[Federal Register Volume 59, Number 193 (Thursday, October 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-24799]


[[Page Unknown]]

[Federal Register: October 6, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-20594; 812-9180]

 

Great Hall Value Ten Trust, Series 1, et al.; Notice of 
Application

September 30, 1994.
Agency: Securities and Exchange Commission (``SEC'').

Action: Notice of application for exemption under the Investment 
Company Act of 1940 (the ``Act'').

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Applicants: Great Hall Value Ten Trust, Series 1 (the ``Rollover 
Trust'') and Insight Investment Management, Inc.

Relevant Act Sections: Order requested under sections 11(a) and 11(c).

Summary of Application: Applicants request an order to permit certain 
offers of exchange of units of a terminating Rollover Trust series for 
units of subsequently offered Rollover Trust series.

Filing Date: The application was filed on August 19, 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 
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 October 25, 
1994, 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 5th Street, NW., Washington, DC 20549. 
Applicants: 60 South 6th Street, Minneapolis, MN 55402-4422.

For Further Information Contact: Elaine M. Boggs, Staff Attorney (202) 
942-0572, 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 is available for a fee at the 
SEC's Public Reference Branch.

Applicants' Representations

    1. The Rollover Trust will consist of a series of unit investment 
trusts (the `Series'') registered under the Act. The units representing 
undivided interests in each Series will be registered under the 
Securities Act of 1933. The Rollover Trust is sponsored by Insight 
Investment Management (``Insight''). Applicants also request relief for 
subsequent series of the Rollover Trust sponsored by Insight or a 
sponsor controlled by or under common control with Insight.
    2. Each Series will pursue an investment objective which is 
consistent with a specified investment philosophy. For example, the 
first Series will consist of a portfolio of commons stocks of the ten 
companies in the Dow Jones Industrial Average having the highest 
dividend yield as of the opening day of business on the day prior to 
the initial date of deposit for such Series.
    Insight intends to maintain a secondary market for the units of 
each Series, although it is not obligated to do so.
    3. Each Series will terminate on a date (the ``Mandatory 
Termination Date'') which is a specified term (e.g., one, three or five 
years) after the Series' initial date of deposit. Commencing on the 
Mandatory Termination Date, the common stocks held in the portfolio 
(``Equity Securities'') will be sold in connection with termination of 
the Series. Insight will determine the manner, timing and execution of 
the sale of the Equity Securities. A specified number of days prior to 
the Mandatory Termination Date of the Trust, the trustee will provide 
notice thereof to all unit holders.
    4. Absent an election discussed below, unit holders will receive a 
cash distribution evidencing their pro rata share of the proceeds from 
the liquidation of the Equity Securities in the Series. Unit holders 
who own at least a specified number of units (e.g., 2,500 units), 
however, may elect to receive a distribution of Equity Securities in 
connection with the termination of the Trust.
    5. Unit holders may elect alternatively to have all of their units 
redeemed in kind on a predetermined date prior to the Mandatory 
Termination Date, and to have the distributed Equity Securities sold by 
the trustee, and the proceeds of such sale reinvested in the units of a 
new Series (the ``Reinvestment Trust Series'') at a reduced sales 
charge. The option of unit holders to make such election is referred to 
as the ``Rollover Option,'' and unit holders making such election are 
referred to as ``Rollover Unit Holders''. The portfolio of the 
Reinvestment Trust Series will contain a specified number of common 
stocks selected by Insight pursuant to the same investment philosophy 
which was followed in selecting the common stocks in the terminating 
Series. The number of common stocks in the Reinvestment Trust Series 
and the approximate duration of the Reinvestment Trust Series will be 
the same as those of the terminating Trust Series.
    6. The applicable sales charge upon the initial investment in the 
Rollover Trust will be 2.95% of the public offering price, while the 
reduced sales charge applicable to Rollover Unit Holders will be no 
more than 2.0% of the public offering price.

Applicant's Legal Analysis

    1. Section 11(a) requires SEC approval of an offer to exchange 
securities between open-end investment companies if the exchange occurs 
on any basis other than the relative net asset values of the securities 
to be exchanged. Section 11(c) makes section 11(a) applicable to any 
type of exchange offer of securities of registered unit investment 
trusts for the securities of any other investment company, irrespective 
of the basis of exchange.
    2. Applicants represent that Rollover Unit Holders will not be 
induced or encouraged to participate in the Rollover Option through an 
active advertising or sales campaign. Insight recognizes its 
responsibility to its customers against generating excessive 
commissions through churning and claims that the sales charge collected 
will not be a significant economic incentive to salesmen to promote 
inappropriately the Rollover Option. Applicants further believe that 
the Rollover Option is 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's Conditions

    If the requested order is granted, applicants agree to the 
following conditions:
    1. Whenever the Rollover Option is to be terminated or its terms 
are to be amended materially, any holder of a security subject to that 
privilege will be given prominent notice of the impending termination 
or amendment at least 60 days prior to the date of termination or the 
effective date of the amendment, provided that:
    a. No such notice need to be given if the only material effect of 
an amendment is to reduce or eliminate the sales charge payable at the 
time of a rollover; and
    b. No notice need to be given if, under extraordinary 
circumstances, either
    i. There is a suspension of the redemption of units of the Rollover 
Trust under section 22(e) of the Act and the rules and regulations 
thereunder, or
    ii. A Reinvestment Trust Series temporarily delays or ceases the 
sale of its units because it is unable to invest amounts effectively in 
accordance with applicable investment objectives, policies and 
restrictions.
    2. The sales charge collected at the time of any rollover shall not 
exceed 2.0% of the public offering price of the unit being acquired on 
each rollover.
    3. The prospectus of each Reinvestment Trust Series and any sales 
literature or advertising that mentions that existence of the Rollover 
Option will disclose that the Rollover Option is subject to 
modification, termination or suspension.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-24799 Filed 10-5-94; 8:45 am]
BILLING CODE 8010-01-M