[Federal Register Volume 60, Number 125 (Thursday, June 29, 1995)]
[Notices]
[Pages 33887-33889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16052]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-21161; 812-9538]
ASA Limited; Notice of Application
June 23, 1995.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of application for an order under section 7(d) of the
Investment Company Act of 1940 (the ``Act'').
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APPLICANT: ASA Limited.
RELEVANT ACT SECTIONS: Order requested under section 7(d) of the Act.
SUMMARY OF APPLICATION: Applicant, a South African company registered
as an investment company in the United States, requests an order to
allow applicant to appoint Chase Manhattan Bank, N.A. (``Chase'') as
its custodian and to authorize Chase to appoint Standard Bank of South
Africa Limited (``Standard Bank'') as applicant's subcustodian. The
order would supersede prior orders issued under section 7(d) with
respect to applicant's custodial arrangements.
FILING DATE: The application was filed on March 16, 1995 and amended on
June 9, 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 July 18, 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, 36 Wierda Road West, Sandton 2196, South Africa.
FOR FURTHER INFORMATION CONTACT: Felice R. Foundos, Senior Attorney, at
(202) 942-0571, 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.
Applicant's Representations
A. Background
1. ASA Limited (formerly known as American-South African Investment
Company, Ltd) is a South African company and a closed-end, non-
diversified management investment company. On August 13, 1958, the SEC
issued an order (the ``Original Order'') under section 7(d) of the Act
allowing applicant to register as an investment company under the Act
and to make a public offering of its securities in the United
States.\1\ Applicant's custodian is Citibank, N.A. (``Citibank'').
\1\ Investment Company Act Release Nos. 2739 (July 3, 1958)
(notice) and 2756 (Aug. 13, 1958) (order).
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2. The Original Order was issued subject to several conditions,
including several restrictions imposed on applicant concerning the
custody of its assets and the consummation of its portfolio
transactions. The Original Order required applicant to, among other
things, keep all of its assets, except for $75,000 in cash to cover
administrative expenses, in the custody of a bank in the United States.
The $75,000 was kept in a non-interest bearing checking account with a
South African bank. The Original Order also required applicant to
settle all purchases and sales of portfolio securities, other than
those executed on certain established stock exchanges, in the United
States. As a condition to the relief, applicant agreed not to change
its undertakings and agreements contained in the original application,
including its custodian agreement with Citibank, without SEC approval.
Since the Original Order, applicant has received several orders
modifying the restrictions on its custodial arrangements.
3. In 1959, the SEC issued an order allowing applicant to
consummate in South Africa purchases and sales of South African
Treasury Bills from and to the South African Treasury or the
[[Page 33888]]
South African Reserve Bank.\2\ That same year, the SEC issued an order
allowing applicant to purchase securities in South Africa upon the
exercise of rights issued to it as a shareholder of other companies,
provided certain conditions were met.\3\
\2\ Investment Company Act Release Nos. 2817 (Jan. 5, 1959)
(notice) and 2821 (Jan. 20, 1959) (order).
\3\ Investment Company Act Release Nos. 2883 (May 22, 1959)
(notice) and 2886 (June 9, 1959) (order).
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4. In 1981, the SEC issued an order allowing applicant to invest
its cash held in U.S. dollars in time deposits and bank certificates of
deposits.\4\
\4\ Investment Company Act Release Nos. 11669 (Mar. 6, 1981)
(notice) and 11722 (Apr. 7, 1981) (order).
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5. In 1985, the SEC issued an order (the ``1985 Order'') allowing
applicant to purchase portfolio securities issued by non-South African
companies listed on certain foreign stock exchanges and to allow
applicant's custodian to settle such transactions in the country where
the relevant exchange was located. In the event that removal of these
securities becomes prohibited by law or regulation or financially
impracticable, the 1985 Order allows applicant's custodian to appoint
an ``eligible foreign custodian'' as that term is defined by rule 17f-5
or an overseas branch of the custodian, to hold these securities in the
country where the relevant exchange was located, provided certain
conditions were met. The 1985 Order also allowed applicant to maintain
in South Africa up to 3% of its assets in short-term rand denominated
investments issued or guaranteed by the Republic of South Africa and to
authorize its custodian to appoint Barclay's National Bank Limited as
applicant's subcustodian in South Africa to hold these investments,
subject to compliance with rule 17f-5.
6. In 1991, the SEC issued an order to allow applicant to, among
other things, increase from $75,000 to $200,000 the amount of cash
applicant may hold outside of the custody of its United States
custodian and to invest up to 5% of its assets in rand-denominated
interest bearing bank accounts with eligible foreign custodians or
overseas branches of qualified U.S. banks located in South Africa,
provided applicant complies with rule 17f-5. (These orders modifying
the Original Order are referred to as the ``Subsequent Orders'').
