale from a Rollover

Series to a New Series, (a) that the

transaction is consistent with the policy

of both the Rollover Series and the New

Series, as recited in their respective

registration statements and reports filed

under the Act, (b) the date of such

transaction, and (c) the closing sales

price on the Qualified Exchange for the

sale date of the securities subject to such

sale. The trustee will then countersign

the certificate, unless, in the unlikely

event that the trustee disagrees with the

closing sales price listed on the

certificate, the trustee immediately

informs Dean Witter orally of any such

disagreement and returns the certificate

within five days to Dean Witter with

corrections duly noted. Upon Dean

Witter’s receipt of a corrected certificate,

if Dean Witter can verify the corrected

price by reference to an independently

published list of closing prices for the

date of the transactions, Dean Witter

will ensure that the price of units of the

New Series, and distributions to holders

of the Rollover Series with regard to

redemption of their units or termination

of the Rollover Series, accurately reflect

the corrected price. To the extent that

Dean Witter disagrees with the trustee’s

corrected price, Dean Witter and the

trustee will jointly determine the correct

sales price by reference to a mutually

agreeable, independently published list

of closing sales prices for the date of the

transaction.

Applicants’ Legal Analysis

1. Section 17(a) of the Act generally

makes it unlawful for an affiliated

person of a registered investment

company to sell securities to or

purchase securities from the company.

Investment companies under common

control may be considered affiliates of

one another. The Series may be under

common control because they have

Dean Witter as a sponsor.