Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices 14047

1 Investment Company Act Release No. 17096

(Aug. 3, 1989) (proposing amendments to rule

12d3–1).

majority of whom are not ‘‘interested

persons’’ of the company, formulate and

approve any such plan in accordance

with Rule 12b–1.

Conclusion

For the reasons set forth above,

Applicants represent that the

exemptions requested to permit the

daily deduction from the assets of the

Separate Accounts of the charge for

assumption of mortality and expense

risks, including an enhanced death

benefit, at a maximum annual rate of

1.40% of net assets, are necessary and

appropriate in the public interest and

consistent with the protection of

investors and the purposes fairly

intended by the policy 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. 95–6354 Filed 3–14–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. IC–20946; 812–9318]

The First Trust Special Situations

Trust, et al.; Notice of Application

March 8, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: The First Trust Special

Situations Trust, Target Equity Trust,

Value Ten Series 1 and subsequent

series, and Nike Securities L.P.

(‘‘Nike’’).

RELEVANT ACT SECTIONS: Order requested

under sections 6(c) and 17(b) from

section 17(a).

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 November 3, 1994, and was amended

on March 3, 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

April 3, 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 request, 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, DC 20549.

Applicants, c/o Nike Securities L.P.,

1001 Warrenville Road, Suite 3000,

Lisle, Illinois 60532.

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.

Applicants’ Representations

1. The First Trust Special Situations

Trust (the ‘‘Trust’’), a unit investment

trust registered under the Act, consists

of a number of series (‘‘Series’’), each of

which will be similar but separate and

designated by a different series number.

Target Equity Trust, Value Ten Series 1

is of one of the Series of the Trust. Nike

is the sponsor for each Series (the

‘‘Sponsor’’). Applicants request that the

relief sought herein apply to any future

Series that has the characteristics

described below and in the application.

2. Each Series will have a portfolio

which contains equity securities

(‘‘Equity 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 (an

‘‘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 that

meets the qualifications set out in the

proposed amendment to rule 12d3–

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

the Commission,1 and that releases

daily closing prices, and (ii) included in

a published index (an ‘‘Index’’).

3. The investment objective of each

Series is to seek a greater total return

than the stocks comprising an entire

related Index (e.g., the Dow Jones

Industrial Average (‘‘DJIA’’), the Hang

Seng Index, or the Financial Times

Industrial Ordinary Share Index).

Certain of the Series will acquire

approximately equal values of a

designated number of stocks in the DJIA

having the highest dividend yields as of

a specified date and will hold those

stocks for a designated period. Other

Series will create their portfolios in a

similar manner using securities that are

included in other Indices. The Sponsor

of the Series intends that, as each Series

terminates, a new Series (‘‘New Series’’)

based on the appropriate Index will be

offered for the next period.

4. Each Series has or will have a

contemplated date (a ‘‘Rollover Date’’)

on which holders of units in that Series

(the ‘‘Rollover Series’’) may at their

option redeem their units in the

Rollover Series and receive in return

units of a New Series which is created

on or about the Rollover Date.

5. There is normally some overlap

from year to year in the stocks having

the highest dividend yields in an Index

and, therefore, between the portfolios of

each Rollover Series and the

corresponding New Series. For example,

of the ten securities selected for

inclusion in Value Ten Series 5 on

September 7, 1994, eight were still

among the top ten dividend yielding

stocks in the DJIA as of the date of the

amended application.

6. In connection with its termination,

each Rollover Series sells all of its

portfolio securities on an Exchange as

quickly as practicable, but over a period

of time so as to minimize any adverse

impact on the market price. Similarly, a

New Series acquires its portfolio

securities in purchase transactions on

an 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.

7. In order to minimize overreaching,

the Sponsor will certify to the trustee of

the Rollover Series and the New Series,

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 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 the Sponsor orally of any such

disagreement and returns the certificate

within five days to the Sponsor with

corrections duly noted. Upon the

Sponsor’s receipt of a corrected

certificate, if the Sponsor can verify the
14048 Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices

correct price by reference to an

independently published list of closing

sales prices for the date of the

transaction, the Sponsor 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 the

Sponsor disagrees with the trustee’s

corrected price, the Sponsor 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 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.

Each Series will have an identical or

common Sponsor, Nike. Since the

Sponsor of each Series may be

considered to control each Series, it is

likely that each Series would be

considered an affiliate of the others.

