Federal Register / Vol. 61, No. 90 / Wednesday, May 8, 1996 / Notices 20869

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. Applicant requests an order

under section 6(c) exempting it from all

provisions of the Act.

3. Rule 3a–6 under the Act exempts

foreign banks from the definition of

investment company for all purposes of

the Act. A ‘‘foreign bank’’ is defined to

include a banking institution that is

regulated as such by that country’s

government. Although applicant

conducts several of the activities

associated with traditional commercial

banks, Colombian law distinguishes

between banks and finance corporations

with respect to checking accounts and

equity investments and underwriting of

securities. Therefore applicant may not

be eligible for the exemption provided

by rule 3a–6.

4. Colombian finance corporations are

credit establishments subject to

extensive regulation by the Banking

Superintendency, essentially the same

regulation that applies to Colombian

banks. Applicant derives the majority of

its business from extending commercial

credit and similar banking activities. In

all material respects, Colombian finance

corporations are distinguished from

Colombian banks in Colombia’s

regulatory regime only because the latter

may not make equity investments and

the former may not offer checking

accounts. Otherwise, the virtually

identical regulation of both types of

credit establishments recognizes that

their businesses are very similar in

nature, that they compete in the same

markets for the same customers, and

that their security holders and

customers require virtually identical

regulatory protections. In the case of

applicant, the same regulatory regime

that applies to Colombian banks applies

to applicant, and such regulations afford

the same substantial protection to U.S.

investors regardless of whether the

issuer of securities is classified as a

‘‘bank’’ or as a ‘‘finance corporation’’

under the Colombian regulatory regime.

5. Applicant also believes that the

rationale of Congress and the SEC in

promulgating rules under the Act in

exempting foreign financial institutions

applies to applicant. Applicant

represents that its activities do not lend

themselves to the abuses against which

the Act is directed, and it believes that

it satisfies the standards of relief under

section 6(c).

Applicant’s Condition

Applicant agrees that the order

granting the requested relief shall be

subject to the following condition:

In connection with any offering of

securities in the United States, applicant

will appoint an agent in the United

States to accept any process which may

be served on it in any action based on

such securities and instituted in the

Supreme Court of the State of New York

or the United States District Court for

the Southern District of New York by

any holder of any such securities.

Applicant will expressly consent to the

jurisdiction of the Supreme Court of the

State of New York or the United States

District Court for the Southern District

of New York in respect of any such

action. Applicant also will waive the

defense of an inconvenient forum to the

maintenance of any such action or

proceeding. Such appointment of an

agent to accept service and such consent

to jurisdiction shall be irrevocable until

all amounts due and to become due in

respect of such securities have been

paid. No such submission to jurisdiction

or appointment of agent for service of

process will affect the right of a holder

of any such security to bring suit in any

court which shall have jurisdiction over

applicant by virtue of the offer and sale

of such securities or otherwise.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–11405 Filed 5–7–96; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–21935; 812–9950]

Indigo Group, Ltd., et al.; Notice of

Application

May 2, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Indigo Group, Ltd. (‘‘Indigo

Group’’), James P. Gorter (‘‘Gorter’’), and

Triangle V III, Limited Partnership

(‘‘Triangle’’).

RELEVANT ACT SECTIONS: Order requested

under section 17(b) of the Act for an

exemption from section 17(a)(2) of the

Act.

SUMMARY OF APPLICATION: Applicants

request an order that would permit an

affiliated person of an affiliated person

of Baker, Fentress & Company (‘‘Baker

Fentress’’), a closed-end investment

company, to purchase a strip shopping

center from a company controlled by

Baker Fentress.

FILING DATES: The application was filed

on January 5, 1996 and amended on

May 1, 1996.

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 28, 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 who wish to be notified 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: c/o Bruce W. Teeters,

President, Indigo Group, Inc., 149 South

Ridgewood Avenue, Dayton Beach, FL

32114; James P. Gorter, Chairman of the

Board, Baker, Fentress & Company, 200

West Madison Street, Suite 3510,

Chicago, IL 60606; c/o Andrew B.

Widmark, Triangle V III, Limited

Partnership, 331 West Main Street,

Durham, NC 27701.

FOR FURTHER INFORMATION CONTACT:

Marianne H. Khawly, Staff Attorney, at

(202) 942–0562, 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 at the SEC’s

Public Reference Branch.

