# SHUMAKER LOOP

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URL: https://www.frixlaw.com/law-library/documents/agency%3Asec%3A623dc609f4b537ad

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

//
SHUMAKER LOOP
NORTH COURTHOUSE

SQUARE

1000

ALN

LOOP
GALLAGHER
ACeEPT
GOSUNE
MALCOLM
RAMEY
JOHN
I.4ACIETT
JR
THOMAS
WEBB
ALEXANDER
GREGORY
CARL
BRUGGEMAN
ROBERT
CLAYTON JR
MARC GERTNER
GEORGE
PICKNELL
DONALD
MEWI4ORT JR
EDWIN
EMEREON
JAMES
TUSCHMAN
JAMES
WHITE JR
BARTON
WAGENMAN
FRANcIs

.1

ROt.F

SCHEIDEL

JOHN

HAYWARD

WIWAM

TOLEDO

OHIO

43624

OWIO

24142Ot

419

WILLIAM

HEYW000

Il

MCDANIEL

JR

FOLI

JOSEPH

RIDEOUT

GEORGE

LCHAPMAN
WITHEREU
GRAHAM
BARRON

DENNIS
KEVIN

S.­

JOHN

.\

t-

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AtL

SECURITIES

October

_.jCKG.FYNES
McCARTHY

TI4OTHY

-RINEE

--

BIPNBALJKI

AM BONINI
83

2-7

ANN LA.NZINGER
KR.HIGH
TN

jQQ

rsr

LJJ

HAEI
ELLEN

APL1

OF

OFFI.E

REOBTS

THOMAS
PLETZ
JOHN
BURSON
THOMAS
WEBB JR
ROBERT
AI%IACH
DAVID
WICKLUNO
GARY
DIESNG
JOHN
MaAY

HAEL
SANOERSON
N.SALES
MS

GOSLINE
HARTSEL

WATERMAN

VIVIAN

0I%

NORMAN
FRANCiS

KjMDRICK

JACXS6

McGOWAN
PISANELLJ

03 SQUILLANTE
GORYtLOOGE

SE1IVICES
ASL.W000MAN
GREGORY
SrSIBLEY
.1

OF

COUNSEL

CHARLES SCHARFY
CORWIN

SWIFT

JOHN

Office

of

Division

Chief
of

Securities

STRAUB

Counsel

Corporation Finance
Commission
Exchange

and

450 5th Street
N.W
D.C
20549
Washington

Re

for

Request

Ohio
Section
Sections
Act

Section

NoAction
and

of

the

3a2
3a4
of

and

Ladies

No

"puncil

Securities

1933
Exchange

Rule

1934

and

12h1a

3c11

of

of

the

the

Securities

Investment

Company

1940
of

the

Advisers

Investment

Act

of

1940

N1575/16191

Northwestern Ohio Building and Construction Trades
Council
is
confederation
of
local
building and__construction

whic reprisent
unions
in
northwestern
Ohio
working
members of the AFLCIO
Building
tLades

Ohio

Council
confederation
industry

of

the

Gentlemen

and

The

the

File

Act

of

of

202a11

Section
Our

Securities

3a5

and
Act

3c5

of

Relating to The Northwestern
Construction Trades Foundation

1934

12h

Exchange
Sections
Act

Letter

Building

in

the

anE

buiIg
The

local

lotion

unions

are

The
Department
of
Construction
Employers
the
Emplo
and
of
in
the
buil
employers
engaged
ng
same

tradesmen

affiliates

Trades

of

Northwestern
is

construction

geographic area

The
Council
and
the Employers
on behalf of the local
unions
associations within their respective groups
employers
desire
to
establish
construction industry
investment
program
the
ns
which
or
their
pyee pension benefi
they
and

foee4toL.

cosponsor

collec

Plans

Our

firm

has

been

retained

as

of

Office

Division
Securities

October

Counsel

Chief
of

Corporation Finance
and Exchange
Commission

27

1983

Page

counsel

special

establishing

and

the

will

be

to

Employers

assist

in

program

brief

In

Council

the

by

the

foundation

established
to
pursuant
want
to
in
the
participate
of
the
foundations
organizational
agreement is
attached
Exhibit
this
The
foundation
will
be
as
to
letter
administered by
The
will be directed to
gsxd pf Tzustees
trustees
establish
an
investment
allow
to
the
Plans
to
invest
in
plan

amElans wo

written
agreement
foundation
draft

mortgage loans
northwestern
Ohio

construction

period

The

foundation

will contact

institutions

in

to

learn

the

in mortgage loans
Each
individual

participations

Plans

member

in
participate
This
decision
tabulate
ag
be

the

ate

will

sed

esta

for

will

The

the

extent

to

the

the

of

participation
which
will

inst

lending

to

its

foundation

Aseparate

nv

to

the

trust

will

this

Plans

and

institutions

lending

in participating

in

mortgage

as
merely
communicate

can

loans

We
that
advise
us that
the
Staff
of
respectfully request
you
Securities
and
Commission
will
not
the
Commission
Exchange

recommend
is

the

mutual interest

indicate

the

endjig

which

through

inform
Plans

will

transaction
The
Plans
participating in
trust with the foundation
acting as
of
the
trust
to
agreement is attached as Exhibit
Plans
will transfer th
yes
to the lending
institution
The
foundation
un

eac

which will forward

to

the

establish

draft

letter

conduit

and

ich

lending

availability of
information
along to its
determine
whether
to

this

pass

Plan

proposed loan and
be
communicated

responses

amount

mortgage
trustee
this

the

and

of

that

organized

Commission take

the

and

in

operated

without

individualrusts

the

investment

as

of

3c5

Sections

Company

Act

trusts

as

without
Securities

of

the

set

forth

in

registering
under

1933

Section

without
trusts

as

this

if

the

letter

fudaUon

the

under

the

Investm

the

fro

exclusions

fojn

set
company
the
anIjjIJTflTiYof
Inystmeitnt

securities
Act

in

companies
the

upon

action

an -invest

exemption from

upon

T194O

ance

forth

the

registering

re

Ct

t1efinirion

set

mariner

Act
Company

enforcement

any

the
the

3a2

the

interests

in

the

21

of

the

Section

1933

Act in reliance

registration provisions
of

the

1933

Act

registering the interests
under
Section
12g

securities

in

the

of

the

program

Office

of

Counsel
Corporation Finance
and Exchange
Commission

Chief
of

Division
Securities

27

October

1983

Page

Securities
the

section

that

Rule

or

the

registration provisions
under that act
adopted

in

reliance

of

broker

without
trusts

3a5

as

an
upon
and
dealer
of

as

the

set

forth

Act

1934

202a11

the

DESCRIPTION

OF

above

the

maintained by their
under
Section 401 of

respective

Relations

Act

the

comply
of

the

1983
Supp
Act
of 1974

Under

in

definitions

3a4

Sections

and

1947

as

LMRA

the

PROPOSED

Council
the

OPERATIONS

and

the

employee

to
Employers desire
pension benefit plans

members

The

Plans

Revenue

Code

of

all

are

1954

as

qualified

amended

the

of
the
Labor
requirements
Management
29 U.S.C.A
S141 et seq
1973 and
amended
and
the
Employee Retirement Income
Security
the

