[Federal Register Volume 62, Number 83 (Wednesday, April 30, 1997)]
[Notices]
[Pages 23513-23514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11088]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 22631; 811-447]


United Periodic Investment Plans to Acquire United Accumulative 
Fund Shares of United Funds, Inc.; 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: United Periodic Investment Plans to Acquire United 
Accumulative Fund Shares of United Funds, Inc.

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

SUMMARY OF APPLICATION: Applicant 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, N.W., Washington, D.C. 
20549. Applicant, 6300 Lamar Avenue, P.O. 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 
Periodic Investment Plans to Acquire United Accumulative Fund Shares of 
United Funds, Inc. and Periodic Investment Plans with Insurance to 
Acquire United Accumulative Fund Shares of United Funds, Inc. 
(collectively, the ``Plans''). Applicant was created under the laws of 
Missouri pursuant to a trust agreement dated October 14, 1940. On July 
15, 1958, applicant and the then-acting trustee entered into a 
supplemental trust agreement (``Trust Agreement''), which in fact was 
an independent agreement creating the Plans. Waddell & Reed, Inc. (the 
``Sponsor'') and State Street Bank and Trust Company (the 
``Custodian'') serve as applicant's Sponsor and Custodian, 
respectively.
    2. On June 25, 1941, 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. Applicant's registration 
statement on Form S-6 under the Securities Act of 1933, for the 
registration of United Accumulative Purchase Agreements and Periodic 
Investment Plans (with and without insurance) (``Purchase Agreements'' 
and ``Periodic Investment Plans''), became effective in 1941, and the 
initial public offering of the Purchase Agreements and Periodic 
Investment Plans commenced on or soon after such effective date. 
Thereafter, applicant filed a registration statement of revised forms 
to register the Plans that became effective on or about February 17, 
1959. The initial public offering of the Plans commenced on or soon 
after such effective date, and the public offering of the Purchase 
Agreements and Periodic Investment Plans ceased on or prior to such 
effective date.
    3. Before February 29, 1996, the Sponsor ceased to offer and sell 
any new Plan. The Custodian subsequently informed the Sponsor that it 
intended to resign as custodian. Accordingly, and in light of changes 
since the inception of the Plans in the ways of investing in United 
Funds, Inc. Accumulative Fund (the ``Fund''), the Fund which underlies 
the Plans, the Sponsor determined not to continue the Plans.
    4. The Trust Agreement provides that the Plans may be changed by 
agreement of the Sponsor and the Custodian without the consent of the 
Plan holders, provided that the change does not adversely affect the 
substantive rights of the Plan holders. The Sponsor determined that: 
(a) The amendment of the certificates of each Plan to permit the 
termination of that Plan by the Sponsor did not adversely affect the 
substantive rights of the Plan holders; and (b) overall, as direct 
shareholders of the Fund, Plan holders on the Termination Date, as 
defined below, would be in a position at least as favorable, if not 
more favorable, then if their Plans had not terminated. Effective March 
11, 1996, the Sponsor and the Custodian amended the certificates of the 
Plans to permit the termination of each Plan by the Sponsor in 
accordance with the terms of the notice sent to Plan 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 Plan 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 Plan 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 $38,841,779 face amount of Plans 
outstanding, representing beneficial interests in applicant having an 
aggregate value of $228,599,642 based on 28,083,494,129 Fund shares 
owned by applicant for outstanding Plans at $8.14 per Fund share.\1\
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    \1\ The dollar value of the face amount of Plans is the total 
amount of payments to be made under the Plans purchased by Plan 
holders. The aggregate value of Plans outstanding is the net asset 
value of the shares of the Fund attributable to such Plans 
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 Plan holders of record on 
that date. Each such Plan holder received, at no acquisition fee, the 
number of Class A shares of the Fund corresponding to the value of his 
or her Plan interest. The distribution to and receipt by each Plan 
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 28,083,494.129 
Fund shares held by applicant in the total

[[Page 23514]]

amount of $230,565,487 to 9,464 holders of record represented 
approximately 100% of the net assets of applicant. Each Plan holder 
received his or her proportionate share of such liquidation 
distribution in Class A shares of the Fund.
    8. Any holder of an uncompleted Plan 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 Plan, if 
the purchase order is so designated. Any holder of an uncompleted Plan 
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 Plan, if the purchase order is 
so designated. In addition, any person who was a Plan holder on the 
Termination Date may purchase Class A shares of the Fund at NAV up to 
the amount representing partial Plan withdrawals outstanding on the 
Termination Date, provided the purchase order is so designated.\2\
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    \2\ The terms of the Plans allowed Plan holders who had made 18 
minimum monthly payments to make partial withdrawals of cash or Fund 
shares from their Plans, subject to certain restrictions. After 90 
days from the time of making a withdrawal and before the Plan's 
termination or exchange, Plan holders could redeposit cash or Fund 
shares (depending on what had been withdrawn) to their Plans without 
a sales charge. Plan 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 of a redeposit request due to the 
termination of the Plans.
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    9. Applicant states that, in order to ensure that holders of 
uncompleted Plans 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 Plan. Applicant 
further states that, for each of the foregoing categories of holders of 
uncompleted Plans, the sales charge, if any, for purchases of Class A 
shares of the Fund reflecting the unpaid balance of the face amount of 
the Plan is less than the sales charge that would have been applicable 
if such purchases had been made under continuation of the Plan. 
Termination of the Plans did not result in any Plan holder paying a 
sales charge in excess of that permitted under section 27 of the Act or 
provided under the terms of the Plan.
    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 $15,052, and 
have been or will be paid by the Sponsor.
    11. Applicant has no assets or securityholders, and is not a 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. 97-11088 Filed 4-29-97; 8:45 am]
BILLING CODE 8010-01-M