[Federal Register Volume 63, Number 236 (Wednesday, December 9, 1998)]
[Notices]
[Pages 67952-67954]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32599]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 23582; 812-11330]
Select Advisors Trust A, et al.; Notice of Application
December 2, 1998.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of application for exemption under section 17(b) of the
Investment Company Act of 1940 (the ``Act'') from section 17(a) of the
Act.
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SUMMARY OF APPLICATION: The requested order would permit a
reorganization involving certain registered investment companies.
APPLICANTS: Select Advisors Trust A (``Trust A''), Select Advisors
Trust C (``Trust C''), Select Advisors Portfolio (``Advisors Trust''),
The Western and Southern Life Insurance Company (``Western Southern
Life''), and The Western and Southern Life Insurance Company Separate
Account A (``SAA'').
FILING DATES: The application was filed on September 28, 1998.
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 December 28,
1998, 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, Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549. Applicants, 400 Broadway, Cincinnati, Ohio, 45202.
FOR FURTHER INFORMATION CONTACT:
Bruce R. MacNeil, Staff Attorney, at (202) 942-0634, or Edward P.
Macdonald, 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, 450 5th Street, N.W., Washington, D.C.
20549 (tel. no. 202-942-8090).
[[Page 67953]]
Applicant's Representations
1. Trust A and Trust C are each an open-end management investment
company registered under the Act. Trust A is comprised of eight series
(each a ``Trust A Fund'').1 Trust C is comprised of seven
series (each a ``Trust C Fund''). Trust A and Trust C are organized as
Massachusetts business trusts. Each Trust A fund and Trust C Fund
invests all of its investable assets in a corresponding series of
Advisors Trust. Advisors Trust, organized as a New York trust, is
registered under the Act as an open-end management investment company.
Advisors Trust is comprised of nine series, seven of which will be
involved in the proposed reorganization. Trust A, Trust C and Advisors
Trust are referred to collectively as the ``Trusts.'' Touchstone
Advisors, Inc. (``Touchstone''), registered under the Investment
Advisers Act of 1940, serves as the investment adviser to Advisors
Trust. Touchstone is a wholly owned subsidiary of Western Southern
Life. Western Southern Life owns more than 5%, and in some cases, more
than 25% of each Trust A Fund and Trust C Fund.
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\1\ One series of Trust A, Standby Income Fund, is not involved
in the proposed reorganization. Applicants do not seek relief with
respect to this series.
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2. SAA is a separate account of Western Southern Life. SAA holds
the assets of the Western Southern Life defined benefit employee
pension plan. SAA is exempt from registration under the Act.
3. On June 18, 1998, the board of trustees of each Trust (each a
``Board''), including a majority of the trustees who are not interested
persons of the Trusts (the ``Independent Trustees''), considered and
approved an agreement and plan of reorganization (``Plan''). Under the
Plan, Trust A, Trust C and SAA will redeem in-kind all of their
respective interests in Advisors Trust by distributing portfolio
securities on a pro rata basis from Advisors Trust to Trust A, Trust C
and SAA.
4. Each Trust A Fund will establish three classes of shares--Class
A, Class C and Class Y. Existing shareholders of each Trust A Fund will
own Class A shares. Trust A will exchange Class C shares for the assets
of Trust C that it received from Advisors Trust, and Class Y shares for
the assets of SAA that it received from Advisors Trust. Trust A shares
delivered to the shareholders of Trust C will have an aggregate net
asset value equal to the aggregate net asset value of Trust C shares
held by the shareholders prior to the transaction. These transactions
are collectively referred to as the ``Reorganization.''
5. On November 3, 1998, Trust A filed with the Commission Post-
Effective Amendment No. 8 to its registration statement in which it
added Class C and Class Y shares. Class C shares of Trust A will have
an identical distribution arrangements structure to that of Trust C. No
sales charge will be imposed in connection with the acquisition of
Trust A shares by the shareholders of Trust C. Applicants state that
the investment objectives, policies and restrictions of each Trust C
Fund are identical to those of the acquiring Trust A Fund.
