[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