[Federal Register Volume 62, Number 10 (Wednesday, January 15, 1997)]
[Notices]
[Pages 2198-2199]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-900]


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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Rel. No 22455; 811-6513]


The BFM Institutional Trust Inc.; Notice of Application

Janaury 8, 1997.
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: The BFM Institutional Trust Inc.

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

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

FILING DATES: The application was filed on September 27, 1996, and 
amended on December 26, 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 February 2, 
1997, and should be accompanied by proof of service on the 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 Fifth Street, N.W., Washington, D.C. 
20549. Applicant, 345 Park Avenue, New York, NY 10154.

FOR FURTHER INFORMATION CONTACT: Harry Eisenstein, Staff Attorney, at 
(202) 942-0552, 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 from 
the SEC's Public Reference Branch.

Applicant's Representations

    1. Applicant, organized as a Maryland corporation, is an open-end 
management investment company. Applicant consists of three separate 
portfolios: the Short Duration Portfolio, the Core Fixed Income 
Portfolio, and the Multi-Sector Mortgage Securities Portfolio III 
(``Mortgage Portfolio'') (collectively, ``BIT Portfolios''). Applicant 
registered under the Act and filed a registration statement on Form N-
1A on December 20, 1991. The registration statement was declared 
effective on July 2, 1992, upon which applicant commenced its initial 
public offering.
    2. On September 28 1995, applicant's board of directors (``Board'') 
approved entry into an Asset Purchase Agreement (``Reorganization 
Agreement'') between applicant and The PNC Fund, which subsequently 
changed its name to Compass Capital Funds (``Acquiring Fund''). The 
Reorganization Agreement provided for the transfer of all of the assets 
and liabilities of applicant to the Acquiring Fund solely in exchange 
for ``Institutional'' class shares (``Institutional Shares'') of 
corresponding portfolios of the Acquiring Fund (``Acquiring Fund 
Portfolios''). The Board determined that the interests of applicant's 
securityholders would best be served by the reorganization because of 
(i) the broader array of investment options available to its 
securityholders; (ii) the maintenance of all then existing investor 
features; and (iii) potential economies of scale in portfolio 
management resulting from a larger asset size.
    3. Pursuant to rule 17a-8 under the Act,\1\ the Board, including a 
majority of the directors who are not ``interested persons'' of 
applicant, found that the transaction was in the best interests of 
applicant and that there would be no dilution, by virtue of the 
proposed exchange, in the value of the shares held at that time by 
applicant's shareholders.
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    \1\ Rule 17a-8 provides an exemption from section 17(a) of the 
Act for certain reorganizations among registered investment 
companies that may be affiliated persons, or affiliated persons of 
an affiliated person, solely by reason of having a common investment 
adviser, common director, and/or common officers.
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    4. At the time of the reorganization, the Acquiring Fund offered 
several classes of shares at the time of the reorganization, including 
Institutional Shares, Service Shares, Investor A Shares and Investor B 
Shares. Applicant's shareholders were offered

[[Page 2199]]

Institutional Shares because (a) applicant's shareholders were 
institutions and/or investors meeting the minimum investment 
requirements for this class and (b) the expense ratios of the 
Institutional Shares for each Acquiring Fund Portfolio most nearly 
matched the expense ratios of the corresponding BIT Portfolio.
    5. On October 11, 1995, preliminary proxy materials were filed with 
the SEC. On November 9, 1995, definitive proxy materials were filed 
with the SEC and distributed to applicant's shareholders on or about 
that date. At a special meeting of applicant's shareholders on December 
20, 1995, applicant's shareholders approved the Reorganization 
Agreement.
    6. On January 13, 1996, the Core bond Portfolio and the Short 
Government Portfolio of the Acquiring Fund acquired all of the assets 
and liabilities of the Core Fixed Income Portfolio and the Short 
Duration Portfolio, respectively, in exchange for Institutional Shares 
of the corresponding Acquiring Fund Portfolio. On April 26, 1996, the 
Multi-Sector Mortgage Securities Portfolio III of the Acquiring Fund 
(``Acquiring Mortgage Portfolio'') acquired all of the assets and 
liabilities of the Mortgage Portfolio in exchange for Institutional 
Shares of the Acquiring Mortgage Portfolio. Shareholders of each BIT 
Portfolio received Institutional Shares having a net asset value equal 
to that of the shares held by them as of the time of that portfolio's 
reorganization, in liquidation of such BIT Portfolio.
    7. Expenses incurred in connection with the sale of assets of 
applicant, totalling $75,000, were assumed by the Acquiring Fund. These 
expenses consisted of proxy/prospectus preparation, filing, printing 
and mailing costs, audit and legal fees and expenses, and miscellaneous 
expenses. No brokerage commissions were incurred in connection with the 
reorganization.
    8. As of the date of the application, applicant had no 
shareholders, assets, or liabilities. Applicant is not a party to any 
litigation or administrative proceeding. Applicant is neither engaged, 
nor does it propose to engage, in any business activities other than 
those necessary for the winding-up of its affairs.
    9. Applicant will file articles of dissolution with the Maryland 
State Department of Assessments and Taxation to effect its dissolution.

    For the SEC, by the Division of Investment Management, under 
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-900 Filed 1-14-97; 8:45 am]
BILLING CODE 8010-01-M