[Federal Register Volume 62, Number 61 (Monday, March 31, 1997)]
[Notices]
[Pages 15210-15212]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8004]


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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-22580; 812-10496]


Dreyfus/Laurel Funds Trust, et al.; Notice of Application

March 24, 1997.
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: Dreyfus/Laurel Funds Trust (the ``Trust'') and Dreyfus 
Growth and Value Funds, Inc. (the ``Company'').

RELEVANT ACT SECTION: Order requested pursuant to section 17(b) of the 
Act granting an exemption from section 17(a) of the Act.

SUMMARY OF APPLICATION: Applicants request an order under section 17(b) 
granting an exemption from section 17(a) of the Act to permit a series 
of the Company to acquire all of the assets and assume all of the 
stated liabilities of a series of the Trust.

FILING DATES: The application was filed on January 14, 1997 and amended 
on March 19, 1997. Applicants have agreed to file an amendment during 
the notice period, the substance of which is included in this notice.

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 16, 1997, 
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 Fifth Street, NW., Washington, DC 20549. 
Applicants, 200 Park Avenue, New York, NY 10166.

FOR FURTHER INFORMATION CONTACT: Lisa McCrea, Staff Attorney (202) 942-
0562, or Mercer E. Bullard, Branch Chief, (202) 942-0564 (Office of 
Investment Company Regulation, Division of Investment Management).

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. The Company, a Maryland corporation, is registered under the Act 
as an open-end management investment company. The Dreyfus Aggressive 
Growth Fund (the ``Acquiring Fund'') is one of ten series of the 
Company. The Trust, a Massachusetts business trust, is registered under 
the Act as an open-end

[[Page 15211]]

