[Federal Register Volume 61, Number 79 (Tuesday, April 23, 1996)]
[Notices]
[Pages 17929-17931]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9865]



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OFFICE OF MANAGEMENT AND BUDGET
SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-21899; 812-9948]


Glickenhaus & Co., et al.; Notice of Application

April 16, 1996.
AGENCY: Securities and Exchange Commission (``SEC'').

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

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APPLICANTS: Glickenhaus & Co. (``Glickenhaus'') and Lebenthal & Co., 
Inc. (``Lebenthal'') (collectively, the `'Sponsors''); Empire State 
Municipal Exempt Trust (``Empire Trust'') and Glickenhaus Value 
Portfolios (``Equity Trust'').

RELEVANT ACT SECTIONS: Order requested under sections 11(a) and 11(c).

SUMMARY OF APPLICATION: Applicants request an order to permit certain 
offers of exchange between unit investment trusts.

FILING DATES: The application was filed on January 4, 1996 and amended 
on March 21, 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 May 13, 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 who wish to be 
notified of a hearing may request notification by writing to the SEC's 
Secretary.

ADDRESSES: Secretary: SEC, 450 5th Street NW, Washington, DC 20549. 
Applicants: Glickenhaus, 6 East 43rd Street, New York, New York 10017; 
Lebenthal, 120 Broadway, New York, New York 10271.

FOR FURTHER INFORMATION CONTACT:
David W. Grim Staff Attorney (202) 942-0571, or David M. Goldberg, 
Branch Chief, at (202) 942-0564 (Division of Investment Management, 
Office of Investment Company Regulation).


[[Page 17930]]


SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application is available for a fee at the 
SEC's Public Reference Branch.

Applicants' Representations

    1. Glickenhaus and Lebenthal are the sponsors for successive series 
of the Empire Trust, and Glickenhaus is the sponsor for successive 
series of the Equity Trust, each series being a separate unit 
investment trust registered under the Securities Act of 1933 and the 
Act. Applicants request that any relief granted pursuant to the 
application also apply to future series of the Empire Trust and the 
Equity Trust and subsequently issued unit investment trusts sponsored 
by either or both of the Sponsors or a sponsor controlled by or under 
common control with the Sponsors and registered (or to be registered) 
under the Securities Act of 1933 and the Act (collectively with the 
Empire Trust and the Equity Trust, the ``Trusts'').
    2. The sales charge for initial investment in the Empire Trust is 
4.9% of the public offering price, and the sales charge for initial 
investment in the Equity Trust is 3.9% of the public offering price. 
Both sales charges are subject to discounts for certain volume 
transactions. The Sponsors intend to maintain a secondary market for 
the units of each series of the Empire Trust and the Equity Trust, 
although they are not obligated to do so. The maximum sales charge upon 
units sold in the secondary market is 5.9% for the Empire Trust and 
3.9% for the Equity Trust.
    3. Applicants propose to offer to purchasers of units of any of the 
Trusts (``Unitholders'') the ability to exchange any or all of their 
units for units in one or more available series of the Trusts (the 
``Exchange Trusts'') at a reduced sales charge (the ``Exchange 
Privilege''). Applicants also propose to offer to Unitholders the 
ability to roll over any or all of their units in a series which is 
terminating for units of one or more new series of the Trusts (the 
``Rollover Trusts'') at a reduced sales charge (the ``Rollover 
Privilege'').
    4. A Unitholder must notify the Sponsors of his or her desire to 
exercise his or her Exchange Privilege. Exercise of the Exchange 
Privilege is subject to the following conditions: (a) the Sponsors must 
be maintaining a secondary market in units of the Trust held by the 
Unitholder and units of the available Exchange Trust, (b) at the time 
of the Unitholder's election to participate in the Exchange Privilege, 
there must be units of the Exchange Trust available for sale, either 
under the initial primary distribution or in the Sponsors' secondary 
market, and (c) exchanges will be effected in whole units only. Any 
excess proceeds from the units surrendered for exchange will be 
remitted to the Unitholder; the Unitholder will not be permitted to 
advance any new funds in order to purchase units of any of the Exchange 
Trusts.
    5. Except for Unitholders who wish to exercise the Exchange 
Privilege within the first five months of their purchase of units of 
the Trust, an investor who purchases units under the Exchange Privilege 
will pay a lower aggregate sales charge than that which would be paid 
for the units by a new investor. For Unitholders who wish to exercise 
the Exchange Privilege within the first five months of their purchase 
of units of an Exchange Trust will be greater of (a) the reduced sales 
charge or (b) an amount which, when coupled with the sales charge paid 
by the Unitholder upon his original purchase of units of the Trust, 
would equal the sales charge applicable to the direct purchase of units 
of an Exchange Trust, determined as of the date of the exchange.
    6. A Unitholder must notify the Sponsors of his or her desire to 
exercise his or her Rollover Privilege. Exercise of the Rollover 
Privilege is subject to the following conditions: (a) the Sponsors must 
be maintaining a secondary market in units of the available Rollover 
Trust, and (b) at the time of the Unitholders' election to participate 
in the Rollover Privilege there must be units of the Rollover Trust 
available for sale, either under the initial primary distribution or in 
the Sponsors' secondary market. Any excess proceeds from the units 
surrendered for exchange will be remitted to the Unitholder.

