[Federal Register Volume 61, Number 145 (Friday, July 26, 1996)]
[Notices]
[Pages 39166-39167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18994]


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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Rel. No. 22083; International Series Rel. No. 
1008; 812-10188]


Van Kampen American Capital Equity Opportunity Trust, Series 28; 
Notice of Application

July 19, 1996.
AGENCY: Securities and Exchange Commission (``SEC'').

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

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APPLICANT: Van Kampen American Capital Equity Opportunity Trust, Series 
28.

RELEVANT ACT SECTIONS: Order requested under section 6(c) for an 
exemption from section 12(d)(3).

SUMMARY OF APPLICATION: Applicant requests an order on behalf of itself 
and certain subsequent series (each a ``Series'') to permit certain 
Series (the ``Strategic Five Series'') to invest up to 20.5%  and other 
Series (the ``Strategic Ten Series'') to invest up to 10.5% of their 
respective total assets in securities of issuers that derived more than 
15% of their gross revenues in their most recent fiscal year from 
securities related activities.

FILING DATES: The application was filed on June 7, 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 
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 August 13, 1996, 
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 who wish to be 
notified of a hearing may request such notification by writing to the 
SEC's Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth Street, N.W., Washington, D.C. 
20549. Applicant, c/o Van Kampen American Capital Distributors, Inc., 
One Parkview Plaza, Oakbrook Terrace, Illinois 60181.

FOR FURTHER INFORMATION CONTACT: Courtney S. Thornton, Senior Counsel, 
at (202) 942-0583, 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 from 
the SEC's Public Reference Branch.

Applicant's Representations

    1. Each Series will be a series of Van Kampen American Capital 
Equity Opportunity Trust, a unit investment trust registered under the 
Act. Van Kampen American Capital Distributors, Inc. is the depositor 
for the Trust (the ``Sponsor'').
    2. Each Strategic Five Series will invest approximately 20%, but in 
no event more than 20.5%, of the value of its total assets in each of 
the five stocks with the second through the sixth lowest per share 
stock price of the ten common stocks having the highest dividend yields 
in the Dow Jones Industrial Average (the ``DJIA''), the Financial Times 
Industrial Ordinary Share Index (the ``FT Index''), the Hang Seng 
Index, the Nikkei 225 Index, the German Stock Index (the ``DAX''), the 
Chilean IPSA Index (the ``IPSA''), the Mexican Bolsa Index (the 
``IPC''), or the Straits Times Industrial Index (the ``Straits'') 
(collectively, the ``Strategic Five Indexes'').\1\ Each Strategic Ten 
Series will invest approximately 10%, but in no event more than 10.5%, 
of the value of the Series' total assets in each of the ten common 
stocks having the highest dividend yields on the Nikkei 225 Index, the 
DAX, the IPSA, the IPC, or the Straits (collectively, the ``Strategic 
Ten Indexes''). Dividend yields will be calculated as of a date no more 
than five business days prior to the Series' initial date of deposit. 
Each Series will hold its stocks for approximately one year.
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    \1\ The Sponsor will attempt to purchase equal values of each of 
the common stocks in a Series' portfolio. However, it is more 
efficient if securities are purchased in 100 share lots and 50 share 
lots. As a result, each Strategic Five Series may purchase 
securities of a securities related issuer that represent in excess 
of 20%, but in no event more than 20.5%, of such Series' assets on 
the initial date of deposit. Similarly, each Strategic Ten Series 
may purchase securities of a securities related issuer that 
represent over 10%, but in no event more than 10.5%, of such Series' 
assets.
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    3. Each Index is recognized indicator of the stock market in its 
respective country. The DJIA, which is the property of DOW Jones & 
Company, Inc., comprises 30 common stocks chosen by the editors of The 
Wall Street Journal. The FT Index comprises 30 common stocks chosen by 
the editors of the Financial Times as representative of British 
industry and commerce. The Hang Seng Index comprises 33 of the stocks 
listed on the Stock Exchange of Hong Kong Ltd. The Nikkei 225 index is 
comprised of 225 Japanese companies listed on the Tokyo Stock Exchange. 
The DAX is a total return index of 30 selected German blue chip stocks 
traded on the Frankfurt Stock Exchange. The IPSA is a capitalization-
weighted index of 40 stocks trading on the Santiago Stock Exchange. The 
IPC is a capitalization-weighted index of the leading stocks on the 
Mexican Stock Exchange. The Straits is a price-weighted index of 30 
stocks traded on the Stock Exchange of Singapore compiled by the 
Straits Times newspaper of Singapore. The publishers of the Indexes are 
not affiliated with any Series or the Sponsor, and do not

