[Federal Register Volume 59, Number 106 (Friday, June 3, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13516]
[[Page Unknown]]
[Federal Register: June 3, 1994]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Rel. No. 20321; 811-5827]
Templeton Tax Free Trust; Notice of Application
May 27, 1994.
Agency: Securities and Exchange Commission (``SEC'').
Action: Notice of Application for Exemption under the Investment
Company Act of 1940 (``Act'').
-----------------------------------------------------------------------
Applicant: Templeton Tax Free Trust.
Relevant Act Section: Section 8(f).
Summary of Application: Applicant seeks an order declaring that it has
ceased to be an investment company.
Filing Date: The application was filed on March 31, 1994, and amended
on May 20, 1994.
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 June 22, 1994,
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: Secetary, SEC, 450 Fifth Street NW., Washington, DC 20549.
Applicant, 700 Central Avenue, St. Petersburg, Florida 33701-3628.
For Further Information Contact: Courtney S. Thornton, Senior Attorney,
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.
Applicant's Representations
1. Applicant, an open-end non-diversified management investment
company, is organized as a business trust under the laws of the
Commonwealth of Massachusetts. On July 19, 1989, applicant filed a
notification of registration on Form N-8A under section 8(a) of the
Act, and a registration statement on Form N-1A under section 8(b) of
the Act and the Securities Act of 1933. The registration statement
became effective on September 15, 1989, and the public offering of
applicant's shares commenced on that date.
2. At a meeting held on February 27, 1993, applicant's board of
trustees approved agreements and plans of reorganization providing for
the transfer of all of the assets of applicant's two series to two
other investment companies. These agreements provided for the transfer
of all of the assets of (1) Templeton Insured Tax Free Fund
(``Templeton Insured'') to Franklin Insured Tax-Free Income Fund
(``Franklin Insured''), a series of Franklin Tax-Free Trust, in
exchange for shares of Franklin Insured, and (2) Templeton Tax Free
Money Fund (``Templeton Money'') to Franklin Tax-Exempt Money Fund
(``Franklin Money'') in exchange for shares of Franklin Money.
3. The trustees determined that the proposed reorganizations were
in the best interests of the shareholders of each series because they
would permit shareholders to pursue their investment goals in larger
funds, which would have enhanced ability to effect portfolio
transactions on more favorable terms and should have greater investment
flexibility. The trustees also decided that the reorganizations would
enable shareholders to obtain the benefits of economies of scale.
4. Templeton Global Bond Managers (``Templeton Global''), a
division of Templeton Investment Counsel, Inc. (``TICI''), is the
investment adviser for Templeton Insured and Templeton Money. Franklin
Advisers, Inc. is the investment adviser for Franklin Insured and
Franklin Money. TICI and Franklin Advisers, Inc. are wholly owned
subsidiaries of Franklin Resources, Inc. Accordingly, Templeton Insured
and Franklin Insured, and Templeton Money and Franklin Money, may be
deemed to be affiliated persons by reason of being under the control of
investment advisers that are themselves under common control. Applicant
therefore relied on the exemption provided by rule 17a-8 under the Act
to effect the transaction.\1\ Consequently, the trustees determined, in
accordance with rule 17a-8, that the purchase of the assets of the two
series by Franklin Insured and Franklin Money was in the best interests
of the shareholders of the series, and that such purchases would not
result in any dilution to the interests of the existing shareholders of
the series.
---------------------------------------------------------------------------
\1\Rule 17a-8 provides relief from the affiliated transaction
prohibition of section 17(a) of the Act for a merger of investment
companies that may be affiliated persons of each other solely by
reason of having a common investment adviser, common directors, and/
or common officers. The staff of the Division of Investment
Management has stated that it would not recommend that the
Commission take enforcement action under section 17(a) of the Act if
investment companies that are affiliated persons solely by reason of
having investment advisers that are under common control rely on
rule 17a-8. See, e.g., Capitol Mutual Funds and Nations Fund Trust
(pub. avail. Feb. 24, 1994).
---------------------------------------------------------------------------
5. A registration statement on Form N-14 was filed with the SEC on
May 28, 1993, and the proxy statement/prospectus contained therein was
furnished to applicant's shareholders on or about July 15, 1993. The
holders of a majority of the outstanding voting shares of each of
Templeton Insured and Templeton Money approved agreements and plans of
reorganization with Franklin Insured and Franklin Money, respectively,
at a special meeting of shareholders held on August 27, 1993.
6. On August 27, 1993, there were 18,793,312 shares with a net
asset value of $1 per share of Templeton Money. On that date, Franklin
Money acquired all of the assets of Templeton Money in exchange for
shares of Franklin Money. The number of full and fractional shares that
were exchanged for the assets of Templeton Money was determined by
dividing the net asset value per share of Templeton Money as of that
date by the net asset value per share of Franklin Money. The result was
then multiplied by the number of outstanding shares of Templeton Money.
Immediately following the acquisition, Templeton Money dissolved and
distributed the shares of Franklin Money pro rata to its shareholders
of record.
7. On August 27, 1993, there were 2,773,418 shares with a net asset
value of $11.7566 per share of Templeton Insured, which had aggregate
net assets of $32,605,919. On that date, Templeton Insured distributed
to its shareholders $.085 per share of net investment income and $.03
per share of net realized capital gains. Shortly thereafter, Franklin
Insured acquired all of the assets of Templeton Insured in exchange for
shares of Franklin Insured. The number of full and fractional shares of
Franklin Insured that were exchanged for the assets of Templeton
Insured was determined by dividing the net asset value per share of
Templeton Insured as of that date by the net asset value per share of
Franklin Insured. The result was then multiplied by the number of
outstanding shares of Templeton Insured. Immediately following the
acquisition, Templeton Insured dissolved and distributed the shares of
Franklin Insured pro rata to its shareholders of record.
8. The expenses attributable to the acquisition of Templeton
Insured by Franklin Insured, including printing and mailing costs for
proxy statements and related documents, amounted to $12,565.77.
Templeton Global, Franklin Advisers, Inc., Templeton Insured, and
Franklin Insured each paid one quarter of this amount. The expenses
attributable to the acquisition of Templeton Money by Franklin Money,
including printing and mailing costs for proxy statements and related
documents, amounted to $16,860.82. Templeton Global, Franklin Advisers,
Inc., Templeton Money, and Franklin Money each paid one quarter of this
amount.
9. At the time of the application, applicant had no shareholders,
assets, or liabilities, nor was it a party to any litigation or
administrative proceedings. Applicant is not engaged in, nor does it
propose to engage in, any business activities other than those
necessary for the winding-up of its affairs.
10. Applicant intends to file a certificate of dissolution in
accordance with the laws of the Commonwealth of Massachusetts.
For the SEC, by the Division of Investment Management, under
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-13516 Filed 6-2-94; 8:45 am]
BILLING CODE 8010-01-M