AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 4, 1997
REGISTRATION NO. 333-32179
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-6
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FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
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A. EXACT NAME OF TRUST:
EQUITY INVESTOR FUND
FINANCIAL FOCUS PORTFOLIO
(FORMERLY CONCEPT SERIES 29)
DEFINED ASSET FUNDS
B. NAMES OF DEPOSITOR:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
C. COMPLETE ADDRESSES OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEFINED ASSET FUNDS
P.O. BOX 9051
PRINCETON, NJ 08543-9051
D. NAMES AND COMPLETE ADDRESSES OF AGENT FOR SERVICE:
TERESA KONCICK, ESQ.
P.O. BOX 9051
PRINCETON, NJ 08543-9051 COPIES TO:
PIERRE DE SAINT PHALLE,
ESQ.
450 LEXINGTON AVENUE
NEW YORK, NY 10017
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Beneficial Interest pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as amended.
F. PROPOSED MAXIMUM OFFERING PRICE TO THE PUBLIC OF THE SECURITIES BEING
REGISTERED: Indefinite
G. AMOUNT OF FILING FEE: Not applicable
H. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of the Registration Statement.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL HEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED SEPTEMBER , 1997
DEFINED ASSET FUNDSSM
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EQUITY INVESTOR FUND The objective of this Defined Fund is capital
FINANCIAL FOCUS PORTFOLIO appreciation by investing for a period of about
(A UNIT INVESTMENT two years in a portfolio consisting primarily of
TRUST) common stocks in the financial sector. These
- ------------------------------stocks are favored by analysts in the Merrill
Lynch Global Research and Economics group and
weighted in the Portfolio according to the Merrill
Lynch Investment Strategy group's recommended
weightings for the financial industry.
This Portfolio is designed for investors who want
to invest a portion of their equity portfolio in
the financial sector, with the opportunity to
change the focus of their equity investment by
exchanging units of this Portfolio into units of
other equity Defined Funds at a reduced sales
charge if their views on this sector change. The
Portfolio is not an appropriate investment for
investors seeking preservation of capital or a
high level of current income. Since all of the
Portfolio stocks are in the financial sector, this
Portfolio is not designed to be a complete equity
investment program.
The value of units will fluctuate with the value
of the common stocks in the Portfolio and there
can be no assurance that the Portfolio will
achieve its objective.
Minimum purchase: $250.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Inquiries should be directed to the Trustee at
SPONSOR: 1-800-323-1508.
Merrill Lynch, Prospectus dated September , 1997.
Pierce, Fenner & Smith INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
Incorporated AND RETAIN IT FOR FUTURE REFERENCE.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
<PAGE>
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Def ined Asset FundsSM
Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $115 billion sponsored in the last 25 years. Each Defined
Asset Fund is a portfolio of preselected securities. The portfolio is divided
into 'units' representing equal shares of the underlying assets. Each unit
receives an equal share of income and principal distributions.
Defined Asset Funds offer several defined 'distinctives'. You know in advance
what you are investing in and that changes in the portfolio are limited - a
defined portfolio. Most defined bond funds pay interest monthly - defined
income. The portfolio offers a convenient and simple way to invest - simplicity
defined.
Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:
o Municipal bond portfolios
o Corporate bond portfolios
o Government bond portfolios
o Equity portfolios
o International bond and equity portfolios
The terms of Defined Funds are as short as one year or as long as 30 years.
Special defined bond funds are available including: insured funds, double and
triple tax-free funds and funds with 'laddered maturities' to help protect
against changing interest rates. Defined Asset Funds are offered by prospectus
only.
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Defined Financial Focus Portfolio
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The Portfolio contains common stocks selected by the Sponsor for capital
appreciation. This Focus Portfolio permits investors to exchange into another
Focus Portfolio or Select Series during the life of this Portfolio or to buy and
hold this Portfolio for approximately two years. At the end of that time, the
Portfolio will be liquidated and the same selection process may be repeated to
select a new Focus Portfolio. The Sponsor reserves the right, however, not to
offer a new portfolio.
If your view of the financial sector changes you may exchange Units of this
Portfolio for Units of other Focus Portfolios or Select Series.
The Sponsor selected the Securities through a three-step screening process.
First, analysts in the Merrill Lynch Global Research and Economics group named
the common stocks in the financial industry they found most attractive. Second,
from that list, stocks were selected representing financial industry sectors
according to the recommended weightings of the Merrill Lynch Investment Strategy
group. Finally, the stocks were reviewed by Defined Asset Funds for market
capitalization and liquidity. (See Fund Description--Portfolio Selection in Part
B.)
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Defining Your Portfolio
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The Portfolio is concentrated in the financial industry.
Based upon the principal business of each issuer and current market values, the
following industry sectors are represented in the Portfolio:
APPROXIMATE
PORTFOLIO PERCENTAGE
/ / Life and Annuity Insurance %
/ / Property and Casualty Insurance
/ / Money Center and Trust Banks
/ / Regional Banks
/ / Thrifts
/ / Government Agencies
/ / Financial Services
/ / REITs
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Defining Your Risks
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The Portfolio is concentrated in common stocks of issuers in the financial
industry and is therefore subject to certain risks associated with that
industry. The Portfolio is not designed to be a complete equity investment
program. (See Risk Factors in Part B.) The Portfolio is not appropriate for
investors who are unable or unwilling to assume the risk involved generally with
an equity investment and who are seeking preservation of capital or high current
income.
There can be no assurance that the Portfolio will meet its objective over its
two-year life or that Merrill Lynch research will continue to recommend
investment in the financial sector or in the Portfolio's stocks over the
Portfolio's two-year life.
Unlike a mutual fund, the Portfolio is not actively managed and the Sponsor
receives no management fee. Therefore, the adverse financial condition of an
issuer, changes in research analysts' opinions or any market movement in the
price of a security will not require the sale of securities from the Portfolio
or mean that the Sponsor will not continue to purchase the security in order to
create additional Units; however, the Sponsor may instruct the Trustee to sell
securities under certain limited circumstances. (See Portfolio Supervision in
Part B.)
A-2
<PAGE>
Unit price fluctuates with the value of the Portfolio, which could be affected
by changes in the financial condition of the issuers, changes in the financial
industry, the impact of the Sponsor's purchase and sale of securities for the
Portfolio, movements in stock prices generally and other factors. Additionally,
equity markets have been at historically high levels and no assurance can be
given that these levels will continue. (See Risk Factors in Part B.)
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Defining Your Investment
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PUBLIC OFFERING PRICE PER 1,000 UNITS $1,000.00
The Public Offering Price as of September , 1997, the business day prior to
the initial date of deposit, is based on the aggregate value of the underlying
securities ($ ) and any cash held to purchase securities, divided by
the number of units outstanding ( ) times 1,000, plus the initial sales
charge. Units offered on the Initial Date of Deposit will also be priced at
$1,000 per 1,000 Units although the aggregate value of the underlying
securities, cash amount and number of Units may vary. The Public Offering Price
on any subsequent date will vary. The underlying securities are valued by the
Trustee on the basis of their closing sale prices at 4:00 p.m. Eastern time on
every business day.
SALES CHARGES
The total sales charge for this investment combines an initial up-front sales
charge and an annual deferred sales charge that will be deducted from the net
asset value of the Portfolio in five monthly payments each year of the
Portfolio. If you redeem or exchange your units prior to October, 1998, you will
not pay the deferred sales charge for the second year.
EXCHANGE OPTION
You may exchange your units of this Portfolio for units of any other Focus
Portfolio or Select Series any time prior to termination of this Portfolio. If
you continue to hold your units, when this Portfolio is about to be liquidated
you may have the option to roll your proceeds into the next Focus Portfolio, if
one is available. If you notify your financial professional by , 1999, your
units will be redeemed and your proceeds will be reinvested in units of the next
Portfolio, if available. If you decide not to roll over your proceeds, you will
receive a cash distribution after termination. Of course you can sell or redeem
your Units at any time prior to termination.
QUARTERLY INCOME DISTRIBUTIONS
You will receive distributions of any dividend income, net of expenses, on the
25th day of , , and commencing , 199 , if
you own Units on the 10th of those months.
In order to meet certain tax requirements, a special distribution of income
including capital gains may be payable to investors of record as of a date in
December. Any capital gain income will generally be distributed after the end of
the Trust's taxable year.
REINVESTMENT OPTION
You can elect to automatically reinvest your distributions into additional units
of the Portfolio subject only to the deferred sales charge remaining at the time
of reinvestment. Reinvesting helps to compound your income for a greater total
return.
TAXES
Distributions which are taxable as ordinary income to investors will constitute
dividends for Federal income tax purposes and may, subject to certain
limitations, be eligible for the dividends-received deduction for certain
corporations. Under the recently enacted Taxpayer Relief Act of 1997, investors
who are individuals and have held their Units for more than 18 months may be
entitled to a 20% maximum federal tax rate for gains from the sale of these
Units. It is not clear at the time of printing this prospectus whether or how
the new 20% maximum Federal long-term capital gain rate will apply to
distributions from the Portfolio. Foreign investors should be aware that
distributions will generally be subject to information reporting and withholding
taxes. (See Taxes.)
MANDATORY TERMINATION DATE
The Portfolio will terminate by , 1999. The final distribution will
be made within a reasonable time afterward. The Portfolio may be terminated
earlier if its value is less than 40% of the value of the securities when
deposited.
