Securities and Exchange Commission
Washington, D. C. 20549-1004
Post-Effective
Amendment No. 4
to
Form S-6
For Registration under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on
Form N-8B-2
Central Equity Trust, Series 17
(Exact Name of Trust)
Unison Investment Trusts Ltd.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
Van Kampen American Capital
Distributors, Inc. Chapman and Cutler
Attention: Don G. Powell Attention: Mark J. Kneedy
One Parkview Plaza 111 West Monroe Street
Oakbrook Terrace, Illinois 60181 Chicago, Illinois 60603
(Name and complete address of agents for service)
( X ) Check if it is proposed that this filing will become effective
on April 24, 1997 pursuant to paragraph (b) of Rule 485.
CENTRAL EQUITY TRUST
UTILITY SERIES 17
PROSPECTUS PART ONE
NOTE: Part One of this Prospectus may not be distributed unless accompanied by
Part Two. Please retain both parts of this Prospectus for future reference.
The Trust
The objectives of the Trusts are providing dividend income and capital
appreciation through investment in a fixed portfolio consisting of publicly
traded common stocks issued by domesticutility companies which may include
electric, gas, water and/or telephone public utility companies (the "
Portfolio" ). The value of the Units of a Trust will fluctuate with the
value of the Portfolio (see "Summary of Essential Financial
Information" in this Part One and "The Trusts" in Part Two). The
Units being offered by this Prospectus are issued and outstanding Units which
have been purchased by Edward Jones (the "Underwriter" ) in the
secondary market or from the Trustee after having been tendered for
redemption. The profit or loss resulting from the sale of Units will accrue to
the Underwriter. No proceeds from the sale of Units will be received by the
Trusts.
Public Offering Price
The Public Offering Price of the Units is based on the Trustee's evaluation
of the aggregate market value of the securities in the Portfolio of a Trust
divided by the number of Units outstanding plus a sales charge of 2.40% of the
Public Offering Price (2.459% of the aggregate market value of the underlying
Securities) until July 1, 1997, at which time the sales charge will decrease.
See "Summary of Essential Financial Information" in this Part One.
Unless terminated earlier, the Trust will terminate on the Mandatory
Termination Date as set forth in the "Summary of Essential Financial
Information" in this Part One, and any Securities then held will, within a
reasonable time thereafter, be sold by the Trustee. Any Securities sold at
termination will be sold at the then current market value for such Securities;
therefore, the amount distributable in cash to a Unitholder may be more or
less than the amount such Unitholder paid for his Units.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The Date of this Prospectus is April 16, 1997
Unison Investment Trusts Ltd.
<TABLE>
CENTRAL EQUITY TRUST, UTILITY SERIES 17
Summary of Essential Financial Information
As of March 5, 1997
Sponsor & Supervisor: Unison Investment Trusts Ltd.
Administrator: Van Kampen American Capital Distributors, Inc.
Evaluator: American Portfolio Evaluation Services
(A division of an affiliate of the Administrator)
Trustee: The Bank of New York
<CAPTION>
Central Equity
Trust
------------------
<S> <C>
General Information
Number of Units....................................................................................... 443,519
Fractional Undivided Interest in Trust per Unit....................................................... 1/443,519
Public Offering Price:
Aggregate Value of Securities in Portfolio <F1>...................................................... $ 11,120,475
Aggregate Value Securities per Unit (including accumulated dividends)................................ $ 25.15
Sales charge 2.40% (2.459% of Aggregate Value of Securities excluding principal cash per Unit)<F3>... $ .62
Public Offering Price per Unit <F2><F3>.............................................................. $ 25.77
Redemption Price per Unit............................................................................. $ 25.15
Excess of Public Offering Price per Unit over Redemption Price per Unit............................... $ .62
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Supervisor's Annual Supervisory Fee...Maximum of $.005 per Unit
Evaluator's Annual Fee ...............$10.00 per evaluation
</TABLE>
Evaluations for purpose of sale, purchase or redemption of Units are made as
of 4:00 P.M. Eastern time on days of trading on the New York Stock Exchange
next following receipt of an order for a sale or purchase of Units or receipt
by The Bank of New York of Units tendered for redemption.
<TABLE>
<CAPTION>
<S> <C>
Date of Deposit.....................May 21, 1992
Mandatory Termination Date..........May 1, 2002
The Trust may be terminated if the market value of such Trust at any time is less than 80% of
Minimum Termination Value...........the market value of the Securities deposited in the Trust on the date of deposit.
Trustee's Annual Fee................$.008 per Unit
Income Distribution Record Date.....Tenth day of each month.
Income Distribution Date............Twenty-fifth day of each month.
Twenty-fifth day of each June and December, unless the amount in the Capital Account available
to be distributed is less than $1.00 per 100 Units outstanding or earlier if the amount is
Capital Account Distribution Date...greater than $10.00 per 100 Units outstanding.
- ----------
<FN>
<F1>Equity Securities listed on a national securities exchange or the NASDAQ
National Market System are valued at the closing sale price, or if no such
price exists or if the Equity Security is not listed, at the closing bid price
thereof.
<F2>Anyone ordering Units will have included in the Public Offering Price a pro
rata share of any cash in the Income and Capital Accounts.
<F3>Effective on each July 1, commencing July 1, 1992, the secondary sales charge
will decrease by .5 of 1% to a minimum sales charge of 1.4%. See "Public
Offering-Offering Price" in Part Two.