Applicants' Legal Analysis

    1. Section 11(a) requires SEC approval of an offer to exchange 
securities by a registered open-end investment company to the holder of 
a security of such company or of any other open-end investment company 
if the exchange occurs on any basis other than the relative net asset 
values of the securities to be exchanged. Section 11(c) makes section 
11(a) applicable to any type of exchange offer of securities of 
registered unit investment trusts for the securities of any other 
investment company, irrespective of the basis of exchange.
    2. Applicants represent that Unitholders will not be induced or 
encouraged to participate in the Exchange or rollover Privilege through 
an active advertising or sales campaign. The Sponsors state that they 
recognize their responsibility to their customers not to generate 
excessive commissions through churning and represent that the sales 
charge collected will not be a significant economic incentive to 
salesmen to promote inappropriately the Exchange or Rollover Privilege. 
Applicants further believe that the Exchange and Rollover Privileges 
are appropriate in the public interest and consistent with the 
protection of investors and the purposes fairly intended by the policy 
and provisions of the Act.

Applicants' Conditions

    If the requested order is granted, applicants agree to the 
following conditions:
    1. The prospectus for each series and any sales literature or 
advertisement that mentions the existence of the Exchange Privilege or 
the Rollover Privilege will disclose that the Exchange and the Rollover 
Privilege are subject to termination and that their terms are subject 
to change.
    2. Whenever the Exchange Privilege or the Rollover Privilege is to 
be terminated or its terms are to be amended materially, any holder of 
a security subject to that privilege will be given prominent notice of 
the impending termination or amendment at least 60 days prior to the 
date of termination or the effective date of the amendment, provided 
that:
    a. No such notice need be given if the only material effect of an 
amendment is to reduce or eliminate the sales charge payable at the 
time of an exchange, to add one or more new series eligible for the 
Exchange Privilege or the Rollover Privilege, or to delete a series 
which has terminated; and
    b. No notice need be given if, under extraordinary circumstances, 
either
    i. There is a suspension of the redemption of units of an Exchange 
Trust or a Rollover Trust under section 22(e) of the Act and the rules 
and regulations thereunder, or
    ii. An Exchange Trust or a Rollover Trust temporarily delays or 
ceases the sale of its units because it is unable to invest amounts 
effectively in accordance with applicable investment objectives, 
policies and restrictions.
    3. An investor who purchases units under the Exchange or Rollover 
Privilege will pay a lower aggregate sales charge than that which would 
be paid for the units by a new investor.


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    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-9865 Filed 4-22-96; 8:45 am]
BILLING CODE 8010-01-M