[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Notices]
[Pages 63113-63114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29919]



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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-21563; 811-6432]


Smith Breeden Institutional Short Duration U.S. Government Fund; 
Notice of Application

December 1, 1995.
AGENCY: Securities and Exchange Commission (``SEC'').

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

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APPLICANT: Smith Breeden Institutional Short Duration U.S. Government 
Fund.

RELEVANT ACT SECTION: Order requested under section 8(f).

FILING DATES: The application was filed on August 22, 1995 and amended 
on November 2, 1995.

SUMMARY OF APPLICATION: Applicant requests an order declaring that it 
has ceased to be an investment company.

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 December 26, 
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, D.C. 20549. 
Applicant, 100 Europa Drive, Suite 200, Chapel Hill, North Carolina, 
27514.

FOR FURTHER INFORMATION CONTACT:
David W. Grim, Law Clerk, 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

    1. Applicant is a registered open-end management investment company 
organized as a business trust under the laws of the Commonwealth of 
Massachusetts. On October 8, 1991, applicant filed a Notification of 
Registration on Form N-8A pursuant to section 8(a) of the Act and a 
registration statement on Form N-1A under section 8(b) of the Act and 
under the Securities Act of 1933. The registration statement became 
effective on February 24, 1992, and the initial public offering 
commenced on February 25, 1992.
    2. On March 1, 1995, applicant's Board of Trustees (the ``Board'') 
unanimously determined through a consent action that the continuation 
of applicant was no longer in the best interest of applicant or its 
shareholders. The Board determined that applicant's shareholders would 
be better served by a liquidation of applicant's assets. Applicant is 
the master fund in a master-feeder arrangement. The master-feeder 
arrangement was chosen initially to allow flexibility in distribution. 
The structure allowed applicant to be sold to institutional investors 
while the Smith Breeden Short Duration U.S. Government Series (the 
``Short Series''), the feeder fund, was sold to retail investors. This 
two-tier structure created redundancies in expenses. As a result, the 
Board concluded that the master-feeder structure was no longer the most 
economically viable alternative over the long term. The Board consented 
to a plan of liquidation whereby the assets of applicant would be 
distributed in cash or in-kind to applicant's shareholders in complete 
liquidation of applicant. Shareholder approval of the liquidation was 
not required under the terms of applicant's declaration of trust, and 
thus no shareholder authorization was obtained in connection with the 
liquidation. Applicant did notify shareholders of the plan of 
liquidation in the form of a letter signed by a majority of the Board 
and sent to the shareholders March 15, 1995.
    3. On March 31, 1995, immediately prior to the liquidation, 
applicant had a total of 22,190,030 shares of beneficial interest 
outstanding. At such time, applicant's net asset value was 
$221,304,914.56 in the aggregate and $9.97 per share.
    4. On March 31, 1995, applicant liquidated all of its assets. 
Applicant transferred cash in the amount of $2,905,338.41 to its 
minority shareholders, who held 291,315.48 shares immediately prior to 
the 

[[Page 63114]]
liquidation. Each minority shareholder received $9.97 per share, which 
was equivalent to the per share net asset value of such shares on such 
date. Also on March 31, 1995, applicant transferred all of its other 
assets to its majority shareholder, the Short Series, which held 
21,898,714.52 shares immediately prior to the liquidation. The fair 
market value of the assets received by the Short Series was 
$218,399,576.24. The Short Series received $9.97 per share, which was 
equivalent to the per share net asset value of such shares on such 
date.
    5. The Short Series assumed all liabilities of applicant, an amount 
equal to $121,844,321. All expenses incurred in connection with the 
liquidation, which amounted to approximately $5,000 in legal fees, were 
paid by the Short Series. Smith Breeden Associates, Inc., applicant's 
investment adviser, paid applicant the balance of unamortized 
organizational expenses as of March 31, 1995, an amount equal to 
$17,869.24.
    6. As of the date of the application, applicant had no assets, 
liabilities, or shareholders. Applicant is not a party to any 
litigation or administrative proceeding.
    7. Applicant is neither engaged nor proposes to engage in any 
business activities other than those necessary for the winding-up of 
its affairs. Applicant will file appropriate certificates of 
liquidation with the Commonwealth of Massachusetts.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-29919 Filed 12-7-95; 8:45 am]
BILLING CODE 8010-01-M