management investment company. The Dreyfus Special Growth Fund (the 
``Acquired Fund'') is one of three series of the Trust. Dreyfus acts as 
investment adviser to both the Acquiring and Acquired Funds. Dreyfus is 
a wholly-owned subsidiary of Mellon Bank, which is a wholly-owned 
subsidiary of Mellon Bank Corporation (``Mellon'').
    2. The Acquiring Fund shares are sold primarily to retail investors 
by the distributor of the Fund, Premier Mutual Fund Services, Inc. 
(``Premier''), and through securities dealers, banks or other financial 
institutions that have entered into a selling agreement with Premier. 
The Acquiring Fund imposes no front-end or deferred sales charges or 
distribution fees. The Acquiring Fund's shares are sold subject to 
shareholder services plan (the ``Shareholder Services Plan''), whereby 
the Acquiring Fund pays Premier for the provision of certain services 
to Acquiring Fund shareholders a fee at the annual rate of 0.25 or 1% 
of the value of the Acquiring Fund's average daily net assets.\1\ 
Shares of the Acquiring Fund acquired by purchase or exchange after 
February 28, 1997 and redeemed or exchanged less than 15 days after 
they are acquired will be subject to a redemption fee of 1.0% of the 
net asset value of the shares redeemed or exchanged.
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    \1\ The Shareholder Services Plan is not a plan adopted pursuant 
to rule 12b-1 under the Act.
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    3. The Acquired Fund issues two classes of shares, Investor shares 
and Class R shares. Investor shares are sold primarily to retail 
investors by banks, securities brokers or dealers, other financial 
institutions, and Premier, the distributor of the Acquired Fund's 
shares. Class R shares are sold primarily to bank trust departments and 
other financial service providers acting on behalf of customers having 
a qualified trust or investment account or relationship at such 
institution or to customers who have received and hold shares of the 
Acquired Fund distributed to them by virtue of such account or 
relationship. Mellon owns with power to vote approximately 99% of the 
outstanding Class R shares of the Acquired Fund, which constitute 
approximately 7% of the shares of the Acquired Fund. The Acquired Fund 
imposes no sales charges in connection with the purchase or redemption 
of either class of its shares, but Investor shares are subject to a 
distribution fee under a distribution plan adopted pursuant to rule 
12b-1 under the Act.
    4. The investment objective of the Acquiring Fund is capital 
appreciation. The Acquiring Fund seeks to obtain this objective by 
investing at least 65% of its assets in a portfolio of publicly-trade 
equities of domestic and foreign issuers that are categorized as growth 
companies by Dreyfus. The investment objective of the Acquired Fund is 
to seek above-average capital growth without regard to income. The 
Acquired Fund seeks to obtain this objective by focusing on companies, 
small or large, with above-average growth opportunities. In obtaining 
this objective, the Acquired Fund will invest in issuers with unique or 
proprietary products or services leading to a rapidly growing market 
share.
    5. The Company, on behalf of the Acquiring Fund, and the Trust, on 
behalf of the Acquired Fund, entered into an Agreement and Plan of 
Reorganization dated as of December 31, 1996 (the ``Agreement''), to 
effectuate a proposed reorganization (the ``Reorganization''). The 
Acquiring Fund proposes to acquire all the assets of the Acquired Fund 
in exchange for shares of the Acquiring Fund with an aggregate net 
asset value equal to that of the assets transferred minus the 
liabilities of the Acquired Fund that will be assumed by the Acquiring 
Fund. The Acquired Fund will endeavor to discharge all of its known 
liabilities and obligations prior to a closing presently expected to 
occur on or about April 18, 1997 (the ``Closing Date''). The Acquiring 
Fund will assume all liabilities, debts, obligations, expenses, costs, 
charges and reserves of the Acquired Fund reflected on the unaudited 
statement of assets and liabilities of the Acquired Fund as of the 
close of regular trading on the New York Stock Exchange (``NYSE'') as 
of the Closing Date.
    6. The number of full and fractional shares of the Acquiring Fund 
to be issued to shareholders of the Acquired Fund will be determined on 
the basis of the relative net asset values of the Acquired Fund 
computed as of the close of regular trading on the NYSE on the Closing 
Date (the ``Valuation Time''). As soon after the Closing Date as 
conveniently practicable, the Acquired Fund will distribute in kind pro 
rata to its shareholders of record determined as of the Valuation Time, 
in liquidation of the Acquired Fund, the shares of the Acquiring Fund 
received by it pursuant to the Reorganization. Such distribution will 
be accomplished by the establishment of an account in the name of each 
shareholder of the Acquired Fund on the share records of the Acquiring 
Fund's transfer agent and transferring to each such account a number of 
shares of the Acquiring Fund representing the respective pro rata 
number of full and fractional shares of the Acquiring Fund due to such 
shareholder of the Acquired Fund. After such distribution and the 
winding up of its affairs, the Acquired Fund will be terminated. Shares 
of the Acquiring Fund received by shareholders of the Acquired Fund 
pursuant to the Reorganization will not be subject to the Acquiring 
Fund's redemption fee.
    7. On or before the Closing Date, the Acquired Fund will have 
declared a dividend and/or other distributions that, together with all 
previous dividends and other distributions, shall have the effect of 
distributing to the Acquired Fund's shareholders all taxable income for 
all taxable years ending on or prior to the Closing Date and for its 
current taxable year through the Closing Date (computed without regard 
to any deduction for dividends paid) and all of its net capital gain 
realized in all such taxable years (after reduction for any capital 
loss carryforward).
    8. On November 6, 1996, the board of directors of the Company, and 
on October 24, 1996 and December 11, 1996, the board of trustees of the 
Trust (collectively, the ``Boards''), including members of the Boards 
who are not interested persons, unanimously approved the Agreement. The 
Boards considered the advisability of the Reorganization and found that 
it was in the best interests of the relevant Fund and that the 
interests of the existing shareholders of each relevant Fund would not 
be diluted as a result of the Reorganization.
    9. In assessing the Reorganization and the terms of the Agreement, 
the factors considered by the Boards included: (a) The relative past 
growth in assets and investment performance of the Funds; (b) the 
future prospects of the Funds, both under circumstances where they are 
not reorganized and where they are reorganized; (c) the compatibility 
of the investment objectives, policies and restrictions of the 
Acquiring Fund and the Acquired Fund; (d) the effect of the 
Reorganization on the expense ratios of each Fund based on a comparison 
of the expense ratios of the Acquiring Fund with those of the Acquired 
Fund on a ``pro forma'' basis; (e) the costs of the Reorganization to 
the Funds; (f) whether any future cost savings could be achieved by 
combining the Funds; (g) the tax-free nature of the Reorganization; and 
(h) alternatives to the Reorganization.
    10. The Funds will bear the expenses of the Reorganization pro rata 
according to the aggregate net assets in each Fund on the Closing Date. 
Each Board considered the fact that the Funds will bear all of the 
direct expenses of the Reorganization, whether or not the 
Reorganization is consummated, when

