Federal Register / Vol. 60, No. 71 / Thursday, April 13, 1995 / Notices 18869

9Because the Exchange filed Amendment No. 1

subsequent to the original filing date, the 30-day

period commences on the filing date of Amendment

No. 1.

10 17 CFR 200.30–3(a)(12) (1994).

review at least five days prior to the

filing date; and (4) does not become

operative for 30 days from April 3,

1995,9 the rule change proposal has

become effective pursuant to Section

19(b)(3)(A) of the Act and Rule 19b–

4(e)(6) thereunder. In particular, the

Commission believes the proposal

would qualify as a ‘‘noncontroversial

filing’’ in that the proposed standards

do not significantly affect the protection

of investors or the public interest and do

not impose any significant burden on

competition. At any time within 60 days

of the filing of the proposed rule change,

the Commission may summarily

abrogate such rule change if it appears

to the Commission that such action is

necessary or appropriate in the public

interest, for the protection of investors,

or otherwise in furtherance of the

purposes of the Act.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning the foregoing.

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 at

the Commission’s Public Reference

Section, 450 Fifth Street, NW.,

Washington, DC 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the CBOE. All submissions

should refer to SR–CBOE–95–17 and

should be submitted by May 4, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.10

Jonathan G. Katz,

Secretary.

[FR Doc. 95–9147 Filed 4–12–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. IC–20991; File No. 812–9490]

Kemper Securities, Inc., et al.; Notice

of Application

April 6, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Kemper Securities, Inc.

(‘‘Sponsor’’); Kemper Tax-Exempt

Insured Income Trust, Kemper TaxExempt Income Trust, Ohio Tax-Exempt

Bond Trust, Kemper Insured Corporate

Trust, Kemper Government Securities

Trust (U.S. Treasury Portfolio), Kemper

Government Securities Trust (GNMA

Portfolio), Kemper Bond Enhanced

Securities Trust, Kemper Equity

Portfolio Trusts, Kemper Defined Funds

U.S. Treasury Portfolio, Kemper Defined

Funds GNMA Portfolio, Kemper

Defined Funds Insured Corporate,

Kemper Defined Funds Corporate

Income, Kemper Defined Funds Insured

National, Kemper Defined Funds

Insured State, Kemper Defined Funds

(the ‘‘Trusts’’).

RELEVANT ACT SECTIONS: Order requested

under section 6(c) for exemptions from

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

26(a)(2)(C) of the Act and rule 22c–1

thereunder, and under section 11(a) for

relief from section 11(c).

SUMMARY OF APPLICATION: Applicants

request an order that would permit the

Trusts to impose deferred sales charges,

waive the deferred sales charge in

certain cases, and exchange units with

deferred sales charges.

FILING DATES: The application was filed

on February 21, 1995, and was amended

on March 31, 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

May 1, 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, N.W., Washington, D.C. 20549.

Applicants, 77 West Wacker Dr.,

Chicago, IL 60601; cc: Mark J. Kneedy,

Chapman and Cutler, 111 West Monroe

St., Chicago, IL 60603.

FOR FURTHER INFORMATION CONTACT:

Bradley W. Paulson, Staff Attorney, at

(202) 942–0147, 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 is

available for a fee from the SEC’s Public

Reference Branch.

Applicants’ Representations

1. Each Trust is a unit investment

trust sponsored by the Sponsor. Each

Trust has one or more separate series

(‘‘Series’’) created by a trust indenture

among the Sponsor, an evaluator, and a

banking institution or trust company

serving as trustee. The Sponsor acquires

a portfolio of securities and deposits

them with the 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 5.5 percent to 1 percent of

the public offering price, and is subject

to reduction as permitted by rule 22d–

1.

2. Applicants request an order

permitting them, future series of the

Trusts, and future trusts sponsored by

the sponsor to 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

following 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.