2. Section 17(b) provides that the SEC

shall exempt a proposed transaction

from section 17(a) if evidence

establishes that: (a) the terms of the

proposed transaction are reasonable and

fair and do not involve overreaching; (b)

the proposed transaction is consistent

with the policies of the registered

investment company involved; and (c)

the proposed transaction is consistent

with the general provisions of the Act.

Under section 6(c), the SEC may exempt

classes of transactions if, and 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. Applicants believe that the

proposed transactions satisfy the

requirements of sections 6(c) and 17(b).

3. Rule 17a–7 under the Act permits

registered investment companies that

might be deemed affiliates solely by

reason of common investment advisers,

directors, and/or officers, to purchase

securities from, or sell securities, one

another at an independently determined

price, provided certain conditions are

met. Paragraph (e) of the rule requires

an investment company’s board of

directors to adopt and monitor the

procedures for these transactions to

assure compliance with the rule. A unit

investment trust does not have a board

of directors and, therefore, may not rely

on the rule. Applicants represent that

they will comply with all of the

provisions of rule 17a–7, other than

paragraph (e).

4. Applicants represent that purchases

and sales between Series will be

consistent with the policy of each

Series, as only securities that otherwise

would be brought and sold on the open

market pursuant to the policy of each

Series will be involved in the proposed

transactions. Applicants further believe

that the current practice of buying and

selling on the open market leads to

unnecessary brokerage fees and is

therefore contrary to the general

purposes of the Act.

Applicants’ Conditions

Applicants agree that the order

granting the requested relief shall be

subject to the following conditions:

1. Each sale of Equity Securities by a

Rollover Series to a New Series will be

affected at the closing price of the

securities sold on the applicable

Exchange on the sale date, without any

brokerage charges or other remuneration

except customary transfer fees, if any.

2. The nature and conditions of such

transactions will be fully disclosed to

investors in the appropriate prospectus

of each future Rollover Series and New

Series.

3. The trustee of each Rollover Series

and New Series will (a) review the

procedures discussed in the application

relating to the sale of securities from a

Rollover Series to a New Series and (b)

make such changes to the procedures as

the trustee deems necessary that are

reasonably designed to comply with

paragraphs (a) through (d) of rule 17a–

7.

4. A written copy of these procedures

and a written record of each transaction

pursuant to this order will be

maintained as provided in rule 17a–7(f).

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–6357 Filed 3–14–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. IC–20949; 812–9442]

ML Venture Partners II, L.P. et al.;

Notice of Application

March 9, 1995.

AGENCY: Securities and Exchange

Commission (the ‘‘SEC’’).

ACTION: Notice of application for an

order under the Investment Company

Act of 1940 (the ‘‘Act’’).

APPLICANTS: ML Venture Partners II, L.P.

(‘‘MLCP II’’), Merrill Lynch, Pierce,

Fenner & Smith Incorporated (‘‘Merrill

Lynch’’), and Donaldson, Lufkin &

Jenrette Securities Corporation (‘‘DLJ’’).

RELEVANT ACT SECTIONS: Order requested

under section 57(c) from section

57(a)(2).

SUMMARY OF APPLICATION: Applicants

request an order relating to the sale of

shares of common stock of Corporate

Express, Inc. by MLVP II in an

underwriting in which Merrill Lynch

and/or DLJ are members of the

underwriting syndicate.

FILING DATE: The application was filed

on January 20, 1995. Applicants have

agreed to file an amendment during the

notice period, the substance of which is

incorporated herein.

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

April 3, 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 reasons for

the request, and the issues contested.

Persons who wish to be notified of a

hearing may request such notification

by writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street NW., Washington, DC 20549.

MLCP II and Merrill Lynch, North

Tower, World Financial Center, New

York, New York 10281.

FOR FURTHER INFORMATION CONTACT: Fran

Pollack-Matz, Senior Attorney, (202)

942–0570, or Robert A. Robertson,

Branch Chief, (202) 942–0560 (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. MLVP II, a Delaware limited

partnership, is a business development

company under the Act. The investment

objective of MLVP II is to seek long-term

capital appreciation by making venture

capital investments. MLVP II has five

general partners, consisting of four

individuals (the ‘‘MLVP II Individual

General Partners’’) and one managing

general partner, MLVP II Co. L.P. (the