[Federal Register Volume 65, Number 5 (Friday, January 7, 2000)]
[Notices]
[Pages 1199-1201]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-383]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 24231; 812-11782


Standish, Ayer & Wood Investment Trust, et al., Notice of 
Application

January 3, 2000.
agency: Securities and Exchange Commission (``Commission'').

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 certain 
limited partnership to transfer all their assets to corresponding new 
series of a registered open-end management investment company in 
exchange for shares of the new series.

applicants: Standish, Ayer & Wood Investment Trust (``Trust''), 
Standish Small Cap Value Fund, Limited Partnership (``Small Cap 
Partnership''), SIMCO International Small Cap Fund, Limited Partnership 
(``International Partnership'' and together with the Small Cap 
Partnership, the ``Partnerships''), Standish, Ayer & Wood Inc. 
(``Standish''), Standish International Management Company, L.P. 
(``SIMCO'' and together with Standish, the ``Advisers''), and Standish 
Investments, Inc. (``SII'').

filing dates: The application was filed on September 20, 1999 and 
amended on December 22, 1999. Applicants have agreed to file an 
amendment during the notice period, the substance of which is reflected 
in this notice.

hearing or notification of hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving applicants with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. on January 26, 2000, 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 Commission's Secretary.

addresses: Secretary, Commission, 450 Fifth Street, NW., Washington, 
D.C. 20549-0609; Applicants, c/o Beverly E. Banfield, Standish, Ayer & 
Wood Inc. One Financial Center, 26th Floor, Boston, MA 02111.

for further information contact: Deepak T. Pai, Senior Counsel, at 
(202) 942-0574 or George J. Zornada, 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 at the 
Commission's Public Reference Branch, 450 Fifth Street, NW., 
Washington, D.C. 20549-0102 (telephone (202) 942-8090).

Applicants' Representations

    1. The Trust, a Massachusetts business trust, is registered under 
the Act as an open-end management investment company. The Trust 
currently offers 23 series and proposes to offer two additional series, 
the Standish Small Cap Value Fund (``Small Cap Fund'') and the Standish 
International Small Cap Fund (``International Fund'' and together with

[[Page 1200]]

the Small Cap Fund, the ``New Funds''). The investment objective and 
principal strategies of each New Fund will be essentially identical to 
those of its corresponding Partnership. The Small Cap Partnership and 
the International Partnership are Massachusetts limited partnerships 
organized on January 4, 1999 and January 2, 1996, respectively. The 
Partnerships are not registered under the Act in reliance on section 
3(c)(1) of the Act.
    2. Standish is registered under the Investment Advisers Act of 1940 
(``Advisers Act'') and serves as investment adviser to the Small Cap 
Partnership and the Small Cap Fund. SIMCO, which is wholly-owned by 
Standish, is registered under the Advisers Act and serves as investment 
adviser to the International Partnership and to the International Fund. 
SII, a wholly-owned subsidiary of Standish, serves as general partner 
(``General Partner'') of the Partnerships.
    3. Applicants propose that each of the New Funds will acquire all 
the assets, minus assets sufficient for winding up the Partnership, 
from its corresponding Partnership in exchange for New Fund shares 
(``Shares'') (the ``Exchanges''). Each Exchange will be effected 
pursuant to an Agreement and Plan of Exchange (the ``Plan''). Under the 
Plan, Shares delivered to each Partnership in an Exchange will have an 
aggregate net asset value (``NAV'') equivalent to the NAV of the assets 
transferred by that Partnership to the Trust on behalf of the 
corresponding New Fund. Each Partnership will subsequently distribute 
the New Fund Shares it receives to its partners on a pro-rata basis 
based on the value of the interests held on the effective date of the 
Exchange by each partner, currently anticipated to be January 28, 2000. 
Following the Exchange, each Partnership will be liquidated and 
dissolved. The expenses of the Exchanges will be borne by Standish.
    4. At an October 12, 1999 meeting of the board of trustees of the 
Trust (the ``Board''), the Board, including a majority of the members 
who are not ``interested persons,'' as defined in section 2(a)(19) of 
the Act (``Independent Trustees''), approved the Exchanges. In 
approving the Exchanges, the Board concluded that: (a) the Exchanges 
are desirable as a business matter from the point of view of the Trust; 
(b) the Exchanges are reasonable and fair, do not involve overreaching, 
and are consistent with the policies of the Funds; and (c) the 
interests of existing shareholders in the Funds will not be diluted as 
a result of the Exchanges. These findings, and the basis upon which 
such findings were made, have been recorded in the minute books of the 
Trust.
    5. The board of directors of SII, as General Partner of the 
Partnerships, approved the Exchange by unanimous written consent. SII, 
as General Partner, will solicit through the delivery of a private 
placement memorandum written consents from each limited partner to 
amend the partnership agreements of the Partnerships to allow for the 
conversion of the Partnerships into a registered investment company. 
The limited partners who do not consent to the amendment to the 
partnership agreements, or who do not wish to participate in the 
conversion of the Partnerships, will have an opportunity to redeem 
their interests in the Partnerships before the conversion occurs.
    6. The Exchanges will not be effective until: (a) The Commission 
has issued an order relating to the application; (b) a majority in 
interest of the limited partners of each Partnership approve an 
amendment to each Partnership Agreement to allow for the conversion of 
the Partnerships into a registered investment company; and (c) the 
Trust and the Partnerships have received an opinion of counsel that no 
gain or loss will be recognized by the New Funds upon the transfer of 
the Partnerships' assets.