UOO1

program
be

et

1975

seq

and

Supp

1983

ERISA

Council
and
the
Employers will
The
Northwestern
Ohio
as
Building and
The
Foundation
will
the Foundation
the

known

foundation to
Construction Trades
Foundation
establish

an exemption from the
adviser
set
forth
in
Investment
Advisers Act

for

Internal

with

U.S.C.A

29

forth

upon

of

vehicle

and

set

or the
registering the foundation
advisers under the Investment

investment

Code

in

investment

noted

As
an

develop

the

from

exemption

Advisers Act in reliance
definition
of
investment
Section

Act

the
foundation
registering either
brokerdealers
under the 1934 Act

without
trusts

1934

the

1934

the

12h1a

in

of

statutory minimums specified in
exceeded
in
reliance
the
upon

are

exemption from

and

Act

Exchange
that
the

event

under
and
association
unincorporated
organized
will
be
under
Section
401
of
of Ohio and
by the laws
qualified
governed
that
benefit
the
Code
The
Foundation will provide
any
employee
plan
and cosponsored
Council
under Section
401 of the Code
by the
qualified
union affiliated with it or the Employers
or any
or any
local
employer
the
if
it
to
in
Foundation
affiliated with
participate
may elect
be

notforprofit

collective

investment

of

the

Plans

funds

is

not

prohibited

by

the

order
the
Plan
The
instrument
decree
or
creating
judgment
Board of Trustees the Trustees
Foundation will be administered by
the
Foundation shall
be
entitled to
two
Plan
in
Every
participating
Trustees

cosponsor

Plan

on
of

the
the

Foundations
Plan

and

the

Board
other

by

one
the

appointed

by

the

employer cosponsor

union
of

the

Office

of

Securities

Corporation Finance
and Exchange
Commission

27

October

Counsel

Chief

of

Division

1983

Page

Foundation will allow the
Plans
to
focus
portion of
investments
that
would
benefit
both
their
members
and the
their
local
Rather
than
in
community
investing
anonymous
corporations or
traditional
investment
other
more
media the Plans hope to encourage new
their
for
construction
within
and
create
their
jurisdictions
jobs
members
an umbrella organization
such
as the Foundation
By creating
the
Plans
can
contribute
to
the
of
number
of
larger
financing
and
involve
themselves
The
Plans
in more extensive
projects
projects
The

funds

also

can

on

the

achieve

expertise

the

economies of scale
Inherent in
Foundation viii allow the Plans
diversification among
providing

and

investments
Additionally
larger
to minimize their investment
risk
and

types

locations

the

by
available
investnents

of

that

could

they

not

obtain

individually

The
Foundation will approach
bank
and
loan
every
savings
and insurance
in
the
northwestern
Ohio
area
and
ask
association
company
that
members the opportunity to participate
they allow the Foundations
in
all
construction
loans
made
them
All
such
by
period
mortgage
shall
be
made
in
accordance
with
documents
prepared
participations
by
the
unless
the
Plans
the
Foundation
to
use
participating
agree
of

paperwork

the

institution

lending

information
from lending
institutions regarding
Upon receiving
the
Foundation
shall
on
this
information to
appropriate loan
pass
the
individual
Plans
Each
individual
Plan
its
trustees
or
through
other
investment
shall
then
determine
if
it
desires
to
manager
an

so

ate

amount

if
the amount
of
and
opportunity
would
their
decisions
to
the
relay
in turn
inform the lending
would
institution of
of
desired
The
atm
Plans
participation
par

reement

with

the

imesnt

to

in the
participate
its
participation

which

Foundation
re

loan
specific
The
Plans

Foundation
Foundation

as

trustee

and

oun

on

The

at

will

collect

the

aid

the
to
immediately forward
lending
received
institution
each
investment
The
institution will hold
lending
all funds
investments until it
contributed to it in certain specified
receives
all funds
and the loan transaction is closed
investments

trustee
in

of

the

Income

of

and

would

the

be

Trust

immediately

would
be
to
paid
distributed to the
will thus not hold

Plans

participating

Plan

funds

conduit

for

The
trust
Foundation
but
serve
time
merely

that

of

length

distribution
accounting
have

not

Trust

Plans

of

obligations
discretion over

assets

described

greatly

thereby

below

other
atd

than

as

the
simplifying
institutions

the

lending

the

investment

as

will render

related
no

Foundation

the

for

as

any

and
payment
and
recordkeeping
The Foundation will

or disposition of
management
the
Foundations
reserves

to

investment

advice

to

the

Plans

Office

of

Division

Chief
of

Corporation Finance
Conission
Exchange

and

Securities

27

October

Counsel

1983

Page

Foundation

will
incur
limited
amount
of
general
in
the
of
nature
and
expenses
postage photocopying
other
operational expenses as well as legal
and
accounting expenses
These
will
be
attributable
to
or
allocated
between
the
expenses
individual
Trusts
as determined by vote
of
the
Foundations
Board
of
Trustees
The
Foundations
reserve
expenses will be reimbursed from
established by the
Foundation from fees
collected
from
the
mortgage
borrower through
the lending
institution at the time the Trusts acquire
The

administrative

their

respective

amount

of

interests
These
fees will be
in the
participation
as
estimated
the
Board
excess
reserves
will
expenses
by
Any
be
distributed
to
the
and
additional
Plans
shall
be
expenses
any
reimbursed from the assets
of the Trust
or Trusts
for
the
responsible
all as determined by
the
Trustees
The
Foundation reserves
expenses
would
be
with
one
or
more
banks
or
and
loan
deposited
savings
institutions maintaining an office
in Lucas
and
invested
County Ohio
in the individual trust agreements
by the Foundation as specified
The

loan

Foundation

may

employees

are

prohibited

by

transactions

into
the
proposed to be entered
through
which
will
be
built
whose
projeØts
by
employers
covered
the
Plans
These
investments
would
be
by
fund

the

terms

that

act

the

Department

transactions

similar

Transaction

observe

following

must

financing
can

bank

independent
Section

been

have

made

be

338

of

an

406 of
exemption from Section
of
Labor
Department

to

those

761B

Service

the

described

761B

PTE

here

for

Under

which

loans

benefit plan
may be made
by an employee
covered
the
employees
by
plan
only
be made
and
commitment
for permanent
may