SPONSOR'S PROFIT OR LOSS
The Sponsor's profit or loss from the Portfolio will include the receipt of
applicable sales charges, fluctuations in the Public Offering Price or secondary
market price of units, a loss of $ on the initial deposit of the
securities and a gain or loss on subsequent deposits of securities (see
Sponsor's and Underwriters' Profits in Part B).
A-3
<PAGE>
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Defining Your Costs
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SALES CHARGE
First-time investors pay a 1.0% sales charge when they buy. For example, on a
$1,000 investment, $990 is invested in the Portfolio. In addition, five monthly
deferred sales charges of $3.50 per 1,000 units ($17.50 annually) will be
deducted from the Portfolio's net asset value each year of the Portfolio's
two-year life (March through July, 1998 and October, 1998 through February,
1999). This deferred method of payment keeps more of your money invested over a
longer period of time. If you exchange units of this Focus Portfolio for units
of another Focus Portfolio or Select Series or roll the proceeds of your
investment into a new portfolio, you will not be subject to the 1.0% initial
charge. Although this is a unit investment trust rather than a mutual fund, the
following information is presented to permit a comparison of fees and an
understanding of the direct or indirect costs and expenses that you pay.
As a %
of Initial Public Amount per
Offering Price 1,000 Units
----------------- --------------
Initial Sales Charge 1.00% $ 10.00
Deferred Sales Charge per Year 1.75% $ 17.50
Maximum Sales Charge 4.50% $ 45.00
Maximum Sales Charge Imposed per
Year on Reinvested Dividends % $
ESTIMATED ANNUAL FUND OPERATING EXPENSES
As a % Amount per
of Net Assets 1,000 Units
----------------- --------------
Trustee's Fee % $
Portfolio Supervision,
Bookkeeping and Administrative
Fees % $
Organizational Expenses % $
Other Operating Expenses % $
----------------- --------------
TOTAL % $
This Portfolio (and therefore the investors) will bear all or a portion of its
organizational costs--including costs of preparing the registration statement,
the trust indenture and other closing documents, registering units with the SEC
and the states, and the initial audit of the Portfolio--as is common for mutual
funds.
COSTS OVER TIME
You would pay the following cumulative expenses on a $1,000 investment, assuming
5% annual return on the investment throughout the indicated periods and
redemption at the end of the period:
1 Year 2 Years 4 Years 6 Years
$ $ $ $
Although the Portfolio has a term of only two years and is a unit investment
trust rather than a mutual fund, this information is presented to permit a
comparison of fees, assuming the investment is rolled over into a new portfolio
subject only to the deferred sales charge and fund expenses.
The example assumes reinvestment of any dividends and distributions and uses a
5% annual rate of return as mandated by SEC regulations applicable to mutual
funds. For purposes of the example, the deferred sales charge imposed on
reinvestment of dividends is not reflected until the year following payment of
the dividend; the cumulative expenses would be higher if sales charges on
reinvested dividends were reflected in the year of reinvestment.
Reductions to the repurchase and cash redemption prices in the secondary market
to recoup the costs of liquidating securities to meet redemption (described
below) have not been reflected. The example should not be considered a
representation of past or future expenses or annual rates of return; the actual
expenses and annual rates of return may be more or less than the example.
REDEEMING OR SELLING YOUR INVESTMENT
You may redeem or sell your units at any time prior to the termination of the
Portfolio. Your price will be based on the then current net asset value. The
redemption and secondary market repurchase price as of September , 1997 was
$972.50 per 1,000 units ($27.50 per 1,000 units less than the Public Offering
Price). This price reflects deductions of the annual deferred sales charge which
declines over each year of the Portfolio ($17.50 initially). If you redeem or
sell your units before October, 1998, you will pay only the balance of any
deferred sales charge remaining for the first year. If you redeem or sell your
units after September, 1998, you will pay the remaining balance of the deferred
sales charge for the second year. After the initial offering period, the
repurchase and cash redemption prices for units will be reduced to reflect the
estimated costs of liquidating securities to meet the redemption, currently
estimated at $ per 1,000 units. If you reinvest in a new portfolio, you will
pay your share of any brokerage commissions on the sale of underlying securities
when your units are liquidated during the rollover.
A-4
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsor, Trustee and Holders of Equity Investor Fund Financial Focus
Portfolio, Defined Asset Funds (the 'Portfolio'):
We have audited the accompanying statement of condition and the defined
portfolio included in the prospectus of the Portfolio as of September , 1997.
This financial statement is the responsibility of the Trustee. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of an irrevocable letter of credit deposited for the purchase of
securities, as described in the statement of condition, with the Trustee. An
audit also includes assessing the accounting principles used and significant
estimates made by the Trustee, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of the Portfolio as of September
, 1997 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
September , 1997
STATEMENT OF CONDITION AS OF SEPTEMBER , 1997
TRUST PROPERTY
Investments--Contracts to purchase Securities(1).........$
Organizational Costs(2)..................................
--------------------
Total.........................................$
--------------------
--------------------
LIABILITY AND INTEREST OF HOLDERS
Accrued Liability(2)...................................$
--------------------
Subtotal...............................................$
--------------------
Interest of Holders of Units of fractional
undivided interest outstanding(3):
Cost to investors(4)...................................$
Gross underwriting commissions(5)...................... ()
--------------------
Subtotal...............................................$
--------------------
Total.........................................$
--------------------
--------------------
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(1) Aggregate cost to the Portfolio of the securities listed under
Defined Portfolio determined by the Trustee at 4:00 p.m., Eastern time on
September , 1997. The contracts to purchase securities are collateralized by
an irrevocable letter of credit which has been issued by
, New York Branch, in the amount of
$ and deposited with the Trustee. The amount of the letter of credit
includes $ for the purchase of securities.
(2) This represents a portion of the Portfolio's organizational
costs, which will be deferred and amortized over the life of the Portfolio.
Organizational costs have been estimated based on projected total assets of $
million. To the extent the Portfolio is larger or smaller, the estimate may
vary.
(3) Because the value of securities at the evaluation time on the
Initial Date of Deposit may differ from the amounts shown in this statement of
condition, the number of Units offered on the Initial Date of Deposit will be
adjusted from the initial number of Units to maintain the $1,000 per 1,000 Units
offering price.
(4) Aggregate public offering price computed on the basis of the
value of the underlying securities at 4:00 p.m., Eastern time on September ,
1997.
(5) Assumes the maximum initial sales charge per 1,000 units of 1.00%
of the Public Offering Price. A deferred sales charge of $17.50 per 1,000 Units
is payable each year ($3.50 per 1,000 Units monthly March - July 1998 and
October 1998 - February 1999). Distributions will be made on behalf of investors
to an account maintained by the Trustee from which the deferred sales charge
obligation of the investors to the Sponsors will be satisfied. If units are
redeemed prior to July, 1998 or between October 1998 and February, 1999 the
remaining portion of the distribution applicable to such units will be
transferred to such account on the redemption date.
A-5
<PAGE>
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Defined Portfolio
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Equity Investor Fund
Financial Focus Portfolio September , 1997
Defined Asset Funds
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE PRICE
TICKER SHARES OF OF PORTFOLIO PER SHARE COST
NAME OF ISSUER SYMBOL COMMON STOCK (1) TO PORTFOLIO TO PORTFOLIO (2)
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<S> <C> <C> <C> <C> <C>
</TABLE>
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(1) Based on Cost to Portfolio.
(2) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on September , 1997, the initial date of deposit. The
value of the securities on any subsequent date will vary.
------------------------------------
The securities were acquired on September , 1997 and are represented entirely
by contracts to purchase the securities. The Sponsor may have acted as
underwriter, manager or comanager of a public offering of the securities in this
Portfolio during the last three years. Affiliates of the Sponsor may serve as
specialists
A-6
<PAGE>
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Defined Portfolio
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Equity Investor Fund
Financial Focus Portfolio September , 1997
Defined Asset Funds (Continued)
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF PRICE
TICKER COMMON PERCENTAGE PER SHARE COST
NAME OF ISSUER SYMBOL STOCK OF PORTFOLIO(1) TO PORTFOLIO TO PORTFOLIO (2)
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<S> <C> <C> <C> <C> <C>
--------------- -----------------
% $
--------------- -----------------
--------------- -----------------
</TABLE>
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in the securities in this Portfolio on one or more stock exchanges and may have
a long or short position in any of these securities or in options on any of
them, and may be on the opposite side of public orders executed on the floor of
an exchange where the securities are listed. An officer, director or employee of
the Sponsor may be an officer or director of one or more of the issuers of the
securities in the Portfolio. The Sponsor may trade for its own account as an
odd-lot dealer, market maker, block positioner or arbitrageur in any of the
securities or in options on them. The Sponsor, its affiliates, directors,
elected officers and employee benefits programs may have either a long or short
position in any securities or in options on them.
A-7
<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
EQUITY INVESTOR FUND FINANCIAL FOCUS PORTFOLIO
FURTHER INFORMATION REGARDING THE PORTFOLIO MAY BE OBTAINED
WITHIN FIVE DAYS BY WRITING OR CALLING THE TRUSTEE AT THE ADDRESS AND
TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS PROSPECTUS.