[[Page 39167]]

participate in any way in the creation of any Series or the selection 
of its stocks.
    4. The securities deposited in each Series will be chosen solely 
according to the formula described above, and will not necessarily 
reflect the research opinions or buy or sell recommendations of the 
Sponsor. The Sponsor is authorized to determine the date of deposit, to 
purchase securities for deposit in the Series, and do supervise each 
Series' portfolio. The Sponsor will have no discretion as to which 
securities are purchased. Securities deposited in a Series may include 
securities of securities related issuers.
    5. The portfolios of the Series will not be actively managed. Sales 
of portfolio securities will be made in connection with redemptions, 
for payment of expenses, and at termination of the Series on a date 
specified a year in advance. The Sponsor does not have discretion as to 
when securities will be sold except in extremely limited circumstances, 
such as a default in the payment of any outstanding obligation, a 
decrease in the price of a security, or other credit factors so that, 
in the opinion of the Sponsor, the retention of the securities would be 
detrimental to the Series.

Applicant's Legal Analysis

    1. Section 12(d)(3) of the Act prohibits an investment company from 
acquiring any security issued by any person who is a broker, dealer, 
underwriter, or investment adviser. Rule 12d3-1 thereunder exempts the 
purchase of securities of an issuer that derived more than 15% of its 
gross revenues in its most recent fiscal year from securities related 
activities, provided that, among other things, immediately after such 
acquisition, the acquiring company has invested to more than 5% of the 
value of its total assets in securities of the issuer.
    2. Section 6(c) of the Act provides that the SEC may exempt any 
person, transaction, or class of transactions from any provision of the 
Act or any rule thereunder, if and to the extent that the exemption is 
necessary or appropriate in the public interest and consistent with the 
provision of investors and the purposes fairly intended by the policy 
and provisions of the Act.
    3. Applicant requests an exemption under section 6(c) from section 
12(d)(3) to permit a Strategic Five Series to invest up to 
approximately 20%, but in no event more than 20.5%, of the value of its 
total assets in securities of a securities related issuer, and to 
permit a Strategic Ten Series to invest up to 10%, but in no event more 
than 10.5%, of the value of its total assets in securities of a 
securities related issuer. Each Series will comply with all of the 
conditions of rule 12d3-1, except the condition prohibiting an 
investment company from investing more than 5% of the value of its 
total assets in securities of a securities related issuer.
    4. Section 12(d)(3) was intended to prevent investment companies 
from exposing their assets to the entrepreneurial risks of securities 
related businesses, to prevent potential conflicts of interest, and to 
eliminate certain reciprocal practices between investment companies and 
securities related businesses. One potential conflict could occur if an 
investment company purchased securities or other interests in a broker-
dealer to reward that broker-dealer for selling fund shares, rather 
than solely on investment merit. Applicant believes that this concern 
does not arise in connection with its application because neither the 
Series nor the Sponsor has discretion in choosing the portfolio 
securities or amount purchased. The security must first be included in 
the appropriate Index, each of which is unaffiliated with the Sponsor 
and the applicant. In addition, with respect to the Strategic Five 
Series, each security must also qualify as one of the five stocks with 
the second through the sixth lowest dollar per share stock price of the 
ten highest dividend yielding stocks in the relevant Strategic Five 
Index. With respect to the Strategic Ten Series, the securities must 
also qualify as one of the ten highest dividend yielding securities in 
the relevant Strategic Ten Index.
    5. Applicant also believes that the effect of a Series' purchase on 
the stock of parents of broker-dealers would be de minimis. The common 
stocks of securities related issuers represented in the Indexes are 
widely held, have active markets, and that potential purchases by any 
Series would represent an insignificant amount of the outstanding 
common stock and trading volume of any of these issues. Accordingly, 
applicant believes it is highly unlikely that purchases of these 
securities by a Series would have any significant impact on the market 
value of such securities.
    6. Another potential conflict of interest could occur if an 
investment company directed brokerage to a broker-dealer in which the 
company has invested to enhance the profitability of the broker-dealer 
or to assist it during financial difficulty, even though that broker-
dealer may not offer the best price and execution. To preclude this 
type of conflict, applicant agrees, as a condition of this application, 
that no company held in the portfolio of a Series, nor any affiliate 
thereof, will act as a broker for any Series in the purchase or sale of 
any security in its portfolio. In light of the above, applicant 
believes that its proposal meets the section 6(c) standards.

Applicant's Condition

    Applicant agrees that the requested exemptive order may be 
conditioned upon no company held in the portfolio of a Series, nor any 
affiliate thereof, acting as broker for any Series in the purchase or 
sale of any security for the Series' portfolio.

    For the SEC, by the Division of Investment Management, under 
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-18994 Filed 7-25-96; 8:45 am]
BILLING CODE 8010-01-M