conditions

an

loan

absent

Exemption

has
employer who
loans
construction period
to

ERISA

nature

in

Prohibited
the

of

exemption has been adopted by the
and
the Internal
Revenue
Service

class

made

the
or

insurance

ERISA

or

someone

by

decision

to

the

which

company

by
Home

other

make

and

savings

than

the

loan

must

plan
be

before
made

the

by

an

meets the requirements
loan association subject

of
to

Loan Bank
Board pursuant to its sole
regulation by the Federal
or control
discretionary authority
regarding management of plan assets
the
and
loan
association must
insurance
or savings
bank
company
make such
loans
terms
and
conditions
from its own
on similar
commonly
their
established for
funds and the loan must satisfy
qualifications
the

review

aggregate
in any one

of

fair

the

of

investments
exceed

certain

of

loans

innnediately

after

making

investments

including

loans

of

an

the

loan

individual

the
plan

exceed
ten percent
employer participating in the plan cannot
market value of the plans assets and the aggregate amount

of

cannot

such

amount

of

the

plan

thirtyfive
records

of

individuals
specified
for six years from the

the

in

loans
of

percent

must

plan

including
date

of

the

to

all

the
be

plan

loan

its

employers
participating
and
fair
market
value
plans

retained

and

participants

made
and

available

to

beneficiaries

Office

of

Chief
of

Division
Securities

27

October

Counsel

Corporation Finance
and Exchange
Commission
1983

Page

The

herein

as

program
because
the

761B

PTE

trustees

described

of

does

Plans

the

not

within

fall

which

may not include
insurance
bank
or savings
and
loan association
will make the
company
investment
decisions on behalf of the Plans
The
Foundation has
filed
an application
with the Department for an administrative exemption under
ERISA
Section
based
on
the
criteria
of
PTE
For

761B

408a

of

purposes

its

will be

ruling

this

to

response

Based
actions

the

individual

Trusts

PROVISIONS

the

by

the

Investment

Company

Trusts

as

securities

under

in

Trusts

as

or

may assume

that

such

ANALYSIS

AND

Act

the

investment

as

companies
interests
in the

registration of interests
registration of the
under
the
1934
Act and

Act

1934

brokerdealers

as

Foundation or
Advisers Act

the

Company Act

Trusts

registration of

1933

under

Trusts

registration of
under
the Investment
Investment

the

opinion that
interests in
without
accomplished

be

may

the

Act

securities

the

Plans

Foundation or

under

Foundation

Staff

the
facts
set
forth
it
is our
upon
above
the proposed Foundation and
the purchase
of

of

registration of the

the

the

received

STATUTORY

the

letter

the

Trusts

as

investment

advisers

1940

of

The

of participations
in construction period mortgage
purchase
constitute
the
of
Even
if
the
may
acquisition
security
viewed
the
participations are
as securities
Foundation does
not
fall
within the definition of investment
of the
company at Section
loans

3a1

investing

Company Act
in
securities

behalf

each

Investment

on

of

behalf

will

of

engage

Trust
the

in

total

investment

criteria

are

but
its

Trusts

could

engage

the

such

acquire

owning

securities

holding
centum

of

Company

Act

40

per
Investment

assets

in

business
of
securities on
as trustee
and passively hold them
be argued however
that
each Trust

capacity
It

business of
value
exceeding

Section
of

will not
will merely

it

the

having

issuers

in

as

the

value

3c

such

from
the
definition
provides various exemptions
In particular
companies
meeting the following
within the definition of investment
company

company
not

of

3a3

Section

Aiiy

business
faceamount

who

person

is

issuing
certificates

periodic
payment
primarily engaged
businesses

not

engaged

redeemable

of

of

the

securities
type

or

and

who

is

certificates
one
or more of
purchasing

the

installment

plan
in

in

or

the

following
otherwise

Office

of

Division

Chief
of

Securities

and

27

October

Counsel

Corporation Finance
Coimnission

Exchange

1983

Page

acquiring
in

and

mortgages

other

liens

and

on

11

stock bonus
Any employees
trust
which
profitsharing
meets the
for qualification
under Section 401 of
Revenue

Code

of

the

Trusts

or

liquidation

available

will not

the

publE

the

Trust

in

partIcipate

The

See

Home

CCH 76704

Say

avail

thus

fall

within

the

Trusts

and

the

investment

company

Investment

The

interests

1980
of

language

3c11

The

actions

first

Fed

of

3c5C

employee

benefit
from

clause

of

themselves

can

and

Trusts

of

consisting

controlled

its

representing

or

of

group

18

the

the

Section

be

assets

or

sponsored

by

the

America

1980

Fed

See

Scripps
any

also

indicated

first

clause

casebycase

employers

Sec

of

basis

not

the

Fed
whose

will

plans
underlying
definition of an

3c11

of

the

viewed as single
established

non

and

employers
be

Sec

the

at1

As

companies
which

trust

and/or

subject

Rep

employees

to

is

union

by

registration

Rep

CCH 76321

January

trust
Staff

has

Workers
to

1179768

avail

in

trust

Workers

of

avail Jan 27 1980
1983
Although we are not aware
of
trusts has
as
qualified
stated
of

that

America

consider

3c11 to different

BankTrusteed

CCH

participate
Communications

employees

willingness

Section

need

the

Communications
its

of

of

available
where

trust

See

Rep

Trusts

generally to
corporation
parent
BankTrusteed
Pension
and
corporations

197374

union

instance

possible

real

Sec

refers

subsidiary

1974

employer

or

employees

companies

Plans

noncollective

an

by

their

Related
ProfitSharing

tate as

the

Section

excluded

are

Foundat1oj

inreai

1981

Association
The

made

be

ya mortgage upon

maintained
related
benefit
plans
by
in Communications Workers of America supra

established

supra

16

individual

trusts

explained

Apr

Oct

the

with

of

instance

and

oan

those

secured

loans-

will not

Act

Company

collective

interests

equity

PlªiTich

involvement

an

the

hold

Trusts

their

ngs

by

the

to

acqu.rine

Foundation

the

in

only

through

plain

Section

of

but

will be

Trusts

Internal

wa

Interests

in

property

the

redeems

be

will

they

requirements

1954

Trust

to

or

pension

3c5C Tb1.arivill

Section

which

jn

interests

estate

real

Pension

the

such

supra

situation
The

Staff

applicability

of companies
groups
and
ProfitSharing

of

is

has
the
on

Plans

Chief Counsel

of

Office

Division

of

Securities

Corporation Finance
and Exchange
Commission

27

October

1983

Page

under
of

the

the

in

sponsors
of

the

the

protections
Part

of the direct
interest
Company Act since because
welfare of their members/employees
imposing the