INDEX
PAGE
---------
PORTFOLIO DESCRIPTION............................... 1
RISK FACTORS........................................ 2
HOW TO BUY UNITS.................................... 5
HOW TO REDEEM OR SELL UNITS......................... 6
EXCHANGE OPTION..................................... 7
INCOME, DISTRIBUTIONS AND REINVESTMENT.............. 9
PORTFOLIO EXPENSES.................................. 9
TAXES............................................... 10
RECORDS AND REPORTS................................. 12
TRUST INDENTURE..................................... 12
MISCELLANEOUS....................................... 13
SUPPLEMENTAL INFORMATION............................ 14
PORTFOLIO DESCRIPTION
THE FINANCIAL FOCUS PORTFOLIO
This Focus Portfolio is designed to permit an investor to buy and hold a
portfolio consisting primarily of domestic equity securities for a period of
approximately two years based upon the Financial Focus Portfolio selection
process. The Portfolio seeks capital appreciation by acquiring and holding for
about two years certain domestic common stocks selected through a three-step
selection process.
PORTFOLIO SELECTION
The Sponsor selected the Securities through a three-step screening process.
First, Merrill Lynch Global Research and Economics group analysts named the
common stocks that they favor as attractive stocks in various financial industry
sectors. Second, stocks were chosen from that list to represent the weightings
of the different sectors within the financial industry as recommended by the
Merrill Lynch Investment Strategy group. Finally, the resulting stocks were
reviewed by Defined Asset Funds for liquidity and market capitalization. The
Merrill Lynch Global Research and Economics group concentrates on specific
companies by industry, while the Merrill Lynch Investment Strategy group focuses
on asset, industry and sector allocations.
Investors should be aware that the Portfolio may not be able to buy each
Security at the same time because of availability of the Security, any
restrictions applicable to the Portfolio relating to the purchase of the
Security by reason of the federal securities laws or otherwise. Any monies
allocated to the purchase of a Security will generally be held for the purchase
of the Security.
The deposit of the Securities in the Portfolio on the initial date of
deposit established a proportionate relationship among the number of shares of
each Security. Following the initial date of deposit the Sponsor may deposit
additional Securities in order to create new Units, maintaining to the extent
practicable that original proportionate relationship. The ability to acquire
each Security at the same time will generally depend upon the Security's
availability and any restrictions on the purchase of that Security under the
federal securities laws or otherwise.
Additional Units may also be created by the deposit of cash (including a
letter of credit) with instructions to purchase additional Securities. This
practice could cause both existing and new investors to experience a dilution of
their investments and a reduction in their anticipated income because of price
fluctuations in the Securities between the time of the cash deposit and the
actual purchase of the additional Securities and because the associated
brokerage
1
<PAGE>
fees will be an expense of the Portfolio. To minimize the risk of price
fluctuations when purchasing Securities, the Portfolio will try to purchase
Securities as close to the evaluation time or at prices as close to the
evaluated prices as possible. The Portfolio may also enter into program trades
with unaffiliated broker/dealers, which may have the effect of increasing
brokerage commissions, while reducing market risk.
PORTFOLIO SUPERVISION
The Portfolio follows an investment strategy that buys stocks and generally
holds them for two years, in contrast to the frequent portfolio changes of a
managed fund based on economic, financial and market analyses. In the event a
public tender offer is made for a Security or a merger or acquisition is
announced affecting a Security, the Sponsor may instruct the Trustee to tender
or sell the Security in the open market when in its opinion it is in the best
interests of investors to do so. While the Portfolio is not actively managed,
the Portfolio is regularly reviewed and evaluated and Securities may be sold in
the case of adverse developments concerning a Security, including the adverse
financial condition of the issuer, the institution of legal proceedings against
the issuer, or a decline in the price or the occurrence of other market or
credit factors that might make retention of the Security detrimental to the
interest of investors or if the disposition of these Securities is necessary in
order to enable the Portfolio to make distributions of the Portfolio's capital
gain net income or desirable in order to maintain the qualification of the
Portfolio as a regulated investment company under the Internal Revenue Code.
Securities can also be sold to meet redemption of Units. In selling Securities
the Portfolio will attempt to minimize any current tax liability for current
investors. The Sponsor is also authorized to direct the reinvestment of the
proceeds of the sale of Securities, as well as moneys held to cover the purchase
of Securities pursuant to contracts which have failed, in additional Securities,
including U.S. Treasury Securities. The Portfolio may, however, continue to hold
a Security and purchase additional shares even though the research analyst's
opinion or the assessment of a Security or sector may have changed or subsequent
to the initial date of deposit a Security may no longer satisfy the Portfolio's
selection criteria.
RISK FACTORS
An investment in the Portfolio entails certain risks, including the risk
that the value of your investment will decline if the financial condition of the
issuers of the Securities becomes impaired or if the general condition of the
stock market worsens. The rights of holders of common stocks to receive payments
from the issuer are generally inferior to the rights of creditors of, or holders
of debt obligations or preferred stocks issued by, the issuer. Moreover, because
common stocks do not represent an obligation of the issuer they do not offer any
assurance of income or provide the degree of protection of capital provided by
debt securities. Common stocks in general are susceptible to general stock
market movements and to volatile increases and decreases in value as market
confidence in and perceptions of issuers change. Equity markets can be affected
by unpredictable factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates, economic expansion
or contraction, and global or regional political, economic or banking crises.
The Sponsor cannot predict the direction or scope of any of these factors.
Additionally, equity markets have been at historically high levels and no
assurance can be given that these levels will continue. There can be no
assurance that the Portfolio will be effective in achieving its objective over
its two-year life or that any future portfolios selected through this process
during consecutive periods would meet their objectives. The Portfolio is not
designed to be a complete investment program.
THE FINANCIAL INDUSTRY
The companies represented in the Financial Portfolio may be subject to
extensive governmental regulation which may limit both the amount and types of
loans and other financial commitments they can make as well as the interest
rates and other fees they can charge. The following sectors are represented in
the Portfolio.
Banking. The activities of U.S. banks and bank holding companies are
subject to comprehensive federal and state regulation which is expected to
continue to change over the life of the Portfolio. Recent changes in federal and
state regulations which will permit greater consolidation and branching within
the industry may lead to increased competition among larger bank complexes.
Geographic expansion may also expose banks to the risks associated with
unmanageable costs and insufficient internal controls. Legislation is currently
being considered which would reduce the separation between commerical and
investment banking businesses. The enactment of any new legislation or
regulations, or any change in interpretation or enforcement of existing laws or
regulations, may affect the profitablity of participants in the banking
industry. No assurance can be given as to what form any such legislation or
regulation would take, if enacted, or what effects any new legislation or
regulation would have on the banking industry.
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The banking industry is particularly susceptible to downturns in economic
conditions and volatility in political conditions as well as fiscal or monetary
policies of governmental units. Banking operations depend heavily on the
availability and cost of capital, and are highly sensitive to interest rate
levels. Profitability, therefore, is subject to significant fluctuation. Banks
are also exposed to the risks of a deflationary economy, which may diminish the
value of a bank's direct investments and contribute to loan defaults if the
value of secured property or other collateral for loans declines.
The banking industry is subject to extensive government regulation which
may limit operational activity as well as certain aspects of a bank's financial
condition. Federal regulators impose restrictions on dividend payment policies,
allowances for loan losses and transactions between banks and their parent
holding companies. In addition, federal regulators require banks and thrifts to
maintain minimum capital requirements; to the extent additional equity is issued
to meet the requirements, outstanding equity holdings will be diluted.
Banks are subject to substantial competition from other banking and thrift
institutions and from other financial service institutions for deposits, as well
as corporate and retail customers. To the extent a bank's portfolio is
concentrated in assets related to a particular industry or geographic region,
the bank's operating results will be subject to additional risks associated with
such industry or region. Loan portfolios of banks have been adversely affected
by depressed conditions in certain markets, including real estate, agriculture
and energy.
Insurance. Insurance companies are subject to extensive regulation and
supervision where they do business by state insurance commissioners who regulate
the standards of solvency, which must be maintained, the nature of and
limitations on investments, reports of financial condition, and requirements
regarding reserves for unearned premiums, losses and other matters. A
significant portion of the assets of insurance companies are required by law to
be held in reserve against potential claims on policies and is not available to
general creditors. Although the federal government does not regulate the
business of insurance, federal initiatives including pension regulation,
controls on medical costs, minimum standards for no-fault automobile insurance,
national health insurance, tax law changes affecting life insurance companies
and repeal of the antitrust exemption for the insurance business can
significantly impact the insurance business. Insurance companies are also
affected by state and federal judicial and regulatory decisions that redefine
risk exposure in areas such as products liability, workers' compensation and
disability benefits. Developments in these areas may reduce short-term
profitability of certain lines of insurance, but long-term effects may be
minimized through revision of coverage and policy terms. Insurance companies'
profitability depends largely on actuarial assumptions based on past experience.
The occurrence of certain significant and unforeseen events may therefore have
an adverse effect on the financial condition of insurance companies. Certain
types of insurance, such as property and casualty insurance may be impacted by
events such as natural catastrophes or environmental and asbestos claims under
decades-old policies. In addition, insurance companies are affected by interest
rate levels, economic conditions and price and marketing competition.
Deregulation of the financial services industry may result in greater
diversification of products offered by financial services companies amd expose
insurance companies to increased competition.
Thrifts. The thrift industry is generally subject to similar risks as the
banking industry discussed above, including, interest rate changes, credit risks
and regulatory risks. Such risks may have different effects on the thrift
industry as thrifts may differ from banks in the general composition of their
loan portfolios. Thrifts are required to maintain certain minimum percentages of
mortgages, credit cards and student loans, and certain maximum percentages of
consumer and commercial loans. The loan portfolios of thrifts may be less
diversified than bank portfolios and have a greater concentration in real
estate, consumer and small business loans. The loan portfolios of thrifts may
also be concentrated in the geographic area in which they are located. Local
market conditions, particularly if the economic base of the area depends on a
depressed industry, may have adverse effects on the financial condition of
thrifts. The enactment of any new legislation or regulations, or any change in
interpretation or enforcement of existing laws or regulations, may affect the
profitability of participants in the thrift industry. No assurance can be given
as to what form any such legislation or regulation would take, if enacted, or
what effects any new legislation or regulation would have on the thrift
industry.
