67154 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices

1Fred Alger is also chairman of the board of

Associates and the Adviser. David Alger is

president and a director of Associates and the

Adviser, and, in addition to his indirect ownership

of Fund shares through Alger Associates, directly

owns .5% of the shares of the Fund.

c. Such associate is an EWG that sells

electricity at rates based upon its cost of

service, as approved by the FERC or any

State Public Utility Commission,

provided that the purchaser of such

electricity is not an associate of GPU; or

d. Such associate is a Subsidiary

Company, the sole business of which is

developing, owning and/or operating

FUCOs or EWGs described in clause 1,

2 or 3 above.

In an order dated June 14, 1995

(HCAR No. 26307), the Commission has

previously authorized EII and ESI to

provide goods and services to associate

EWGs and FUCOs who satisfy one of the

requirements in clause a, b, or c above

under an exemption from the cost

standard. EII and ESI now requests an

exemption under section 13(b) of the

Act from the requirements of rules 90

and 91 with respect to the rendering of

services or sale of goods to Subsidiary

Companies that satisfy the requirements

of clause d above. GPUSC and the

Operating Companies also propose to

provide certain services at cost to any

Subsidiary Company or Exempt Entity

in which GPU owns an interest.

The Order set forth different limits on

the interest rates for U.S. dollardenominated debt of Subsidiary

Companies than for non-U.S. dollardenominated debt. GPU now proposes

that the interest rate on indebtedness of

a Subsidiary Company or Exempt

Entity, with respect to which there is

recourse to GPU, whether or not the

indebtedness is denominated in U.S.

dollars or foreign currency, not exceed

that rate of interest which is generally

obtainable for indebtedness bearing

similar terms, conditions, and features

and which is issued by companies of the

same or reasonably comparable credit

quality.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–31379 Filed 12–22–95; 11:12

am]

BILLING CODE 8010–01–M

[Investment Company Act Release No.

21617; 812–9750]

Spectra Fund, Inc., et al.; Notice of

Application

December 21, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Spectra Fund, Inc.

(‘‘Fund’’), Spectra Fund (‘‘Trust’’), Fred

Alger Management, Inc. (‘‘Adviser’’),

and Alger Associates, Inc.

(‘‘Associates’’).

RELEVANT ACT SECTIONS: Order requested

under section 17(b) for an exemption

from sections 17(a)(1) and 17(a)(2).

SUMMARY OF APPLICATION: Applicants

seek an order permitting the Fund to

convert from a closed-end management

investment company organized as a

Massachusetts corporation to an openend management investment company

organized as a Massachusetts business

trust by transferring all of its assets and

liabilities to the Trust in exchange for

shares of the Trust.

FILING DATES: The application was filed

on September 7, 1995, and amended on

December 1, 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 16, 1996, 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 may request notification or a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street NW., Washington, DC 20549.

Applicants, 75 Maiden Lane, New York,

New York 10038.

FOR FURTHER INFORMATION CONTACT:

Courtney S. Thornton, Senior Counsel,

at (202) 942–0583, 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

may be obtained for a fee from the SEC’s

Public Reference Branch.

Applicants’ Representations

1. The Fund was organized in 1968 as

a Massachusetts corporation, and

operated as an open-end management

investment company until 1978, when it

converted to a closed-end management

investment company. The Trust, which

has been organized as a Massachusetts

business trust, will register as an openend management investment company

and will have substantially the same

investment objectives and policies as

the Fund. The Adviser serves as

investment adviser to the Fund, and

will serve as the investment adviser to

the Trust.

2. Associates, the indirect parent of

the Adviser, owns 34.4% of the

outstanding shares of the Fund. Fred M.

Alger, III, chairman of the board of the

Fund and the Trust, owns 53.1% of the

outstanding voting securities of

Associates. His brother, David D. Alger,

president and a director of the Fund and

president and a trustee of the Trust,

owns 17.2% of the outstanding voting

securities of Associates.1

3. Since the Fund’s conversion to a

closed-end management investment

company, its shares generally have

traded at a discount of greater than 10%

to their net asset value. On May 24,

1995, after considering various means of

reducing the discount to net asset value

at which Fund shares typically trade,

the board of directors of the Fund (the

‘‘Board’’) decided to recommend

conversion from closed-end to open-end

status, which would give shareholders

the right to dispose of Fund shares at

such time as they choose at prices based

on the net asset value of their shares.

The Board also recommended that the

Fund convert from a Massachusetts

corporation to a Massachusetts business

trust in order to reduce its operating

expenses by eliminating the need for

annual shareholder meetings, with their

associated costs.

4. To effect the conversion of the

Fund from a closed-end management

investment company organized as a

Massachusetts corporation to an openend management investment company

organized as a Massachusetts business

trust (the ‘‘Reorganization’’), a majority

of the Board (including a majority of

directors who are not interested persons

of the Fund) approved an agreement and

plan of reorganization and liquidation

(the ‘‘Agreement’’). In accordance with

the Agreement, the Fund will transfer

all of its assets and liabilities to the

Trust in a tax-free exchange for shares

of beneficial interest of the Trust equal

in number and value to the shares of

common stock of the Fund then

outstanding. Immediately thereafter, the

Fund will distribute these shares of the

Trust pro rata to its shareholders in
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Notices 67155

2The Fund is currently the sole shareholder of

the Trust, but will redeem its Trust shares prior to

the Reorganization.

complete liquidation of the Fund.2

Upon completion of the Reorganization,

each former shareholder of the fund will

be the owner of full and fractional

shares of the Trust equal in number and

aggregate net asset value to the shares he

or she held in the Fund.