Investment

Investment

Act

Company

is

Feb

1051

CCII
will

join

This

can

enhance

only

who

sponsors

are

The
banded

to

members

In

of

Rep

several unions
situation
establish
Trusts
to
the
employers
present

from
to be
protections
gained
the beneficiaries
welfare

having

plan

in

related

are

also

Sec

Fed

in

the

coon

pursue
employees

that

sense

investment

have

they
to

goal

the

voluntarily
benefit of

can
sponsoring employers and unions
and
the
fact
by
geographic location
all work
in some
of
the
construction industry
The
that
they
aspect
Foundation
trustee
of
the
Trusts
will
be
under
Section
401
qualified
as
and
be
able
to
of the Code will have
no investment
will
not
discretion
will
sell investment
services
to
other
benefit plans
The
Plans
also

be

and

the

group
the

interested

Plans

together

their

1980

together with

See

unnecessary

IVB1d of Commission Release No 336188

seen

to

be

The

related

their

Trusts

maintain responsibility for each
to terminate
their participation
We

within
exempt
either

in

therefore

3a

Section

Securities

of

Act

through

their

power

Trust

of

the

to

be

3c11

of

1933

in

the

Interests

securities

Section

3a2

of

act

that

performance

the opinion that
fall
assuming the Trusts
Investment Company
Act the Trusts will be
of
from
registration as an investment company
by the provisions
Section
or Section
as explained above
are

3c5

deemed

the

Trusts
as

the

exempts

interest

to

defined

be
in

held

from

following

by

the

the

21

Section

Plans
of

the

trust

the
any

or

fund

Internal

Revenue
plan
in

Code

of

1954

the

other

contributions

than

under

maintained by
under
which
for
single
employer
of
the
contribution
an amount
in excess
employers
to
the
of
securities
is
allocated
purchase
issued
directly or
by the employer or by any company
under
controlled
or
controlling
by
indirectly
which covers
coion control with the employer
within
or all of whom are
employees
employees some

which are
bank

held

single

trust

be

Act

registration provisions

in
participation
single
which interest
or participa
stock
tion is issued
in connection with
bonus
the
which
meets
or
plan
profitsharing
pension
under
Section
401
of
for
qualification
requirements
any

could
1933

fund

and

ii

Corporation Finance
Commission
Exchange

of

Division

and

Securities

27

October

Counsel

Chief

of

Office

1983

Page

meaning of
iii which is
in

described
Staff

The
that
and

first

the

words

the

funded

plan

403b

Section

stated
of

clause

401c1

Section

the

trustfund

the

America

of

Workers

3c11 of

Section

single

Code

such

Communications

in

or

contract

annuity

an

by
of

Code

such

of

3a2

in--Section

supra

Company Act

Investment

the

of

indicated

1933

Trusts

of
trust
As
above
the
describe
same
type
of the Investment
of Section
will fall within the first clause
interests
or
Plans
Act
The
underlying eachirust will_acquire
Company
will
be
or
participations
participations in the Trust which interests
benefit plan
witht
Section
401 employee
issued in connection
Act

3c11

interest

No

with

connection
of

the

which

Code

by

of

investment

by

of

in
an

invest

the

Code
include

meaning of
an
annuity
of

the

the

of

assets

the

it

will not

any event
in excess
amount
the

funds

Keogh

thus

the

Trusts

the

interests

will

that

act

Plans

in

by

the

of

the

that

Sec

of

at

from

Section

some

point
plans

funds

is

or
plans
fund

the

employers
employer

under

of

Keogh

the

the

assuming
Section

Individual
is

created

bank

but

cause

that

the

by

trust

contribution
or

by

for

any company
under
common

by

or

the

interests

21

of

the

of

1933

the

Act

registration requirements
above
as explained

of

3a2
in

with

the
the

future
Trust

the

Trust

assets

-elects

interests

to
or

or any
plans
sold
to Keogh plans
of
the
1933
Act
Section
by
provided
exemption
by
an exemption from
be
registered pursuant to the 1933 Act unless
This
approach is consistent with
registration is then available
Fed
No 336281
of Commission Release
noted
in Part

covered

such

provisions

assets

participations
will

exempted

of

trust

the

that

opinion
securities

are
be

however

If
commingle

our

for

maintained by
Foundation will not

of
securities
by
the
purchase
controlled
controlling
or
indirectly
directly
with the employer
control
is

will

used

none

single

in

be

be

issued

It

described

contract

and

any

that

401c1

Section

Trust

public

extent

To

employer

and

Foundation

of

the

members

Accounts

single

all

the

2to

in

to
be
issued
Trust
is
expected
or
some
covers
employees
plan which

by
None

expected

Retirement

to

any

employees
funded
plan
any

presently

fund

the

within

403b

Section

for

held

or

are

or

direct

in

offered

or

3a2

the

IIB2

Rep

CCII 1052

Jan

15 1981

other

not

of

Office

Counsel
Corporation Finance
and Exchange
Commission

Chief
of

Division
Securities

27

October

1983

10

Page

Securities

12g

Section

$1000000

exceeding

of

1934

the

1934

Act

Exchange

of

and

class

held
of record
security
the
other
conditions
specified
with the Commission
security

12h1a

Rule

12h

Section

of

interest

register

from

exempts

with

assets

an
security other than
more persons and who meet

12h2a

Rule

Act

1934

equity

Securities

issuers

requires

by 500 or
to
therein

formerly

the

12g

Section

Act
of

exempted

of

Registration

the

class

under

promulgated

the

of

of

requirements

in an employee
stock
participation
purchase
profitsharing
pension
thrift savings
or
similar
retirement
incentive
plan which is not transferable by the holder except
in the event
of death or mental incompetency
or any

Any

bonus

or

stock

security issued
that

Assuming
Trusts

12h1a

Rule

contained

Section

excluded

are

as

in

the

Section

fund

to

such

plans

12g

could

from

the

language

of

3a2

of

of

provisions

12h1a

Rule

the

1933

Act

the

to

apply

is

fund

issued

In

related

companies

and

be

transferable

by

the

Plans

Thus

are

of

the

not

in

the

provisions

we

Trusts
of

should

Section

Securities

means

any
securities

interests

be

not

12g1

Exchange

in

of

Trusts

the

1934

1934

3a4

of

the

1934

person

engaged

in

the

business

of

others

the

Section

The

account

3a5

the

1934

dealer means

term

business

of

of

buying

own

account

through

not

include

bank

or

sells

securities

issued

to

in

pension
The

or

Trusts

of
group
will
Plans

the

and

Act

does

Act

provides

any

person

selling

any
for

as

BrokerDealer

The term broker
provides
of effecting
transactions in

but

not

include

engaged
securities

bank

in

the

for

his

but does
or otherwise
as be buys
person insofar
either
his
own
account

broker
or

Act

Registration

Section
for

that

or participations
opinion that interests
to
be
under
the
required
registered
of

Act

the

by

to

interests

connection with
stock
bonus
single
under
Section
401
of
the
Code
profitsharing
plan qualified
retirement
maintained
can
be
seen
as pension or
plans
by
trust

