ONE INTERNATIONAL

ROPES

GRAY

ONE INTERNATIONAL

30

KENNEDY

02903-2328

RI

40 455-4400

FAX

WRITERS

401 455-4401

DIRECT

DIAL

NUMBER

Chief Counsel

Director

of Investment

Division

Securities

800

Re

202 626-3900

FAx

202 626-3961

1995

RULE

20549

AVAILABILITY_1

The Standish

Value

Stable

Wood Inc

Ayer

Group Trust

Mr Murphy

On behalf

the

that

request

of our client

staff

3c1

of Section

of the Division

proposed

Wood Inc Standish we respectfully

Ayer

of Investment

under the Investment

to the

applies

Standish

Company

as

amended the 1940

Act

below

described

activities

concur with our interpretation

Management

Act of 1940

Facts

The Standish

established

by Standish

investment

collective

vehicle

governmental

trust will be

tax exempt

Standish

1940

amended

as

the Trusts

It

investment

is

is

directed

plans

which

registered

will serve

as the

Trusts

Trust

is

Street

as

will

Company

and profit-sharing

trusts

be organized

so-called

by virtue of satisfying the requirements

as an investment

adviser

investment

as

and certain

group

of Revenue Ruling

under the Investment

manager

being

1-100

Advisers Act of

and State Street will serve as

Trustee

expected that

funds

for tax-qualified pension

The Trust

the

State

Value Group Trust

Stable

and State Street Bank and Trust

retirement

which

Wood Inc

Ayer

pursuant

each with

its

own

to

the Trusts

investment

Agreement

objectives

EAST

20005-3333

SECTION

Commission

N.W

DC

Washington

it

DC

ACT

Management

and Exchange

450 Fifth Street

as

SUITE

WASHINGTON

SQUARE

STREET

Murphy Esq

Associate

Dear

I3

7400

95

December 27

Jack

ONE rRANKLIN

BOSTON MASSACH USETTS 02110-2624

617 951-7000

FAX 617 951-7050

PLAZA

PROVIDENCE

PLACE

of Trust

and policies

one or more separate

may be established

ROPES

GRAY

Jack

Murphy Esq

27 1995

December

Page

from time to time by State Street at the direction

of Standish

Group Trust Fund

will seek to

level

preserving

and secondarily

principal

interest

as declining

risk to

indicate

rates

AAA-rated securities of private

investment

adviser

Contract

or trust

Accordingly

in

investing

investment

contract

contract

provider

between

the

prior to

structured

based

objective

significant

primarily

securities

and

as

However

if the

of its

rated

amount

It

is

intended

Rule 506 under

Standish

3c1

The

amount

investment

to

to

pay

units

that

involve

1940 Act or Section

of Section

of the

intends

to

of

factors

including

calculated

or decrease

its

in Group Trust

will

the

redemptions

as additional

Act

of Section

expected

that

Fund

some if not

fund as

the

but

of such

exceeds

Participating

similar pro

with

either in compliance

within

is

Fund

value

premiums

be offered

the meaning

share

pro-rated

in Group Trust

certain

upon

such

to

of such Participating

account exceeds

units

value

will pay

conditions

value

units

designated

of negotiations

book

amended the 1933

offering

It

of

each such investment

Participating

of cash invested

interest

treat

as

certain

the

Trusts

provider

result

Group Trust Fund

investment

then

Trust by

separate

or in such

other

3c

of the

all

of the

issuer

for purposes

of the 1940 Act

value

accrued

account

42 of the 1933 Act

guaranteed

to

in

between

Group Trust Fund

public

Trust must

each Contracts

subject

of units

Participating

the contract

in

of each plan

enter into

may vary as

Trust

Investment

fiduciary

of the Participating

Contract

and the value

Act of 1933

the Securities

as will not

redemptions

of such structured

value

structured

on behalf

on the difference

Guaranteed

Fund

in Group Trust

provider

account

investment

the value

value

increase

will

Participating

issued

the contract

the extent

will be required

the

such

factors

without

and agency

synthetic

and the Participating

certain

upon

Trust

manner

with

consistent

market

fund

Group Trust Fund Is

serve as Group Trust Fund Is

will serve

as

the terms of each

provider

of the amount withdrawn

the

investment

its

government

entity

serve

participating

Contract

Although

Trust

to

Group Trust Fund

the

contract

Participating

units.2

Standish

issuers

when

may be available

achieve

to

of U.S

income

appreciation

appreciation

will seek

designed

is