</TABLE>
PORTFOLIO
As of December 31, 1996, Central Equity Trust, Utility Series 17, consists
of 28 issues of Securities, issued by entities located in 18 States, all of
which are issued by domestic electric, gas, water and telephone public utility
companies. All of the issues are listed or traded on the New York Stock
Exchange.
PER UNIT INFORMATION
<TABLE>
<CAPTION>
1993<F1> 1994 1995 1996 1996<F2>
------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value per Unit at beginning of period...................... $ 19.94 $ 23.23 $ 20.31 $ 21.80 $ 23.98
============ =========== =========== =========== ============
Net asset value per Unit at end of period............................ $ 23.23 $ 20.31 $ 21.80 $ 23.98 $ 24.91
============ =========== =========== =========== ============
Distributions to Unitholders of investment income including
accumulated dividends paid on Units redeemed (average Units
outstanding for entire period)....................................... $ 1.03 $ 1.15 $ 1.24 $ 1.21 $ .71
============ =========== =========== =========== ============
Distributions to Unitholders from Security redemption proceeds
(average Units outstanding for entire period)........................ $ -- $ -- $ -- $ -- $ --
============ =========== =========== =========== ============
Unrealized appreciation (depreciation) of Securities (per Unit
outstanding at end of period)........................................ $ 3.20 $ (3.15) $ 1.77 $ 2.10 $ .74
============ =========== =========== =========== ============
Units outstanding at end of period................................... 683,515 643,219 564,619 493,919 455,519
</TABLE>
- ----------
For the period from May 21, 1992 (date of deposit) through May 31, 1993.
For the period from June 1, 1996 through December 31, 1996 to reflect change
in fiscal year end. All other previous periods reflect year ends ending May 31.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of Unison Investment Trusts Ltd. and the Unitholders of
Central Equity Trust, Utility Series 17:
We have audited the accompanying statements of condition (including the
analyses of net assets) and the related portfolio of Central Equity Trust,
Utility Series 17 as of December 31, 1996, and the related statements of
operations and changes in net assets for the year ended May 31, 1996 and the
seven month period ended December 31, 1996. These statements are the
responsibility of the Trustee and the Administrator. Our responsibility is to
express an opinion on such statements 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 statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at December 31, 1996 by
correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Trustee and
the Sponsor, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Central Equity Trust, Utility
Series 17 as of December 31, 1996, and the results of operations and changes
in net assets for the year ended May 31, 1996 and the seven month period ended
December 31, 1996, in conformity with generally accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
March 14, 1997
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of Unison Investment Trusts Ltd., The Bank of New York and the
Unitholders of Central Equity Trust, Utility Series 17:
We have audited the accompanying statements of operations and changes in net
assets of Central Equity Trust, Utility Series 17 for the years ended May 31,
1994 and 1995. These financial statements are the responsibility of Unison
Investment Trusts Ltd. (the "Sponsor" ). Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statements of operations and
changes in net assets are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statements of operations and changes in net assets. An audit also includes
assessing the accounting principles used and significant estimates made by the
Sponsor, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the statements of operations and changes in net assets
referred to above present fairly, in all material respects, the results of
operations and changes in net assets of Central Equity Trust, Utility Series
17 for the years ended May 31, 1994 and 1995, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
St. Louis, Missouri
September 27, 1995
<TABLE>
CENTRAL EQUITY TRUST,
UTILITY SERIES 17
Statements of Condition
December 31, 1996
<CAPTION>
Central
Equity
Trust
--------------
<S> <C>
Trust property
Cash.................................................................................. $ --
Securities at market value, (cost $8,757,358) (note 1)................................ 11,299,873
Accumulated dividends................................................................. 46,838
Receivable for securities sold........................................................ --
$ 11,346,711
==============
Liabilities and interest to Unitholders
Cash overdraft........................................................................ $ 788
Redemptions payable................................................................... --
Interest to Unitholders............................................................... 11,345,923
$ 11,346,711
==============
Analyses of Net Assets
Interest of Unitholders (455,519 Units of fractional undivided interest outstanding)
Cost to original investors of 683,515 Units (note 1).................................. $ 14,324,228
Less initial underwriting commission (note 3)......................................... 701,173
--------------
13,623,055
Less redemption of 227,996 Units...................................................... 5,032,557
--------------
8,590,498
Undistributed net investment income
Net investment income................................................................. 3,255,724
Less distributions to Unitholders..................................................... 3,209,421
--------------
46,303
Realized gain (loss) on Security sale or redemption................................... 166,607
Unrealized appreciation (depreciation) of Securities (note 2)......................... 2,542,515
Distributions to Unitholders of Security sale or redemption proceeds.................. --
Net asset value to Unitholders........................................................ $ 11,345,923
==============
Net asset value per Unit (455,519 Units outstanding)................................... $ 24.91
==============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
CENTRAL EQUITY TRUST, UTILITY SERIES 17
Statements of Operations
Years ended May 31, 1994, 1995 and 1996
and the period ended December 31, 1996
<CAPTION>
May May May December
1994 1995 1996 1996
--------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Investment income
Dividend Income..................................................... $ 796,893 $ 728,333 $ 641,477 $ 350,682
Expenses.............................................................