12g

equivalent

exempting

the

Trusts

Section

Office

of

of

Division
Securities

Corporation Finance
and Exchange
Commission

27

October

Counsel

Chief

1983

11

Page

individually or
as

of

part

in some
fiduciary
regular business

not

but

capacity

15a1 of the 1934 Act provides in part

Section
It

shall

to

make

unlawful

be

of

use

instrumentality of

in

transactions

any broker
mails
or

for
the

interstate

or

to

any

commerce

induce

or

dealer

or

to

means
effect
to

attempt

or

any
induce

of

other than an
any security
commercial
bankers
security
paper
commercial
unless
such
broker
or
bills
acceptances
or
dealer
is
in
accordance
with
registered
subsection
of this section
the

or

purchase

sale

or

exempted

It

that
argued
have
to

be

might

would

individual

Trusts

individual

Trusts

however

effecting

transactions

in

behalf

of

their

either or

register as

will

be

not

Plans

the

As

Foundation and the
or dealers
The
in
the
business
of

brokers

engaging

either

securities

participating

both

for

their

own

account

above

indicated

or

each

on

Trust

the
of
enter
into
transaction
purchase
only
single
mortgage loan and will dissolve
upon the completion
participation in
of
that
transaction
Funds
held
as
reserves
the
Trusts
by
may be
invested
the
Foundation as
trustee
in
securities
i.e
exempt
by
couercial
commercial bills obligations
paper bankers acceptances
not
issued
the
United
States and
notes
or
guaranteed
by
having
To the extent
that
Trust
would invest
maturity exceeding nine months
these
investments would be made only through
in nonexempt
securities
The
Trusts
will hold any
brokerdealer
registered under the 1934 Act
and
with
the
securities
for
will
not
investment
purchase
acquired

will

intent

to

distribute these
We

as
register
securities
on
to

facilitate

are

also

broker

securities

of

the

its

own

the

collective

that
the
Foundation
Foundation will not be
will be acting
merely as

opinion

dealer
As
behalf

The

or

it

purchase

participations

will not

actually

effect

Digital

Equipment

Corp

Oct

The
Foundation will hold no funds
1978
minimal investment
and
have
only
expenses

for

will

its

merely

contributions

act
of

in
the

transactions

of

an
Plans

1979

Fed

for

the

Sec

administrative
deliver the

and

accounts

Rep

by
of

capacity
collected

conduit

Plans it
others
See
than

avail
reserves

responsibility
to

not

the

CCH 81931
other

need

acquiring

collect

contributions
interests

It
the

to

to
the

the
institution selling
participation
mortgage
Trusts
The
Foundation will act only on the Plans behalf and will not
behalf of
otherwise
seek
to
act
on
solicit
additional
customers
or
The
Foundation will have
no significant
other
than
the
Plans
anyone
the

Office

of

Chief

Division

of

Page

Corporation Finance
Commission
Exchange

and

Securities

27

October

Counsel

1983

12

and
will
not
assets
or
sponsor
analyze
The
participation
proposals
Foundation
through
Board
of
is already subject
Trustees
to
coon
duties

fiduciary

to

the

Plans

and

to

recommend
loan
any
the
members of its
law

and

the

of

contractual
ERISA and the

requirements
the
Foundation
will
Finally
not
undertake
sales
or
any
and will receive
promotional efforts
no compensation
from the Plans
for
taken
any actions
by it on behalf of the Trusts but would receive
only
reimbursement for
incurred
in
ministerial
expenses
performing its
functions

LMRA

When
all
of
these
factors
are
taken
it
becomes
together
neither the Trusts nor the Foundation need to be registered

evident

that

brokerdealer

as

increase

serve
to
Requiring
registration would
merely
burden
and
regulatory
expense upon the Foundation and its
while duplicating
the regulating
effect
of bodies already
the
Plans
themselves
oversight responsibilities
including

the

member Plans
with
charged

Advisers

Investment

Section

Act

of

1940

202a11

of

the

Advisers

Investment

Act

defines

an

as

adviser

investment

for
person who
business
of
advising

in
the
compensation
engages
either
others
or
directly

any

of
publications or writings as to the value
through
securities or as to the advisability of investing

in purchasing
or selling
securities
or who
for
of
and
as
compensation
part
regular
business
issues
or promulgates analysis or reports
concerning
securities
In
fall

within

Plans

will

of

the

neither the Trusts
Foundation will
nor
the
opinion
definition of investment
adviser
Assuming that the

our
the

202a18

in Section
purchasing securities as defined
the Trusts
Advisers Act through
It could
be
Foundation will be in the business of advising others
be

Investment

that

the

the

Plans

selling

as

to

the

advisability

securities

close

makes

advisory
information
from

services

to

from

lenders

the

Plans

Foundation

thus

The

participations

the

the

concerning
has no part
Trusts
are

are

purchased

the
in

it

clear
and
The

to

Plans

amount
the

and
Plans

sole

instructions

want

to

invest

of

the

the

vehicles

no

have

receives

decisions

have

Plans

the

investment

merely
and

the

the

Foundation provides
Foundation merely
transmits

that

Plans
the

or
purchasing
the
Foundations

of
that

namely

in

investing

analysis

however
responsibilities
responsibility for making investments
no

of

argued

separate

through

existence

or

The

Plans
which
function

Office

of

Counsel
Corporation Finance
and Exchange
Commission

Chief
of

Division
Securities

27

October

1983

13

Page

from
holding their
apart
particular
participations
therefore
play no role in the investment decisions of

NOACTION

POSITION

upon the foregoing facts
taken
the
positions
by
the
considerations
policy

statutes

REQUESTED
Based
prior

noaction
of

Trusts

The
the

Plans

and

releases

Coission

Staff

and

will

the
our

and
statutes
involved
we
that the Staff
respectfully request
advise
it will not recommend
us that
to the Commission that
action be taken
under the 1933 Act
or 1934
any
analysis

Act
as

in

We

ask

Office

of

Chief

confirmation
as

the

regarding
summarized

an

that

proposed
operations
this letter

that you forward
Counsel
for the
the

investment

under

under

the

the

enclosed

Division

Foundation and

company

adviser

investment

an

of

the

the

of

Foundation

the

need

not

be

Company
Advisers
Act

Act

Investment

as

contact

the

undersigned if you
Very truly
SHUMAKER

By

GLC/sjs

Attachments
Enclosures

cc

Marc

Gertner Esq

have

any

or

LOOP

KENDRICK

for

as

an

explained

questions

yours

the

registered

above
Please

Trusts

of this letter
to
copy
Investment
Management

Trusts

Investment

and

KENDRCK

SHUMAKER LOOP
NORTH COURTHOUOE

ALL

SQUARE

T0LEO

JACXSON

i1Cj

LGDP

OHIO

43C24

419

__

O-I

AC.ET

TMOH4AS

WESB

DNNS
KEV

Al

ALJR

GREG

j.rrO

GEOCEA.P1CKNELL
DO.A.0
MY-iQ1
EOWIH
E.1ESON

JP

BARTC

30

November

1983

OHH

I-

WILLAM

GOSiNF

Re

The

4EW.000

FrW.ICIS

orthwest

Construction

jn

McANEL

No

Our File

Ohio

iuilding and
ouncation
N1575/16191
Trades

JANET

JN

PCM
E.CATIJN

GREGORY

AP-4
wcw

COuNSEL
CH.RLE
SCKAPFY
OF

P.