will provide that

guarantee

only

capital

and State Street or another

Group Trust Fund

to

of current

investment

initial

Trustee

directed

Trusts

that

diversified portfolio

in

investing

high

will seek capital

Group Trust Fund

principal

through

achieve

The

in

Trusts

Group Trust Fund

by reference

premium owed

account will

and thereafter

will be adjusted

formula contained

to

withdrawals from or additional

in the

investment

structured

to

the

investments

contract

in the

Contract

in Group Trust

provider

initially

equal

based on

and other

Fund

and any

ROPES

GRAY

Jack

Murphy Esq

December 27

1995

Page

plans

Fund

and State Street

Standish

will

--

and not plan

accept

Group Trust Fund

deemed

discussed

participants

and

thus

under the staffs

in greater

Accordingly

plans

forth in The

set

below

has

the

investment

existing

the decision

to

withdraw

the

investment

direction

nor

both

Trust

would

of units

plan

invest

in

will not

be

letter

which

in Group Trust

Fund

and conditions

criteria

eligibility

must be made

fund

is

for self-

for

on behalf

desirable

the generic

investment

alternative

investment

in

and

the initial investment

to

must not be made

of

fiduciary

of its sole discretion

in the exercise

of an

Trust.3

must be made by

pursuant

to

make such

to

the

with any participant

in the Participating

of the

the plan or such fiduciary

sponsor

plan

or poll plan participants

be

Participating

and subsequent

decisions

on behalf

investment

generic

Group Trust Fund

acting

acting

of

Group

no-action

assets of the generic

initially

Such

decisions

may anyone

Fund

invest

of or upon consultation

seek the views

participants

funding medium

assets from

Participating

plan

Trust

owners

investment

distinct

as

Group Trust Fund

to

where

Group Trust Fund

in

serving

alternative

that

much to

Group Trust Fund

and

separate

Second

PanAgora

developed the following

invest in

or how

whether

decides

be the beneficial

to

in Group Trust

it can be clearly established

where

actually

self-directed

plans

as investors

plans

under circumstances

only

to

seeking

First

test

detail

Standish

--

contribution

self-directed

only under very limited circumstances

fiduciary

directed

defmed

will be participant-directed

Trusts

Participating

whether

as to

for assets of the

investment

units

in

generic

Trust

Group Trust

investment

alternative

Third

of units in Group Trust

any

specific

Trust

Participating

alternative

portion

will

Such

generic

such as stable value

that

investment

income

or

specific

be invested

mentions

least

units in

to

Trust

the

portion

will agree

generic

50%

of its assets invested

or

to

in

the

Participating

account balances

of the relevant

in

generic

Trust

under the

investment

Fund

that

any information

investment

will typically

each purchase

Group Trust Fund

participants

in Group Trust

alternative

growth

than

at

of their contributions

or any

Finally each Participating

participants

other

may be made

Fourth no representation

that

must have

Fund

or other property

securities

immediately following

alternative

have

alternatives

its

own

delivered

investment

investment

to

in

objective

GRAY

RoPEs

Jack

Murphy Esq

27 1995

December

Page

Group Trust Fund

invest

By

its

the

signing

Adoption

Fund

in Group Trust

continue

to

Group

Trust

Fund

Trust that

and

to the

to

the

redeem

to time

to

with such

comply

any

seek

and

criteria

establishing

that

invests in

from each

such conditions

will have

Standish

Trust

to meet

with Standishs

or cooperate

by

and

criteria

alternative

satisfy

the

fails

established

with such

investment

in the

of each investment

time

the

to

Fund

and conditions

confirmation

Trust

Participating

at

No

that

will continue

with an investment

compliance

as the generic

long

from time

conditions

foregoing

to maintain

Agreement of Trust

terms of the

with such

compliance

continues

it

involuntarily

satisfy

for so

will

Standish

Participating

the ability

will agree

effect

in Group Trust

criteria

eligibility

the

to

alternative

connection

in

and warrant that

represent

Trust

such conditions

satisfy

pursuant

will

of its assets

required

meets the applicable

it

Each Participating