Financial Services. The financial services industry includes credit card
issuers and companies that provide private mortgage insurance, home equity loans
and point-of-sale loans for various durable goods. Companies in the credit card
business are subject to the demands of a competitive market, including,
increased use of advertising, target marketing and pricing competition. Because
of increased competition, some credit card issuers have pursued customers with
lower credit quality and have experienced rising delinquency rates.
Profitability for credit card issuers is
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largely dependent on the ability to generate new receivables. Social, legal and
economic factors, including inflation, unemployment levels and interest rates,
may result in changes in market demand, credit use and payment patterns of
customers. No assurance can be given as to what effect such factors may have on
the credit card industry. Companies in other areas of the financial services
industry are dependent on federal housing legislation and other laws and
regulations that affect the demand for home equity loans and mortgage insurance.
Such companies are also subject to insurance laws and regulations in the
jurisdictions where they do business. Future changes in laws or regulations
relating to this industry may adversely affect market demand, restrict premium
rates or otherwise impair transactions in this industry. Companies in this
industry are exposed to credit risk and may be adversely affected by economic
events such as national or regional economic recession, falling housing prices,
rising unemployment rates and changes in interest rates.
Government Agencies. The companies included in this industry are
government-sponsored, privately-held companies that were established by the
government to stimulate lending activity in the housing and student loan
markets. Companies such as Freddie Mac, Fannie Mae and Sallie Mae provide a flow
of funds to these markets by purchasing loans from loan originators, thereby
replenishing the funds available for additional lending. Sallie Mae also engages
in other credit, service and investment operations related to post-secondary
education finance. Such loan purchases are generally limited to conforming loans
that satisfy certain principal amount limits and credit-related standards
mandated by statute. The loan purchases are financed by the securities issued by
these companies, which are priced and traded by reference to U.S. Treasury
securities. Downgrading, events of default or interruption in the issuance of
U.S. Treasury securities may disrupt the companies' access to capital markets,
funding and investment operations, and other activities. Business activities of
these companies are subject to direct regulation by the government and may also
be affected by the legislative and regulatory actions imposed on entities
representing the customer base for their securities, including, banks, savings
institutions, insurance companies, securities dealers and other regulated
entities. Companies in this industry may be exposed to credit risk of borrowers
and of institutional counterparties, such as mortgage insurers. The companies
may also be exposed to risks associated with changing interest rates, which
affect borrowers' abilities to prepay loans and may cause fluctuations in
earnings by creating mismatches in maturities of the companies' assets and
liabilities.
REITS. Real Estate Investment Trusts (REITs) are financial vehicles that
have as their objective the pooling of capital from a number of investors in
order to participate directly in real estate ownership or financing and offer a
convenient and cost effective way to diversify your portolio with real estate
investments. They generally have interests in income-producing real estate. Many
factors can have an adverse impact on the performance of a particular REIT,its
cash available for distribution, the credit quality of a particular REIT or the
real estate industry generallly. Risks associated with the direct ownership of
real estate include, among other factors, general and local economic conditions,
decline in real estate values, the financial health of tenants, overbuilding and
increased competition for tenants, oversupply of properties for sale, changing
demographics, changes in interest rates, changes in government regulations,
faulty construction, changes in neighborhood values, and the unavailability of
construction financing or mortgage loans at rates acceptable to developers.
Variations in rental income and space availability and vacancy rates in terms of
supply and demand are additional factors affecting real estate generally and
REITs in particular. REITs may not be diversified and are subject to the risks
of financing projects. REITs are also subject to defaults by borrowers,
self-liquidation and the market's perception of the REIT industry generally.
LIQUIDITY
Whether or not the Securities are listed on a national securities exchange,
the principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the Securities
may depend on whether dealers will make a market in the Securities. There can be
no assurance that a market will be made for any of the Securities, that any
market for the Securities will be maintained or of the liquidity of the
Securities in any markets made. In addition, the Portfolio may be restricted
under the Investment Company Act of 1940 from selling Securities to the Sponsor.
The price at which the Securities may be sold to meet redemptions and the value
of the Portfolio will be adversely affected if trading markets for the
Securities are limited or absent.
LITIGATION AND LEGISLATION
The Sponsor does not know of any pending litigation as of the initial date
of deposit that might reasonably be expected to have a material adverse effect
on the Portfolio, although pending litigation may have a material adverse effect
on the value of Securities in the Portfolio. In addition, at any time after the
initial date of deposit, litigation may be
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initiated on a variety of grounds, or legislation may be enacted, affecting the
Securities in the Portfolio or the issuers of the Securities. Changing
approaches to regulation may have a negative impact on certain companies
represented in the Portfolio. There can be no assurance that future litigation,
legislation, regulation or deregulation will not have a material adverse effect
on the Portfolio or will not impair the ability of the issuers of the Securities
to achieve their business goals. From time to time Congress considers proposals
to reduce the rate of the dividends-received deduction. This type of
legislation, if enacted into law, would adversely affect the after-tax return to
investors who can take advantage of the deduction. See Taxes.
LIFE OF THE FUND; FUND TERMINATION
The size and composition of the Portfolio will be affected by the level of
redemptions of Units that may occur from time to time. Principally, this will
depend upon the number of investors seeking to sell or redeem their Units or
participating in an exchange or rollover. The Portfolio will be terminated no
later than the mandatory termination date specified in Part A of the Prospectus.
It will terminate earlier upon the disposition of the last Security or upon the
consent of investors holding 51% of the Units. The Portfolio may also be
terminated earlier by the Sponsor once its total assets have fallen below the
minimum value specified in Part A of the Prospectus. A decision by the Sponsor
to terminate the Portfolio early, which will likely be made following the
rollover, will be based on factors such as the size of the Portfolio relative to
its original size, the ratio of Portfolio expenses to income, and the cost of
maintaining a current prospectus.
Notice of impending termination will be provided to investors and
thereafter units will no longer be redeemable. On or shortly before termination,
the Trustee will seek to dispose of any Securities remaining in the Portfolio
although any Security unable to be sold at a reasonable price may continue to be
held by the Trustee in a liquidating trust pending its final disposition. A
proportional share of the expenses associated with termination, including
brokerage costs in disposing of Securities, will be borne by investors remaining
at that time. This may have the effect of reducing the amount of proceeds those
investors are to receive in any final distribution.
HOW TO BUY UNITS
Units are available from the Sponsor, Underwriter and other broker-dealers
at the Public Offering Price. The Public Offering Price varies each Business Day
with changes in the value of the Portfolio and other assets and liabilities of
the Portfolio.
PUBLIC OFFERING PRICE
Units are charged a combination of Initial and Deferred Sales Charges
equal, in the aggregate, to a maximum annual charge of 2.75% of the public
offering price or, for quantity purchases of units of all Focus Portfolios by an
investor and the investor's spouse and minor children, or by a single trust
estate or fiduciary account, made on a single day, the following percentages of
the public offering price:
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APPLICABLE SALES CHARGE
(GROSS UNDERWRITING PROFIT)
----------------------------------
AS % OF PUBLIC AS % OF NET
AMOUNT PURCHASED OFFERING PRICE AMOUNT INVESTED
- ---------------------------------------- ----------------- -----------------
Less than $50,000....................... % %
$50,000 to $99,999......................
$100,000 to $249,999....................
$250,000 to $999,999....................
$1,000,000 or more......................
The annual Deferred Sales Charge is a charge of $1.75 per 1,000 units and
is accrued in five monthly installments each year of the Portfolio, in the
months indicated in part A of this Prospectus. Units redeemed or repurchased
prior to the accrual of the final Deferred Sales Charge installment in the first
or second year will have the amount of any remaining installments deducted from
the redemption or repurchase proceeds or deducted in calculating an in-kind
redemption, although this deduction will be waived in the event of the death or
disability (as defined in the Internal Revenue Code) of an investor. The Initial
Sales Charge is equal to the aggregate sales charge, determined as described
above, less the aggregate amount of any remaining installments of the Deferred
Sales Charge.
It is anticipated that Securities will not be sold to pay the Deferred
Sales Charge until after the date of the last installment in each year of the
Portfolio. Investors will be at risk for market price fluctuations in the
Securities from the several installment accrual dates to the dates of actual
sale of Securities to satisfy this liability. In selling Securities the
Portfolio will attempt to minimize any current tax liability for current
investors.
Employees of the Sponsor and Sponsor affiliates and non-employee directors
of Merrill Lynch & Co. Inc. may purchase Units subject only to the Deferred
Sales Charge.
EVALUATIONS
Evaluations are determined by the Trustee on each Business Day. This
excludes Saturdays, Sundays and the following holidays as observed by the New
York Stock Exchange: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas; for Securities issued
by government agencies, the following Federal holidays are also not business
days: Martin Luther King's Birthday, Columbus Day and Veterans Day. If the
Securities are listed on a national securities exchange or the Nasdaq National
Market, evaluations are generally based on closing sales prices on that exchange
or system (unless the Trustee deems these prices inappropriate) or, if closing
sales prices are not available, at the mean between the closing bid and offer
prices. If the Securities are not listed or if listed but the principal market
is elsewhere, the evaluation is generally determined based on sales prices of
the Securities on the over-the-counter market or, if sales prices in that market
are not available, on the basis of the mean between current bid and offer prices
for the Securities or for comparable securities or by appraisal or by any
combination of these methods. Neither the Sponsor nor the Trustee guarantees the
enforceability, marketability or price of any Securities.