Trustee fees and expenses........................................... 14,227 11,017 2,884 3,975
Evaluator fee....................................................... -- -- 1,377 607
Supervisory fees.................................................... -- -- 2,107 1,834
--------------- ------------- ------------- ------------
Total expenses...................................................... 14,277 11,017 6,368 6,416
--------------- ------------- ------------- ------------
Net investment income............................................... 782,666 717,316 635,109 344,266
Realized gain (loss) from Security sale or redemption
Proceeds............................................................ 876,834 1,592,047 1,590,481 972,943
Cost................................................................ 803,253 1,731,480 1,490,650 840,315
--------------- ------------- ------------- ------------
Realized gain (loss)................................................ 73,581 (139,433) 99,831 132,628
Net change in unrealized appreciation (depreciation) of Securities... (2,023,219) 998,593 1,039,438 339,355
--------------- ------------- ------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..... $ (1,166,972) $ 1,576,476 $ 1,774,378 $ 816,249
=============== ============= ============= ============
</TABLE>
Statements of Changes in Net AssetsYears ended May 31, 1994, 1995 and 1996 and
the period ended December 31, 1996
<TABLE>
<CAPTION>
1994 1995 1996 1996
--------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income.............................................. $ 782,666 $ 717,316 $ 635,109 $ 344,266
Realized gain (loss) on Security sale or redemption................ 73,581 (139,433) 99,831 132,628
Net change in unrealized appreciation (depreciation) of Securities. (2,023,219) 998,593 1,039,438 339,355
--------------- --------------- --------------- --------------
Net increase (decrease) in net assets resulting from operations.... (1,166,972) 1,576,476 1,774,378 816,249
Distributions to Unitholders from:
Net investment income.............................................. (774,292) (747,220) (640,324) (340,831)
Security sale or redemption proceeds............................... -- -- -- --
Redemption of Units (874,169) (1,585,684) (1,599,339) (973,365)
--------------- --------------- --------------- --------------
Total increase (decrease).......................................... (2,815,433) (756,428) (465,285) (497,947)
Net asset value to Unitholders
Beginning of period................................................ 15,881,016 13,065,583 12,309,155 11,843,870
Additional Securities purchased from the proceeds of Unit Sales.... -- -- -- --
--------------- --------------- --------------- --------------
End of period (including undistributed net investment income of
$77,987, $48,043, $42,868 and $46,303).............................. $ 13,065,583 $ 12,309,155 $ 11,843,870 $ 11,345,923
=============== =============== =============== ==============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
CENTRAL EQUITY TRUST, UTILITY SERIES 17
PORTFOLIO as of December 31, 1996
<CAPTION>
Current
Number Annualized Aggregate
Portfolio of Dividend per Market
Number Shares Name of Issuer of Securities Share <F1> Value
- ------------ ---------- --------------------------------------------------------- -------------- --------------
<S> <C> <C> <C> <C>
1 21,374 American Water Works, Incorporated $ 0.70 $ 440,839
- ---------------------------------------------------------------------------------------------------------------
2 13,341 Ameritech Corporation 2.26 808,798
- ---------------------------------------------------------------------------------------------------------------
3 9,070 Bell Atlantic Corporation 2.88 587,283
- ---------------------------------------------------------------------------------------------------------------
4 1,176 California Water Service Company 2.08 49,392
- ---------------------------------------------------------------------------------------------------------------
5 17,649 Cascade Natural Gas Company 0.96 300,033
- ---------------------------------------------------------------------------------------------------------------
6 9,377 Central & South West Corporation 1.74 240,286
- ---------------------------------------------------------------------------------------------------------------
7 18,787 DQE Incorporated 1.36 544,823
- ---------------------------------------------------------------------------------------------------------------
8 11,547 Duke Power Company 2.12 534,049
- ---------------------------------------------------------------------------------------------------------------
9 693 Echelon International Corporation 0.00 10,828
- ---------------------------------------------------------------------------------------------------------------
10 15,721 Equitable Resources, Incorporated 1.18 467,700
- ---------------------------------------------------------------------------------------------------------------
11 10,375 Florida Progress Corporation 2.06 334,594
- ---------------------------------------------------------------------------------------------------------------
12 10,691 GTE Corporation 1.88 486,441
- ---------------------------------------------------------------------------------------------------------------
13 16,919 IPALCO Enterprises, Incorporated 1.48 461,043
- ---------------------------------------------------------------------------------------------------------------
14 16,473 Kansas City Power & Light Company 1.62 469,480
- ---------------------------------------------------------------------------------------------------------------
15 13,105 KU Energy Corporation 1.72 393,150
- ---------------------------------------------------------------------------------------------------------------
16 8,243 NYNEX Corporation 2.36 396,694
- ---------------------------------------------------------------------------------------------------------------
17 6,868 Northern States Power Company 2.76 315,069
- ---------------------------------------------------------------------------------------------------------------
18 18,437 ONEOK Incorporated 1.20 553,110
- ---------------------------------------------------------------------------------------------------------------
19 924 PECO Energy Company 1.80 23,331
- ---------------------------------------------------------------------------------------------------------------
20 12,057 Peoples Energy Corporation 1.84 408,431
- ---------------------------------------------------------------------------------------------------------------
21 21,627 Piedmont Natural Gas Company, Incorporated 1.16 505,531
- ---------------------------------------------------------------------------------------------------------------
22 22,247 Public Service Company of North Carolina, Incorporated 0.88 406,008
- ---------------------------------------------------------------------------------------------------------------
23 20,670 The Southern Company 1.26 467,659
- ---------------------------------------------------------------------------------------------------------------
24 11,156 SIGCORP, Incorporated 1.73 386,276
- ---------------------------------------------------------------------------------------------------------------
25 20,969 TECO Energy, Incorporated 1.12 505,877
- ---------------------------------------------------------------------------------------------------------------
26 11,239 Union Electric Company 2.54 432,701
- ---------------------------------------------------------------------------------------------------------------
27 13,933 Utilicorp United Inccorporated 1.76 376,191
- ---------------------------------------------------------------------------------------------------------------
28 14,670 Wisconsin Energy Corporation 1.52 394,256
----------- --------------
369,338 $ 11,299,873
=========== ==============
</TABLE>
The accompanying notes are an integral part of these statements.