Applicants' Legal Analysis

    1. Section 17(a) of the Act prohibits any affiliated person of a 
registered investment company, or any affiliated person of that person, 
acting as principal, from selling to or purchasing from the registered 
investment company any security or other property. Section 2(a)(3) of 
the Act defines an `affiliated person'' as, among other things, 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; any person controlling, controlled by, or under common 
control with, the other person; any officer, director, partner, 
copartner or employee of the other person; and, if the other person is 
an investment company, its investment adviser.
    2. Applicants state that each Partnership could be deemed to be an 
affiliated person of an affiliated person of each Fund. Applicants 
state that because SII (as General Partner of the Partnerships) and 
SIMCO (as investment adviser to the International Partnership) are 
under common control with Standish (the investment adviser to the Small 
Cap Partnership), Standish could be deemed to control the Partnerships. 
Each Partnership would be an affiliated person of Standish and an 
affiliated person of an affiliated person of each New Fund based on 
Standish and SIMCO begin the investment advisers to the New Funds. In 
addition, several limited partners who are directors or officers of 
Standish own greater than 5% of the Small Cap Partnership, which would 
make these limited partners affiliated persons of the Small Cap 
Partnership. These limited partners are also affiliated persons of the 
New Funds by reason of their positions with Standish. Accordingly, the 
Small Cap Partnership could also be deemed an affiliated person of an 
affiliated person of the Small Cap Fund. Thus, applicants state that 
the proposed Exchanges may be prohibited under section 17(a).
    3. Rule 17a-7 exempts certain purchase and sale transactions 
otherwise prohibited by section 17(a) if an affiliation exists solely 
by reason of having a common investment adviser, common directors, and/
or common officers or directors, provided, among other requirements, 
that the transaction involves a cash payment against prompt delivery of 
a security. Applicants state that the relief provided by rule 17a-7 may 
not be available for the Exchanges because the Exchanges will be 
effected on a basis other than cash. Applicants also state that because 
several limited partners who are officers or directors of Standish may 
be deemed affiliated persons of the Small Cap Partnership because they 
own 5% or more of the Partnership, the New Funds and the Partnerships 
may be affiliated in a manner other than allowed under rule 17a-7.
    4. Section 17(b) of the Act authorizes the Commission to exempt a 
transaction from the provisions of section 17(a) if the terms of the 
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 and the proposed transaction is consistent with the 
policy of each registered investment company concerned and the general 
purposes of the Act.
    5. Applicants submit that the terms of the Exchanges are consistent 
with the requirements of section 17(b) of the Act. Applicants state 
that the Shares issued by each New Fund will have an aggregate NAV 
equal to the value of the assets acquired from its corresponding 
Partnership and that because Shares will be issued at their NAV, Fund 
shareholders will not be diluted. Applicants also state that the 
investment objective and policies of each New Fund are substantially 
similar to its corresponding Partnership.

[[Page 1201]]

Applicants further state that the Board, including the Independent 
Trustees, have approved the Exchanges, and that each Exchange will 
comply with rule 17a-7 (b) through (f).

Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    1. The Exchanges will comply with the terms of Rule 17a-7 (b) 
through (f).

    For the Commission, by the Division of Investment Management 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-383 Filed 1-6-00; 8:45 am]
BILLING CODE 8010-01-M