NO CERTIFICATES
All investors are required to hold their Units in uncertificated form and
in 'street name' by their broker, dealer or financial institution at the
Depository Trust Company ('DTC').
HOW TO REDEEM OR SELL UNITS
You can redeem your Units at any time for net asset value. In addition, the
Sponsor has maintained an uninterrupted secondary market for Units for over 20
years and will ordinarily buy back Units at net asset value. The following
describes these two methods to redeem or sell Units in greater detail.
REDEEMING UNITS WITH THE TRUSTEE
You can always redeem your Units for net asset value. This can be done by
contacting your broker, dealer or financial institution that holds your Units in
street name. In certain instances, additional documents may be required such as
a trust instrument, certificate of corporate authority, certificate of death or
appointment as executor, administrator or guardian.
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Within seven days after the receipt of your request containing any
necessary documents, a check will be mailed to you in an amount equal to the net
asset value of your Units. Because of the sales charge, market movements or
changes in the Portfolio, net asset value at the time you redeem your Units may
be greater or less than the original cost of your Units. Net asset value is
calculated each Business Day by adding the value of the Securities, declared but
unpaid dividends on the Securities, cash and the value of any other Portfolio
assets; deducting unpaid taxes or other governmental charges, accrued but unpaid
Portfolio expenses and any remaining deferred sales charges for the current
period, unreimbursed Trustee advances, cash held to redeem Units or for
distribution to investors and the value of any other Portfolio liabilities; and
dividing the result by the number of outstanding Units. After the initial
offering period, net asset value will be reduced to reflect the cost to the
Portfolio of liquidating Securities to pay the redemption price.
As long as the Sponsor is maintaining a secondary market for Units (as
described below), the Trustee will not actually redeem your Units but will sell
them to the Sponsor for net asset value. If the Sponsor is not maintaining a
secondary market, the Trustee will redeem your Units for net asset value or will
sell your Units in the over-the-counter market if the Trustee believes it will
obtain a higher net price for your Units. If the Trustee is able to sell the
Units for a net price higher than net asset value, you will receive the net
proceeds of the sale.
If cash is not available in the Income and Capital Accounts to pay
redemptions, the Trustee may sell Securities selected by the Sponsor based on
market and credit factors determined to be in the best interest of the
Portfolio. These sales are often made at times when the Securities would not
otherwise be sold and may result in lower prices than might be realized
otherwise and may also reduce the size and diversity of the Portfolio. If
Securities are being sold during a time when additional Units are being created
by the purchase of additional Securities (as described under Portfolio
Selection), Securities will be sold in a manner designed to maintain, to the
extent practicable, the proportionate relationship among the number of shares of
each Security in the Portfolio.
Any investor owning Units representing Securities with a value of at least
$500,000 who redeems those Units prior to the rollover notification date
indicated in Part A of the Prospectus may, in lieu of cash redemption, request
distribution in kind of an amount and value of Securities per Unit equal to the
otherwise applicable Redemption Price per Unit. Generally, whole shares of each
Security together with cash from the Capital Account equal to any fractional
shares to which the investor would be entitled (less any Deferred Sales Charge
payable) will be paid over to a distribution agent and either held for the
account of the investor or disposed of in accordance with instructions of the
investor. Any brokerage commissions on sales of Securities in connection with
in-kind redemptions may be borne by the redeeming investors. The in-kind
redemption option is subject to all applicable legal restrictions and may be
terminated by the Sponsor at any time upon prior notice to investors.
Redemptions may be suspended or payment postponed (i) if the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (ii) if
the SEC determines that trading on the New York Stock Exchange is restricted or
that an emergency exists making disposal or evaluation of the Securities not
reasonably practicable or (iii) for any other period permitted by SEC order.
SPONSOR'S SECONDARY MARKET FOR UNITS
The Sponsor, while not obligated to do so, will buy back Units at net asset
value without any other fee or charge as long as they are maintaining a
secondary market for Units. Because of the sales charge, market movements or
changes in the portfolio, net asset value at the time you sell your Units may be
greater or less than the original cost of your Units. You should consult your
financial professional for current market prices to determine if other
broker-dealers or banks are offering higher prices for Units.
The Sponsor may discontinue the secondary market for Units without prior
notice. Regardless of whether the Sponsor maintains a secondary market, you have
the right to redeem your Units for net asset value, as described above.
EXCHANGE OPTION
You may exchange Units for units of other Focus or Select Portfolios,
subject only to the Deferred Sales Charge on the units received. Holders of
units of any other Focus or Select Portfolio, of any other Defined Asset Fund
with a regular maximum sales charge of at least 3.50%, or of any unaffiliated
unit trust with a regular maximum sales charge of at least 3.0%, may exchange
those units for Units of this Portfolio at their relative net asset values,
subject only to the Deferred Sales Charge on the Units.
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To make an exchange, you should contact your financial professional to find
out what exchange funds are available and to obtain a prospectus. You may
acquire units of only those exchange funds in which the Sponsor is maintaining a
secondary market and which are lawfully for sale in the state where you reside.
An exchange is a taxable event normally requiring recognition of any gain or
loss on the units exchanged. However, the Internal Revenue Service may seek to
disallow a loss if the portfolio of the units acquired is not materially
different from the portfolio of the units exchanged; you should consult your own
tax advisor. If the proceeds of units exchanged are insufficient to acquire a
whole number of exchange fund units, you may pay the difference in cash (not
exceeding the price of a single unit acquired).
As the Sponsor is not obligated to maintain a secondary market in any
series or to offer successor portfolios, there can be no assurance that units of
a desired series will be available for exchange. The Exchange Option may be
amended or terminated at any time without notice.
ROLLOVER
In lieu of redeeming Units or receiving liquidation proceeds upon the
termination of the Portfolio, investors who hold their units with the Sponsor
may elect, by contacting their financial adviser prior to the rollover
notification date indicated in Part A, to apply their proportional interest in
the Securities and other assets of the Portfolio toward the purchase of units of
a new Focus Portfolio or a Select Series (if available). It is expected that the
terms of any new Focus Portfolio, including the exchange and rollover features,
will be substantially the same as those of this Portfolio.
A rollover of your units is accomplished by the in-kind redemption of Units
followed by the sale of the underlying Securities by a distribution agent on
behalf of participating investors and the reinvestment of the sale proceeds (net
of brokerage fees, governmental charges and other sale expenses) in units of the
new portfolio at their net asset value.
The Sponsor intends to sell the distributed Securities, on behalf of the
distribution agent, as quickly as practicable and then to create units of the
new portfolio as quickly as possible, subject in both cases to the Sponsor's
sensitivity that the concentrated sale and purchase of large volumes of
securities may affect market prices in a manner adverse to the interest of
investors. Accordingly, the Sponsor may, in its sole discretion, undertake a
more gradual sale of the distributed Securities and a more gradual creation of
units of the new portfolio to help mitigate any negative market price
consequences caused by this large volume of securities trades. In order to
minimize potential losses caused by market movement during the rollover period,
the Sponsor may enter into program trades, which might increase brokerage
commissions payable by investors. There can be no assurance, however, that any
trading procedures will be successful or might not result in less advantageous
prices. Pending the investment of rollover proceeds in the securities to
comprise the new portfolio, those moneys may be uninvested for up to several
days. For any Securities in the Portfolio that will also be in a new Focus
Portfolio, a direct sale of those securities between the two funds is now
permitted pursuant to an SEC exemptive order. These sales will be effected at
the securities' closing sales prices on the exchanges where they are principally
traded, free of any brokerage costs.
By participating in the rollover you may realize taxable capital gain on
the rollover but may not be entitled to a deduction for capital loss recognized
on the rollover and, because of the rollover procedures, you will not receive a
cash distribution with which to pay those taxes. You should consult your own tax
advisors in this regard. Investors who do not participate will continue to hold
their Units until the termination of the Portfolio; however, depending upon the
extent of participation in the rollover, the aggregate size of the Portfolio may
be sharply reduced resulting in a significant increase in per Unit expenses.
The Sponsor may, in its sole discretion and without penalty or liability to
investors, decide not to sponsor a new portfolio or to modify the terms of the
rollover. Prior notice of any decision would be provided to investors.
The Division of Investment Management of the SEC is of the view that the
rollover option constitutes an 'exchange offer', for the purposes of Section
11(c) of the Investment Company Act of 1940, and would therefore be prohibited
absent an exemptive order. The Sponsor has received exemptive orders under
Section 11(c) which it believes permit it to offer the rollover, but no
assurance can be given that the SEC will concur with the Sponsor's position and
additional regulatory approvals may be required.
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INCOME, DISTRIBUTIONS AND REINVESTMENT
INCOME AND DISTRIBUTIONS
The annual income per Unit, after deducting estimated annual expenses per
Unit, will depend primarily upon the amount of dividends declared and paid by
the issuers of the Securities and changes in the expenses of the Portfolio and,
to a lesser degree, upon the level of purchases of additional Securities and
sales of Securities. There is no assurance that dividends on the Securities will
continue at their current levels or be declared at all.