Applicants’ Representations

1. Baker Fentress is a closed-end

management investment company

under the Act. Consolidated-Tomoka

Land Co. (‘‘Consolidated Tomoka’’) is a

majority-owned subsidiary of Baker

Fentress. Consolidated Tomoka is

engaged primarily in the business of

commercial and residential real estate

development and sales through

subsidiaries, and citrus production.

Gorter is chairman of the board of

directors of Baker Fentress and a

director of Consolidated Tomoka.

2. Palms Del Mar, Inc. (‘‘Palms Del

Mar’’) is a wholly-owned subsidiary of

Consolidated Tomoka. Palms Del Mar

and Consolidated Tomoka are the

limited partners of Indigo Group, a

partnership primarily engaged in the

business of real estate development.
20870 Federal Register / Vol. 61, No. 90 / Wednesday, May 8, 1996 / Notices

1The Agreement was amended on December 14,

1995 (the ‘‘Amended Agreement’’).

2Prior to entering into the Agreement, Indigo

received a firm offer of $4,850,000 from Triangle to

purchase the Property and another smaller

shopping center, Mariner Town Square, in a single

transaction. Indigo also received a preliminary offer

of $4,500,000 for the two properties from a real

estate firm not related to any party to the

application. Neither of these two offers resulted in

a sale of the two properties. Indigo sold Mariner

Town Square as a separate parcel in May 1995 for

$1,225,000.

Indigo Group, Inc., another whollyowned subsidiary of Consolidated

Tomoka, is the sole general partner of

Indigo Group. As a limited partner, the

sole stockholder of the only other

limited partner, and the sole

stockholder of the sole general partner,

Consolidated Tomoka owns 100% of the

equity interests in Indigo Group.

3. Triangle is a limited partnership

established to invest in real estate and

acquire various properties from owners,

banks, insurance companies,

developers, or builders. Triangle’s

primary investments are in developed

shopping centers. Acquisitions and

overall control of operations are

handled by Triangle’s general partner,

Mark Realty Corp. (‘‘Mark Realty’’).

4. Triangle has issued class A and

class B limited partnership interests.

The class B limited partnership interests

are owned by Mark Realty and members

of Mark Realty’s management. The class

A limited partnership interests are

owned by members of Mark Realty’s

management, investors associated with

Mark Realty, and Gorter. Gorter owns

class A limited partnership interests

having a value of approximately 6% of

Triangle’s aggregate capital.

5. On September 21, 1995, Indigo

Group and Triangle, through their

respective general partners, entered into

an agreement of purchase and sale (the

‘‘Agreement’’) 1 to permit Triangle to

purchase Mariner Village Center, a strip

shopping center located in Spring Hill,

Florida (the ‘‘Property’’), from Indigo

Group (the ‘‘Sale’’). The Sale was

approved by the officers of both Indigo

Group, Inc. and Consolidated Tomoka.

Because the Sale is part of the

implementation of a business strategy

established by Consolidated Tomoka’s

board of directors, no specific review or

authorization of the Sale by

Consolidated Tomoka’s board of

directors was required.

6. Triangle’s partnership agreement

states that holders of class A limited

partnership interests may, by a vote of

two thirds of the outstanding class A

limited partnership interests, ‘‘expel’’

the general partner. Triangle’s

partnership agreement also gives the

class A limited partners the right to

approve all proposed property

acquisitions by Triangle. Triangle is

required to provide written notice of

each proposed acquisition to all class A

limited partners for their approval. If

any class A limited partner objects to

the proposed acquisition within 15

days, Triangle will not complete the

acquisition, effectively giving each class

A limited partner a ‘‘veto right’’ over

every acquisition. Triangle sent its

required notice of the proposed Sale to

its class A limited partners, including

Gorter, on October 11, 1995. No class A

limited partner objected to the Sale.