CN

WiT

MacKAl

JOl-iNC

Ms

KarEn

Burgess

Securities
450

SRAi3

M.rket

of

Division

Regulation
Exchange CnmnLision

and

Strt

5th

D.C

Uashirgtcn

20549

Ms uress

Dear

ou

BFtsed

conversations
on behalf of
concerning our noaction request
Foundation
revised
the
Foundation we hereby submit

our

cboveaptiond

the

than

request

the

sion dcvie

Staff
that

us

Ccis

the
SecurIties
and
Cotizission
Exchange
the
will not recoriend that the Commicion take
enforce
any
tha
of
the
Foundation
without
the
actions
registering

of

it

ment action
concerning
Foundation as
brokerdealer

under

Act

letter

will

Octcber 27
Corporation Finance

1983

This

letter of

Plans

In particular
maintained
by

$2000000

the

suppier-ient

addressed

Securities

the

factual

to

the

we repesent that
participants

the

Echane Act

rpreser.t-ations

Office

the

of

of

Chia

the

1934

contained

1934

ir our

Counsel Division

employee pesinn benefit plans
Foundation range
size
in

the

ifl

of

the
from

in total
$30000000
assets with the combined assets of the Plans
The
investments
to
be
entered
into
each
$811000000
mortgage
by
the
Foundation
will
to
between
tr1t established by
amount
$2000000
to

exceeding
transac.tior
and

SHIBLEY

t.1

tiAVID

GAIY

SlTZER
ONIHI

SANDERSCN
GARY
SALES
MCHAEL
McGOWAN
MARY EL.LEN
PISMNELL
DAVDG.S0JILLANTE
GREGO2
LODGE

.R

R0EPT

LYMAN

MICHAEL

i.i.AfNPD

1LLIA

M.CARfl-fY

B3AcM

JUDANZP.JGER

iiACN4AN

SKDEI

ROLF

BA

RENEE

ALETA

W4ZMuSC-.AN

C-.APMAN

FYES

JACK
1IMOTHY

I3

ROBERT
W.APC

I.

TEELL
rI

.Y-N

BCEMA

CARL

ZUT

J3S
GEORGE

/.

OK

VVIAN

241-4201

PA.i

MALCO.M

.TEWAN

DAvD

Gi
GJ_

-flCI3

$5000000

determined to reduce
its
involvement
in each
Foundation has
also
whiic still providing the lending
imtitutions with an adinis
Piar
convenient program
orignaily contplated each participatng
tratively
was to fc7ard funds
to
the
ord of the Foundation which would take pnssessicr
The

trausiction

of

the

trust
sum
to

on
the

trust

frds cccuuIate
was

fully

bctalf

funded

of

Foundatc-n

the

them
ruid

cru

chih

in

deliver

-onld

Incci..e

Lransaation
tho
of

distr.but

funds
the

trust
to

the

trust

as

the

funds

lo

account

until

the

tiansaction

institution
Jt.nding
to
delivcred in
the

Plns

in

lump

luap
sut

Karen
November 30
14s

Burgess
1983

Page

the
he m.ide
Foundation now proposes
to collect
investments
to
by
in
the
form
of
checks
each individual Plan
or federal funds
drafts
made payable to
of
income
the
institution
the
trust
would be allocated
the
Any
among
lending
various participating Plans by the lending
institution which would prepare checks
These checks
would be delivered to the Foundaticn
to the individual Plans
which
The

would

distrIbute

would

continue

these
to

pay

checks

Plans

individual

the

to

directly

lending institution
which
is
to be
This administrative

The

the

Foundation the loan
incurred
by the Foundation

to

fee

borrower for expenses
would
of the Plans
procedure
provide maximum protecticn of the funds
by minimizing
the opportunity for and effect of any misapprcpriation
of funds
by the Foundation
the
of
the
transctioa
could
be
and
At
same
time funds
trusts
conveniently
transferred
to
the
institution
with
minimum
of
involvement
efficiently
lending
charged

the

by the

lending

institution

In modifying the transaction as proposed the Foundation seeks
to comply
mandate contained
within Section
of the Employee Petirement
Income
Act of 1974
that
each
Plan
Security
qualified thereunder must
which
be
Plan
minimize the
are
to
expenses
charged
against
participants

with

404a1A

the

ERISA

29

1104a1A

U.S.C.A

Tenn

1977

Section

of

payment

404a

1975

unreasonable

Sea
Marshall
amounts or for

Mo 376373

Wilson
unnecessary

expenses

E.D

violates

ERISA

of

By utilizing
the Foundation

Foundation

the

as

trustee

for

each

of

the

transaction

to save
trust
trusts
expects
approximately $5000
per transaction
over the cost of utilizing
bank trustee
for each
trust
This would result
in
substantial savings
Plans
the
life of
the
to the
Foundation
over
e.g if the

Foundation

formed

$50000

over

two

believe

the

the

the

protections

Please

contact

provided

the

by

brokerdealer

the

undersigned

if

SHUMAKER

you have

LOOP

By

Mark

UiIsj
John

Gorman
Division of Corporate Finance
Securities and Exchange
Commission

Iarc Gertner
George

savings

any

questions

Esq
Chapman Esq

High

KENDRICK

of

protections
contract
law when
nature
of
these
the

Staff

registration provIsions

Ver truly yours

cc

years

to

with

We

next

of
ERISA and
state
common and
provisions
nonsecurities
essentially
connercial
would
comfort
loan
transactions
mortgage
provide

by

concerning

the

the

afforded

be

transaction
trusts
over
realized by the Plans

that

combined

shortterm

ten

could

SHUMAKER LOOP
NORTH COURTHOUSE

SOUARE

LOOP
PPANCISJ
GALLAGHER

KENDRICK
TOLEDO

JACKSON

1000

OHIO

43624

ALAN

ROBERT

WATERMAN

DAVID

49

GOSLINE

FOLK

VIViAN

241-4201

JOSEPH

RIDEOuT

MA.COLM
RAMEY
JOHN
HACKETT JR
THOMAS WEBB
ALEXANDER
GREGORY

GEORGE

CARL

JACK

KEVIN

JOHN

BRLJGGEMAN

CLAYTON JR
MARC GEPTNER
GEORGE
PICKNELL
MEWNORT
JR
DONALD
EMERSON
EDWIN
JAMES
M.TUSCIMAN
ROBERT

BARTON

FYNES

TIMOTHY
RENEE

March

12

JUDH

1984

SelTZER
BONINI

ANN LANZINGER
SANDERSON

MICHAEL

SCHEIDEL

GARY

JOHN

HAYWARD
GOSUNE

MICHAEL

MARY

NORMAN

NARTSEL

WILLIAM

P4EYW000

SALES
ELLEN

DID

THOMAS
JOHN
BJRSON
THOMAS
WEBB JR
ROBERT
ANSPACH
DAVID
WICKLUND
GARY
DIESING
JOHN
MhcAY

MCGOWAN
PSANEUJ

SOUILLANTE

GREGORY

III

JR

MCDANIEL
PLETZ

LODGE

JANET

CATLIN

PHILIP

CHUBB

THOMAS
GREGORY
OR

W000MAN
Si-IIBLEY

COUNSEL

CHARLES SCHARFY
CORWIN
JOHN
STRAUB
SWIFT

Mr

Harmon

Thomas

Division

of

450

Investment
and

Securities

Management
Commission

Exchange

Street

5th

D.C

Washington

20549

Re

Dear

Northwest Ohio Building and
Construction Trades
Foundation
Our File No N1575/16191
The

