<PAGE> PAGE 1
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<PAGE> PAGE 2
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012 C03AA01 19809
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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SIGNATURE PAUL SCHUBERT
TITLE TREASURER
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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FORM 10f-3 FUND: PaineWebber Utility Income Fund
Record of Securities Purchased Under the Fund's Rule 10f-3 Procedures
1. Issuer: Univision
2. Date of Purchase: 9/27/96
3. Date offering commenced: 9/27/96
4. Underwriters from whom purchased: Donaldson
5. "Affiliated Underwriter" managing or participating in syndicate:
PaineWebber
6. Aggregate principal amount of purchase: $115,000
7. Aggregate principal amount of offering: $187,910,000
8. Purchase price (net of fees and expenses): 23
9. Initial public offering price: 23
10. Commission, spread or profit: % $ .93
11. Have the following conditions been satisfied? YES NO
a. The securities are part of an issue
registered under the Securities Act
of 1933 which is being offered to the public
or are "municipal securities" as defined in
Section 3(a)(29) of the Securities Exchange
Act of 1934. X
b. The securities were purchased prior to the
end of the end first full business day of
the offering at not more than the initial
offering price (or, if a rights offering,
the securities were purchased on or before
the fourth day preceding the day on which
the offering terminated. X
c. The underwriting was a firm commitment underwriting. X
d. The commission, spread or profit was reasonable
and fair in relation to that being received by
others for underwriting similar securities during
the same period. X
e. (1) If securities are registered under the
Securities Act of 1933, the issuer of the
securities and its predecessor have been in
continuous operation for not less than three years. X
(2) If securities are municipal securities,
the issue of securities has received an
investment grade rating from a nationally
recognized statistical rating organization or,
if the issuer or entity supplying the revenues
from which the issue is to be paid shall have
been in continuous operation for less than
three years (including any predecessor), the issue
has received one of the three highest ratings from
at least one such rating organization. ______ ______
f. The amount of such securities purchased by all
of the investment companies advised by Advisor
did not exceed 4% of the principal amount of the
offering or $500,000 in principal amount, whichever
is greater, provided that in no event did such amount
exceed 10% of the principal amount of the offering. X
g. The purchase price was less than 3% of the Fund's
total assets. X
h. No Affiliated Underwriter was a direct or indirect
participant in or beneficiary of the sale or, with
respect to municipal securities, no purchases were
designated as group sales or otherwise allocated
to the account of any Affiliated Underwriter. X
Approved: K. Finkel Date: 10/1/96
FORM 10f-3 FUND: PaineWebber Utility Income Fund
Record of Securities Purchased Under the Fund's Rule 10f-3 Procedures
1. Issuer: Smartalk Teleservices
2. Date of Purchase: 10/23/96
3. Date offering commenced: 10/23/96
4. Underwriters from whom purchased: Salomon Brothers
5. "Affiliated Underwriter" managing or participating in syndicate:
PaineWebber
6. Aggregate principal amount of purchase: $290,000
7. Aggregate principal amount of offering: $60,900,000
8. Purchase price (net of fees and expenses): 14.5
9. Initial public offering price: 14.5
10. Commission, spread or profit: % $ .61
11. Have the following conditions been satisfied? YES NO
a. The securities are part of an issue
registered under the Securities Act
of 1933 which is being offered to the public
or are "municipal securities" as defined in
Section 3(a)(29) of the Securities Exchange
Act of 1934. X
b. The securities were purchased prior to the
end of the end first full business day of
the offering at not more than the initial
offering price (or, if a rights offering,
the securities were purchased on or before
the fourth day preceding the day on which
the offering terminated. X
c. The underwriting was a firm commitment underwriting. X
d. The commission, spread or profit was reasonable
and fair in relation to that being received by
others for underwriting similar securities during
the same period. X
e. (1) If securities are registered under the
Securities Act of 1933, the issuer of the
securities and its predecessor have been in
continuous operation for not less than three years. X
(2) If securities are municipal securities,
the issue of securities has received an
investment grade rating from a nationally
recognized statistical rating organization or,
if the issuer or entity supplying the revenues
from which the issue is to be paid shall have