6. The Reorganization is presently expected to occur on or about
December 31, 1998. The expenses of the proposed Reorganization will be
borne by Touchstone.
7. The Boards, including a majority of the Independent Trustees,
determined that the Reorganization is in the best interests of the
shareholders of Trust A and Trust C and that the interests of the
existing shareholders of Trust A and Trust C would not be diluted as a
result of the Reorganization. In assessing the Reorganization, the
Boards considered, among other factors: (1) the business objectives and
purposes of the Reorganization, (2) the terms and conditions of the
Plan, including the allocation of expenses of the Reorganization, and
(3) the tax-free nature of the Reorganization.
8. The Reorganization is subject to a number of conditions
precedent, including that: (a) definitive proxy solicitation materials
will have been filed with the Commission and distributed to
shareholders of Trust C; (b) Trust C shareholders will have approved
the Reorganization; (c) Trust A and Trust C will have received an
opinion of tax counsel that the proposed Reorganization will be tax-
free for each Trust A Fund and Trust C Fund and its shareholders; and
(d) applicants will have received from the Commission an exemption from
section 17(a) of the Act for the Reorganization. The Plan may be
terminated and the Reorganization abandoned at any time by mutual
consent of the respective Boards of the Trust A and Trust C. Applicants
agree not to make any material changes to the Plan without prior
Commission approval.
9. Definitive proxy solicitation materials were filed with the
Commission on September 29, 1998 and mailed to the Trust C shareholders
on October 2, 1998. A special meeting of Trust C shareholders was held
on October 29, 1998, and November 19, 1998, and the Reorganization was
approved.
Applicants' Legal Analysis
1. Section 17(a) of the Act generally prohibits an affiliated
person of a registered investment company, or an affiliated person of
that person, acting as principal, from selling any security to, or
purchasing any security from, the company. Section 2(a)(3) of the Act
defines an ``affiliated person'' of another person to include (a) any
person directly or indirectly owning, controlling, or holding with
power to vote 5% or more of the outstanding voting securities of the
other person; (b) any person 5% or more of whose securities are
directly or indirectly owned, controlled, or held with power to vote by
the other person; (c) any person directly or indirectly controlling,
controlled by or under common control with the other person, and (d) if
the other person is an investment company, any investment adviser of
that company. Under section 2(a)(9) of the Act a person who owns 25% or
more of the outstanding voting securities of a company is presumed to
control the company.
2. Section 17(b) of the Act provides that the Commission may exempt
a transaction from the provisions of section 17(a) if the 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 each registered investment
company concerned and with the general purposes of the Act.
3. Applicants state that the in-kind redemption of shares of
Advisors Trust by Trust A, Trust C, and SAA may be prohibited by
section 17(a) because Trust A, Trust C, and SAA each own more than 5%
of Advisors Trust and Western Southern Life owns more than 5% of each
of the Trusts and SAA. To the extent the redemption in-kind is deemed a
purchase and sale of the portfolio securities of Advisors Trust,
Applicants request an exemption under section 17(b). Applicants state
that the standards of section 17(b) are met because the redemption will
involve a pro rata distribution of the Advisors Trust portfolio, which
will be valued in the same manner in which the net asset value of
Advisors Trust is determined. Applicants further state that the
transaction has been approved by the Boards of the Trusts and is
consistent with the policies of each Trust.
4. Applicants also request an exemption under section 17(b) to
permit the merger of Trust C into Trust A and the transfer of assets
received by SAA from Advisors Trust to Trust A, in
[[Page 67954]]
exchange for shares of Trust A. Applicants submit that the terms of the
proposed Reorganization meet the standards set forth in section 17(b).
Applicants state that the Reorganization has been approved by the
Boards and the shareholders of Trust C, that it will be effected on the
basis of relative net asset values, and that it is consistent with the
policies of the Trusts.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-32599 Filed 12-8-98; 8:45 am]
BILLING CODE 8010-01-M