5. In assessing the proposed

Reorganization, the Board considered

the following factors: (a) The terms and

conditions of the Agreement, including

the fact that shareholders of the Fund,

in effect, will receive shares of a

substantially identical Trust in an

exchange based on the relative net asset

values of such shares; (b) no transaction

costs or other charges will be incurred

by shareholders of the Fund in

connection with their acquisition of

Trust shares; and (c) the tax-free nature

of the Reorganization.

6. In connection with the proposed

Reorganization, shareholders of the

Fund were provided with a proxy

statement dated August 4, 1995. At a

special meeting held on September 28,

1995, shareholders of the Fund voted to

amend the Fund’s investment

management agreement and certain of

its fundamental investment policies,

and approved the Reorganization.

7. All expenses relating to the

Reorganization will be borne by the

Fund and, if the Reorganization is

consummated, will be assumed by the

Trust.

Applicants’ Legal Analysis

1. Sections 17(a)(1) and 17(a)(2) of the

Act, in relevant part, prohibit an

affiliated person of a registered

investment company, or any affiliated

person of such a person, acting as

principal, from selling to or purchasing

from such registered company, any

security or other property. Section 17(b)

provides that the SEC may exempt a

transaction from section 17(a) if

evidence establishes that the terms of

the 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, that the proposed

transaction is consistent with the

policies of the investment company

concerned and with the general

purposes of the Act.

2. Rule 17a–8 generally 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, or affiliated

persons of an affiliated person, solely by

reasons of having a common investment

adviser, common directors, and/or

common officers, provided that certain

conditions are satisfied. Applicants may

not rely on rule 17a–8 because, under

section 2(a)(3)(D), Fred Alger and David

Alger are affiliated persons of the Trust

by virtue of their offices. Under section

2(a)(3)(B), the Fund may be an affiliated

person of each of Fred Alger and David

Alger by virtue of the fact that each may

be said indirectly (through Associates)

to own at least 5% of the Fund’s

outstanding shares. In addition, Fred

Alger also owns or controls, directly and

through trusts of which he is the trustee,

6.7% of the shares of the Fund, so that

the Fund may be said to be an affiliated

person of him on this basis as well.

Accordingly, the Fund may be

considered an affiliate person of an

affiliated person of the Trust. The Board

nonetheless reached the determinations

required by rule 17a–8. Specifically, the

Board determined that changing from a

corporation to a business trust was in

the best interest of the Fund, and that

the interests of existing shareholders of

the Fund would not be diluted as a

result of the transaction.

3. Applicants believe that the

proposed Reorganization is properly

viewed as a mere change in the form of

organization rather than as a disposition

of property giving rise to section 17(a)

concerns. Applicants also submit that

the Reorganization satisfies the

requirements of section 17(b). The Trust

was created specifically for the purpose

of effecting the Reorganization, and,

prior to the Reorganization, will be

simply a shell with nominal assets, no

liabilities, and no business operations.

The transfer of Fund shares for Trust

shares of identical value will leave Fund

shareholders with identical ownership

positions, and no additional

consideration will be paid by the Fund

or its shareholders for the Trust shares.

Because Fund shareholders will receive

interests in the Trust identical to their

previous interests in the Fund pursuant

to a tax-free transaction, with no

transaction costs or other charges

imposed on shareholders, no party to

the transaction will have the

opportunity to influence the actions of

the Fund or the Trust to the detriment

of shareholders. Accordingly, applicants

believe that the terms of the

Reorganization, including the

consideration to be paid and received,

are reasonable and fair and do not

involve overreaching on the part of any

persons concerned.

For the SEC, by the Division of

Investment Management, under

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–31380 Filed 12–27–95; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

Applications of Capital Cargo

International Airlines, Inc. for Issuance

of New Certificate Authority

AGENCY: Department of Transportation.

ACTION: Notice of Order to Show Cause

(Order 95–12–29) Dockets OST–95–589

and OST–95–590.

SUMMARY: The Department of

Transportation is directing all interested

persons to show cause why it should

not issue orders (1) finding Capital

Cargo International Airlines, Inc., fit,

willing, and able, and (2) awarding it

certificates to engage in foreign charter

air transportation of property and mail

and interstate all-cargo air

transportation.

DATES: Persons wishing to file

objections should do so no later than

January 2, 1996.

ADDRESSES: Objections and answers to

objections should be filed in Dockets

OST–95–589 and OST–95–590 and

addressed to the Documentary Services

Division (C–55, Room PL–401), U.S.

Department of Transportation, 400

Seventh Street, SW, Washington, D.C.

20590 and should be served upon the

parties listed in Attachment A to the

order.

FOR FURTHER INFORMATION CONTACT: Ms.

Janet A. Davis, Air Carrier Fitness

Division (X–56, Room 6401), U.S.

Department of Transportation, 400

Seventh Street, SW, Washington, D.C.

20590, (202) 366–9721.

Dated: December 20, 1995

Mark L. Gerchick,

Acting Assistant Secretary for Aviation and

International Affairs.

[FR Doc. 95–31377 Filed 12–27–95; 8:45 am]

BILLING CODE 4910–62–P

Coast Guard

[CGD 95–087]

National Boating Safety Activities:

Funding for National Nonprofit Public

Service Organizations

AGENCY: Coast Guard, DOT.

ACTION: Notice of availability.