7. Citibank plans to relocate its global custody services to
London, England and has informed applicant that it will no longer be
able to serve as applicant's custodian as of July 1, 1995. In view of
the termination of these custody arrangements, applicant seeks to
appoint Chase as its new custodian. On February 3, 1995, applicant's
board of directors approved the appointment of Chase, authorized
applicant's officers to file the application, and complete the new
custodial arrangements upon obtaining SEC approval. Citibank has agreed
to remain applicant's custodian for a limited period after July 1, 1995
pending SEC approval of applicant's new custody arrangements.
B. Relief Requested
1. Applicant requests an order to permit it to enter into a new
custody arrangement with Chase and to permit Chase to appoint Standard
Bank as applicant's South African subcustodian, subject to compliance
with rule 17f-5.
2. Applicant states that it is not requested a change in any of the
material aspects of its existing custody arrangements under the
Original Order as amended by the Subsequent Orders. Applicant, however,
intends that any order granting the relief requested in the application
supersede the Original and Subsequent Orders with respect to
applicant's custodial arrangements. Therefore, applicant reaffirms in
the application its prior representations, undertakings and agreements
in the Original and Subsequent Orders with respect to its custodial
arrangements.
3. Applicant will settle its purchases and sales of portfolio
securities in the United States by use of the mails or means of
interstate commerce, except for:
(a) Purchases and sales on an ``Established Securities Exchange,''
defined as a national securities exchange as defined in section
2(a)(26) of the Act, London Stock Exchange, the Johannesburg Stock
Exchange, the Stock Exchange of Melbourne, Ltd., the Toronto Stock
Exchange, the Tokyo Stock Exchange, and Effektenborsenverein Zurich
Exchange;
(b) Purchase and sales in South Africa of South African Treasury
Bills from and to the South African Treasury or the South African
Reserve Bank; and
(c) Purchases in South Africa of securities upon the exercise of
rights issued to applicant as shareholder of other companies for the
purchase of such securities, provided that (i) the rights so exercised
are offered to applicant as a shareholder in another company on the
same basis as all other holders of the class or classes of shares of
such other company to whom such rights are offered, (ii) the rights
exercised do not exceed 10% of the total amount of the rights offered,
and (iii) the securities purchased pursuant to the exercise, or
securities of the same class, are listed on the Johannesburg Stock
Exchange, or application has been made to such exchange for the listing
thereon of the securities, or it has been publicly announced that
application will be made to such exchange for the listing thereon of
the securities, and applicant has no reason to believe that the listing
will not be effected.
4. Applicant will keep all of its assets (which may include U.S.
dollars invested in time deposits and bank certificates of deposit) in
the custody of a United States custodian, except:
(a) $200,000 in cash maintained in an account with an eligible
foreign custodian or an overseas branch of a qualified U.S. bank
located in South Africa for the purpose of meeting its administrative
expenses;
(b) Up to 3% of applicant's assets in short-term rand denominated
investments issued or guaranteed by the Republic of South Africa;
(c) Up to 5% of applicant's assets in rand-denominated interest-
bearing accounts with eligible foreign custodians or overseas branches
of qualified U.S. banks located in South Africa;
(d) If removal of securities purchased on an Established Securities
Exchange in Japan, Australia, Switzerland, and Canada becomes either
prohibited by law or regulation or financially impracticable, up to 5%
of applicant's assets may be held by an eligible foreign custodian or
an overseas branch of Chase in each of these countries.
5. Applicant will comply with rule 17f-5 as if it were a registered
management investment company organized or incorporated in the United
States with respect to any of its assets held by eligible foreign
custodians (including Standard Bank) or overseas branches of qualified
U.S. banks (including Chase), outside the United States.
6. Applicant represents that Chase and any future custodian will
enter into an agreement to comply with ASA's Memorandum and Articles of
Association, the provisions of the Act and the rules thereunder, each
of the undertakings and agreements contained in the original
application and the terms of the Original Order and any other
application or order of the SEC relating to applicant's custodial
arrangements, as each of the same may from time to time be amended, and
to do nothing inconsistent with applicant's undertakings and agreements
contained in the original application or required by any present or
future rule under the Act.
7. The custodian agreements will insure to the benefit of
applicant's
[[Page 33889]]
shareholders as parties and beneficiaries so as to enable them to
maintain actions at law or in equity within the United States and South
Africa. Applicant's custodian also will maintain a list of affiliated
persons of applicant, its officers, directors, and investment adviser,
and will not consummate any otherwise prohibited transaction with such
person unless specifically permitted by SEC order. In addition,
applicant will perform every action necessary to cause and assist the
custodian of its assets to distribute the assets, or proceeds thereof,
if the SEC or a court of competent jurisdiction shall have directed so
by final order.
For the SEC, by the Division of Investment Management, under
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-16052 Filed 6-28-95; 8:45 am]
BILLING CODE 8010-01-M