[Federal Register Volume 60, Number 218 (Monday, November 13, 1995)]
[Notices]
[Pages 57043-57045]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27968]



-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-21474; 812-9812]


Standish, Ayer & Wood Investment Trust; Notice of Application

November 6, 1995.
AGENCY: Securities and Exchange Commission (the ``SEC'').

ACTION: Notice of Application for Exemption under the Investment 
Company Act of 1940 (the ``Act'').

-----------------------------------------------------------------------

APPLICANT: Standish, Ayer & Wood Investment Trust (the ``Trust'').

RELEVANT ACT SECTIONS: Order requested under section 17(b) of the Act 
to exempt applicant from the provisions of section 17(a).

SUMMARY OF APPLICATION: Applicant seeks an order to permit the in-kind 
redemption of Trust shares held by an ``affiliated person'' of the 
Trust.

FILING DATE: The application was filed on October 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 

[[Page 57044]]
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 December 1, 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 
may request notification of a hearing by writing to the SEC's 
Secretary.

ADDRESSES: Secretary, SEC, 450 5th Street, NW., Washington, DC 20549. 
Applicant, One Financial Center, Boston, Massachusetts 02111 .

FOR FURTHER INFORMATION CONTACT:
Elaine M. Boggs, Staff Attorney, at (202) 942-0572, 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 at the 
SEC's Public Reference Branch.

Applicant's Representations

    1. The Trust is an open-end management investment company 
established as a Massachusetts business trust. The Trust consists of 
twelve portfolios, including the Standish Equity Fund (the ``Fund''). 
Standish, Ayer & Wood, Inc. (the ``Adviser'') serves as the Fund's 
investment adviser.
    2. State Mutual Separate Account F (the ``Separate Account'') is a 
shareholder of the Fund and is an insurance company segregated asset 
account established by State Mutual Life Assurance Company of America 
(``State Mutual''). It is operated as a comingled funding and 
investment vehicle for several qualified pension plans. As of September 
21, 1995, the Separate Account owned beneficially and of record 
approximately 39.3% of the outstanding shares of the Fund.
    3. State Mutual, acting pursuant to its fiduciary obligation under 
the Employee Retirement Income Security Act of 1974, as amended, has 
concluded that the assets of the Separate Account invested in the Fund 
should be managed directly by the Adviser in the form of a separate 
investment advisory account. Consequently, State Mutual, on behalf of 
the Separate Account, has notified the Trust that it expects to redeem 
its shares of the Fund and place the proceeds in a separate investment 
advisory account to be managed by the Adviser.
    4. The Fund's prospectus and statement of additional information 
provide that redemption requests generally will be paid in cash. If, 
however, the Fund's board of trustees (the ``Board'') determines that 
it would be in the best interest of the shareholders of the Fund, 
redemption amounts will be paid in-kind with respect to redemption 
requests in a single transaction or series of transactions during any 
90 day period in excess of $250,000. In such event, cash will be paid 
for that portion of the Fund's assets represented by cash equivalents 
(such as certificates of deposit, commercial paper, and repurchase 
agreements) and other assets which are not susceptible for distribution 
(including receivables and prepaid expenses), net of all liabilities. 
The Board has determined that it would be in the best interest of 
shareholders to redeem the shares of the Separate Account in-kind to 
the extent permitted by the Trust's election under rule
18f-1.\1\

    \1\ The Trust has elected to be governed by the provisions of 
rule 18f-1 under the Act and is, therefore, committed to pay in cash 
all requests for redemption by any shareholder of record, limited in 
amount with respect to each shareholder during any 90 day period to 
the lesser of $250,000 or 1% of the Fund's net asset valve at the 
beginning of such period.
---------------------------------------------------------------------------

Applicant's Legal Analysis

    1. Section 17(a)(2) of the Act prohibits affiliated persons of the 
Fund from knowingly purchasing any securities from the Fund. Section 
2(a)(3)(A) of the Act defines an ``affiliated person'' of another 
person as any person owning five percent or more of the outstanding 
voting securities of such other person. The Separate Account is an 
affiliated person of the Fund because it owns beneficially and of 
record in excess of 5% of the Fund's shares.
    2. Section 17(b) of the Act provides that the SEC may exempt a 
transaction from the prohibitions of 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.
    3. Applicant submits that the terms of the proposed in-kind 
redemption meets the standards set forth in section 17(b). Applicant 
believes that the redemption will be on terms that are reasonable and 
fair to the Fund and its shareholders and will not involve overreaching 
on the part of any person because the Fund will use an objective, 
verifiable standard for the selection and valuation of any securities 
to be distributed in connection with the proposed redemption in-kind. 
Similarly, the proposed transactions are consistent with the investment 
policy of the Fund, which expressly allows redemptions in-kind. 
Finally, applicant believes that the proposed transaction is consistent 
with policies and purposes of the Act to protect shareholders of 
investment companies from self-dealing on the part of investment 
company affiliates to the detriment of other shareholders because the 
Separate Account would not receive any advantage not available to any 
other shareholder if the proposed in-kind redemption is permitted.

Applicant's Conditions

    Applicant agrees that any order granting the requested relief will 
be subject to the following conditions:
    1. The portfolio securities of the Fund distributed to the Separate 
Account pursuant to a redemption in-kind (the ``In-Kind Securities'') 
will be limited to securities that are traded on a public securities 
market or for which quoted bid prices are available.
    2. The In-Kind Securities will be distributed on a pro rata basis 
after excluding (a) securities which, if distributed, would be required 
to be registered under the Securities Act of 1933 and (b) certain 
portfolio assets (such as futures and options contracts and repurchase 
agreements) that, although they may be liquid and marketable, must be 
traded through the marketplace or with the counterparty to the 
transaction in order to effect a change in beneficial ownership. In 
addition, the Fund will distribute cash in lieu of any securities held 
in the Fund's portfolio not amounting to round lots, fractional shares, 
and accruals on such securities.
    3. The In-Kind Securities distributed to the Separate Account will 
be valued in the same manner as they would be valued for purposes of 
computing the Fund's net asset value, which, in the case of securities 
traded on a public securities market for which quotations are 
available, is the last reported trade price on the exchange on which 
the securities are principally traded, or, if there is no such reported 
price, is the last quoted bid price.
    4. The Fund will maintain and preserve for a period of not less 
than six years from the end of the fiscal year in which the proposed 
in-kind redemption by the separate account occurred, the first two 
years in an easily accessible place, a written record of such 

[[Page 57045]]
redemption setting forth a description of each security distributed, 
the terms of the distribution, and the information or materials upon 
which the valuation was made.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-27968 Filed 11-9-95; 8:45 am]
BILLING CODE 8010-01-M