[Federal Register Volume 64, Number 158 (Tuesday, August 17, 1999)]
[Notices]
[Pages 44766-44767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-21274]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 23942; 812-11704]


Anchor Resource and Commodity Trust, et al.; Notice of 
Application

August 11, 1999.
AGENCY: Securities and Exchange Commission (``SEC'').

ACTION: Notice of an application under section 17(b) of the Investment 
Company Act of 1940 (the ``Act'') for an exemption from section 17(a) 
of the Act.

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SUMMARY OF APPLICATION: Applicants request an order to permit Anchor 
Resource and Commodity Trust to acquire the assets and liabilities of 
Anchor Strategic Assets Trust (the ``Reorganization''). Because of 
certain affiliations, applicants may not rely on rule 17a-8 under the 
Act.

APPLICANTS: Anchor Resource and Commodity Trust (``ARCT''), Anchor 
Strategic Assets Trust (``ASAT,'' ARCT and ASAT each a ``Trust,'' and 
together the ``Trusts'') an Anchor Investment Management Corporation 
(``Adviser'').

FILING DATES: The application was filed on June 25, 1999. Applicants 
have agreed to file an amendment to the application during the notice 
period, the substance of which is reflected in this notice.

HEARING OR NOTIFICATION OF HEARING: An order granting the requested 
relief 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 
September 1, 1999, 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, N.W., Washington, D.C. 
20549-0609. Applicants, 579 Pleasant Street, Suite 4, Paxton, 
Massachusetts 01612.

FOR FURTHER INFORMATION CONTACT: Susan K. Pascocello, Senior Counsel, 
at (202) 942-0674, or Michael W. Mundt, Branch Chief, at (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, 450 Fifth Street, N.W., Washington, D.C. 
20549-0102 (tel. 202-942-8090).

Applicants' Representations

    1. The Trusts, both Massachusetts business trusts, are registered 
under the Act as open-end management investment companies. The Adviser, 
a Massachusetts corporation, serves as the investment adviser to the 
Trusts and is registered as an investment adviser under the Investment 
Advisers Act of 1940. The Adviser is under common control with Societe 
D'Etudes et de Gestion Financieres Meeschaert, S.A. (``Societe 
D'Etudes''), which owned in excess of 99% of the outstanding shares of 
ARCT and in excess of 60% of the outstanding shares of ASAT as of June 
1999.
    2. On June 21, 1999, the boards of trustees of each Trust 
(together, the ``Boards''), including all of the trustees who are not 
``interested persons,'' as defined in section 2(a)(19) of the Act 
(``Independent Trustees''), unanimously approved an agreement and plan 
of reorganization (``Reorganization Agreement'') under which ARCT will 
acquire the assets and liabilities of ASAT in exchange for ARCT shares. 
The number of ARCT shares to be issued to ASAT will be determined on 
the basis of the relative net asset value per share and aggregate net 
assets of ARCT and ASAT as of the close of business on the closing date 
of the Reorganization (``Closing Date''), currently anticipated to 
occur in early September 1999. Portfolio securities of ARCT and ASAT 
will be valued in accordance with the valuation practices of each 
Trust, which are described in each Trust's current prospectus and 
statement of additional information. As soon as practicable after the 
Closing Date, ASAT will liquidate and distribute pro rata to its 
shareholders the ARCT shares. No sales charges will be imposed upon 
ASAT shareholders in connection with the Reorganization.
    3. Applicants state that the investment objectives, restrictions 
and limitations of ARCT are similar to those of ASAT. Neither ASAT nor 
ARCT impose any sales charges or distribution related fees.
    4. The Boards, including all of the Independent Trustees, 
determined that the Reorganization is in the best interests of each 
Trust, and that the interests of the existing shareholders of each 
Trust would not be diluted by the Reorganization. In assessing the 
Reorganization, the Boards considered various factors, including: (a) 
the compatibility of each Trust's investment objective, policies and 
restrictions, and shareholder services; (b) the terms and conditions of 
the Reorganization; (c) the expense ratios of each Trust; (d) the tax-
free nature of the Reorganization; and (e) the estimated costs of the 
Reorganization. All Reorganization expenses will be borne by ARCT, as 
determined by its Board.
    5. The Reorganization is subject to a number of conditions, 
including that: (a) the Reorganization is approved by each Board and 
the shareholders of ASAT; (b) the Trusts receive opinions of counsel 
that the Reorganization will be tax-free; and (c) applicants receive 
exemptive relief from the SEC as requested in the application. The 
Reoganization Agreement may be terminated by ASAT by resolution of its 
Board if the Board determines that circumstances have changed to make 
the Reorganization inadvisable. Applicants agree not to make any 
material changes to the Reorganization Agreement without prior SEC 
approval.
    6. A registration statement on Form N-14 was filed with the SEC on 
June 23, 1999, and became effective on July 29, 1999. Definitive proxy 
solicitation materials have been filed with the SEC and were mailed to 
ASAT shareholders on July 29, 1999. A special meeting of ASAT 
shareholders is scheduled for August 20, 1999.

Applicants' Legal Analysis

    1. Section 17(a) of the Act generally prohibits an affiliated 
person of a registered investment company, or an affiliated person of 
such a person, acting as principal, from selling any security to, or 
purchasing any security from, the company. Section 2(a)(3) of the Act 
defines an ``affiliated person'' of another person to include (a) any 
person directly or indirectly owning, controlling, or holding with 
power to vote 5% or more of the outstanding voting securities of the 
other person; (b) any person 5% or more of whose securities are 
directly or indirectly owned, controlled, or held with power to vote by 
the other person; (c) any person directly or indirectly controlling, 
controlled by or under common control with the other person; and (d) if 
the other person is an investment company, any investment adviser of 
that company.

[[Page 44767]]

    2. 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, or affiliated persons of an affiliated person, 
solely by reason of having a common investment adviser, common 
directors, and/or common officers, provided that certain conditions set 
forth in the rule are satisfied.
    3. Applicants believe that they may not rely on rule 17a-8 in 
connection with the Reorganization because the Trusts may be deemed to 
be affiliated by reasons other than having a common investment adviser. 
Applicants state that Societe D'Etudes, affiliate of the Adviser, owns 
more than 25% of the outstanding voting securities of each of the 
Trusts.
    4. Section 17(b) of the Act provides that the SEC may exempt a 
transaction from the provisions of section 17(a) if the evidence 
establishes that the terms of the proposed transaction, including the 
consideration to be paid, are reasonable and fair and do not involve 
overreaching on the part of any person concerned, and that the proposed 
transaction is consistent with the policy of each registered investment 
company concerned and with the general purposes of the Act.
    5. Applicants request an order under section 17(b) of the Act 
exempting them from section 17(a) to the extent necessary to complete 
the Reoganization. Applicants submit that the Reorganization satisfies 
the standards of section 17(b) of the Act. Applicants believe that the 
terms of Reorganization are fair and reasonable and do not involve 
overreaching. Applicants state that the Reorganization will be based on 
the Trusts' relative net asset values. In addition, applicants state 
that the Boards, including all of the Independent Trustees, have 
determined that the participation of each Trust in the Reorganization 
is in the best interests of each Trust and that such participation will 
not dilute the interests of shareholders of each Trust.

    For the SEC, by the Division of Investment Management, under 
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-21274 Filed 8-16-99; 8:45 am]
BILLING CODE 8010-01-M