Federal Register / Vol. 61, No. 84 / Tuesday, April 30, 1996 / Notices 19097

1Concurrently with these acquisitions, Medallion

will merge with Tri-Magna and operate Tri-Magna’s

two subsidiaries, MFC, an SSBIC, and Medallion

Taxi Media, Inc. (‘‘Media’’), a corporation providing

taxicab rooftop advertising, as its own subsidiaries.

In 1988, the SEC issued an order to MFC permitting

it to create a holding company structure, with MFC

as a wholly-owned subsidiary of such holding

company, and permitting the holding company and

its subsidiaries to engage in certain joint

transactions and other activities otherwise

prohibited under the Act. Medallion Financial

Corporation, Investment Company Act Release Nos.

16253 (Feb. 4, 1988) (notice) and 16296 (Mar. 1,

1988) (order).

For the Nuclear Regulatory Commission.

Donald A. Cool,

Director, Division of Industrial and Medical

Nuclear Safety, Office of Nuclear Material

Safety and Safeguards.

[FR Doc. 96–10619 Filed 4–29–96; 8:45 am]

BILLING CODE 7590–01–P

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–21915; 812–9744]

Medallion Financial Corp., et al.; Notice

of Application

April 24, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Medallion Financial Corp.

(‘‘Medallion’’), Tri-Magna Corporation

(‘‘Tri-Magna’’), Medallion Funding

Corp. (‘‘MFC’’), Alvin Murstein, and

Andrew Murstein.

RELEVANT ACT SECTIONS: Order requested

under section 6(c) of the Act for an

exemption from sections 12(d), 18(a),

and 61(a) of the Act, under sections

17(d) and 57(a)(4) of the Act and rule

17d–1 thereunder permitting certain

joint transactions, under section 17(b) of

the Act for an exemption from section

17(a) of the Act, and under section 57(c)

of the Act for an exemption from

sections 57(a) (1), (2), and (3) of the Act.

SUMMARY OF APPLICATION: Applicants

request an order to permit Medallion to

acquire all the outstanding stock of TriMagna Corporation through a merger

and to acquire certain other companies.

In addition, the order would permit

Medallion to engage in certain joint

transactions with its subsidiaries and

would permit modified asset coverage

requirements for Medallion and its

subsidiaries on a consolidated basis.

FILING DATE: The application was filed

on September 1, 1995 and amended on

January 16, 1996. Applicants have

agreed to file an additional amendment,

the substance of which is incorporated

herein, during the notice period.

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 20, 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 of a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 5th

Street NW., Washington, DC 20549.

Applicants, Suite 2000, 205 East 42d

Street, New York, NY 10017.

FOR FURTHER INFORMATION CONTACT:

James M. Curtis, Senior Counsel, at

(202) 942–0563, 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. Medallion is a closed-end

investment company. It was organized

for the purpose of acquiring: Tri-Magna,

another closed-end investment

company; Edwards Capital Company,

L.P. (‘‘ECC’’), a privately-held limited

partnership licensed as a Small

Business Investment Company (an

‘‘SBIC’’) by the Small Business

Administration (the ‘‘SBA’’); and

Transportation Capital Corp. (‘‘TCC’’), a

Specialized Small Business Investment

Company (an ‘‘SSBIC’’) licensed by the

SBA.1 Tri-Magna, ECC, and TCC are

referred to as the ‘‘Acquired

Companies.’’ Medallion plans to file an

election under section 54 of the Act to

be regulated as a business development

company (a ‘‘BDC’’) and,

contemporaneous with the acquisition

of TCC and ECC, will register each

company under the Act as a closed-end

investment company. Upon completion

of these transactions, Medallion will

engage directly and/or through its

principal subsidiaries (the

‘‘Subsidiaries’’) primarily in the

business of making loans to small

businesses and, to a lesser degree, in the

business of taxicab rooftop advertising.

2. Medallion proposes to acquire all

the outstanding shares of Tri-Magna

through a merger of Tri-Magna into

Medallion (the ‘‘Merger’’) for $20.00 per

share in cash plus an additional

dividend of $.50 per share plus the

accumulated earnings, if any, of Media

to be paid immediately prior to the

Merger and to acquire the remaining

Acquired Companies for cash or

Medallion stock or some combination

thereof. Acquisitions for cash will be

financed from the proceeds of the initial

public offering of Medallion stock (the

‘‘IPO’’). The acquisitions will be closed

contemporaneously with the IPO.

