[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