Mr Harmon
Based

on

our

our

we

behalf

of

submit

hereby

the

abovecaptioned
additional
factual

representations are for your use in responding
of the Securities
and Exchange
Staff
Commission
advise
that
will
us
it
not
recommend
that
the

that

request

on

These

representations

the

conversations

Foundation

the

foundation

to

INGLIS

ALETA

WAGENMAN

FRANCIS

MCCARTHY
BIRNBAUM

JOHN
LYMAN

ROLF
WILLIAM

CHAPMAN
WITHEREU
GRAHAM
SARRON

DENNIS

the

Commission

Commission
take
enforcement
action
the
actions
of
the
concerning
Foundation or the Trusts
to be
created
thereunder without registering
the
Foundation
the
Trusts
investment
under
the
or
as
companies
Investment
of
1940
the Investment
and
Company Act
Company
without
advisers
as investment
registering the Foundation or the Trusts
under
the
Investment
Advisers
Act
of
1940
Investment
Advisers
the

Act

Act

This

addressed
Finance
Division

letter
the

Office

supplement
Chief

of
November 30
Market Regulation

1983

and
of

will

of

to

our

letters

Counsel
addressed

of

October

of
Division
to Ms Karen

27

1983

Corporation
Burgess

the
Foundation will be providing
question of whether
confirm
that
the
Foundation
will contact
all banks
advice we
and
and
loan
associations
located
within
the
savings
geographic area
served
Foundation and request
that
those
financial
institutions
by the
the
with
information
all
construction
Foundation
provide
concerning
On

investment

the

Mr

Harmon

Thomas

12

March

1984

Page

which
opportunities
Foundation shall
transmit

to offer participations
participating
pension plans
Plans all materials received from all cooperating banks and
the
and
loan
associations
It
is then
the
savings
responsibility of the
individual
Plans
to determine whether
that
to
particular Plan desires
loan

mortgage

In

The

they
to

desire

all

The
Foundation will not
screen in any
participate In any given loan
to
and
the
brought
it
individuals
way any proposals
representing the
Plans
will take all proposals presented to them back to their respective
for decision
Plans

Foundation has

The

reserve funds
Instead
the
borrowers
at
distributed through
any

either

Trusts

determined to dispense with
on its behalf or on behalf of

all

loan

participation

fees

time

that

the

made

the
the

holding of
Individual
from
the

collected
will be
immediately
the Foundation directly to the Plans
who are members
of that particular Trust
Any expenses incurred by the Foundation will
then
be
assessed
to
and
the
individual Plans
Under this
paid by
the Foundation will not hold any
funds
In reserve and thus have
design
no investment
responsibilities relating to the reserves

I_ussions
structure

concernig_the

Tisyillng acquire

y.rf

tb_the

of

the

loan

is

United

Fouiidptipn

States
it

was

of
Labor
Department
established that

50%
more than
limitation is

participatirm fn any individual
in addition
the
to
limitations
each
Plan
for
of
the
from
certain
place
upon
purposes
exemption
of
ERISA
of
the
of
described
provisions
requested
Department
Labor as
in our letter
to the Division
of Corporation Finance
dated
October 27
1983
This
limitation on the size of the investments
which
Trust
may
make will
the ability
of the Trust
to effect
enforcefiU

ba

construction

This

npffcf

cft.I

ridocuments
foreclosure on the mortgage in the
including
occurrence
of
nt of default
under the loan documaliiti

March

Finally as we related to
the
administrative
1984

performed

Northwestern

by

Ohio

event

conversation
you in our telephone
functions
of
the
Foundation will
Administrators

Inc

an

of

be

Ohio

Arthur
serve
corporation
as
Young
Company will
accountants
to the Foundation
and it is anticipated
that this firm will
serve
counsel
The
will annually review the
accountants
as Its legal
finances
of the Foundation and
the
Trusts
which have been in existence
The
Foundation will either
distribute copies
that
of this
during
year
review
or
to
an
annual
based
on
this
be
report
report
prepare

notforprofit

distributed
be

clearly

Foundations
indication
investment

to

the

Plans

identified
accountants
concerning
results

either case the information provided will
factual
information
the
prepared
by
will not
and
be
as
presented
providing any
In

as

future

investment

possibilities

or

projected

Based on the foregoing we are of the opinion that r.ither the
Foundation nor the Trusts will fall within the definition of investment

Mr Thomas

Harmon

12

March

1984

Page

202a11

of the Investment
Advisers Act
contained in Section
the
the
Foundation and
the
Trusts will be
exempted from
investment
contained
in
Section
of
the
definition of
company
of that
Investment
Company Act by the provisions of Section

adviser
and

that

3a

3c5C

Act
We

trust

process

We

colleagues

have

questions

or

these

appreciate
to

given
concerns

will assist
you
attention which

representations
the

time

and

our

letter

please contact

If you
request
the undersigned

Very truly
SHUMAKER

MRH/sjs

cc

John

Gorman
Division of Corporation Finance

Karen

Burgess
of

Division
Marc

Gertner

George

Market

Esq

Chapman

Esq

Regulation

have

yours
LOOP

By

Mark

your review
you and
your

in

High

KENDRICK

any

further

2D 984

Our

Ref No

83373CC

Northwestern
RESPONSE

OF flE OFFICE OF CHIEF CJNSEL

DIVISION

OF

Ohio Building
Construction Trades
Foundation

INES1ENT MAAGEME

File No

1323

The Northwestern Ohio Building and Construction Trades Council
confederation
of local building and construction trades unions represent
and construction
tradenen working in northwestern Ohio and
ing building
Northwestern Ohio Council of Construction flnployers
confederation
employers in the same industry in the same geograMc area propose to
establish
foundation for the benefit of the employee pension benefit
their members sponsor
or
The foundation
plans
they
notforprofit
association
and
organized
unincorporated
governed by the laws of Ohio
would
be administered by
board of trustees
Every plan participating in
the foundation
would be entitled to two trustees on the foundations
board
one appointed by the union
cosponsor of the plan the other by the employer
of the plan
construction pericd
cosponsor
Thp1ans iiuld invest
mQrtgg loans throqgh the medium rf trut created pursuant to trist
the
of