been in continuous operation for less than
three years (including any predecessor), the issue
has received one of the three highest ratings from
at least one such rating organization. ______ ______
f. The amount of such securities purchased by all
of the investment companies advised by Advisor
did not exceed 4% of the principal amount of the
offering or $500,000 in principal amount, whichever
is greater, provided that in no event did such amount
exceed 10% of the principal amount of the offering. X
g. The purchase price was less than 3% of the Fund's
total assets. X
h. No Affiliated Underwriter was a direct or indirect
participant in or beneficiary of the sale or, with
respect to municipal securities, no purchases were
designated as group sales or otherwise allocated
to the account of any Affiliated Underwriter. X
Approved: K. Finkel Date: 10/28/96
FORM 10f-3 FUND: PaineWebber Utility Income Fund
Record of Securities Purchased Under the Fund's Rule 10f-3 Procedures
1. Issuer: Compania Anoma Telvenez
2. Date of Purchase: 11/21/96
3. Date offering commenced: 11/21/96
4. Underwriters from whom purchased: Lehman Brothers
5. "Affiliated Underwriter" managing or participating in syndicate:
PaineWebber
6. Aggregate principal amount of purchase: $46,000
7. Aggregate principal amount of offering: $466,900,000
8. Purchase price (net of fees and expenses): 23
9. Initial public offering price: 23
10. Commission, spread or profit: % $ .33
11. Have the following conditions been satisfied? YES NO
a. The securities are part of an issue
registered under the Securities Act
of 1933 which is being offered to the public
or are "municipal securities" as defined in
Section 3(a)(29) of the Securities Exchange
Act of 1934. X
b. The securities were purchased prior to the
end of the end first full business day of
the offering at not more than the initial
offering price (or, if a rights offering,
the securities were purchased on or before
the fourth day preceding the day on which
the offering terminated. X
c. The underwriting was a firm commitment underwriting. X
d. The commission, spread or profit was reasonable
and fair in relation to that being received by
others for underwriting similar securities during
the same period. X
e. (1) If securities are registered under the
Securities Act of 1933, the issuer of the
securities and its predecessor have been in
continuous operation for not less than three years. X
(2) If securities are municipal securities,
the issue of securities has received an
investment grade rating from a nationally
recognized statistical rating organization or,
if the issuer or entity supplying the revenues
from which the issue is to be paid shall have
been in continuous operation for less than
three years (including any predecessor), the issue
has received one of the three highest ratings from
at least one such rating organization. ______ ______
f. The amount of such securities purchased by all
of the investment companies advised by Advisor
did not exceed 4% of the principal amount of the
offering or $500,000 in principal amount, whichever
is greater, provided that in no event did such amount
exceed 10% of the principal amount of the offering. X
g. The purchase price was less than 3% of the Fund's
total assets. X
h. No Affiliated Underwriter was a direct or indirect
participant in or beneficiary of the sale or, with
respect to municipal securities, no purchases were
designated as group sales or otherwise allocated
to the account of any Affiliated Underwriter. X
Approved: K. Finkel Date: 11/25/96
Board of Trustees
PaineWebber Utility Income Fund
In planning and performing our audit of the financial statements of
PaineWebber Utility Income Fund for the period ended March 31, 1997,
we considered its internal control structure, including procedures for
safeguarding securities, in order to determine our auditing procedures
for the purpose of expressing our opinion on the financial statements and
to comply with the requirements of Form N-SAR, not to provide assurance on
the internal control structure.
The management of PaineWebber Utility Income Fund is responsible for
establishing and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required to assess
the expected benefits and related costs of internal control structure policies
and procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce
to a relatively low level the risk that errors or irregularities in amounts
that would be material in relation to the financial statements being audited
may occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions. However, we noted no
matters involving the internal control structure, including procedures for
safeguarding securities, that we consider to be material weaknesses as defined
above as of March 31, 1997.
This report is intended solely for the information and use of management and
the Securities and Exchange Commission.
ERNST & YOUNG LLP
May 13, 1997