- ----------
Based on the latest quarterly or semi-annual declaration. There can be no
assurance that future dividend payments will be maintained in an amount equal
to the dividend listed above.
CENTRAL EQUITY TRUST,
UTILITY SERIES 17
Notes to Financial Statements
December 31, 1996
- --------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - Securities listed on a national securities exchange or
the NASDAQ National Market System are valued at the last closing sales price.
Security Cost - The original cost to the Trust of the Securities was based,
for Securities listed on a national securities exchange or the NASDAQ National
Market System, on the closing sale prices on the exchange. In each case, the
costs were determined on the day of the various Dates of Deposit.
Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in such Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value determined
by the Evaluator and (3) accumulated dividends thereon, less accrued expenses
of the Trust, if any.
Federal Income Taxes - Each Unitholder is considered to be the owner of a pro
rata portion of such Trust and, accordingly, no provision has been made for
Federal income taxes.
Distributions to Unitholders of the Trust's taxable income will be taxable as
ordinary or capital gain income to Unitholders.
Other - The financial statements are presented on the accrual basis of
accounting. Any realized gains or losses from securities transactions are
reported on an identified cost basis.
Certain Reclassifications - Certain reclassifications have been made to
conform to the 1995 financial statements to conform to the 1995 and 1996
financial statements.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at December 31, 1996 is as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized Appreciation $ 2,560,826
Unrealized Depreciation (18,311)
-------------
$ 2,542,515
=============
</TABLE>
NOTE 3 - OTHER
Marketability - Although it is not obligated to do so, the Underwriter intends
to maintain a market for Units and to continuously offer to purchase Units at
prices, subject to change at any time, based upon the value of the Securities
in the portfolio of the Trust, valued described in Note 1, plus accumulated
dividends to the date of settlement. If the supply of Units exceeds demand, or
for other business reasons, the Underwriter may discontinue purchases of Units
at such prices. In the event that a market is not maintained for the Units, a
Unitholder desiring to dispose of his Units may be able to do so only by
tendering such Units to the Trustee for redemption at the redemption price.
Cost to Investors - The cost to original investors was based on the underlying
value of the Securities per unit on the date of an investor's purchase, plus a
sales charge of 4.9% of the public offering price which is equivalent to
5.152% of the aggregate offering price of the Securities. The secondary market
cost to investors is based on the determination of the underlying value of the
Securities per unit on the date of an investor's purchase, plus a Sales charge
of 4.9% of the public offering price which is 5.152% of the underlying value
of the Securities. Effective on each July 1, commencing on July 1, 1992, the
secondary sales charge will decrease by .5 of 1% to a minimum sales charge of
1.4%.
Compensation of Sponsor - The Sponsor receives a fee for providing portfolio
supervisory services for the Trust ($.005 per Unit, not to exceed the
aggregate cost of the Sponsor for providing such services to all applicable
Trusts). This fee may be adjusted for increases under the category "All
Services Less Rent of Shelter" in the Consumer Price Index.
Compensation of Evaluator - The Evaluator receives an annual fee for regularly
evaluating the Trust's portfolio.
NOTE 4 - REDEMPTION OF UNITS
During the years ended May 31, 1994, 1995 and 1996 and the period ended
December 31, 1996, 40,296 Units, 78,600 Units, 70,700 Units and 38,400 Units,
respectively, were presented for redemption.
- --------------------------------------------------------------------------
NOTE: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMPANIED BY PART ONE. BOTH
PARTS OF THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.
PROSPECTUS PART TWO
The Trusts. The objectives of the Trusts are to provide dividend income and
capital appreciation through investment in a fixed portfolio consisting of
publicly traded equity securities issued by domestic utility companies, which
may include electric, gas, water and/or telephone public utility companies.
With respect to Utility Series 27 only, up to 20% of the initial aggregate
market value of the Trust may have been invested in American Depositary
Receipts ("ADRs"). (The securities on deposit in a Trust are herein
collectively referred to as the "Portfolio").
The value of the Units of a Trust will fluctuate with the value of the
relevant Portfolio. The Trusts consist of a series of unit investment trusts.
The Units being offered by this Prospectus are issued and outstanding Units
which have been purchased by Edward D. Jones & Co. (the "Underwriter") in the
secondary market or from the Trustee after having been tendered for
redemption. The profit or loss resulting from the sale of Units will accrue to
the Underwriter. No proceeds from the sale of the Units will be received by
the Trusts.
