[Federal Register Volume 60, Number 24 (Monday, February 6, 1995)]
[Notices]
[Pages 7088-7089]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2818]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-20870 / 812-9430]
The Dreyfus/Laurel Funds, Inc. et al.; Notice of Application
January 30, 1995.
agency: Securities and Exchange Commission (``SEC'').
action: Notice of Application for Exemption under the Investment
Company Act of 1949 (the ``Act'').
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applications: The Dreyfus/Laurel Funds, Inc. (``Dreyfus/Laurel Funds'')
and The Dreyfus/Laurel Investment Series (``Dreyfus/Laurel Series'').
relevant act sections: Order requested under section 17(b) granting an
exemption from section 17(a), and under section 17(d) and rule 17d-1
permitting certain joint transactions.
summary of application: Applicants request an order to permit Dreyfus
International Equity Allocation Fund (the ``Acquiring Fund''), a series
of Dreyfus/Laurel Funds, to acquire all of the assets of Dreyfus/Laurel
International Fund (the ``Acquired Fund''), a series of Dreyfus/Laurel
Series. (The Acquiring Fund and the Acquired Fund are referred to
individually as a ``Fund'' and collectively as the ``Fund.'') Because
of certain affiliations, the two series may not rely on rule 17a-8
under the Act.
filing date: The application was filed on January 11, 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
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 February 24,
1995, 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 notification by writing to the
SEC's Secretary.
addresses: Secretary, SEC, 450 Fifth Street, NW., Washington, DC 20549.
Applicant, 200 Park Avenue, New York, New York 10166.
for further information contact: Deepak T. Pai, Staff Attorney, at
(202) 942-0574, 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. The Acquiring Fund is one of nineteen series of Dreyfus/Laurel
Funds, a Maryland corporation. Dreyfus/Laurel Funds is registered as an
open-end management investment company and the shares of the Acquiring
Fund are registered under the Securities Act of 1933. The Acquired Fund
is one of three series of Dreyfus/Laurel Series, a Massachusetts
business trust. Dreyfus/Laurel Series is registered as an open-end
management investment company and the shares of the Acquired Fund are
registered under the Securities Act.
2. The Dreyfus Corporation (``Dreyfus'') serves as the investment
manager to each Fund. Dreyfus is a wholly-owned subsidiary of Mellon
Bank, N.A. (``Mellon''), which in turn is a wholly-owned subsidiary of
Mellon Bank Corporation.
3. Mellon holds with power to vote more than 50% of the outstanding
shares of the Acquiring Fund and controls Dreyfus. The Acquiring Fund
currently offers two classes of shares, Investor Class shares and Class
R shares. Class R shares are sold primarily to bank trust departments
and other financial service providers. The objective of the Acquiring
Fund is to exceed the total return of the Morgan Stanley Capital
International--Europe Australia Far East Index benchmark through active
stock selection, country allocation and currency allocation. The
Acquired Fund, currently offering only Investor Class shares, seeks
long-term growth in capital by investing in common stocks and
securities convertible into common stock of companies located outside
the United States. Neither Fund imposes a sales charge in connection
with the purchase or redemption of shares.
4. The Acquiring Fund proposes to acquire all or substantially all
of the assets of the Acquired Fund in exchange for Investor Class
shares of the Acquiring Fund on or about May 1, 1995, the closing date.
The number of full and fractional Investor Class shares of the
Acquiring Fund to be issued to shareholders of the Acquired Fund will
be determined on the basis of the relative net asset values of the
Acquired Fund and the Acquiring Fund. After the closing date, the
Acquired Fund will liquidate and distribute pro rata to its
shareholders of record the Investor Class shares of the Acquiring Fund
received by it in the reorganization. After such distribution and the
winding up of its affairs, the Acquired Fund will be terminated.
