[Federal Register Volume 62, Number 83 (Wednesday, April 30, 1997)]
[Notices]
[Pages 23514-23515]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11081]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 22634; 811-2097]
United Vanguard Investment Programs; Notice of Application
April 23, 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: Untied Vanguard Investment Programs.
RELEVANT ACT SECTION: Order requested under section 8(f).
SUMMARY OF APPLICATION: Appicant requests an order declaring that it
has ceased to be an investment company.
FILING DATES: The application was filed on July 26, 1996, and amended
on November 26, 1996, and March 12, 1997.
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 May 19, 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, NW., Washington, DC 20549.
Applicant, 6300 Lamar Avenue, PO Box 29217, Shawnee Mission, KS 66201-
9217.
FOR FURTHER INFORMATION CONTACT:
Christine Y. Greenlees, Senior Counsel, (202) 942-0581, or Mercer E.
Bullard, 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 is a unit investment trust that has variously offered
Monthly Investment Programs (``MIPs''), Executive-Professional
Investment Programs (``EIPs''), and Variable Investment Programs
(``VIPs''). Applicant was created under the laws of Missouri pursuant
to a custodian agreement dated July 15, 1970. Waddell & Reed, Inc. (the
``Sponsor'') and State Street Bank and Trust Company (the
``Custodian'') serve as applicant's Sponsor and Custodian,
respectively.
2. On August 5, 1970, applicant filed a notification of
registration on Form N-8A under section 8(a) of the Act, and a
registration statement on Form N-8B-2 under section 8(b) of the Act.
According to SEC records, on the same day, applicant filed a
registration statement on Form S-6 under the Securities Act of 1933.
The Form S-6, filed to register $10,000,000 face amount of MIPs and
$10,000,000 face amount of EIPs, became effective on November 18, 1970,
and the initial public offering of MIPs and EIPs commenced on or after
such date. Thereafter, applicant filed a registration statement to
register an indefinite face amount of VIPs that became effective in
October 1975. The initial public offering of VIPs commenced and the
public offering of applicant's MIPs and EIPs ceased on or soon after
such effective date (MIPs, EIPs, and VIPs are collectively referred to
herein as ``Programs'').
3. Before February 29, 1996, the Sponsor ceased to offer and sell
any new Program. The Custodian subsequently informed the Sponsor that
it intended to resign as custodian. Accordingly, and in light of
changes since the inception of the Programs in the ways of investing in
United Vanguard Fund, Inc. (the ``Fund''), the Fund which underlies the
Programs, the Sponsor determined not to continue the Programs.
[[Page 23515]]
4. The Program certificates provide that the Programs may be
changed by agreement of the Sponsor and the Custodian without the
consent of the Program holders, provided that the change does not
adversely affect the substantive rights of the Program holders. The
Sponsor determined that (a) The amendment of the certificates of each
Program to permit the termination of that Program by the Sponsor did
not adversely affect the substantive rights of the Program holders; and
(b) overall, as direct shareholders of the Fund, Program holders on the
Termination Date, as defined below, would be in a position at least as
favorable, if not more favorable, than if their Programs had not been
terminated. Effective March 11, 1996, the Sponsor and the Custodian
amended the certificates of the Programs to permit the termination of
each Program by the Sponsor in accordance with the terms of the notice
sent to Program holders as described below.
5. On or about February 29, 1996, applicant sent to all holders of
record of an interest in applicant notice that, as of May 30, 1996 (the
``Termination Date''), applicant would be terminated and the Sponsor
would arrange for each holder of a Program to receive the number of
Class A shares of the Fund held by applicant corresponding to the value
of such holder's interest in the Program and thus representing an in-
kind distribution of the holder's pro rata interest in the assets of
applicant.
6. As of May 29, 1996, there was $159,658,510 face amount of
Programs outstanding, representing beneficial interests in applicant
having an aggregate value of $124,345,028 based on 14,325,464,045 Fund
shares owned by applicant for outstanding Programs at $8.68 per Fund
share.\1\
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\1\ The dollar value of the face amount of Programs is the total
amount of payment to be made under the Programs purchased by Program
holders. The aggregate value of Programs, outstanding is the net
asset value of the shares of the Fund attributable to such Programs
outstanding, which may be greater or less than the face amount
depending on the number of payments made and changes in the value of
the Fund shares.
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7. On the Termination Date, applicant distributed all of its net
assets, consisting of shares of the Fund, to Program holders of records
on that date. Each such Program holder received, at no acquisition fee,
the number of Class A shares of the Fund corresponding to the value of
his or her Program interest. The distribution to and receipt by each
Program holder of record was effected by the establishment, on the
books of the Fund, of an account in the name of that individual with
the requisite number of Class A shares of the Fund. Distributions of
14,325,464.045 Fund shares held by applicant in the total amount of
$125,634,320 to 20,339 holders of records represented approximately
100% of the net assets of applicant. Each Program holder received his
or her proportionate share of such liquidation distribution in Class A
shares of the Fund.
8. Any holder of an uncompleted Program on the Termination Date
with a face amount of less than $12,000, may purchase Class A shares of
the Fund at net asset value (``NAV''), plus a maximum sales charge of
2%, up to the amount representing the unpaid balance of his or her
Program, if the purchase order is so designated. Any holder of an
uncompleted Program on the Termination Date with a face amount of
$12,000 or more, may purchase Class A shares of the Fund at NAV, up to
the amount representing the unpaid balance of the Program, if the
purchase order is so designated. In addition, any person who was a
Program holder on the Termination Date may purchase Class A shares of
the Fund at NAV up to the amount representing partial Program
withdrawals outstanding on the Termination Date, provided the purchase
order is so designated.\2\
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\2\ The terms of the Programs allowed Program holders who had
made 18 minimum monthly payments to make partial withdrawals of cash
or Fund shares from their Programs, subject to certain restrictions.
After 90 days from the time of making a withdrawal and before the
Program's termination or exchange, Program holders could re-deposit
cash or Fund shares (depending on what had been withdrawn) to their
Programs without a sales charge. Program holders were permitted to
make partial withdrawals up to the Termination Date. The Sponsor
therefore determined to allow redeposits at any time subsequent to
the conversion to avoid the denial request due to the termination of
the Program.
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9. Applicant states that, in order to ensure that holders of
uncompleted Programs received full credit for sales commissions
previously paid, the Sponsor analyzed the maximum commission rate that
would have been applicable to subsequent payments under the Program.
Applicant further states that, for each of the foregoing categories of
holders of uncompleted Programs, the sales charge, if any, for
purchases of Class A shares of the Fund reflecting the unpaid balance
of the face amount of the Program is less than the sales charge that
would have been applicable if such purchases had been made under
continuation of the Program. Termination of the Programs did not result
in any Program holder paying a sales charge in excess of that permitted
under section 27 of the Act or provided under the terms of the Program.
10. Expenses incurred in connection with the liquidation consist
primarily of legal, printing, mailing, and miscellaneous administrative
expenses. The expenses are expected to total approximately $30,678, and
have been or will be paid by the Sponsor.
11. Applicant has no assets or securityholders, and is not party to
any litigation or administrative proceeding. The only known debts or
other liabilities of applicant that remain outstanding are legal fees
of approximately $325, which will be paid by the Sponsor. Applicant is
not engaged, nor does it propose to engage, in any business activities
other than those necessary for the winding-up of its affairs.
For the SEC, by the Division of Investment Management, under
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-11081 Filed 4-29-97; 8:45 am]
BILLING CODE 8010-01-M