SEC Division of Investment Management staff letter: Gilbert G. Beezley

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r"l"'~~. ..'~!,' ,.. ~j; SECURITIES AND EXCHANGE COMMISSION WASHINGTON. D.C. 20549 )W -i ,1\ JA- 1J I f (/0 D,. ,:;ION OF ACT ---.n!.---..¡t-.-:i---L ---¡

::STMENT MANAGEMENT ",~~-.-- 0 II SE-C!.u~L '2 L l~.. . -- RULE July 17, 1995

Gilbert G. Beezley

228 South A street, Suite 1

Post Office Box 645

Oxnard, CA 93032

Dear Mr. Beezley:

Your letter to Chairman Levitt has been referred to the

Division of Investment Management for response. In your letter,

you request registration material regarding your services as a

"Russian stocks Advisor," and inquire whether an investment fund

for Russian stocks would be required to be registered with the

Commission. You also request information about Russian companies

that have filed applications regarding American Depository

Receipts ("ADR i s") .
It appears that your services as a Russian stocks Advisor

may require you to register with the Commission as an investment

adviser under the Investment Advisers Act of 1940 ("Advisers

Act"). section 203 (a) of the Advisers Act requires an investment

adviser that makes use of the u.s. mails or any means or

instrumentality of interstate commerce in connection with its

business as an investment adviser to register with the

Commission. section 202 (a) (11), in pertinent part, defines the

term "investment adviser" to mean any person who, for

compensation, engages in the business of advising others as to

the value of securities or as to the advisability of investing

in, purchasing, or selling securities, or who issues or

promulgates analyses or reports concerning securities. For your

information, I have enclosed an Investment Adviser Registration

Package that includes the forms and their instructions. Also

enclosed is a copy of a memorandum that explains the requirements

imposed by the Advisers Act and the rules thereunder.

The propos~d investment fund for Russian stocks may be an

investment co~pany subject to regulation under the Investment

Company Act Jof 1940 (the "1940 Act"). 1 An investment company

section 3 (a) (1) of the Investment Company Act defines

company as any II issuer which is or

holds itself out as being primarily, or

investment
(continued. . . )

.Gilbert G. Beezley i July 17, 1995

registers under the 1940 Act and, if it is making a public

offering, registers its securities under the Securities Act of

1933, by filing a registration statement with the Commission.

The registration statement includes the prospectus, which the

fund must provide to all shareholders.

The 1940 Act requires that an investment company have at

least $100,000 in total assets before it can offer its securities

to the public. An investment company also must have financial

independent public

accountant. The 1940 Act and the rules thereunder also, impose a

number of substantive requirements including limitations on

transactions between an investment company and its affiliates,

restrictions on the ability to leverage its portfolio and

requirements regarding the composition of a company's board of

directors and the purchase and redemption of a company's shares.

For your information, I have enclosed an Investment Company

Registration Package.

statements that are certified by an

Due to the complexity of investment company and investment

adviser regulation, it is advisable to consult with an attorney

familiar with this area before proceeding. In addition, you
 ) should contact the appropriate state authority (or authorities)
to determine what, if any, state requirements may apply to your

proposed activities.2 For more information on forming an

investment company, you may also wish to contact the Investment

Company Institute, a group representing the investment company

industry, at 1401 H street, N. W., Washington, D. C. 20005-2148,

(202) 326-5800.

1 ( . . . continued)
proposes to engage primarily, in the business

of investing, reinvesting, or trading in
 securities. II section 3 (c) (1) of the
Investment Company Act, however, excludes

from the definition of investment company any

issuer whose outstanding securities are

beneficially owned by not more than 100

persdns and which is not making and does not

presently propose to make a public offering

of its securities.

To obtain the names and addresses of state authorities,

you may wish to contact the North American Securities

Administrators Association, One Massachusetts Ave.,

N.W., suite 310, Washington, D.C. 20001, (202) 737
0900.
2

Gilbert G. Beezley

July 17, 1995

Finally, the Office of International Corporate Finance of

the Division of Corporation Finance has informed us that, to

date, no Russian companies have filed a Form F-6 registration

statement to establish an ADR facility in the united states.

I hope this information is helpful. If we can be of further

assistance, please contact this office at (202) 942-0659.

~(r~:

~ w. Murphy

Associate Director

enclosures
.

LEGALTEK
CALFORNIA PARGALS
GILER G, BEEZLY LEAL ADMIISTRATORS

228 SOUTH A STREET, SUITE i PERSONAL IN.JY

POST OFFICE Box 645
 REAL PROPERTY

AVIATION OXNAR, CA 93032
(SOh. .2000
 FAX: (805) 487.2800
March 18, 1995 ?63f/ft ~~A' ø' ~ -~

t. ~ \21

~ ~ ~
Arthur Levitt, Chairman
U. S. SECURIS & EXCHANGE COMMISSION í. ~ ~ (' ~ :. .. 450 5th Street, N.W. ~ ;' Washington, D. C. 20549 re: Russian Stocks ~ c.
~
Dear Mr. Levitt,
Please provide the assistance of your offce on my behalf for the following

items of interest:
1. The enclosed flyer is to offer my services to portolio managers who may have
an interest in Russian Stocks. Would this require me to be licensed in any way with
your Commission? If so, please provide the details, forms and instructions.
2. There may be some interest in forming an investment fund for Russian Stocks.
This is a new concept, and may require some form of registration with your
Commission. If so, please outline those requirements.
3. There are reports of
 Russian companies now applying for ADR's at your offces.
Would it be possible to obtain copies of their applications, or requests or fiings??
Thank you very much for your response to this request.
1l-L.I./ RECEIVED

d!'nce ely, .
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MAR 2 8 195
 End:
SECURITIES & ,EXCHNGE COMMISION
CONSUMER AFAIRS BRACH
MEMBER
REALTORS ASS'NS. - CALRNIA HOTEL-MOTEL ASS'N. - VENTUR COUNTY ASS'N. LEGAL ASSISTANTS

~. 0--__

THINKING AHEAD
RUSSIA STOCKS ADVISOR

Gilbert G. Beezley has dedicated 40 years

anticipatig a new future for Russia. From 1954, as a

Russian Language Specialist for the USAF; From 1958,
three decades of business and fmancial services; affilate
of a major exporter to the Soviet Union; .... a recent

traveler within the Soviet Union, and presently a member

of the California Russia Trade Association in Los Angeles.
RUSSIAN STOCKS ADVISOR

POST OFFCE BOX 645, OXNAR, CA 93032-0645

TEL: (805) 487-200 FAX: (805) 487-2800

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