Public Offering Price. The secondary market Public Offering Price of the Units
is based on the Evaluator's evaluation of the aggregate market value of the
securities in the Portfolio of a Trust divided by the number of Units
outstanding plus a sales charge as set forth in "Public Offering Price" in the
"Summary of Essential Financial Information" in Part One.
NEITHER THESE TRANSACTIONS NOR THE SECURITIES OFFERED HEREBY HAVE BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF THESE
TRANSACTIONS OR UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Sponsor: Unison Investment Trusts, LTD.
Prospectus Part Two dated as of the date of Prospectus Part One
INTRODUCTION
Each series of the Central Equity Trust (a "Trust") was created under the laws
of the State of New York pursuant to a Trust Agreement (the "Agreement") and a
related Standard Terms and Conditions of Trust (the "Indenture", as amended
and restated, collectively with the Agreement, the "Indenture and Agreement")
by and between Unison Investment Trusts Ltd. (the "Sponsor"), as depositor and
United States Trust Company, as trustee and evaluator. Pursuant to the
Indenture and Agreement, The Bank of New York (the "Trustee" ) was
named successor trustee to United States Trust Company and Van Kampen American
Capital Investment Advisory Corp. (the "Evaluator" ) was named
successor evaluator to United States Trust Company, both effective June 19,
1995. The purpose and objective of a Trust is to provide dividend income and
capital appreciation through investment in a fixed portfolio of publicly
traded equity securities issued by electric, gas, water and/or telephone
public utility companies. In addition, up to 20% of the aggregate market value
of Utility Series 27 may have been invested in American Depositary Receipts
("ADRs") (the securities on deposit in the Trust are herein collectively
referred to as the "Portfolio"). The Portfolio allows investors greater
diversification than they might be able to acquire individually. ADRs are
receipts issued by United States depositaries evidencing ownership of common
stocks issued by corporations formed in countries other than the United States
and on deposit with custodians located outside the United States. The issuers
of the publicly traded common stocks in a Portfolio, together with the foreign
issuers of the common stocks underlying the ADRs, are collectively referred to
herein as the "Issuers." Both the publicly traded common stocks and any ADRs
may provide income or are considered to have the potential for capital
appreciation or both (such common stocks and any ADRs are collectively
referred to herein as the "Securities"). ADRs provide income in the form of
distribution payments of dividends received on the underlying foreign
securities, while common stocks provide income in the form of dividends. Any
reference in this Prospectus Part Two to "dividends" shall with respect to
Utility Series 27 also refer to distribution payments made with respect to any
ADRs in a Portfolio. There is no assurance that these objectives will be met
because the payment and level of dividends are dependent upon, among other
things, the amount each issuer has available for such purpose, and with
respect to ADRs, the exchange rates in effect at the time of conversion.
Furthermore, diversification of a Trust's assets will not eliminate the risk
of loss inherent in the ownership of equity securities.
THE TRUSTS
Summary Description of the Portfolio
An investment in Units of a Trust should be made with an understanding of the
risks which an investment in equity securities, including common stock (and
ADRs in Utility Series 27), entails. Such risks include those arising from the
fact that the rights of common stock owners to payments are generally inferior
to creditors, debt holders and preferred stock owners of the issuing company.
Common stock owners are also subject to risks of declines in the general
equity market or in the market for the company's industry sector and the
worsening of the financial condition of a company or the economy in which it
operates. Such risks may result in declines in values of the common stocks
which in turn would negatively affect the value of Units. Although actions
have been taken to provide a diversified portfolio of equity securities which
tends to reduce the effects of these risks, no guarantee can be made that they
will not occur and negatively affect the value of Units.
Holders of common stock of the type held in each Trust have a right to receive
dividends only when, if, and in the amounts declared by the issuer's board of
directors and to participate in amounts available for distribution by the
issuer only after all other claims on the issuer have been paid or provided
for. The issuance of debt securities and preferred stock will create superior
claims for payment of principal and interest (in the case of debt securities)
and dividends (in the case of preferred stock) which could adversely affect
the ability and inclination of the issuer to declare or pay dividends on its
common stock or the rights of holders of common stock with respect to assets
of the issuer upon liquidation or bankruptcy. Further, unlike debt securities
which typically have a stated principal amount payable at maturity (which
value will be subject to market fluctuations prior thereto), or preferred
stocks which typically have liquidation preference and which may have stated
optional or mandatory redemption provisions, common stocks do not have a fixed
principal amount or a maturity date and their value is subject to market
fluctuations for as long as the common stocks remain outstanding. The market
value of the Securities in each Trust thus is expected to fluctuate over the
entire life of each Trust to market values higher or lower than those
currently prevailing. The Sponsor may direct the Trustee to dispose of
Securities under certain specified circumstances but the Securities will not
be sold by the Trustee as a result of ordinary market fluctuations. (See
"Administration of the Trusts -- Administration of the Portfolio" herein.)
Whether or not the Securities are listed on a national 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.
The risks referred to above could adversely affect the ability and the
inclination of the Issuers to declare or to pay dividends, and the ability of
holders of common stock and (ADRs in Utility Series 27) to realize any value
from the assets of the Issuers upon liquidation or bankruptcy.