Each Unit receives an equal share of distributions of dividend income.
Dividends received are credited to an Income Account and other receipts to a
Capital Account. A Reserve Account may be created by withdrawing from the Income
and Capital Accounts amounts considered appropriate by the Trustee to reserve
for any material amount that may be payable out of the Portfolio. Funds held by
the Trustee in the various accounts do not bear interest. In addition,
distributions of amounts necessary to pay the Deferred Sales Charge will be made
from the Capital Account to an account maintained by the Trustee for purposes of
satisfying investors' sales charge obligations. [Although the Sponsor may
collect the Deferred Sales Charge during the months stated in Part A, to keep
Units more fully invested the Sponsor currently does not anticipate sales of
Securities to pay the Deferred Sales Charge until after the final Deferred Sales
Charge installment in each year of the Portfolio]. Proceeds of the disposition
of any Securities not used to pay Deferred Sales Charge or to redeem Units will
be held in the Capital Account and distributed following liquidation of the
Fund.
REINVESTMENT
Any income and principal distributions on Units may be reinvested by
participating in the Portfolio's reinvestment plan. Under the plan, the Units
acquired for investors will be either Units already held in inventory by the
Sponsor or new Units created by the Sponsor's deposit of additional Securities,
contracts to purchase additional Securities or cash (or a bank letter of credit
in lieu of cash) with instructions to purchase additional Securities. Deposits
or purchases of additional Securities will generally be made so as to maintain
the then existing proportionate relationship among the number of shares of each
Security in the Portfolio. Units acquired by reinvestment will not be subject to
the initial sales charge but will be subject to any remaining installments of
Deferred Sales Charge. The Sponsor reserves the right to amend, modify or
terminate the reinvestment plan at any time without prior notice. Investors
holding Units in 'street name' should contact their broker, dealer or financial
institution if they wish to participate in the reinvestment plan.
PORTFOLIO EXPENSES
Estimated annual expenses are listed in Part A of the Prospectus; if actual
expenses exceed the estimate, the excess will be borne by the Portfolio. To the
extent that expenses exceed the amount available in the Income Account, the
Trustee is authorized to sell Securities and pay the excess expenses from the
Capital Account. The estimated expenses do not include the brokerage commissions
payable by the Portfolio in purchasing and selling Securities. The Trustee's Fee
shown in Part A of this Prospectus assumes that the Portfolio will reach a size
estimated by the Sponsor and is based on a sliding scale that reduces the
Trustee's fee as the size of the Portfolio increases. The Trustee's annual fee
is payable in monthly installments. The Trustee also benefits when it holds cash
for the Portfolio in non-interest bearing accounts. Possible additional charges
include Trustee fees and expenses for extraordinary services, costs of
indemnifying the Trustee and the Sponsor, costs of action taken to protect the
Portfolio and other legal fees and expenses, Portfolio termination expenses and
any governmental charges. The Trustee has a lien on Portfolio assets to secure
reimbursement of these amounts and may sell Securities for this purpose if cash
is not available. The Sponsor receives an annual fee currently estimated at
$0.35 per 1,000 Units to reimburse it for the cost of providing Portfolio
supervisory services to the Portfolio. While the fee may exceed its costs of
providing these services to the Portfolio, the total supervision fees from all
Series of Equity Investor Fund will not exceed its costs for these services to
all of those Series during any calendar year. The Sponsor may also be reimbursed
for its costs of providing bookkeeping and administrative services to Defined
Asset Portfolios, currently estimated at $0.10 per 1,000 Units. The Trustee's
and Sponsor's fees may be adjusted for inflation without investors' approval.
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All or a portion of expenses incurred in establishing the Portfolio,
including the cost of the initial preparation of documents relating to the
Portfolio, Federal and State registration fees, the initial fees and expenses of
the Trustee, legal expenses and any other out-of-pocket expenses will be paid by
the Portfolio and amortized over the life of the Portfolio. Advertising and
selling expenses will be paid by the Sponsor at no charge to the Portfolio.
Defined Asset Portfolios can be a cost-effective way to purchase and hold
investments. Annual operating expenses are generally lower than for managed
funds. Because Defined Asset Portfolios have no management fees, limited
transaction costs and no ongoing marketing expenses, operating expenses are
generally less than 0.25% a year. When compounded annually, small differences in
expense ratios can make a big difference in your investment results.
TAXES
TAXATION OF THE PORTFOLIO
The Portfolio intends to qualify for and elect the special tax treatment
applicable to 'regulated investment companies' under Sections 851-855 of the
Internal Revenue Code of 1986, as amended (the 'Code'). Qualification and
election as a 'regulated investment company' involve no supervision of
investment policy or management by any government agency. If the Portfolio
qualifies as a 'regulated investment company' and distributes to investors 90%
or more of its taxable income, excluding its net capital gain (i.e., the excess
of its net long-term capital gain over its net short-term capital loss), it will
not be subject to Federal income tax on the portion of its taxable income
(including any net capital gain) it distributes to investors in a timely manner.
In addition, the Portfolio will not be subject to the 4% excise tax on certain
undistributed income of 'regulated investment companies' to the extent it
distributes to investors in a timely manner at least 98% of its taxable income
(including any net capital gain). It is anticipated that the Portfolio will not
be subject to Federal income tax or the excise tax, because the Indenture
requires the distribution of the Portfolio's taxable income (including any net
capital gain) in a timely manner. Although all or a portion of the Portfolio's
taxable income (including any net capital gain) for any calendar year may be
distributed shortly after the end of the calendar year, such a distribution will
be treated for Federal income tax purposes as having been received by investors
during the calendar year.
DISTRIBUTIONS
Distributions to investors of the Portfolio's dividend income and net
short-term capital gain in any year will generally be taxable as ordinary income
to investors to the extent of the Portfolio's taxable income (other than taxable
income attributable to its net capital gain) for that year. Distributions in
excess of the Portfolio's taxable income will be treated as a return of capital
and will reduce the investor's basis in his Units and, to the extent that such
distributions exceed his basis, will be treated as a gain from the sale of his
Units as discussed below. It is anticipated that substantially all of the
distributions of the Portfolio's net capital gains will be designated as capital
gain dividends and that the Portfolio's dividend income and net short-term
capital gain will be taxable as ordinary income to investors. Distributions that
are taxable as ordinary income to investors will constitute dividends for
Federal income tax purposes. Certain corporate investors will be eligible for
the 70% dividends-received deduction to the extent that the distributions are
appropriately designated by the Portfolio and are attributable to dividends
received by the Portfolio from domestic issuers with respect to whose Securities
the Portfolio satisfies the requirements for the dividends-received deduction.
Depending upon the particular corporate investor's circumstances, limitations on
the availability of the dividends-received deduction may be applicable. Further,
Congress from time to time considers proposals that would adversely affect the
after-tax return to investors that can take advantage of the deduction. For
example, the recently enacted Taxpayer Relief Act of 1997 requires the holding
period for the dividends-received deduction (during which the investor's
position may not be hedged) to be satisfied immediately proximate to each
ex-dividend date. Investors are urged to consult their own tax advisers in this
regard.
Under the recently enacted Taxpayer Relief Act of 1997, investors who are
individuals and have held their Units for more than 18 months may be entitled to
a 20% maximum federal tax rate for gains from the sale of these Units. Prior to
the issuance of relevant regulations, it is not certain whether or how the 20%
maximum rate will be available with respect to capital gain dividends paid by
the Portfolio. Investors should consult their own tax advisers in this regard.
Distributions of the Portfolio's net capital gain that are designed as
capital gain dividends by the Portfolio will be taxable to investors as
long-term capital gain, regardless of the time the investor has held his Units.
However, if the
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Portfolio were to terminate in less than one year, the Portfolio would not
distribute any capital gain dividends. An investor, other than a dealer in
securities, will generally recognize capital gain or loss when the investor
disposes of his Units (by sale, redemption or otherwise). In the case of a
distribution of Securities to an investor upon redemption of his Units, gain or
loss will generally be recognized in an amount equal to the difference between
the investor's tax basis in his Units and the fair market value of the
Securities received in redemption. Net capital gain may be taxed at a lower rate
than ordinary income for certain individuals and other non-corporate taxpayers.
Any such capital gain or loss asset is long-term if the asset is held for more
than one year and short-term if held one year or less. However, any capital loss
on the sale or redemption of a Unit that an investor has held for six months or
less will be a long-term capital loss to the extent of any capital gain
dividends previously distributed to the investor by the Portfolio. The deduction
of capital loss is subject to limitations.
The investor's basis in his Units will be equal to the cost of his Units,
including the initial sales charge. A portion of the sales charge is deferred
until the termination of the Portfolio or the redemption of the Units. The
proceeds received by an investor upon such event will reflect deduction of the
deferred amount. The relevant tax reporting forms received by investors will
reflect the actual amounts paid to them, net of the deferred sales charge.
Accordingly, investors should not increase their basis in their Units by the
deferred sales charge amount.
Investors will be taxed in the manner described above regardless of whether
distributions from the Portfolio are actually received by the investor or are
reinvested pursuant to the reinvestment plan. The Federal tax status of each
year's distributions will be reported to investors and to the Internal Revenue
Service. The Portfolio intends to report to each investor, no later than January
31, the amount of distributions to that investor.