trust would never
ac
designating the foundation as trustee
trian
5U% participation
th
construction period itortgage loan
enable the foundation
bujyrticipation it wouldJxld
as trustee

quirenore
for

trust

to

forec

u1d

the

mortgag

securing

the

loan

in

the

event

of

default
We

would

action

under

Act of

1940

the

not

Commission take
any enforcement
Act
of
1940
the
Investment advisers
or
Company
foundation or the trusts if they proceed with their

recommend

that

the

Investment

against the
without registering

as either
investment companies or investment
on the facts
and representations in your
position is based
letters
and exhibits of October
27 1983 November 30 1983 and March 12
1984 and upon the statements made by Mark High and Marc Gertner of your firm
to Thomas Harman of the staff on January 25 February
February 27
March
1984
We will first discuss with
29 and April
respect to the
foundation
and then
to
trust the applicability of the Investment Company
Act and then
the Advisers Act
proposal

advisers

Our

Section

3a

of the

Company Act defines an investxnent
which is or holds itself out as
any
in
the
business
of
or trad
being
engaged primarily
investing
reinvesting
in
is
or
to
in
the
business
of
securities
or
ing
engaged
proposes
engage
in
securities
and
or
owns
investing
reinvesting
owning holding
trading
securities having
value
or proposes to acquire
investment
40 per
exceeding
of such issuers total assets exclusive of Government
centum of the value
Section
securities and cash items on an unconsolidated basis
companyTM

in pertinent

part

Investment
as

issuer

2a 22

defines

ity

or

to issue
TMissuerTM
as every person who issues
or proposes
which
it
has
issued
has outstanding
any security

any secur

the

Because

foundation

would not

issue

any security or interest to

2a22

and there
anyone it would not be an issuer as defined by section
fore it would not be an investment ccinpany as defined by section
Eaci trust however would issue uity interests to various plarE and
an issuer
thus would
oreoveth trust woulJld assetsconsisting
cortruct Ion idrvrtgage J.Q.-A_CVnstruc
oley oLrticpa4orE in
oan

loan

3a

secured

on an
term
in
construction1roject
security
setibiF2
36
the Investment Carpany Act thcles any note or par
or any
ticipation in any note
Atruction period nortgage.loan
.in
udig
fh
..j
1nn
paticiptHon
ofjisecirity ctained in section
trust thus
appear
to be an investTint
caipany subject to
tiin

period

The definition

ed

of

the

frr

44nH

fr

m1i

2a36

ild

thcwestnæ Atjgj

ex

3c 5C

Section
of the Investment Canpany Act in pertinent part
fran the definition of investment canpany
any person who is not
engaged in the business of issuing redenable securities and who is prisnar
in purdiasing or otherwise
ily engaged
auiring nortgages and other liens
on and interests
in real estate
The participation
interests
in
cons truc
tion period prgage loan
truct would be an interest in real estate
by
excepts

he

whereeth

loan is fully secured
by real prcierty
andtheparicion
nterests
held by the trust are sufficient to give the foundation
asE�stee
for the trust th.gbt by itself to foreclose the nortgage

iiie event
it is

BecaUse

repreØi

that

eaci

interests

astrustee for the

secri thIÆæ

MIC Mortgage

default

of

Corporation pub avail August 1Ig741
loan would be tui.ly securdbyreal prcperty
trust would give the foundation

heIda

trust the tight by itself
in the event of default it

to

foreclose

the

nr�

be
otherwise
and
othr
zdiasir or
eraged
uiriri nrrtgaqes
liep on r1 interests
-estate
trust would not appear to be isiuing
redeenable
securities
within the meanirg of section
because
the plan
trust would not be redeenable except
plans interest in
witFrawal fran the trust or liquidation of the trust and because witndrawal

secur4g

the

pry

loan

appears

trust would

that

in

r1

3c5

un

fran
status

trust would be conditioned upxI
plans
iider the Internal
Recenue Code of 1954

excepted

fran the

Section

a3viser

Investment

202a11

of

of exetpt or qualified
trust would
Accordingly
Canpany Act pursuant to section
loss

be

3c

the

Mvisers Act

in part

defines

an

inestnent

as

any person who for
of vising others

in the business
canpensation
engages
either directly or through publications
or writings as to the value of securities or as to the
or selling securities
visability of investing in purthasing

or who for canpensation and as part of
regular business
issues or pranulgates analyses or rerts concerning securities

Because

the foundation
intends
to contact
institutions in northwestern
lending
Ohio to learn of the availability of participations in mortgage loans and
to the plans
pass this information along
question exists as to whether

foundation

the

would be

issuing

or

proim.ilgating

analyses or

reports con

securities

cerning

foundation

intends
to approach every bank
savings and loan
insurance
in
the
northwestern
Ohio area and ask
association
company
that
the
foundation
with
information
they provide
concerning all con
struction period mortgage loan opportunities
in which they desire to
The

and

offer
or

The
foundation would not sponsor
screen analyze
Each individual plan
any loan participation opportunities
trustees or other investment manager would determine whether to

participations

recommend
its

through

loan opportunity
and if it does the amount of
participate in
specific
its participation
The foundation would transmit to all participating plans
all materials received
from all cooperating
financial institutions
The
information

the

institutions

and

foundation transmits would
would be so identified

be

prepared by the

various

lending

In Texas Newsletter
pub avail January 23 1984 we stated that
action would be reconended
to the Canmission if
without
newsletter
under
the
Advisers
information
Act
about
securities
registering
printed
no

security would be prepared by the issuer
presented as an advertisement for the security
Because the foundation would
distribute only information about
construction period mortgage loan prepared by the
participation in
cooperating financial institution issuing the participation
identify
such
information
as having been prepared by the cooperating
financial
transmit
all information given to the foundation
institution and
without commenting on screening
or evaluating the information in any
manner we would not consider the foundation to be engaged in the business
where

any

of

the

of

issuing

such

information

security and

would

about

be

or promulgating
analyses or reports concerning securities
would not regard the foundations
to bring the
proposed service
foundation
within the definition of investment
adviser contained in section
of the Advisers Act
202a

Thus

we

11

trusts sole function would be to hold participations in
Because
construction period mortgage loan selected
by the plans partici
in the trust
trust would neither be engaged
in the business of
pating
others
about
the
value
of
securities
the
or
advising
advisability of invest
particular

in securities nor
securities as part of
ing
be

an

Act

investment

adviser

or

promulgating analyses or reports concerning
business
trust would not
Accordingly
regular
defined
section
of
as
202a
the Advisers
by

issuing

11

We

understand that the Division of Corporation Finance and the
of Market Regulation will be writing separately to address
issues
you have raised
regarding the Securities Act of 1933 and
Securities Exchange Act of 1934

Division
the
the

470
omas

Harinan

Attorney/vi

ser

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Asec%3A623dc609f4b537ad. Public record. Not legal advice.