5. An agreement and plan of reorganization (the ``Reorganization
Agreement'') was unanimously approved by the board of directors of
Dreyfus/Laurel Funds, including the non-interested directors, and by
the board of trustees of the Dreyfus/Laurel Series, including the
independent trustees, on December 20, 1994. In the assessment of the
reorganization and the terms of the Reorganization Agreement, the
factors considered by the boards of Dreyfus/Laurel Funds and Dreyfus/
Laurel Series included: (a) the relative past growth in assets and
investment performance of the Funds; (b) the future prospects of the
Funds, both under circumstances where they are not reorganized and
where they are reorganized; (c) the compatibility of the investment
objectives, policies and restrictions of the Acquiring Fund and the
Acquired Fund; (d) the effect of the reorganization on the expense
ratios of each Fund; (e) the costs of the reorganization to the Funds;
(f) whether any future cost savings could be achieved by combining the
Funds; (g) the tax-free nature of the reorganization; and (h)
alternatives to the reorganization.
6. The Dreyfus/Laurel Series will submit the proposed
reorganization plan to the shareholders of the Acquired Fund for their
approval at a meeting expected to be held in April, 1995. Shareholders
of the Acquired Fund will receive a notice of the special meeting of
shareholders and a prospectus/proxy statement. A majority of the
outstanding shareholders of the Acquired Fund must approve the
reorganization. The expenses of the reorganization will be borne by
Dreyfus. In addition to shareholder approval, the
[[Page 7089]] consummation of the reorganization is conditioned upon
receipt from the SEC of the order requested herein.
Applicants' Legal Analysis
1. Section 17(a) of the Act, in pertinent part, prohibits an
affiliated person of a registered investment company, or any affiliated
person of such a person, acting as principal, from selling to or
purchasing from such registered company, any security or other
property. Section 17(b) provides that the SEC may exempt a transaction
from section 17(a) if evidence establishes that the terms of the
proposed transaction, including the consideration to be paid, are
reasonable and fair and do not involve overreaching on the part of any
person concerned, and that the proposed transaction is consistent with
the policy of the registered investment company concerned and with the
general purposes of the Act.
2. Rule 17a-8 under the Act exempts from the prohibitions of
section 17(a) mergers, consolidations, or purchases or sales of
substantially all the assets involving registered investment companies
that may be affiliated persons, or affiliated persons of an affiliated
person, solely by reason of having a common investment adviser, common
directors/trustees and/or common officers provided that certain
conditions are satisfied.
3. The proposed reorganization may not be exempt from the
prohibitions of section 17(a) by reason of rule 17a-8 because the
Acquiring Fund and the Acquired Fund may be affiliated for reasons
other than those set forth in the rule. Mellon owns 100% of the
outstanding voting securities of Dreyfus, the adviser to the Acquired
Fund. In addition, Mellon holds with power to vote more than 50% of the
outstanding voting securities of the Acquiring Fund. Therefore, the
Acquiring Fund may be deemed an affiliated person of the Acquired Fund
for reasons not based solely on their common adviser.
4. Applicants believe that the terms of the reorganization satisfy
the standards of section 17(b). Each Fund's board, including the
disinterested trustees and directors, has reviewed the terms of the
reorganization and have found that participation in the reorganization
as contemplated by the Reorganization Agreement is in the best
interests of Dreyfus/Laurel Funds, Dreyfus/Laurel Series, and each
Fund, and that the interests of existing shareholders of each Fund will
not be diluted as a result of the reorganization. Each board considered
the compatibility of the investment objectives, policies and
restrictions of the two Funds and found that they were similar in that
both Funds emphasized investment in international equity securities.
5. Section 17(d) prohibits any affiliated person of a registered
investment company, acting as principal, from effecting any transaction
in which such registered investment company is a joint participant with
such person in contravention of SEC rules and regulations. Rule 17d-1
provides that no joint transaction may be consummated unless the SEC
first approves the transaction.
6. The Funds may be affiliated persons of each other, and the
proposed transaction might be deemed to be a joint enterprise or other
joint arrangement. Applicants believe that the terms of the
reorganization are consistent with the provisions, policies and
purposes of the Act in that they are reasonable and fair to all
parties, do not involve overreaching, and are consistent with the
investment policies of each of the Funds. The participation in the
reorganization by each Fund also is not on a basis different from or
less advantageous than that of other participants.
For the Commission, by the Division of Investment Management,
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-2818 Filed 2-3-95; 8:45 am]
BILLING CODE 8010-01-M