[Federal Register Volume 61, Number 70 (Wednesday, April 10, 1996)]
[Notices]
[Pages 16017-16018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-8910]



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SECURITIES AND EXCHANGE COMMISSION

[Rel No. IC-21873; 812-9980]


Dreyfus Asset Allocation Fund, Inc., et al.; Notice of 
Application

April 3, 1996.
AGENCY: Securities and Exchange Commission (the ``SEC'').

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

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APPLICANTS: Dreyfus Asset Allocation Fund, Inc. (``DAAF''), Dreyfus 
LifeTime Portfolios, Inc. (``DLPI), and the Dreyfus Corporation 
(``Dreyfus'').

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

SUMMARY OF APPLICATION: Applicants seek an order to permit applicants 
to reorganize two series of DAAF, the Growth Series and the Income 
Series (the ``Acquired Portfolios''), and two series of DLPI, the 
Growth Portfolio and the Income Portfolio (the ``Acquiring 
Portfolios'').

FILING DATES: The application was filed on February 7, 1996, and 
amended on March 29, 1996, and April 2, 1996.

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 April 29, 1996, 
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 may request 
notification of a hearing by writing to the SEC's Secretary.

ADDRESSES: Secretary, SEC, 450 5th Street, N.W., Washington, D.C. 
20549. Applicants, 200 Park Avenue, New York, New York 10166.

FOR FURTHER INFORMATION CONTACT: Elaine M. Boggs, Staff Attorney, at 
(202) 942-0572, or Alison E. Baur, 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.

Applicants' Representations

    1. DAAF and DLPI are Maryland corporations registered under the Act 
as diversified, open-end management investment companies. DAAF and DLPI 
each offer three series of shares, including the Acquired and Acquiring 
Portfolios, respectively. DAAF offers one class of shares and DLPI 
offers two classes of shares, the Investor Class and Class R. The 
Investor Class is identical to DAAF's sole class of shares. Major 
Trading Corporation (``Major Trading'') owns in excess of 59% of the 
outstanding shares of the Growth Series and in excess of 65% of the 
outstanding shares of the Income Series. Allomon Corporation 
(``Allomon'') owns in excess of 98% of the outstanding shares of the 
Income Portfolio.
    2. Dreyfus serves as the investment adviser to the Acquiring and 
Acquired Portfolios. Mellon Equity Associates serves as a sub-adviser 
to the Acquiring