Standish

criteria

Trust

investment

same portion

Agreement

disclaimer

by

the

that

or the

assets

each Participating

Trust

will be accompanied

can be given

assurances

the

foregoing

to monitor

efforts

and conditions

criteria

Analysis

3c

Section

company

paper

not

shall

propose

no-action

letter

it

much

any

would

to

in

relevant

the

part that

outstanding

term investment

than short-term

other

securities

owned by not more than one hundred persons and which does not

In The PanAgora Group Trust

make

of its securities

public offering

to

April

29 1994

consider

invest

in

December 28 1994 the

below

discussed

staff

different

we believe

that

seek

be

mere device

separate

to

invest

above

fiduciary

assets of

separate

property

other

will have

than units

under

will

which

will

in Group Trust

on self-directed

Group Trust Fund

investment

invested

Unlike the

Fund

plans

will not

by plan participants

determine

alternative

50% of its assets

Fund

standards

and agreed that

by the generic

that

For the reasons

Watkins

decisions

will

investment

represented

least

--

letter

letter

stated

by Latham

that

how

or

and Group Trust

of the Trust

assure

investment

generic

no-action

different circumstances

participants

Fund

at

Watkins

eligibility

whether

owner of the companys

of the PanAgora

activities

stated

Management

who decides

beneficial

as contemplated

individual

have

be

scope

impose

Fund

pre-existing

purchase of units in Group Trust

alternative

discussing

Standish

will

the

the proposed

that

to

subsequent Latham

and not plan

The plan fiduciary

investment

in

of Investment

plan participant

company

In the

conclusion

for facilitating

plan

Fund

contribution

in Group Trust

--

of the Division

from PanAgora

are clearly distinguishable

As discussed

staff

investment

private

might reach

the

defined

Emphasis added

securities

the

whose

issuer

are beneficially

presently

that

of the 1940 Act provides

include

facts

whether

to

invest

and

in

how much

Group Trust

immediately following

the

alternative

in securities

presented

of

generic

or other

in PanAgora

each

ROPES

GRAY

Jack

Murphy Esq

27

December

1995

Page

Group Trust Fund

any manner

that

represented

has

not

has

it

polled

for assets

represented

that

take

direction

Trust

Fund

In

investment

not

not

plan

Fund

The

with respect

to

generic

to

cumulative

invest

in

will

same

or the

assets

its

include

will

disclaimer

or

in all

the

that

generic

of its assets

portion

in

investment

that

assure

be made

fact

with

alternatives

there can be no assurances

that

it

of assets in Group

investment

generic

consult

it

that

desirable

will also have

fiduciary

nor will

have agreed to

the

them in

to

and

would be

with any investment

of these factors

effect

Group Trust Fund

alternative

are as of any

alternative

will not

additional

contributions

investment

and

by the plan fiduciary

amount

to

ability

currently

company

circumstances

investment

trust

would be

Group

Trust

investment

continued

Fund

continue

two

Group

any portion

Fund

and

alternatives

investment

that

on

Fund

alternative

in

assets of self-directed

plans

may be invested

from the circumstances

in

investment

of the conditions

Trust

Fund

which

are that

of their contributions

any communications

in

Group

Group Trust Fund

Trust

be imposed

will

plan

Fund

balances

participants

will

include

the

including

no

that

or public

Consequently

where

in Group Trust

the private

investment

trust

As described

participants

no representation

or account

to

the future.4

PanAgora

for such

choice

other private

under the private

created

alter

means that

any

funds

to

Fund

entity

matter

in

pro-rated

sole authority

investment

generic

for that

be invested

investment

investment

in

or

from Group Trust

to

or that

such

as an available

in

allocated

to be so held

in

to

the

separate

As noted above

wishes to invest

that

amounts

Group

in Group Trust

invested

assets

the investment

in

by such generic

held

of the

possession

generic

investment

will be invested

alternative

fiduciarys

alternatives

distinguishable

or the

identified

participants

that

under which

are clearly

that units

of the generic