7. Under the terms of the Amended

Agreement, Triangle will purchase the

Property from Indigo Group and assume

all the rights and privileges belonging to

the land. Triangle also will assume all

rights, title, and interests of Indigo

Group in all the tenant leases relating to

the Property. The purchase price

Triangle will pay to Indigo Group is

$3.7 million but will be increased to

$3.8 million if Indigo Group is

successful in securing a major tenant for

the Property before the closing of the

Sale. The purchase price will consist of

a $100,000 earnest money deposit and

$1.2 million in additional cash or $1.3

million in additional cash if the

purchase price is increased as described

above. In addition, Triangle is expected

to assume Indigo Group’s liability under

its existing mortgage loan on the

Property of $2.4 million. Alternatively,

Triangle may seek financing elsewhere

and pay Indigo Group an additional $2.4

million in cash.2

Applicants’ Legal Analysis

1. Applicants request an order under

section 17(b) of the Act for an

exemption from section 17(a)(2) of the

Act. The order would permit Triangle,

an affiliated person of an affiliated

person of Baker Fentress, to purchase

the Property from Indigo Group, a

company controlled by Baker Fentress.

2. Section 17(a)(2) of the Act generally

prohibits an affiliated person of a

registered investment company or any

affiliated person of such a person, acting

as principal, knowingly to purchase

from such registered company, or from

any company controlled by such

registered company, any security or

other property. Section 2(a)(3)(D)

defines ‘‘affiliated person’’ as, among

other things, any officer, director,

partner, copartner, or employee of such

other person. Thus, Gorter is an

affiliated person of Baker Fentress

because he is chairman of Baker

Fentress’s Board of directors.

3. Section 2(a)(3)(B) defines ‘‘affiliated

person’’ as, among other things, any

person 5% or more of whose

outstanding voting securities are owned

with power to vote by such other

person. Section 2(a)(42) defines ‘‘voting

security’’ as any security presently

entitling the owner or holder thereof to

vote for the election of directors of a

company. Since Triangle’s class A

limited partners have the right to vote

to ‘‘expel’’ the general partner and a

‘‘veto right’’ over every acquisition, the

class A limited partnership interests

may represent an interest that is

tantamount to a voting security.

Applicants, therefore, believe that

Triangle may be considered an affiliated

person of Gorter because he owns 6% of

its class A limited partnership interests.

Thus, Triangle may be an affiliated

person of an affiliated person of Baker

Fentress.

4. Section 2(a)(9) defines ‘‘control’’ as

the power to exercise a controlling

influence over the management or

policies of a company. Section 2(a)(9)

also establishes a rebuttable

presumption that a person who owns

more than 25% of the voting securities

of a company shall be presumed to

control such company. Applicants state

that as a result of the ownership by

Baker Fentress of a majority of

Consolidated Tomoka’s outstanding

common stock, Consolidated Tomoka

and its directly and indirectly whollyowned subsidiaries, including Indigo

Group, are controlled by Baker Fentress.

Accordingly, Triangle’s purchase of the

Property from Indigo Group may be

prohibited by section 17(a)(2).

5. 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.

6. Applicants believe that the Sale

will benefit all of the applicants and

their respective investors. As Indigo

Group’s sole equity owner, Consolidated

Tomoka will benefit from the Sale and

therefore Baker Fentress and its

stockholders will indirectly benefit from

the Sale. Indigo Group is in the business

of real estate development which

necessarily means the willingness to

dispose of developed real estate at times

and prices considered to be

advantageous. Triangle’s primary

business is to invest in real estate, east

of the Mississippi River, primarily in

developed strip shopping centers. The

Property is considered by Triangle to be

a desirable example of property of the
Federal Register / Vol. 61, No. 90 / Wednesday, May 8, 1996 / Notices 20871

type in which Triangle was formed to

invest.

7. Applicants state that Gorter did not

take part in any negotiations

surrounding the terms of the Sale.

Gorter’s involvement in the Sale is due

solely to his positions with Baker

Fentress and Consolidated Tomoka and

his limited partnership interests in

Triangle. Gorter was unaware of the

negotiations and Sale until he received

notice from Triangle, on October 11,

1995, in his capacity as a class A limited

partner. Applicants submit that Gorter

did not exercise his right as a class A

limited partner of Triangle to object to

the Sale because Gorter and Indigo

Group believe that to have done so

might have been a breach of his

fiduciary duties to Consolidated

Tomoka and Baker Fentress by causing

them to lose the benefit of a transaction

believed by them to be in their best

interest. As a result, Indigo Group and

Gorter believe that avoidance of the

need for the application by Gorter’s

objection to the Sale was not a viable

option.