3. At a meeting held on October 18,

1995, the full board of directors of TriMagna voted unanimously to accept the

recommendation of a committee of its

independent directors (the

‘‘Independent Committee’’) to pursue

the Merger, determining that the Merger

is in the best interests of and is fair to

the stockholders of Tri-Magna. The

board of directors also unanimously

recommended that the stockholders of

Tri-Magna approve the Merger. On

December 21, 1995, the Merger

Agreement was executed and delivered

by Tri-Magna and Medallion.

4. The consummation of the Merger is

subject to certain conditions, including

(a) approval of the Merger Agreement by

the holders of at least a majority of the

outstanding shares of Tri-Magna stock,

(b) approval by all governmental

agencies and other third parties from

whom such approval is required,

including the SEC and the SBA, (c)

receipt by Tri-Magna of an opinion from

Gruntal & Co., Incorporated (‘‘Gruntal’’),

an investment banking firm engaged by

the Independent Committee, opining as

to the fairness from a financial point of

view of the terms of the Merger to the

stockholders of Tri-Magna, (d) the

successful negotiation and closing of the

acquisitions of the other Acquired

Companies, and (e) the closing of the

IPO.

5. Alvin Murstein and Andrew

Murstein will serve as chief executive

officer and as president, respectively, of

Medallion following the Merger. Each of

Alvin Murstein and Andrew Murstein

currently holds 100 shares of

Medallion’s common stock through a

trust. In addition, Alvin Murstein will

make a capital contribution of

approximately $1,000,000 to Medallion

in exchange for shares of Medallion

stock valued at the public offering price

of Medallion shares sold in the IPO.

6. Myron Cohen, Robert Fanger, and

Michael Miller (the ‘‘Affiliated

Advisers’’) will form and register an
19098 Federal Register / Vol. 61, No. 84 / Tuesday, April 30, 1996 / Notices

2Rule 17a–3 provides in pertinent part that

transactions solely between a registered investment

company and one or more of its ‘‘fully owned

subsidiaries’’ are exempt from section 17(a) Rule

17a–3 defines a ‘‘fully owned subsidiary’’ as a

subsidiary that, among other things, is not indebted

to any person other than its parent, the parent’s

other fully owned subsidiaries, and/or banks or

insurance companies in any amount that is material

in relation to the particular subsidiary.

investment adviser (the ‘‘Sub-Adviser’’)

that will enter into a sub-advisory

contract (the ‘‘Sub-Advisory

Agreement’’) with Medallion to provide

investment advisory services. The

Affiliated Advisers presently are officers

and directors of Tri-Magna and

collectively hold 14.9% of Tri-Magna’s

outstanding stock. Following the IPO,

the Affiliated Advisers will resign their

positions with Tri-Magna and will no

longer own Tri-Magna stock. Pursuant

to the Sub-Advisory Agreement,

Medallion will pay the Sub-Adviser, in

arrears, a monthly fee of $18,750 as

compensation for the services to be

rendered and the expenses to be paid by

the Sub-Adviser.

7. The Sub-Advisory Agreement will

be approved by a majority of the noninterested directors of Medallion and a

majority of Medallion’s voting securities

outstanding immediately prior to the

closing of the IPO. The Sub-Advisory

Agreement will be subject to section 15

of the Act and will be terminable

without penalty to Medallion on 60

days’ written notice by either party or

by vote of a majority of Medallion’s

outstanding voting securities and will

terminate if assigned.

Applicants’ Legal Analysis

Section 6(c)

1. Applicants request relief under

section 6(c) of the Act from sections

12(d), 18(a), and 61(a). Section 6(c)

permits the SEC to exempt any person

or transaction from any provision of the

Act 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.

Sections 12(d) and 60

1. Section 12(d)(1) limits the amount

of securities a registered investment

company may purchase of another

registered investment company. Section

60 applies the provisions of section 12

to BDCs.