such units will continue

that

investment

the plan

in Group Trust

will

Fund

The fact

the

equate

in the

one of the investments

generic

completely withdraw

invests

investment

Fund

Also

generic

in Group Trust

to

nor an investment

of such units and the other investments

investment

can be assured

participant

time

basis for participants

Fund

Trust

representation

the

to

amounts

alternative

of the

given

constitute

basis in additional

be no reasonable

Group

with

with an investment

alternative

Trust Fund

that

the effect

to

there simply will

investment

investment

the

Fund

plan

from

direction

will

out

by the plan participants

Furthermore

the

participants

Fund

The

alternative

mention

that

fiduciary

Group Trust

connection

fiduciary

will continue

alternative

Trust

in

held

will have

views of plan participants

the

with or taken

consulted

addition the plan

to

plan The plan

seek

investment

or otherwise

participants

whether

as to

participants

in Group Trust

investment

Group

of the generic

from plan

communications

plan

their

sought and will not

not

has

it

to

under

choice

and will not poil them

investment

decisions

be promoted

will not

as an investment

on

self-directed

can be made

will be invested

mentioning

plan

to

in

the generic

disclaimer

as

to

any

GRAY

RoPEs

Jack

Murphy Esq

27 1995

December

Page

above

the

simply are not

plan participants

with respect

decision

We believe

that

in

there

are substantial

participant

direction

has

foreseeable

future

Unless the

not

the

from participating

this

this

which

Group trusts

including

plans

ERISA

investment

any significant degree

number of reasons

such as mutual funds due

fiduciary

standards

and prohibited

available

may be preferable

cases

particular investment

with only

limited

skill

of

particular

of assets

investment

through

normally required

an investment

Smaller plans

them

these

sized stand-alone

of the

replication

vehicles

many cases

investment

more diversified

by establishing

plans

for

is

minimum

seeking

managers

its

deprive

account

index

own smaller

would

investment

through

trust

them

participation

index

in

of

account

options

expensive

size

group

For

of $20

are of

trusts

provide plans

investing

establishment

of

plan could achieve

with substantial

self-directed

available

to

of the investment

investment

deprive

and

of $2 million

it

through

trust

plan

of

account

stand-alone

able to

or

plan

without having

the benefits

To

many

the expertise

manager

sponsored by

group

In

the benefits

obtain

stand-alone

be achieved

account

less

smaller

obtain

able to

obtain

and

choices

fund managed by

to

of an index

reduce the investment

of more diversified and

investment

Many established

could

In the case

stand-alone

significantly

than

strict

portion

numbers

of reasons

variety

managed by that

to

the

significant

in substantial

investment

plan

group

investment

to

subject

with additional

establishment

in

as do plans

amended

and the

of collective

constitute

e.g $100 million or more and are therefore

size

with

reasonably

better

way

and strategies of several

substantial

in

benefit

trust

plans

as

ERISA fiduciaries

exist

for investment

may require

manager

in this

styles

trusts

Often

for the

minimum investment

plan

perspective

of 1974

assets

may be the only way for

group

million but accept

as

trusts

alternatives

available

manager

Act

policy

of ERISA

such

Such

investment

for tax-qualified

other types

to

provisions

vehicles

vehicle

Security

serve

will be excluded

companies

they must be operated

that

where

and therefore

manager

manager

commit the amounts

example

fact

They provide pension

other

to

amount

management by such

permit

that

plans

public

are considered

may be the only form of collective

trust

group

the

the point

investment

assets

significant

represent

which

collective

to

transaction

Group trusts have grown to

all

benefit

From

Income

that they

acknowledge

vehicles

of

investment

collective

the assets of which

of which

investment

to

plan trustees may prefer these vehicles

Consequently

investment

of this

favor

of employee

private

Employee Retirement

provide vehicles

managers

number

the

in

reasons

policy

for

provide

