U.S. Securities and Exchange Commission
Washington D.C. 20549
Form 24F-2
Annual Notice of Securities Sold
Pursuant to Rule 24f-2
1. Smith Breeden Trust
100 Europa Dr., Chapel Hill, NC 27514
2. Market Tracking Fund
3. Investment Company Act File No: 811-6520
Securities Act File No: 33-44909
4. The fiscal year for which this notice is filed is the year
ended March 31, 1996
5. Not applicable.
6. Not applicable.
7. The number and amount of securities of the same class or
series of the Fund which had been registered under the Securities
Act of 1933 other than pursuant to Rule 24f-2 in a prior year but
which remained unsold at the beginning of the year was: 153,494
shares or $1,688,491
8. The number and amount of securities registered during the
fiscal year other than pursuant to Rule 24f-2 was: NONE
9. The number and aggregate sales price of securities sold
during such fiscal year was: 225,663 shares or $2,754,048.
10. The number and aggregate sales price of securities of the
Fund sold during such fiscal year in reliance upon registration
pursuant to Rule 24f-2 was: 72,169 or $1,065,557
11. The number and aggregate sales price of securities issued
during the fiscal year in connection with dividend reinvestment
plans are included in item 9.
12. Calculation of filing fee pursuant to Rule 24f-2(c):
(i) Aggregate sales prices of securities sold pursuant
to Rule 24f-2 during the fiscal year from Item 10:
$1,065,557
(ii) Aggregate price of shares issued in connection with
dividend reinvestment plans: Included in (i)
(iii) Aggregate price of securities redeemed or repurchased
during fiscal year: $383,180
(iv) Aggregate price of shares redeemed or repurchased and
previously applied as a reduction to filing fees pursuant to
Rule 24e-2: None
(v) Net aggregate price of securities sold and issued during
the fiscal year in reliance on Rule 24f-2: $682,377
(vi) Multiplier prescribed by Section 6(b) of the Securities
Act of 1933 or other applicable law or regulation: 1/29 of 1%
(vii) Fee due: $235.31
13. Check box if fees are being remitted to the Commission's
lockbox depository as described in Section 3a of the Commission's
Rules of Informal and Other Procedures: { }
Date of mailing or wire transfer: apply to account
SIGNATURES
This report has been signed below by the following persons
on behalf of the issuer and in the capacities and on the dates
indicated:
By: Marianthe S. Mewkill s/
Vice President and Treasurer
May 30, 1996
May 29, 1996
Smith Breeden Trust (the "Trust")
100 Europa Drive
Chapel Hill, North Carolina 27514
Ladies and Gentlemen:
We are furnishing this opinion in connection with the sale
during the fiscal year ended March 31, 1996 of 72,169 shares of
beneficial interest (the "Shares") of the Market Tracking Fund, a
series of shares of the Trust, pursuant to the provisions of
Rule 24f-2 (the "Rule") under the Investment Company Act of 1940,
as amended.
We have examined copies of (i) your Agreement and
Declaration of Trust as on file at the office of the Secretary of
State of The Commonwealth of Massachusetts, which provides for an
unlimited number of authorized shares of beneficial interest, and
(ii) your Bylaws, which provide for the issue and sale by the
Trust of such Shares. We have also examined (i) a copy of the
notice (the "Notice") to be filed pursuant to the Rule by you
with the Securities and Exchange Commission relating to your
registration of an indefinite number of shares of beneficial
interest of the Trust pursuant to the Securities Act of 1933,
as amended, and making definite registration of the Shares
pursuant to the Rule, and (ii) a certificate of the Treasurer of
the Trust stating that all of the Shares had been recorded as
issued and that the appropriate consideration therefor as
provided in your Bylaws had been received at March 31, 1996.
We assume that appropriate action has been taken to register
or qualify the sale of the Shares under any applicable state and
federal laws regulating offerings and sales of securities, and
that the Notice will be timely filed with the Securities and
Exchange Commission.
Based on the foregoing, we are of the opinion that:
1. The Trust is a legally organized and validly existing
voluntary association with transferable shares of beneficial
interest under the laws of The Commonwealth of Massachusetts and
is authorized to issue an unlimited number of shares of
beneficial interest.
2. The Shares were validly issued, fully paid and
nonassessable by the Trust at March 31, 1996.
The Trust is an entity of the type commonly known as a
"Massachusetts business trust". Under Massachusetts law,
shareholders of the Trust could, under certain circumstances,
be held personally liable for the obligations of the Trust.
However, the Agreement and Declaration of Trust disclaims
shareholder liability for acts or obligations of the Trust and
requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by
the Trust or its Trustees. The Agreement and Declaration of
Trust provides for indemnification out of the property of the
particular series of shares for all loss and expense of any
shareholder of that series held personally liable for the
obligations of that series solely by reason of his being or
having been a shareholder. Thus, the risk of a shareholder's
incurring financial loss on account of shareholder liability is
limited to circumstances in which that series of shares itself
would be unable to meet its obligations.
We consent to this opinion accompanying the Notice.
Very truly yours,
/s/ Ropes & Gray
Ropes & Gray