2. Since Medallion will operate those

of its Subsidiaries licensed as an SBIC

or SSBIC (the ‘‘SBA Subsidiaries’’) as

wholly-owned subsidiaries, the

acquisition of the securities of the SBA

Subsidiaries, any loans or advances

made to such SBA Subsidiaries by

Medallion, and any other transfer of

assets from Medallion to the SBA

Subsidiaries will be exempt from

sections 12(d)(1) (A) and (C) by virtue of

rule 60a–1, which exempts from those

sections the acquisition by a BDC of the

securities of an investment company

licensed by the SBA that is operated as

a wholly-owned subsidiary of the BDC.

The making of loans or advances by the

SBA Susidiaries to Medallion, however,

may violate section 12(d) if such loans

or advances were deemed to be

purchases by the SBA Subsidiaries of

Medallion’s debt securities.

Accordingly, applicants request under

section 6(c) an exemption from section

12(d)(1) to permit the acquisition by the

SBA Subsidiaries of any securities of

Medallion representing indebtedness.

Sections 18(a) and 61(a)

1. Section 18(a) prohibits a registered

closed-end investment company from

issuing any class of senior security

unless such company complies with the

asset coverage requirements set forth in

that section. ‘‘Asset coverage’’ is defined

in section 18(h) as the ration which the

value of the total assets of an issuer, less

all liabilities not represented by senior

securities, bears to the aggregate amount

of senior securities of such issuer.

Under section 18(a)(1)(A), senior

securities of closed-end investment

companies representing indebtedness

must had an asset coverage of 300%

immediately after their issuance or sale

and, under section 18(a)(2)(A), senior

securities of such companies

representing stock must have an asset

coverage of 200%. Section 18(k)

provides an exemption from the

foregoing asset coverage requirements

for investment companies licensed by

the SBA. Section 61(a) applies section18

to BDCs, with certain exceptions.

2. Medallion will be a BDC and each

of the SBA Subsidiaries will be closedend investment companies registered

under the Act and, accordingly, subject

to the provisions of, and the exemptions

available under, section 18 on an

individual basis (as modified by section

61(a) with respect to Medallion). In

addition, as a holding company for

controlled, closed-end investment

company subsidiaries, such as the SBA

Subsidiaries, applicants believe that

Medallion may be subject to the asset

coverage requirements of section 61(a)

on a consolidated basis because it may

be deemed to be an indirect issuer of

senior securities with respect to the SBA

Subsidiaries’ indebtedness.

Accordingly, applicants request under

section 6(c) an exemption from sections

18(a) and 61(a) to treat borrowings by

any of the SBA Subsidiaries and the

SBA’s preferred stock interest in such

SBA Subsidiaries as liabilities and

indebtedness not represented by senior

securities in applying the asset coverage

requirements of section 18(a) to

Medallion and the SBA Subsidiaries on

a consolidated basis.

Sections 17(b) and 57(c)

1. Section 17(b) of the Act permits the

SEC to exempt a proposed transaction

from section 17(a) if evidence

establishes that (a) the terms of the

proposed 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; (b) the proposed transaction

is consistent with the policy of each

registered investment company

concerned; and (c) the proposed

transaction is consistent with the

general purposes of the Act. Section

57(c) permits the SEC to exempt a

proposed transaction from sections 57(a)

(1), (2), and (3) using substantially the

same standard imposed by section 17(b).

Sections 17(a) and 57(a)

1. Section 17(a) of the Act generally

prohibits sales or purchases of securities

between registered investment

companies and any affiliated person of

that company. Paragraphs (1), (2), and

(3) of section 57(a) impose substantially

the same prohibitions on transactions

between BDCs and certain of their

affiliates, including any director, officer,

or employee of a BDC and any entity

controlled by a director, officer, or

employee of a BDC.