3. The Sponsor anticipates collecting

a portion of the total sales charge

immediately upon purchase of Units. A

portion of the outstanding balance will

be deducted periodically by the trustee

from distributions on the Units and paid

to the Sponsor until the total amount of

the sales charge is collected. If

distribution income is insufficient to

pay a deferred sales charge installment,
18870 Federal Register / Vol. 60, No. 71 / Thursday, April 13, 1995 / Notices

1Without 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.’’

the trustee will have the ability under

the trust indenture to sell portfolio

securities in an amount necessary to

provide the requisite payments. These

securities will be sold on a pro rata

basis, to the extent practicable, so that

the remaining composition of the Trust

will be similar to its composition prior

to the sale. If a unitholder redeems or

sells to the Sponsor his or her Units

before the total sales charge has been

collected from installment payments,

the balance of the sales charge may be

collected at the time of such redemption

or sale.

4. For purposes of calculating the

amount of the deferred sales charge 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.

5. The Sponsor intends to waive

collection of the unpaid balance of the

deferred sales charge upon any sale or

redemption of Units. If applicants later

decide to collect the unpaid balance of

the deferred sales charge upon sale or

redemption, they may nonetheless

waive payment of the balance of the

deferred sales charge on redemptions or

sales of Units in certain specific cases.

Any such waiver will be disclosed in

the prospectus and will satisfy the other

conditions of rule 22d–1.

6. The Sponsor believes that the

operation and implementation of the

deferred sales charge program will be

disclosed adequately to potential

investors as well as unitholders. The

prospectus for each Series will describe

the operation of the deferred sales

charge, including the amount and date

of each installment payment. The

prospectus also will contain disclosure

pertaining to the trustee’s ability to sell

portfolio securities if the income

generated by a Series’ portfolio is

insufficient to pay an installment. The

securities confirmation statement sent

by the Sponsor to each purchaser will

state the amount of the ‘‘up-front’’ sales

charge, if any, and the amount of the

deferred sales charge to be deducted in

regular installments. The annual report

of each Series will state the amount of

annual installment payments deducted

during the previous fiscal year on both

a per Trust and per Unit basis.

7. The maximum sales charge on

Units acquired in the secondary market

normally ranges from 5.5 percent to 1.0

percent of the public offering price of

the Units. Applicants request that the

order also permit them to allow

unitholders to exchange Units of one

Series for Units of another subject to an

additional sales charge not to exceed 2.5

percent of the public offering price of

the acquired Units. This sales charge is

calculated as the greater of (a) 2.5

percent per Unit, or (b) an amount that

together with the sales charge already

paid on the exchanged Units equals the

normal sales charge on the acquired

Units if either Units are exchanged

within five months of their acquisition

for Units of another Series with a higher

sales charge, or Units with a deferred

sales charge are exchanged for Units of

another Series with an ‘‘up-front’’

charge before the deferred sales charge

on the exchanged Units has been

collected.

8. If Units subject to a deferred sales

charge are exchanged for Units of a

Series not having a deferred sales

charge, the deferred sales charge will be

collected at the time of the exchange. If

Units subject to a deferred sales charge

are exchanged for Units of a Series with

a deferred sales charge, installment

payments will continue to be deducted

from the distributions on the acquired

Units until the balance of the sales

charge owed on the exchanged Units

has been collected. In either case, the

additional sales charge will be imposed

at the time of the exchange.

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. Applicants

believe that implementation of the

deferred sales charge program in the

manner described above would be fair

and in the best interests of the

unitholders of the Trusts.

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 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 section 2(a)(32) so that Units

subject to a deferred sales charge are

considered redeemable securities for

purposes of the Act.1

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. Rule 22c–1 requires 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

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 sale of redeemable

securities ‘‘at prices that reflect

scheduled variations in, or elimination

of, the sales load.’’ Because rule 22d–1

does not extend to scheduled variations

in deferred sales charges, applicants

seek relief from section 22(d) to permit

them to waive or reduce their deferred

sales charge in certain specified

instances.

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 deferred sales

charge installments from distribution

deductions or Trust assets.

7. Paragraphs (a) and (c) of section 11

prohibit any offers of exchange of the

securities of a registered unit 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 a reasonable and justifiable

expense to be allocated for the

professional assistance and operational

expenses incurred in connection with

the exchange.
Federal Register / Vol. 60, No. 71 / Thursday, April 13, 1995 / Notices 18871

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 that 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) of the

Act 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. An investor who purchases Units

under the exchange option will pay a

lower aggregate sales charge than that

which would be paid for the Units by

a new investor.

