[Federal Register Volume 68, Number 241 (Tuesday, December 16, 2003)]
[Notices]
[Pages 70052-70053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30985]


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SECURITIES AND EXCHANGE COMMISSION

[Rel. No. IC-26286; 811-78332]


Bexil Corporation; Notice of Application

December 10, 2003.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for deregistration under section 8(f) of 
the Investment Company Act of 1940 (the ``Act'').

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Summary of Application: Bexil Corporation requests an order declaring 
that it has ceased to be an investment company.
    Applicant: Bexil Corporation.
    Filing Dates: The application was filed on April 8, 2002, and 
amended on December 5, 2003.
    Hearing or Notification of Hearing: An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary and serving applicant 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 5, 2004, and should be accompanied by proof of 
service on 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 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, DC 
20549-0609. Applicant, c/o Stephanie A. Djinis, Law Offices of 
Stephanie A. Djinis, 1749 Old Meadow Road, Suite 310, McLean, VA 22102.

FOR FURTHER INFORMATION CONTACT: Jaea F. Hahn, Senior Counsel, at (202) 
942-0614, or Todd F. Kuehl, 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 
Commission's Public Reference Branch, 450 Fifth Street, NW., 
Washington, DC 20549-0102 (tel. 202-942-8090).
    Applicant's Representations:
    1. From 1986 through 1996, applicant's predecessor operated as a 
diversified series of shares of Bull & Bear Funds II, Inc., an open-end 
management investment company organized in 1974 under the laws of the 
State of Maryland and registered under the Act. Applicant was 
incorporated under the laws of the State of Maryland as Bull & Bear 
U.S. Government Securities Fund, Inc. on August 30, 1996. On September 
27, 1996, applicant registered under the Act as a closed-end management 
investment company. Applicant changed its name to Bexil Corporation on 
August 26, 1999. On November 28, 2000, applicant's stockholders 
approved a proposal to change the nature of applicant's business so as 
to cease to be an investment company and become an operating company. 
On June 13, 2001, applicant's board of directors (the ``Board'') 
terminated its management contract with an outside investment adviser 
effective July 31, 2001, and authorized applicant's officers to manage 
applicant's business affairs.
    2. On January 18, 2002, applicant acquired 50% of the outstanding 
voting stock of York Insurance Services Group, Inc. (``York''), a newly 
formed Delaware corporation. On that same date, York purchased all of 
the outstanding stock of certain subsidiaries of AIG Insurance 
Services, Inc. (``AIGIS''), a Delaware corporation. These subsidiaries 
have served as independent adjustment companies and third party 
administrators providing claims, data, and risk related services to 
insurers, insureds, and intermediaries located throughout the United 
States. Applicant states that York is not an investment company as 
defined in section 3(a) of the Act.
    3. Mr. Thomas MacArthur (``MacArthur''), York's chairman and chief 
executive officer, owns the remaining 50% of York's outstanding stock. 
Pursuant to a stockholder's agreement among MacArthur, York and the 
applicant, York's board of directors consists of five members; each of 
MacArthur and the applicant has the right to nominate two members and 
AIGIS has the right to nominate one member.\1\ Through a voting 
agreement among York, MacArthur and the applicant (``Voting 
Agreement''), applicant states that it has control over 50% of York's 
board of directors.\2\ Two members of applicant's Board currently serve 
as members of York's board of directors. Applicant's president 
currently serves as York's vice-chairman. Applicant states that it 
substantially contributes to the management of York's lines of business 
expansion or contraction, executive compensation and human resources, 
internal audit, accounting and auditing, budgeting and capital 
expenditures, legal capitalization structure and related uses of debt 
and equity financing and mergers and acquisition activity. Applicant 
also states that it sets the compensation of all York officers, other 
than MacArthur, through its control over the compensation committee of 
York's board of directors. At June 30, 2003, applicant's interest in 
York represented approximately 98% of applicant's total assets on an 
unconsolidated basis (exclusive of Government securities and cash 
items).
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    \1\ York's bylaws provide that directors shall be nominated by a 
plurality of votes, except that any election of the individual 
nominated by AIGIS shall require a unanimous vote. All of AIGIS' 
rights with respect to directorships of York terminate at such time 
as the principal amount of a subordinated note dated January 18, 
2002, of York payable to AIGIS shall be paid in full.
    \2\ The Voting Agreement requires that MacArthur vote his shares 
in favor of the AIGIS nominee, and that MacArthur will not vote for 
any individual to fill the vacancy left by an AIGIS nominee. The 
Voting Agreement contains no similar provision regarding the 
applicant's voting shares in York.
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    Applicant's Legal Analysis:
    1. Section 8(f) of the Act provides that whenever the Commission, 
upon application or its own motion, finds that a registered investment 
company has ceased to be an investment company, the Commission shall so 
declare by order and upon the taking effect of such order, the 
registration of such company shall cease to be in effect.
    2. Section 3(a)(1)(A) of the Act defines an investment company as 
any issuer which ``is or holds itself out as being engaged primarily, 
or proposes to engage primarily, in the business of investing, 
reinvesting, or trading in securities.'' Section 3(a)(1)(C) of the Act 
defines an investment company as any issuer which ``is engaged or 
proposes to engage in the business of investing, reinvesting, owning, 
holding, or trading in securities, and owns or proposes to acquire 
investment securities having a value exceeding 40 per centum of the

[[Page 70053]]

value of such issuer's total assets (exclusive of Government securities 
and cash items) on an unconsolidated basis.'' Section 3(a)(2) of the 
Act defines investment securities as ``all securities except (a) 
Government securities, (B) securities issued by employees' securities 
companies, and (C) securities issued by majority-owned subsidiaries of 
the owner which (i) are not investment companies, and (ii) are not 
relying on the exception from the definition of investment company in 
paragraph (1) or (7) of subsection (c).'' Section 2(a)(24) of the Act 
defines majority-owned subsidiary of a person as ``a company 50 per 
centum or more of the outstanding voting securities of which are owned 
by such person, or by a company which, within the meaning of this 
paragraph, is a majority-owned subsidiary of such person.'' Applicant 
states that it is no longer an investment company as defined in section 
3(a)(1)(A) or section 3(a)(1)(C). Applicant states that it is actively 
engaged in the business of overseeing its York subsidiary's provision 
of claims, data, and risk related services to insurers, insureds, and 
intermediaries located throughout the United States, and that applicant 
is also actively engaged in conducting a business review, development, 
and acquisition program for other operating businesses.
    3. Applicant states that it no longer meets the definition of 
investment company under the Act, and that it is thus qualified for an 
order of the Commission pursuant to section 8(f) of the Act. Applicant 
states that after entry of the order requested by the application, it 
will continue to be a publicly-held company listed on the American 
Stock Exchange and will continue to be subject to the reporting and 
other requirements of the Securities Exchange Act of 1934.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-30985 Filed 12-15-03; 8:45 am]
BILLING CODE 8010-10-P