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approving the Reorganization and the Agreement. These expenses include 
professional fees and the cost of soliciting proxies for the meeting of 
the Acquired Fund's shareholders, consisting principally of printing 
and mailing expenses, together with the cost of any supplementary 
solicitation.
    11. On January 13, 1997, the Acquiring Fund filed with the SEC its 
registration statement on Form N-14, containing a preliminary combined 
prospectus/proxy statement. Applicants sent the prospectus/proxy 
statement to shareholders of the Acquired Fund on or about March 5, 
1997 for their approval at a special meeting of shareholders scheduled 
for April 7, 1997.
    12. Notwithstanding approval of the Reorganization Agreement by the 
shareholders of the Acquired Fund, the Closing Date of the 
Reorganization may be postponed and the Agreement may be terminated 
prior to the Closing Date by either party because: (a) Its governing 
board determines that circumstances have developed that make proceeding 
with the Reorganization inadvisable; (b) a material breach by the other 
party of any representation, warranty, or agreement contained therein 
has occurred; or (c) a condition to the obligation of the terminating 
party cannot be met. (p. 15) Applicants agree not to make any material 
changes to the Agreement without prior SEC approval.

Applicants' Legal Analysis

    1. Section 17(a) of the Act, in relevant part, prohibits an 
affiliated person of a registered investment company, or any affiliated 
person of such a person, acting as principal, from knowingly selling 
any such security or other property to such registered company, or 
purchasing from such registered company any security or other property.
    2. Section 2(a)(3) of the Act defines the term ``affiliated person 
of another person'' to include, in pertinent part, 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, and any 
person directly or indirectly controlling, controlled by, or under 
common control with such other person, and 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/trustees, and/or common officers, provided 
that certain conditions are satisfied.
    4. Applicants believe that they may not rely on rule 17a-8 in 
connection with the Reorganization because the Acquiring Fund and the 
Acquired Fund may be affiliated for reasons other than those set forth 
in the rule. Mellon owns 100% of the outstanding voting securities of 
Dreyfus and approximately 99% of the outstanding Class R shares of the 
Acquired Fund, which constitute approximately 7% of the outstanding 
shares of the Acquired Fund. Because of this ownership, applicants 
believe that the Acquiring Fund may be deemed an affiliated person of 
an affiliated person of the Acquired Fund, and vice versa, for reasons 
not based solely on their common adviser.
    5. Section 17(b) of the Act provides that the SEC may exempt a 
transaction from the provisions of section 17(a) if the terms of the 
proposed transaction, including the consideration to be paid or 
received, are reasonable and fair and do not involve overreaching on 
the part of any person concerned; the proposed transaction is 
consistent with the policy of each registered investment company 
concerned; and the proposed transaction is consistent with the general 
purposes of the Act.
    6. Applicants submit that the terms of the Reorganization satisfy 
the standards set forth in section 17(b), in that the terms are fair 
and reasonable and do not involve overreaching on the part of any 
person concerned. Applicants note that each Board, including the non-
interested Trustees and Directors, reviewed the terms of the 
Reorganization as set forth in the Agreement, including the 
consideration to be paid or received, and found that participation in 
the Reorganization as contemplated by the Agreement is in the best 
interests of the Company, the Trust, and each Fund, and that the 
interests of existing shareholders of each Fund will not be diluted as 
a result of the Reorganization. Applicants also note that the exchange 
of the Acquired Fund's assets and liabilities for the shares of the 
Acquiring Fund will be based on the Funds' relative net asset values.

    For the SEC, by the Division of Investment Management, under 
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-8004 Filed 3-28-97; 8:45 am]
BILLING CODE 8010-01-M