Utility Series 27
An investment in Units of Utility Series 27 should also be made with an
understanding of the additional risks and consequences an investment in ADRs
entails, which include risks involved in the ADRs themselves and those
inherent in foreign securities as well as the investor's risk of becoming
subject to special tax consequences due to the receipt of income from foreign
sources. (See "Federal Taxation -- Taxation of Dividends Received by a Trust"
herein.) The Sponsor will not deposit ADRs in amounts that would cause the
aggregate market value of a Trust invested in domestic electric, gas, water or
telephone utilities to be less than 80%. An ADR is a receipt that is issued by
an American depositary, usually a bank, and which is denominated in and
represents the ownership of a specified number of foreign securities on
deposit with a foreign entity, also usually a bank, that acts as custodian of
and transfer and collection agent with respect to such foreign securities. The
depositary and custodian usually charge fees upon the deposit and withdrawal
of securities, the conversion of dividends to U.S. dollars, the disposition of
non-cash distributions and the performance of other services. ADRs, although
not necessarily the underlying securities, are registered with the Securities
and Exchange Commission.
Ownership of ADRs by U.S. investors can provide certain advantages over direct
ownership of the foreign securities, including greater ease of transferability
and simplified collection and conversion of dividends paid in foreign
currencies. However, ownership of ADRs also poses certain disadvantages in
comparison to direct ownership of the foreign securities. For example, holders
of ADRs may not be able to participate in foreign warrants and rights
offerings or in certain exchange or tender offers involving foreign issuers.
ADR depositaries will typically sell warrants and subscription rights, if they
are transferable, and distribute the proceeds, which are often less than the
value of the securities represented by such warrants or subscription rights,
to the ADR holders. Further, in some cases the voting rights of owners of
foreign stock are restricted by the home country, and the flow of information
from the foreign issuer to ADR holders may be delayed or reduced.
ADR holders have the right to demand and receive actual securities in exchange
for their ADRs. Furthermore, ADR facilities may be terminated, in which case
the ADR holder may come into possession of the underlying securities. If such
an event were to occur, the advantages of holding ADRs described above would
be lost and the tax consequences to the holder could change. Neither the
Trustee nor the Sponsor is authorized under the Indenture and Agreement to
initiate such an exchange. However, if an ADR facility is terminated, the
Sponsor may, but is not required to, direct the Trustee to sell any underlying
securities it may receive and distribute the proceeds of such sale to the
Unitholders pursuant to the terms of the Indenture and Agreement. In some
cases, an unsponsored ADR facility (see below for a discussion of sponsored
and unsponsored ADRs) may be terminated upon the creation of a sponsored ADR
facility. In such cases, it is the usual practice for the sponsor of the
facility to effect an exchange of its sponsored ADRs for the outstanding
unsponsored ADRs and to pay the costs of such exchange. Such an occurrence, in
and of itself, will not constitute an event that gives rise to the ability of
the Sponsor to direct the Trustee to sell the ADR. (See "Administration of the
Trusts -- Administration of the Portfolio" herein.)
An ADR facility may be established by a foreign issuer that seeks to have its
securities traded in the United States, in which case the ADRs are referred to
as "sponsored", or the ADR facility may be initiated by an entity unrelated to
the foreign issuer, usually a brokerage firm, that seeks to make a market in
the foreign security, in which case the ADRs are referred to as "unsponsored".
In the case of a sponsored ADR, the foreign issuer enters into an arrangement
with a single American depositary and a foreign custodian and usually agrees
to pay certain administrative and shareholder related fees and expenses,
although ADR holders will bear certain costs. Under the terms of most
sponsored ADRs, depositaries undertake to distribute notices of shareholder
meetings and voting instructions and to make other shareholder communications
available to ADR holders upon the foreign issuer's instruction. Generally, the
underlying security of a sponsored ADR will be registered with the Securities
and Exchange Commission, making the ADR eligible for listing on United States
exchanges.
In the case of an unsponsored ADR, the fees and expenses of the facility are
generally born solely by the ADR holders. In addition, the depositary is
frequently under no contractual obligation to distribute shareholder
communications of any type or to pass through voting rights to the ADR
holders. Other unsponsored ADRs with respect to the same underlying security
are often established by other market makers and depositaries. Such duplicate
ADRs are treated as fungible in the trading markets. Therefore, when duplicate
unsponsored ADRs exist, there is no mechanism that links a particular
unsponsored ADR to its actual depositary or the distributions made by it.
Instead, unsponsored ADRs are usually held on deposit with U.S. clearing
agencies, which take in the various unsponsored ADR distributions and forward
them on to the ADR owners. Additionally, if a holder of an unsponsored ADR
seeks to exchange the ADR for the underlying securities there can be delays in
settlement if it becomes necessary to trace the ADR to its issuing depositary.
This may occur if other depositaries refuse to accept the ADR or have
insufficient securities to effect the exchange. Because the underlying
securities are not generally registered in the United States and because the
underlying securities may have been issued at different times, there is a
possibility that if an unsponsored ADR is exchanged for underlying securities,
or the ADR holder otherwise receives the underlying securities, such holder
may come into possession of unregistered restricted securities which cannot be
sold in the U.S. until certain statutory waiting periods have expired.