8. Applicants state that although the

policies of Baker Fentress are not

directly implicated by the Sale because

Baker Fentress is not a party to the Sale,

the Sale is not inconsistent with any

policies of Baker Fentress. In addition,

applicants believe that the terms of the

Amended Agreement, including the

consideration to be paid and received

are reasonable and fair and do not

involve overreaching by any of the

applicants. Triangle’s general partner,

Mark Realty, has had extensive

experience in valuing and negotiating

transactions related to investments in

strip shopping malls. Applicants

represent that the Sale was negotiated

by Mark Realty and Indigo at armslength. As a result, applicants believe

that the purchase price is fair and

reasonable both as to amount and as to

form of payment. Furthermore, the Sale

will not result in any ongoing

relationship between Indigo Group and

Triangle. For the reasons discussed

above, applicants believe that the

proposed transaction satisfies the

criteria of section 17(b).

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–11450 Filed 5–7–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37161; File No. SR–Amex–

96–10]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the American Stock Exchange, Inc.

Relating to the Implementation of a

Wireless Data Communications

Infrastructure

May 2, 1996.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on March 27, 1996,

the American Stock Exchange, Inc.

(‘‘Amex’’ or ‘‘Exchange’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’ or ‘‘SEC’’) the proposed

rule change as described in Items I, II

and III below, which Items have been

prepared by the self-regulatory

organization. The Commission is

publishing this notice to solicit

comments on the proposed rule change

from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The American Stock Exchange, Inc.

proposes to amend Exchange Rules 60

and 220 and to adopt a policy regarding

the use of wireless data communications

devices at the Exchange (‘‘Wireless

Communications Policy’’).

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

self-regulatory organization included

statements concerning the purpose of

and basis for the proposed rule change

and discussed any comments it received

on the proposed rule change. The text

of these statements may be examined at

the places specified in Item IV below.

The self-regulatory organization has

prepared summaries, set forth in

Sections A, B, and C below, of the most

significant aspects of such statements.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

The Exchange has undertaken the

development of an infrastructure

(‘‘Infrastructure’’) to accommodate the

use of wireless data communications

devices on the Trading Floor. In

connection with the implementation of

the Infrastructure, the Exchange seeks to

amend Rule 220 to explicitly provide

that the Exchange may regulate

communications between points on the

Floor. The Exchange also seeks to adopt

a detailed policy (‘‘Wireless

Communications Policy’’) regarding the

use of wireless data communications

devices at the Exchange. The Wireless

Communications Policy will address the

following issues:

1. The ability of the Exchange to

administer wireless data

communications on a real time basis

(e.g., the implementation of a protocol

for prioritizing and/or managing

message traffic during periods of

extraordinary use);

2. Surveillance of wireless data

communications;

3. Member, member firm and

Exchange preservation of records of

orders and trades;

4. Security with respect to

confidential wireless transmissions and

access to the Infrastructure;

5. Review and approval of member

and member firm applications to use

wireless data communications devices;

6. The fair allocation of a finite

resource (i.e., radio frequency

bandwidth);

7. Exchange fees and allocation of

expenses associated with the

implementation, operation of, and

enhancements to, the Infrastructure;

8. Sanctions for violations of the

Exchange’s Wireless Communications

Policy;

9. Inspection and oversight of wireless

data communications technology; and

10. The design and implementation of

the Infrastructure.

The Wireless Communications Policy

furthers the policy in Article IV, Section

1(e) of the Exchange Constitution which

currently provides that the Exchange

shall not be liable for any damages

sustained by a member or member

organization growing out of the use or

enjoyment by such member or member

organization of the facilities afforded by

the Exchange to members for the

conduct of their business. This

provision, as well as similar provisions

at other exchanges, reflect the common

understanding that exchanges should

not bear the risk of liability associated

with member firm use of their systems.

Accordingly, the Exchange will not be

liable to member firms with respect to

their use of the Infrastructure.

In addition, the Exchange proposes to

adopt new Commentary .03 to Rule 60

which will provide that, in connection

with member or member organization

use of any electronic system, service, or

facility provided by the Exchange to

members for the conduct of their

business on the Exchange: (i) the

Exchange may expressly provide in the

contract with any vendor providing all

or part of such electronic system,