[Federal Register: December 16, 2003 (Volume 68, Number 241)]
[Notices]
[Page 70052-70053]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16de03-92]
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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