Elements of risk associated with investing in the securities of foreign
issuers of equity securities include but are not limited to trade balances and
imbalances and related economic policies; currency exchange rate fluctuations;
non-U.S. currency exchange control policies; expropriation or confiscatory
taxation; limitations on the removal of funds or other assets; political or
social instability; the diverse structure and liquidity of securities markets
in various countries and regions; policies of government with respect to
possible nationalization of their own industries; and other specific local
political and economic considerations. Companies located outside the United
States may operate under different accounting, auditing and financial
reporting regulations than U.S. companies. In addition, because ADRs represent
ownership of securities issued by a foreign company, often less information is
available about the issuer than would be the case for publicly held United
States companies. Further, it may be more difficult to obtain and enforce a
judgment against a foreign issuer.
An investment in Units should be made with particular attention to risks
presented by probable changes in future currency exchange rate relationships,
especially during periods of broad adjustments in such relationships. The
securities underlying any ADRs in the Portfolio have been issued by
corporations that, to the extent they pay dividends, pay them in foreign
currencies. In the past, most foreign currencies values have fluctuated widely
against the United States dollar for many reasons, including supply and demand
of the respective currency, monetary policies, the soundness of the world
economy and the strength of a particular foreign economy as compared to the
economies of the United States and other countries. Thus, even though a
foreign Issuer's dividend payment may remain constant in its local currency,
the U.S. dollar value of the distribution will vary with fluctuations in the
U.S. dollar exchange rates for the relevant currency. The Sponsor anticipates
that dividends received by the foreign custodians in foreign currencies will
be converted on the date of receipt, or as soon as practicable thereafter, to
U.S. dollars. Due to fluctuations in exchange rates and possible delays in the
conversions of dividends to U.S. dollars, the U.S. dollar value of the
dividend on the date of receipt may not reflect, exactly, the actual amount in
U.S. dollars a Trust will receive.
To the best knowledge of the Sponsor, none of the foreign securities
underlying any ADRs in the Portfolio were subject to currency exchange control
restrictions which would materially interfere with the payment or receipt of
dividends on such underlying securities. However, there can be no assurance
that currency exchange control regulations will not be adopted in the future
that would adversely affect such payments.
Risk Factors
Electric, Gas, Water and Telephone Industries. Other than with respect to
Utility Series 27 where at least 80% of its aggregate market value is so
invested, each Trust invested in common stocks of domestic companies in the
electric, gas, water and/or telephone public utility industries. (See
"Portfolio" in Part One.) In view of this, an investment in a Trust should be
made with an understanding of the risks inherent in those industries. Public
utilities are generally subject to extensive regulation by state utility
commissions which, for example, establish and approve the rates which may be
charged for their services and the appropriate rate of return on an approved
asset base. Certain public utilities have difficulty from time to time
persuading regulators to grant the rate increases necessary to maintain an
adequate return on investment and voters in many states have the ability to
impose limits on rate adjustments. There are substantial differences between
the regulatory policies and practices of various jurisdictions, and any given
regulatory agency may make major shifts in policy from time to time. There is
no assurance that regulatory authorities will in the future grant rate
increases or that any such increases will be adequate to permit the payment of
dividends on common stocks. Additionally, existing and possible future
regulatory legislation may make it even more difficult for these utilities to
obtain adequate rate relief.
Issuers of the Securities may face other problems, including difficulty in
financing large construction programs and raising capital during inflationary
periods, rising costs of fuels and the transportation of fossil fuels,
uncertainty of transmission service costs, changes in tax laws which may
adversely affect a utility's ability to operate in a profitable manner,
difficulty in estimating future demand for electricity, gas, water and
telephone service in certain regions, recent reductions in estimates for
future demand for electricity, gas, water and telephone in certain regions,
restrictions on operations and increased costs and delays attributable to
environmental regulations and the effects of energy conservation.
There may also be risks associated with a particular type of public utility.
Governmental authorities may from time to time review existing requirements
and impose additional requirements governing the licensing, construction and
operation of power plants by electric utilities. On the other hand, electric
companies in general have been favorably affected by the full or near
completion of major construction programs, and many utility companies have
generated cash flows in excess of current operating expenses and some
construction expenditures, permitting some degree of diversification into
unregulated businesses. The Energy Policy Act of 1992 (the "Energy Act")
provides for, among other things, the promotion of competition in the electric
utility industry. The Energy Act reforms the Public Utility Holding Company
Act of 1935 by lifting restrictions on independent producers of electric power
who build and operate generating plants in order to produce power for sale to
utilities at competitive rates. Further, the Energy Act provides that
transmission lines will now be made available to any producer, utility or
independent entity who is willing to pay for the transmission of power. This
access makes the utility companies' traditional customer base more uncertain
and could have a significant effect on the accuracy of, and the ability to
make, the long-term demand projections that are necessary to determine the
need for new construction of plants and for other capital expenditures.
Gas pipeline and distribution companies have had difficulties in adjusting to
short and surplus energy supplies, enforcing or being required to comply with
long-term contracts and avoiding litigation from their customers, on the one
hand, or suppliers, on the other. Recent deregulatory efforts by the Federal
Energy Regulatory Commission ("FERC") have resulted in a number of important
changes in the sale, transportation and delivery of natural gas. FERC Orders
have caused pipeline companies to become merely carriers, as opposed to
sellers, of natural gas, which in turn has allowed local distribution
companies ("LDC's") to negotiate purchases directly with producers. These
changes, however, have resulted in significant transition costs and increased
competition. For example, LDC's now face the risk of losing major customers
who can fill their requirements through direct negotiation with producers if
the LDC's fail to provide competitive pricing. Finally, although there has
been deregulation by FERC, state regulators retain the power to scrutinize LDC
performance and rate setting. LDC's that may have difficulty adjusting to the
deregulated environment or minimizing the transition costs in connection
therewith risk rejection of rate increases to make up for those costs.