2. Medallion will be an affiliated

person of its Subsidiaries by reason of

its ownership of all their voting stock,

and the Subsidiaries will be affiliated

persons of Medallion and of each other

by reason of their common control by

Medallion. Applicants believe that

Media and another Subsidiary that

Medallion may organize in the future

(‘‘Newco’’) will be fully-owned

subsidiaries, as defined in rule 17a–3,

and, therefore, transactions between

each of them and Medallion will be

exempt from section 17(a) under rule

17a–3.2 In addition, applicants believe

that additional investments in any of the

Subsidiaries by Medallion in the form of

stock purchases, capital contributions or

loans do not violate section 17(a) since

the seller (a Subsidiary) will be the

issuer of any securities issued and will

be controlled by the purchaser

(Medallion). Applicants believe,

however, that loans from the SBA

Subsidiaries to Medallion will not be

exempt from section 17(a), as such
Federal Register / Vol. 61, No. 84 / Tuesday, April 30, 1996 / Notices 19099

3Applicants believe that such transactions would

be exempt from the perspective of medallion under

rules 57b–1 and 17a–6, since the SBA Subsidiaries

will be ‘‘downstream affiliated persons’’ of

Medallion. Applicants also believe that transactions

between the SBA Subsidiaries and Media or Newco

also would be exempt under rule 17a–6.

Subsidiaries will not be fully-owned

and the lender (the SBA Subsidiary)

will be controlled by the borrower

(Medallion). Accordingly, absent an

exemptive order, such loans could be

deemed to violate section 17(a).

3. Applicants also believe that from

the perspective of the SBA Subsidiaries,

purchases and sales of portfolio

securities between Medallion and the

SBA Subsidiaries also would be

violations of section 17(a) as such

transactions would not involve

securities issued by Medallion or the

SBA Subsidiaries.3 Since Medallion, an

‘‘upstream affiliated person,’’ would be

a participant to such transactions, the

exemption provided by rule 17a–6

would not be available.

4. Applicants believe that small

business or other concerns (‘‘Portfolio

Companies’’) to which loans may be

made by Medallion or the SBA

Subsidiaries, which may become

affiliated persons of Medallion and/or

the SBA Subsidiaries, may borrow from,

or sell securities issued by such

concerns to, Medallion and the SBA

Subsidiaries. Such transactions may be

prohibited by section 17(a), since (a) in

the case of a sale of securities by a

Portfolio Company, the sale may not be

part of a general offering to as class of

the issuer’s stockholders, or (b) in the

case of a loan, the Portfolio Company

may not be controlled by Medallion or

the SBA Subsidiaries. In addition, such

transactions may violate section 57(a)

since rule 57b–1 only exempts

transactions with affiliates of

downstream affiliates of a BDC that are

affiliated within the meaning of section

2(a)(3) (C) or (D). Accordingly,

transactions between Medallion and

Portfolio Companies of which an SBA

Subsidiary owns 5% of the outstanding

voting securities would not be exempted

by rule 57b–1.

5. Applicants believe that the

requested relief from sections 17(a) and

57(a) (1), (2), and (3) meets the

standards for relief because the SBA

Subsidiaries will be wholly-owned by

Medallion and because no officers or

directors of Medallion, the SBA

Subsidiaries or any controlling persons

or other ‘‘upstream affiliated persons’’ of

Medallion will have any financial

interest (other than as shareholders of

Medallion) in (a) transactions with

Portfolio Companies which may become

affiliates of Medallion and/or the SBA

Subsidiaries and (b) the purchase and

sale of securities or other property or the

borrowing of money or other property

solely between Medallion and its SBA

Subsidiaries, there can be no

overreaching on the part of any person

and no harm to the public interest will

occur in such transactions.

Sections 17(d) and 57(a)(4) and Rule

17d–1

1. Section 17(d) and rule 17d–1 make

it unlawful for an affiliated person of a

registered investment company or any

affiliated person of such person, acting

as principal, to participate in or effect

any transaction in connection with any

joint enterprise or arrangement in which

any such registered company or a

company controlled by it is a

participant, unless an application

respecting such transaction has been

granted by the SEC. Section 57(a)(4)

imposes substantially the same

prohibitions on joint transactions

involving BDCs and certain of their

affiliates, including any director, officer

or employee of a BDC and any entity

controlled by a director, officer, or

employee of a BDC. Section 57(i)

provides that the rules and regulations

under section 17(d) shall apply to

transactions subject to section 57(a)(4)

in the absence of rules under that

section. No rules with respect to joint

transactions have been adopted under

section 57(a)(4) and, therefore, the

standards set forth under rule 17d–1

govern the order requested herein.