[[Page 16018]]
Portfolios. Dreyfus, Mellon Equity Associates, Major Trading, and 
Allomon are wholly-owned subsidiaries of Mellon Bank Corporation.
    3. The investment objectives of the Growth Series and Growth 
Portfolio are capital appreciation. The investment objectives of the 
Income Series and Income Portfolio are maximum current income and 
capital appreciation.
    4. The boards of directors of DAAF and DLPI have approved a plan of 
reorganization providing for the transfer of all of the assets of each 
of the Acquired Portfolios to the Acquiring Portfolios in exchange for 
Acquiring Portfolio shares. In connection with the reorganization, the 
Acquiring Portfolios will assume the liabilities of the respective 
Acquired Portfolios.
    5. The number of shares to be issued to each Acquired Portfolio 
will be determined on the basis of the relative net asset values per 
share and aggregate net assets of the Acquired and Acquiring 
Portfolios. Each Acquired Portfolio will liquidate and distribute pro 
rata shares of the Acquiring Portfolio to their respective shareholders 
at or as soon as practicable after the relevant closing.
    6. At or prior to the relevant closing, each of the Acquired 
Portfolios shall declare a dividend or dividends which shall have the 
effect of distributing to the shareholders of each Acquired Portfolio 
all of the respective Portfolio's investment company taxable income for 
all taxable years ending on or prior to the respective closing 
(computed without regard to any deduction for dividends paid) and all 
of its net capital gain realized in all taxable years ending on or 
prior to the respective closing (after reduction for any capital loss 
carry-forward).
    7. The board of directors of the Acquired and Acquiring Portfolios, 
including the directors who are not ``interested persons'' as such term 
is defined by the Act, have concluded that the reorganizations are in 
the best interests of the Acquired and Acquiring Portfolios and that 
the interests of the existing shareholders of the respective portfolios 
will not be diluted as a consequence thereof. In making this 
determination, the directors considered a number of factors, including 
the compatibility of the Acquired and Acquiring Portfolios investment 
objectives, management policies, and investment restrictions; expense 
ratios and published information regarding the fees and expenses of the 
Acquiring and Acquired Portfolios; the Acquired Portfolios' inability 
to attract sufficient assets to operate efficiently without sufficient 
expense subsidization; and the estimated costs that will be incurred as 
a result of the exchange.
    8. The proposed reorganization is subject to approval by the 
holders of a majority of the outstanding shares of each Acquired 
Portfolio. Approval will be solicited pursuant to a prospectus/proxy 
statement, which is expected to be sent to shareholders of each 
Acquired Portfolio in mid-April 1996. Each prospectus/proxy statement 
will include a description of the material aspects of the proposed 
reorganization and pertinent financial information.
    9. The total expenses of each exchange are expected to be 
approximately $30,000. Each Acquired and Acquiring Portfolio will bear 
its own expenses, except for the expenses of preparing, printing, and 
mailing of the combined prospectus/proxy statement and other related 
materials, which will be borne by each party to the exchange ratably 
according to its respective aggregate net assets on the date of the 
exchange.
    10. The consummation of each reorganization is subject to certain 
conditions, including that the parties shall have received from the SEC 
the order requested in the application, and the receipt of an opinion 
of tax counsel to the effect that upon consummation of each 
reorganization and the transfer of substantially all the assets of each 
Acquired Portfolio, no gain or loss will be recognized by the Acquired 
or Acquiring Portfolios or their shareholders as a result of the 
reorganization. Applicants will not make any material changes that 
affect the application without the prior approval of the SEC staff.

Applicants' Legal Analysis

    1. Section 17(a) of the Act provides, in pertinent part, that it is 
unlawful for any affiliated person of a registered investment company, 
or any affiliated person of such an affiliated person, acting as 
principal, knowingly to sell or purchase securities to or from such 
registered company.
    2. Section 2(a)(3) of the Act defines the term ``affiliated 
person'' of another person to include, in pertinent part, (a) any 
person directly or indirectly owning, controlling, or holding with 
power to vote 5% or more of the outstanding voting securities of such 
other person, (b) any person directly or indirectly controlling, 
controlled by, or under common control with such other person, and (c) 
if such other person is an investment company, any investment adviser 
thereof.
    3. Rule 17a-8 under the Act exempts from the prohibitions of 
section 17(a) mergers, consolidations, or purchases or sales of 
substantially all of the assets of registered investment companies that 
are affiliated persons solely by reason of having a common investment 
adviser, common directors, and/or common officers, provided that 
certain conditions set forth in the rule are satisfied. Major Trading 
and Allomon, affiliates of Dreyfus, own more than 5% of the outstanding 
voting securities of the Acquired and Acquiring Portfolios, 
respectively. Accordingly, the Acquiring Portfolio may be deemed an 
affiliated person of an affiliated person of each of the Acquired 
Portfolios, and vice versa, for reasons not based solely on their 
common adviser.
    4. 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.
    5. Applicants believe that the reorganization is consistent with 
the policies and purposes of the Act. In addition, applicants state 
that the exchange of assets will be based on each portfolio's relative 
net asset values. Further, applicants state that the directors, 
including the non-interested directors, have concluded that any 
potential benefits to Dreyfus or Mellon Equity Associates and their 
affiliates as a result of the reorganizations are on balance outweighed 
by the potential benefits to each portfolio and its shareholders.

    For the Commission, by the Division or Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-8910 Filed 4-9-96, 8:45 am]
BILLING CODE 8010-01-M