the

to

subject

public

above

described

market

would be unfortunate

result

make any

to

This trend is likely to continue

for the

grown substantially

staff makes it clear that

the scope of the PanAgora letter does

circumstances

in

Group

the opportunity

Fund

Trust

3c1 Recently

interpretation of Section

prohibit

afforded

units

to

to

alternatives

assets than

plans

such plans

of

and

in

ROPES

GRAY

Jack

Murphy Esq

December

27 1995

Page

Request

We respectfully

request

above

self-directed

be the beneficial

owner of units

described

1940 Act

assuming

that

the

your concurrence

plan

in

--

in

our view that

and not the participants

Group Trust Fund

look-through

provisions

under the circumstances

thereof

--

would be deemed to

for purposes of Section

of Section

3c1A

3c1 of the

do not apply

Should you need any further information please do not hesitate to contact

undersigned

at

617

951-7400

Very

truly

yours

Bryan Chegwidden

3050055.12

the

%rI

RESPONSE

DIVISION

DEC

OF THE OFFICE

OF INVESTMENT

OF CHIEF COUNSEL

MANAGEMENT

28

Our Ref No 95-423--CC

The Standish

Ayer

Wood Inc Stable

Value Group Trust

File No 132-3

Your letter of December

27 1995 requests assurance that the

action

staff would

not recommend

enforcement

to the Commission

of the

Investment

if for purposes of section

Company Act

of 1940

defined contribution

participant-directed

plan that

invests

portion of its assets in

separate investment fund

the

of The Standish

Wood Inc Stable Value

Ayer

Group Trust

Group Trust is treated as

single beneficial

owner of the investment fund under the circumstances

described

3c

Fund

below

You state that the Group Trust will be

collective

investment vehicle

for tax-qualified

retirement and prof itdefined

sharing plans including participant-directed

contribution

will

consist of the Fund and

plans The Group Trust

other

investment

in

funds that may

the

future be created at

any

direction

of

the

the

Standish Ayer

Wood Inc

investment

fund

investment

Group Trusts

manager Each separate

will have its own investment objectives and policies and will he

treated as

separate issuer for purposes of section

Standish

You represent

that Standish has developed

certain criteria

the investment of assets in the Fund by

governing

participantdirected defined contribution

plan

Participating Plan or

the

including

following

Plan

Plans investment in the Fund will be made with assets

directed by Plan participants

to an account

with an

identified generic investment objective

generic

investment option

The

decision

the Fund

invest

assets

investment option

the initial

investment and to withdraw assets from the Fund will be

made solely by

direction from or

Plan fiduciary without

consultation

with any Plan participant

in

to

of

generic

both initially and subsequent

to

each purchase of Fund units by

Immediately

following

at least 50 of the options

generic investment option

assets will consist of securities or property other than

units of the Fund

No

that any

representation will be made to Plan participants

to or account

specific

portion of their contributions

balances

under the Plan or any specific

portion of the

in the

relevant generic investment option will be invested

Fund

If

Plan delivers

any information to participants

that mentions an investment in the Fund it will be

-2disclaimer

that no assurances

to the effect

accompanied

by

that

the

investment

be

can

generic

option will

given

continue to invest its assets or the same portion of its

assets in the Fund

Plan as an investor

represent

that before accepting

Standish will require the Plan to represent and

warrant that it will comply with the foregoing

eligibility

criteria for as long as the Plan invests in the Fund

Standish

will

monitor

Plans

periodically

Participating

compliance with

these criteria and will have the ability without

the

consent of

the

to

redeem

the

Plans

interest

in

the

Fund

if

the Plan

Plan

is not in compliance

or fails to cooperate

with Standishs

efforts to monitor compliance

You

in

the

Fund

3c

Section

of the Investment

from

Company Act excludes

definition of investment company any issuer that is not

making and does not propose to make

public offering and whose

securities

outstanding

other than short-term paper are