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 Form N–1A (modified as

appropriate to reflect the differences

between unit investment trusts and

open-end management investment

companies) and a schedule setting forth

the number and date of each installment

payment.

For the Commission, by the Division of

Investment Management, pursaunt to

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 95–9074 Filed 4–12–95; 8:45 am]

BILLING CODE 8010–01–M

U.S. SMALL BUSINESS

ADMINISTRATION

[Declaration of Disaster Loan Area #2766]

California; Declaration of Disaster

Loan Area (Amendment #1)

The above-numbered Declaration is

hereby amended, effective March 24,

1995, to include Alameda, Alpine,

Calaveras, Contra Costa, Merced, San

Francisco, San Joaquin, and San Mateo

Counties in the State of California as a

disaster area due to damages resulting

from severe winter storms causing

flooding, landslides, and mud debris

flows beginning on February 13, 1995

and continuing.

All counties contiguous to the abovenamed counties have previously been

declared.

All other information remains the

same, i.e., the termination date for filing

applications for physical damage is May

11, 1995, and for loans for economic

injury the deadline is December 12,

1995.

(Catalog of Federal Domestic Assistance

Program Nos. 59002 and 59008.)

Dated: April 7, 1995.

Bernard Kulik,

Associate Administrator for Disaster

Assistance.

[FR Doc. 95–9145 Filed 4–12–95; 8:45 am]

BILLING CODE 8025–01–M

THRIFT DEPOSITOR PROTECTION

OVERSIGHT BOARD

National Advisory Board Meeting

AGENCY: Thrift Depositor Protection

Oversight Board.

ACTION: Change of meeting date.

SUMMARY: This is to announce a change

in the date for the National Advisory

Board meeting schedule for April 27 as

published in the Federal Register,

March 30, 1995, page 16529. The

meeting is rescheduled for May 31 at the

Federal Deposit Insurance Corporation,

550 17th Street, N.W., Washington, D.C.

DATES: Wednesday, May 31, 9 a.m. to

noon.

ADDRESSES: Federal Deposit Insurance

Corporation, 550 17th Street, NW.,

Washington, D.C.

FOR FURTHER INFORMATION CONTACT: Jill

Nevius, Committee Management Officer,

Thrift Depositor Protection Oversight

Board, 808 17th Street, NW,

Washington, DC 20232, 202/416–2626.

Dated: April 7, 1995.

Jill Nevius,

Committee Management Officer.

[FR Doc. 95–9055 Filed 4–12–95; 8:45 am]

BILLING CODE 2221–01–M

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

NAFTA Land Transportation Standards

Subcommittee Work Program

AGENCY: Office of the Secretary, Office

of International Transportation and

Trade, DOT.

ACTION: Notice.

SUMMARY: This notice gives the status of

the Department of Transportation’s

(DOT) actions to implement the Land

Transportation Standards Subcommittee

(LTSS) work program set forth in the

North American Free Trade Agreement

(NAFTA). It also describes the LTSS’

scope of work, notifies the public of

upcoming meetings, and invites

interested parties to write to DOT to be

included in the Department’s

distribution list for LTSS reports and

related information.

The United States, Canada, and

Mexico intend to continue to work to

develop more compatible land

transportation standards through the

LTSS in accordance with a timetable set

in the NAFTA. Five working groups of

federal and state government technical

experts from the three countries were

established last year to accomplish this

work under the direction of the LTSS.

The groups made considerable progress

during the NAFTA’s first year,

including the completion of efforts

related to cross-border rail operations.

Representatives from industry, labor,

and safety advocacy organizations,

while not directly involved in the LTSS

process, may take part in briefings and

listening sessions conducted before or

after the official meetings. In 1994, the

LTSS held one plenary session, one

executive session, and eight working

group meetings. Copies of the LTSS

1994 Annual Report will be available in

mid-May. The U.S. Department of

Transportation conducted two public

briefings in August and November 1994.

The Department intends to publish

periodic notices on the LTSS’ activities,

and to distribute regularly relevant

information to individuals and

organizations on its mailing list.

Respondents are requested to send a fax

or a post card with their full names and

addresses to DOT, specifying the

group(s) about which they would like to

receive information.