The foregoing discussion summarizes only certain U.S. Federal income tax
consequences of an investment in Units by investors who are U.S. persons, as
defined in the Code. Foreign investors (including nonresident alien individuals
and foreign corporations) not engaged in U.S. trade or business will generally
be subject to 30% withholding tax (or lower applicable treaty rate) on dividend
distributions by the Portfolio. Investors may be subject to taxation in New York
or in other U.S. or foreign jurisdictions and should consult their own tax
advisers in this regard.
RETIREMENT PLANS
This Series of Equity Investor Portfolio may be well suited for purchase by
Individual Retirement Accounts ('IRAs'), Keogh plans, pension funds and other
qualified retirement plans, certain of which are briefly described below.
Generally, capital gains and income received in each of the foregoing plans are
exempt from Federal taxation. All distributions from such plans are generally
treated as ordinary income but may, in some cases, be eligible for special 5 or
10 year averaging (prior to the year 2000) or tax-deferred rollover treatment.
Investors in IRAs, Keogh plans and other tax-deferred retirement plans should
consult their plan custodian as to the appropriate disposition of distributions.
Investors considering participation in any of these plans should review specific
tax laws related thereto and should consult their attorneys or tax advisers with
respect to the establishment and maintenance of any of these plans. These plans
are offered by brokerage firms, including the Sponsor of this Portfolio, and
other financial institutions. Fees and charges with respect to such plans may
vary.
Retirement Plans for the Self-Employed--Keogh Plans. Units may be purchased
by retirement plans established for self-employed individuals, partnerships or
unincorporated companies ('Keogh plans'). The assets of a Keogh plan must be
held in a qualified trust or other arrangement which meets the requirements of
the Code. Keogh plan participants may also establish separate IRAs (see below)
to which they may contribute up to an additional $2,000 per year ($4,000 in a
spousal account).
Individual Retirement Account--IRA. Any individual can make use of a
qualified IRA arrangement for the purchase of Units. Any individual (including
one covered by an employer retirement plan) can make a contribution in an IRA
equal to the lesser of $2,000 ($4,000 in a spousal account) or 100% of earned
income; such investment must be made in cash. However, the deductible amount of
a contribution by an individual covered by an employer retirement plan will be
reduced if the individual's adjusted gross income exceeds $25,000 (in the case
of a single individual), $40,000 (in the case of a married individual filing a
joint return) or $200 (in the case of a married individual filing a separate
return). Certain transactions which are prohibited under Section 408 of the Code
will cause all or a portion of the amount in an IRA to be deemed to the
distributed and subject to tax at that time. Unless nondeductible contributions
were made in 1987 or a later year, all distributions from an IRA will be treated
as ordinary income but generally are eligible for tax-deferred rollover
treatment. Taxable distributions made before attainment of age 59 1/2,
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except in the case of the participant's death or disability or where the amount
distributed is part of a series of substantially equal periodic (at least
annual) payments that are to be made over the life expectancies of the
participant and his or her beneficiary, are generally subject to a surtax in an
amount equal to 10% of the distribution. Under the recently enacted Taxpayer
Relief Act of 1997 the 10% surtax will be waived for withdrawals for certain
educational and first-time homebuyers expenses. The Taxpayer Relief Act also
provides, subject to certain income limitations, for a special type of IRA under
which contributions would be non-deductible but distributions would be tax-free
if the account were held for at least five years and the account holder was at
least aged 59 1/2 at the time of distribution.
Corporate Pension and Profit-Sharing Plans. A pension or profit-sharing
plan for employees of a corporation may purchase Units.
RECORDS AND REPORTS
The Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Portfolio,
including a current list of the Securities and a copy of the Indenture, which
may be inspected by investors at reasonable times during business hours.
With each distribution, the Trustee includes a statement of the amounts of
income and any other receipts being distributed. The Trustee sends each investor
of record an annual report summarizing transactions in the Portfolio's accounts
including amounts distributed from them during the year, identifying Securities
sold and purchased and listing Securities held and the number of Units
outstanding and stating the Redemption Price per 1,000 Units at year end, and
the fees and expenses paid by the Portfolio, among other matters. Portfolio
accounts are audited annually by independent accountants selected by the Sponsor
and audited financial statements are available from the Trustee on request.
TRUST INDENTURE
The Portfolio is a 'unit investment trust' created under New York law by a
Trust Indenture between the Sponsor and the Trustee. This Prospectus summarizes
various provisions of the Indenture, but each statement is qualified in its
entirety by reference to the Indenture.
The Indenture may be amended by the Sponsor and the Trustee without consent
by investors to cure ambiguities or to correct or supplement any defective or
inconsistent provision, to make any amendment required by the SEC or other
governmental agency or to make any other change not materially adverse to the
interest of investors (as determined in good faith by the Sponsor). The
Indenture may also generally be amended upon consent of investors holding 51% of
the Units. No amendment may reduce the interest of any investor without the
investor's consent or reduce the percentage of Units required to consent to any
amendment without unanimous consent of investors. Investors will be notified of
the substance of any amendment.
The Trustee may resign upon notice to the Sponsor. It may be removed by
investors holding 51% of the Units at any time or by the Sponsor without the
consent of investors if it becomes incapable of acting or bankrupt, its affairs
are taken over by public authorities, or if under certain conditions the Sponsor
determines in good faith that its replacement is in the best interest of the
investors. The resignation or removal becomes effective upon acceptance of
appointment by a successor; in this case, the Sponsor will use its best efforts
to appoint a successor promptly; however, if upon resignation no successor has
accepted appointment within 30 days after notification, the resigning Trustee
may apply to a court of competent jurisdiction to appoint a successor.
If the Sponsor fails to perform its duties or becomes incapable of acting
or bankrupt or its affairs are taken over by public authorities, the Trustee may
appoint a successor Sponsor at reasonable rates of compensation, terminate the
Indenture and liquidate the Portfolio or continue to act as Trustee without a
Sponsor.
The Sponsor and the Trustee are not liable to investors or any other party
for any act or omission in the conduct of their responsibilities absent bad
faith, willful misfeasance, negligence (gross negligence in the case of the
Sponsor) or reckless disregard of duty. The Indenture contains customary
provisions limiting the liability of the Trustee.
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MISCELLANEOUS
LEGAL OPINION
The legality of the Units has been passed upon by Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017, as special counsel for the
Sponsor.
AUDITORS
The Statement of Condition in Part A of the Prospectus was audited by
Deloitte & Touche LLP, independent accountants, as stated in their opinion. It
is included in reliance upon that opinion given on the authority of that firm as
experts in accounting and auditing.
TRUSTEE
The Trustee and its address are stated on the back cover of the Prospectus.
The Trustee is subject to supervision by the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System and New York
State banking authorities.
SPONSOR
The Sponsor is a wholly-owned subsidiary of Merrill Lynch Co. Inc. The
Sponsor, or one of its predecessor corporations, has acted as Sponsor of a
number of series of unit investment trusts and as principal underwriter and
managing underwriter of other investment companies. The Sponsor, in addition to
participating as a member of various selling groups or as agent of other
investment companies, executes orders on behalf of investment companies for the
purchase and sale of securities of these companies and sells securities to these
companies in its capacities as broker or dealer in securities.
CODE OF ETHICS
The Sponsor has adopted a code of ethics requiring preclearance and
reporting of personal securities transactions by its personnel who have access
to information on Defined Asset portfolio transactions. The code is intended to
prevent any act, practice or course of conduct which would operate as a fraud or
deceit on any portfolio and to provide guidance to these persons regarding
standards of conduct consistent with the Sponsor's responsibilities to Defined
Asset Funds.
PUBLIC DISTRIBUTION
During the initial offering period and thereafter to the extent additional
Units continue to be offered for sale to the public by means of this Prospectus,
Units will be distributed directly to the public by this Prospectus at the
Public Offering Price determined in the manner provided above or to selected
dealers who are members of the National Association of Securities Dealers, Inc.
at a concession not in excess of the maximum sales charge. The Sponsor intends
to qualify Units for sale in all states in which qualification is deemed
necessary through the Underwriting Account and by dealers who are members of the
National Association of Securities Dealers, Inc.. The Sponsor does not intend to
qualify Units for sale in any foreign countries and this Prospectus does not
constitute an offer to sell Units in any country where Units cannot lawfully be
sold.
UNDERWRITER'S AND SPONSOR'S PROFITS
Upon sale of the Units, the Sponsor will be entitled to receive sales
charges. The Sponsor also realizes a profit or loss on deposit of the Securities
equal to the difference between the cost of the Securities to the Portfolio
(based on the aggregate value of the Securities on their date of deposit) and
the purchase price of the Securities to the Sponsor plus commissions payable by
the Sponsor. In addition, the Sponsor or Underwriter may realize profits or
sustain losses on Securities it deposits in the Portfolio which were acquired
from underwriting syndicates of which it was a member. During the initial
offering period, the Sponsor also may realize profits or sustain losses as a
result of fluctuations after the initial date of deposit in the Public Offering
Price of the Units. In maintaining a secondary market for Units, the Sponsor
will also realize profits or sustain losses in the amount of any difference
between the prices at which it buys Units and the prices at which it resells
these Units (which include the sales charge) or the prices at which it redeems
the Units. Cash, if any, made available by buyers of Units to the Sponsor prior
to a settlement date for the purchase of
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Units may be used in the Sponsor's business to the extent permitted by Rule
15c3-3 under the Securities Exchange Act of 1934 and may be of benefit to the
Sponsor.