owned by not more than 100 persons

beneficially

Generlly

beneficial

of

issuer by

term

ownership

company

that includes

an employee

benefit plan

deemed to be

beneficial

In The PanAgora Group

ownership by

single person

Trust pub

avail Apr 29 1994 PanAgora the staff

concluded

that for purposes of determining compliance with the

limit of section

in

each participant

100-person

defined contribution

participant-directed

plan who allocates

to

issuer should be

portion of his or her account

treated as

beneficial

owner of that issuers securities

PanAgora was based on the staffs view that the securityholders

of

issuer should be deemed

company that invests in

to be beneficial

owners of the issuers securities if the company

is managed

to facilitate

its securityholders individual

decisions

to invest in the issuer.3

the

3c

3c

3c

3c

2a

The term company

is defined

in section

of the

Investment

Act

to

mean any corporation partnership

Company

association

joint-stock

company trust fund or organized group

of persons whether

incorporated

or not

An exception to the general rule is

attribution provisions of section

assumes that those provisions do not apply

1992

See e.g WR Investment

the limited partners of

Partners

found

in

Your

the

letter

pub avail Apr 15

partnership were the beneficial

interest

in

owners of the partnerships

entity because

the

which made all the investment decisions

for

general partner

the partnership

would

consult with the limited partners about

their individual investment objectives and vary from investment

3c

continued..

-3The eligibility criteria and other representations

set out

your letter and described above are designed to ensure that

Plans will not be managed to facilitate

their

Participating

individual decisions

to invest in the Fund

In

participants

this regard we note particularly your representations that

Plan participants

discretion

will be limited to allocating

his

or her account

number of generic investment options

the

among

decision

to invest in the Fund and the amount of assets

of

Plan

invested will be solely within the discretion

fiduciary and immediately following any purchase of Fund units

Plan less than 5O of the asets of

by

Participating

generic

investment option will be invested

in the Fund

in

On the

enforcement

basis of the foregoing we would not recommend

action

to the Commission if for purposes

of section

Plan is deemed to be

single beneficial

owner of the

.continued

investment each limited partners percentage

share of profits

Six Pack

pub

avail Nov 13 1989 the partners of

general partnership were

the beneficial

investment in

owners of the partnerships

the

entity because

partnership permitted each partner to

determine the amount of his or her contribution

to each

investment based on his or her individual investment

particular

Market Capital pub

objectives Tyler Capital Fund L.P./South

avail Sept 28 1987 the partners of

general partnership

were the beneficial

owners of the partnerships

investment in

the partnership

created

entity because

separate subaccount

for each new investment it made and permitted each

on an investment-by-investment

partner to contribute

basis

to

and

losses

based

on

individual

circumstances

3c

The

50%

is intended to ensure that

Plan

representation

decision

to

allocate

assets

to

investment

participants

generic

is not the

substantial

of

decision

to invest

option

equivalent

in the Fund

this

in

its

By incorporating

representation

the staff does not suggest that

response

higher percentage

investment necessarily would mean that

Plans participants

must

be treated as the beneficial

owners of an underlying

issuers securities

Nor does the staff foreclose the

that

different

facts from those stated here might

possibility

Plan

as

owner

The staff

justify treating

single beneficial

does not intend to respond to no-action

that

requests however

involve

generic investment option seeking to invest more than

50% of its assets in

issuer if the request does not

otherwise differ materially from the facts described in the

letter

incoming

3c

3c

-4facts and represen

is based on the

position

different facts

that

should

note

and

tations in your letter

you

result

different

might require

and circumstances

Funds units

This

H_

Barry

Senior

Mendelson

Counsel