2. In passing upon applications filed

pursuant to rule 17d–1, the SEC is

directed by rule 17d–1(b) to consider

whether the participation of the

registered investment company in a

joint enterprise or arrangement is

consistent with the provisions, policies

and purposes of the Act and the extent

to which such participation is on a basis

different from or less advantageous than

that of other participants.

3. The proposed Merger and the

transactions contemplated thereby in

which Tri-Magna, MFC, Medallion, the

Affiliated Advisers, Alvin Murstein, and

Andrew Murestein will participate may

be deemed to be a joint enterprise or

transaction in which they have a joint

participation in the profits. In addition,

applicants believe that it may become

necessary or desirable for Medallion and

its Subsidiaries to participate together

with third persons which have no other

affiliation with Medallion or its

Subsidiaries in joint transactions such

as investments in the same or different

securities of the same issuer, either

simultaneously or sequentially. Section

17(d) and rule 17d–1 may prohibit such

joint participation by Medallion and the

SBA Subsidiaries. Accordingly,

applicants request an order of the SEC

under sections 17(d) and 57(a)(4) of the

Act and rule 17d–1 thereunder

permitting Medallion and the SBA

Subsidiaries to participate in any joint

enterprise or joint arrangement

involving other participants only to the

extent that any such transaction would

not be prohibited if Medallion and the

SBA Subsidiaries were not separate

companies.

4. Applicants believe that transactions

with the Portfolio Companies would not

result in overreaching on the part of any

person. Applicants also believe that

there can also be no overreaching on the

part of any person and no harm to the

public interest will occur in the

purchase and sale of securities or other

property or the borrowing of money or

other property between Medallion and

its SBA Subsidiaries, so long as

Medallion and its Subsidiaries are the

sole participants in such transactions

because Medallion will own all the

voting stock of the SBA Subsidiaries

and, together, all three entities will in

effect operate as a single economic unit.

In addition, since the SBA Subsidiaries

will have the same fundamental

investment policies as those of

Medallion, such transactions will be

consistent with the fundamental

policies of both. Finally, applicants

believe that the relief requested herein

is consistent with the purposes of the

Act.

Applicants’ Conditions

As a condition to the granting of the

exemptive relief sought, each of

Medallion and the SBA Subsidiaries

will comply with the following

conditions:

1. Medallion will at all times own and

hold beneficially and of record all of the

outstanding voting capital stock of the

SBA Subsidiaries.

2. The SBA Subsidiaries will have the

same fundamental investment policies

as those of Medallion, as set forth in

Medallion’s registration statement; the

SBA Subsidiaries will not engage in any

other action described in section 13(a)

of the Act, unless such action shall have

been authorized by Medallion after

approval of such action by a vote of a

majority (as defined in the Act) of the

outstanding voting securities of

Medallion.

3. Medallion will not cause or permit

the SBA Subsidiaries to enter into,

renew or perform any investment

advisory or underwriting contract or

agreement, written or oral, as

contemplated by section 15 of the Act,

unless the terms of any such contract or

agreement and any renewal thereof shall
19100 Federal Register / Vol. 61, No. 84 / Tuesday, April 30, 1996 / Notices

have been approved in compliance with

said section 15; and where any vote of

the stockholders of the SBA

Subsidiaries would be required by said

section 15, unless the stockholders of

Medallion also shall have approved the

same by a vote of a majority (as defined

in the Act) of the outstanding voting

securities of Medallion; or where any

action of the directors of the SBA

Subsidiaries would be required by said

section 15, unless the board of directors

of Medallion, including a majority of

those directors who are not parties to

any such contract or agreement or

interested persons of any such party,

also shall have approved the same.

4. Medallion will not, and will not

cause or permit any SBA Subsidiary to,

issue any senior security or sell any

senior security of which Medallion or

any SBA Subsidiary is the issuer except

as hereinafter set forth:

(a) each of the SBA Subsidiaries may

continue to have outstanding and may

issue additional shares of its preferred

stock to the SBA in accordance with

applicable SBA regulations; and

(b) Medallion and each SBA

Subsidiary may issue and sell to banks,

insurance companies, and other

financial institutions its secured or

unsecured promissory notes or other

evidences of indebtedness in

consideration of any loan, or any

extension or renewal thereof made by

private arrangement, and each SBA

Subsidiary may issue debt securities

held or guaranteed by the SBA,

provided the following conditions are

met:

(i) such notes or evidences of

indebtedness are not intended to be

publicly distributed,

(ii) such notes or evidences of

indebtedness are not convertible into,

exchangeable for, or accompanied by

any options to acquire, any equity

security, and

(iii) immediately after the issuance or

sale of any such notes or evidences of

indebtedness, Medallion and its

Subsidiaries on a consolidated basis,

and Medallion, individually, shall have

the asset coverage required by section

18(a) of the Act, (as modified by section

61(a) for Medallion), except that, in

determining whether Medallion and its

Subsidiaries on a consolidated basis

have the asset coverage required by

section 18(a) of the Act (as modified by

section 61(a)), any SBA preferred stock

interest in the SBA Subsidiaries and any

borrowings by the SBA Subsidiaries

shall not be considered senior securities

and, for purposes of the definition of

‘‘asset coverage’’ in section 18(h), shall

be treated as indebtedness not

represented by senior securities.

5. No person shall serve as a director

of any SBA Subsidiary who shall not

have been elected as a director of

Medallion at its most recent annual

meeting, as contemplated by section

16(a) of the Act and subject to the

provisions thereof relating to the filling

of vacancies. Notwithstanding the

foregoing, the board of directors of each

SBA Subsidiary will be elected by

Medallion as sole stockholder.

6. Any small business or other

concern to which loans may be made by

Medallion or any of the SBA

Subsidiaries, which may become an

affiliated person of Medallion and/or

the SBA Subsidiaries, may borrow from,

or sell securities issued by it to,

Medallion and the SBA Subsidiaries,

provided that such transaction meets

the requirements for an exemption

pursuant to rule 17a–6 promulgated

pursuant to the Act, except to the extent

that it fails to meet the requirements of

such rule solely because another

member of the group of Medallion and

its SBA Subsidiaries is also a party to

the transaction or has, or within 6

months prior to the transaction had, or

pursuant to an arrangement will

acquire, a direct or indirect financial

interest in the small business or other

concern. In addition, Medallion and the

SBA Subsidiaries may effect purchases

and sales of securities and other

property or the borrowing of money or

other property, provided that Medallion

and its SBA Subsidiaries are the sole

participants in such transactions.

7. Medallion and its SBA

Subsidiaries, as a group or individually,

may participate in any join enterprise or

joint arrangement involving other

participants, provided that such

transaction meets the requirements for

an exemption pursuant to rule 17d–1

except to the extent it fails to meet the

requirements of such rule solely because

any of Medallion and its SBA

Subsidiaries as a group are, or propose

to be, participants in the joint enterprise

or joint arrangement.

8. Medallion will acquire securities of

its SBA Subsidiaries representing

indebtedness only if, in each case, the

prior approval of the SBA has been

obtained. Medallion and its SBA

Subsidiaries will purchase and sell

portfolio securities between themselves

only if, in each case, the prior approval

of the SBA has been obtained.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–10644 Filed 4–29–96; 8:45 am]

BILLING CODE 8010–01–M

[Investment Company Act Rel. No. 21913;

International Series Rel. No. 973; 812–9846]

The Mexico Equity and Income Fund,

Inc.; Notice of Application

April 24, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (‘‘Act’’).

APPLICANT: The Mexico Equity and

Income Fund, Inc. (‘‘Fund’’).

RELEVANT ACT SECTIONS: Order requested

under section 10(f) granting an

exemption from that section.

SUMMARY OF APPLICATION: Applicant

seeks an order that would permit it to

purchase securities in underwritten

public offerings in Mexico in which an

affiliated person of its Mexican

investment adviser or U.S. co-adviser

participates as a principal underwriter.

FILING DATES: The application was filed

on November 8, 1995, and amended on

March 29, 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 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

May 20, 1996, and should be

accompanied by proof of service on

applicant, 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 such notification

by writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, N.W., Washington, D.C. 20549.

Applicant, 200 Liberty Street, New

York, New York 10281.

FOR FURTHER INFORMATION CONTACT:

Courtney S. Thornton, Senior Counsel,

at (202) 942–0583, 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.

Applicant’s Representations

1. The Fund, a Maryland corporation,

is a closed-end management investment

company registered under the Act. The