PERFORMANCE INFORMATION
Total returns, average annualized returns or cumulative returns for various
periods of the current Portfolio may be included from time to time in
advertisements, sales literature and reports to current and prospective
investors. Total return shows changes in unit price during the period plus
reinvestment of dividends and capital gains, divided by the maximum public
offering price. Average annualized returns show the average return for stated
periods for longer than a year. Figures reflect deduction of all Portfolio
expenses and, unless otherwise stated, the maximum sales charge. No provision is
made for any income taxes payable. Investors should bear in mind that this
represents past performance and is no assurance of the future results of any
current or future Portfolio.
Past performance of any series may not be indicative of results of future
series. Portfolio performance may be compared to the performance of the DJIA,
the S&P 500 Composite Price Stock Index, the S&P MidCap 400 Index, the S&P
500/Barra Growth Index, the average growth mutual fund or performance data from
publications such as Lipper Analytical Services, Inc., Morningstar Publications,
Inc., Money Magazine, The New York Times, U.S. News and World Report, Barron's,
Business Week, CDA Investment Technology, Inc., Forbes Magazine or Fortune
Magazine.
DEFINED ASSET FUNDS
For decades informed investors have purchased unit investment trusts for
dependability and professional selection of investments. Defined Asset
Portfolios' philosophy is to allow investors to 'buy with knowledge' (because,
unlike managed funds, the portfolio is relatively fixed) and 'hold with
confidence' (because the portfolio is professionally selected and regularly
reviewed). Defined Asset Portfolios offers an array of simple and convenient
investment choices, suited to fit a wide variety of personal financial goals--a
buy and hold strategy for capital accumulation, such as for children's education
or retirement, or attractive, regular current income consistent with the
preservation of principal. Unit investment trusts are particularly suited for
the many investors who prefer to seek long-term profits by purchasing sound
investments and holding them, rather than through active trading. Few
individuals have the knowledge, resources or capital to buy and hold a
diversified portfolio on their own; it would generally take a considerable sum
of money to obtain the breadth and diversity that Defined Asset Portfolios
offer. Your investment objectives may call for a combination of Defined Asset
Portfolios.
One of the most important investment decisions you face may be how to
allocate your investments among asset classes. Diversification among different
kinds of investments can balance the risks and rewards of each one. Most
investment experts recommend stocks for long-term capital growth. Long-term
corporate bonds offer relatively high rates of interest income. By purchasing
both defined equity and defined bond funds, investors can receive attractive
current income, as well as growth potential, offering some protection against
inflation. From time to time various advertisements, sales literature, reports
and other information furnished to current or prospective investors may present
the average annual compounded rate of return of selected asset classes over
various periods of time, compared to the rate of inflation over the same
periods.
Investors may pursue investment growth to meet long-term goals such as
children's education or retirement. But they are faced with decisions of
selecting stock groups, choosing individual stocks, determining when to buy and
sell and how to reinvest sales proceeds. Growth stocks--those whose price is
expected to appreciate above average usually because of superior growth in
earnings per share--can be difficult to select successfully because their prices
tend to be more volatile than more established stocks and, by the time they are
discovered by ordinary investors, their prices may have already increased beyond
attractive levels or may be susceptible to dramatic declines if actual
performance is less than anticipated.
SUPPLEMENTAL INFORMATION
Upon writing or calling the Trustee shown on the back cover of this
Prospectus, investors will receive without charge supplemental information about
the Portfolio, which has been filed with the SEC. The supplemental information
includes more detailed risk factor disclosure about the types of securities that
may be part of the Portfolio and general information about the structure and
operation of the Portfolio.
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Def ined
Asset FundsSM
SPONSOR: EQUITY INVESTOR FUND
Merrill Lynch, FINANCIAL FOCUS PORTFOLIO
Pierce, Fenner & Smith Incorporated
Defined Asset Funds
P.O. Box 9051
Princeton, NJ 08543-9051 This Prospectus does not contain all of the
(609) 282-8500 information with respect to the investment
TRUSTEE: company set forth in its registration
The Chase Manhattan Bank statement and exhibits relating thereto which
Customer Service Retail Department have been filed with the Securities and
Bowling Green Station Exchange Commission, Washington, D.C. under
P.O. Box 5187 the Securities Act of 1933 and the Investment
New York, NY 10274-5187 Company Act of 1940, and to which reference
1-800-323-1508 is hereby made. Copies of filed material can
be obtained from the Public Reference Section
of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates.
The Commission also maintains a Web site that
contains information statements and other
information regarding registrants such as
Defined Asset Funds that file electronically
with the Commission at http://www.sec.gov.
------------------------------
No person is authorized to give any
information or to make any representations
with respect to this investment company not
contained in its registration statement and
exhibits relating thereto; and any
information or representation not contained
therein must not be relied upon as having
been authorized.
------------------------------
When Units of this Portfolio are no longer
available or for investors who may reinvest
into subsequent Financial Focus Portfolios,
this Prospectus may be used as a preliminary
prospectus for a future series, and investors
should note the following:
Information contained herein is subject to
amendment. A registration statement relating
to securities of a future series has been
filed with the Securities and Exchange
Commission. These securities may not be sold
nor may offers to buy be accepted prior to
the time the registration statement becomes
effective.
This Prospectus shall not constitute an offer
to sell or the solicitation of an offer to
buy nor shall there be any sale of these
securities in any State in which such offer,
solicitation or sale would be unlawful prior
to qualification under the securities laws of
any such State.
11 --9/97
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PART II
ADDITIONAL INFORMATION NOT INCLUDED IN THE PROSPECTUS
A. The following information relating to the Depositors is incorporated by
reference to the SEC filings indicated and made a part of this Registration
Statement.
I. Bonding arrangements of the Depositor are incorporated by reference to Item
A of Part II to the Registration Statement on Form S-6 under the Securities Act
of 1933 for Municipal Investment Trust Fund, Monthly Payment Series--573 Defined
Asset Funds (Reg. No. 333-08241).
II. The date of organization of the Depositor is set forth in Item B of Part II
to the Registration Statement on Form S-6 under the Securities Act of 1933 for
Municipal Investment Trust Fund, Monthly Payment Series--573 Defined Asset Funds
(Reg. No. 333-08241) and is herein incorporated by reference thereto.
III. The Charter and By-Laws of the Depositor are incorporated herein by
reference to Exhibits 1.3 and 1.4 to the Registration Statement on Form S-6
under the Securities Act of 1933 for Municipal Investment Trust Fund, Monthly
Payment Series--573 Defined Asset Funds (Reg. No. 333-08241).
IV. Information as to Officers and Directors of the Depositor has been filed
pursuant to Schedules A and D of Form BD under Rules 15b1-1 and 15b3-1 of the
Securities Exchange Act of 1934 and is incorporated by reference to the SEC
filing indicated and made a part of this Registration Statement:
IncorporatedMerrill Lynch, Pierce, Fenner & Smith 8-7221
------------------------------------
B. The Internal Revenue Service Employer Identification Numbers of the
Sponsor and Trustee are as follows:
IncorporatedMerrill Lynch, Pierce, Fenner & Smith 13-5674085
The Chase Manhattan Bank, Trustee............... 13-4994650
II-1
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CONTENTS OF REGISTRATION STATEMENT
This Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet of Form S-6.
The Cross-Reference Sheet (incorporated by reference from the
Cross-Reference Sheet of the Registration Statement of Defined Asset Funds
Municipal Insured Series, 1933 Act File No. 33-54565).
The Prospectus.
The Signatures.
The following exhibits:
1.1 --Form of Trust Indenture (incorporated by reference to Exhibit 1.1 to
Amendment No. 2 to the Registration Statement on Form S-6 of Equity
Income Fund, Select Growth Portfolio--1995 Series 2, Defined Asset
Funds, Reg. No. 33-58535).
1.1.1 --Form of Standard Terms and Conditions of Trust Effective as of October
21, 1993 (incorporated by reference to Exhibit 1.1.1 to the
Registration Statement of Municipal Investment Trust Fund, Multistate
Series-48, 1933 Act File No. 33-50247).
1.2 --Form of Master Agreement Among Underwriters (incorporated by reference
to Exhibit 1.2 to the Registration Statement under the Securities Act
of 1933 of The Corporate Income Fund, One Hundred Ninety-Fourth
Monthly Payment Series, 1933 Act File No. 2-90925).
*3.1 --Opinion of counsel as to the legality of the securities being issued
including their consent to the use of their name under the heading
'Miscellaneous--Legal Opinion' in the Prospectus.
*5.1 --Consent of independent accountants.
9.1 --Information Supplement (incorporated by reference to Exhibit 9.1 to
the Registration Statement of Equity Income Fund, Select Ten Portfolio
1996 International Series B (United Kingdom and Japan Portfolios),
1933 Act File No. 33-00593).
- ------------------------------------
* To be filed by amendment.
R-1
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 4TH DAY OF
SEPTEMBER, 1997.
SIGNATURES APPEAR ON PAGE R-3.
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
R-2
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MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Board of Directors of Merrill Form SE and the following 1933 Act
Lynch, Pierce, File
Fenner & Smith Incorporated: Number: 33-43466
HERBERT M. ALLISON, JR.
BARRY S. FREIDBERG
EDWARD L. GOLDBERG
STEPHEN L. HAMMERMAN
JEROME P. KENNEY
DAVID H. KOMANSKY
DANIEL T. NAPOLI
THOMAS H. PATRICK
JOHN L. STEFFENS
DANIEL P. TULLY
ROGER M. VASEY
ARTHUR H. ZEIKEL
By DANIEL C. TYLER
(As authorized signatory for Merrill Lynch, Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons listed above)
R-3