Water companies are subject to federal and state environmental laws and
regulation of water quality. Pending federal and state environmental rules and
regulations may require increased expenditures by the public water utilities
and may increase substantially operating costs and capital requirements for
those companies. Because certain aspects of telephone company operations are
being deregulated, telephone companies face increasing competitive pressures
that require the commitment of substantial capital, technological and
marketing resources.
Each of the problems referred to above could adversely affect the ability and
the inclination of these public utilities to declare or to pay dividends and
the ability of holders of common stock to realize any value from the assets of
the issuer upon liquidation or bankruptcy. The electric, gas, water and
telephone utilities which are issuers of the Securities have been experiencing
or may experience one or more of these problems in varying degrees. Moreover,
price disparities within selected utility groups and discrepancies in relation
to averages and indices have occurred frequently for reasons not directly
related to the general movement of price levels of utility common stocks.
Causes of these disparities and discrepancies include changes in the overall
demand for or supply of various securities (including the potentially
depressing effect of new stock offerings), and changes in investment
objectives, market expectations or cash requirements of other purchasers and
sellers of securities.
Furthermore, the Public Utility Holding Company Act of 1935 (the "1935 Act")
regulates, among other things, certain acquisitions of voting securities of
electric utility companies and gas utility companies by anyone who is an
"affiliate" of a public utility company (a person or organized group of
persons that directly or indirectly owns, controls or holds with power to vote
5% or more of the outstanding voting securities of a public utility company).
In addition, the 1935 Act requires a "holding company" (among other
categories, a company which directly or indirectly owns, controls or holds
with power to vote 10% or more of the outstanding voting securities of a
public utility company or another "holding company") to register as such with
the Securities and Exchange Commission and be otherwise subject to certain
restrictions on the acquisition of securities and other interests in public
utility companies. In order to avoid becoming an "affiliate", each Trust has
adopted an investment restriction that it will not purchase securities of a
public electric or gas utility company if by reason thereof such Trust would
hold 5% or more of the outstanding voting securities of the issuer.
Nevertheless, if a Trust were considered to be a member of an organized group
of persons, the 1935 Act might limit such Trust's acquisitions of the voting
securities of public utility companies by reason of the control by the group
of 5% or more of the voting securities of a public utility company. The
Sponsor believes that even if a Trust is appropriately included in a group, it
is unlikely that the holdings of such group will aggregate to as much as 5% of
the voting securities of any public electric or gas utility company.
The issuers of utility securities have in the past and may in the future
undertake various types of reorganization, such as spin-offs, split-offs,
mergers, creation of holding companies and asset sales, in order to, among
other things, avoid or minimize the effects of regulatory activities.
Depending on the circumstances, the Sponsor may direct the Trustee to either
hold or sell the Securities that are distributed or otherwise the subject of
such an event. (See "Administration of the Trusts -- Administration of the
Portfolio" herein.) In which case the Trust may contain Securities of issuers
not subject to the types of regulatory risks described above, but subject
instead to more general market risks.
Telecommunications Industries. In addition to the stock of companies in the
utilities industries described above, the Sponsor may deposit into Utility
Series 27 securities of telecommunications companies. The Sponsor will not
deposit securities of ADRs in amounts that would cause the aggregate market
value of Utility Series 27 invested in domestic electric, gas, water or
telephone utilities to be less than 80%.
Telecommunications is defined as the science and technology of communicating
by electronic means. Telecommunications companies are those whose products or
services facilitate the transmission of voice, data and video communications
electronically. Such entities include traditional telephone companies,
long-distance providers, cellular/wireless telecommunication companies, cable
television providers, telecommunications equipment manufacturers and satellite
communications companies. To some degree, the deregulation of traditional
telephone utilities and the growth of other telecommunications technologies
and companies is blurring the distinction between these two types of
companies.
There are two key differences between telecommunications companies, as defined
above, and utilities in the electric, gas, water and traditional telephone
industries. The first is the regulatory environment. For example, local
telephone service is currently regulated at the state level on a
return-on-equity basis, much like the electric, gas and water utilities.
However, other companies included in the telecommunications industry are not
regulated in the same manner or are not regulated at all. A second difference
is competition. Utilities have traditionally enjoyed monopoly positions in
their distinct service areas. To a certain degree, however, telecommunications
companies have broken into areas that had been controlled by telephone company
monopolies, such as providing long distance service. Additionally, because the
telecommunications companies do business in unregulated areas, they are also
subject to greater competition and the risks that come with that competition,
such as pressures on pricing and operating margins.
Objective and Securities Selection
The primary objective of each Trust is to provide investors with dividend
income and capital appreciation. There is no guarantee that a Trust's
objective will be achieved because it is subject to the continuing ability of
the respective issuers to continue to declare and pay dividends on the
Securities and because the market value of the Securities can be affected by a
variety of factors. (See "The Trusts -- Summary Description of the Portfolio"
herein.) Common stocks may be especially susceptible to general stock market
movements and to volatile increases and decreases in value as market
confidence in and perception of the issuers change, thus investors should be
aware that there can be no assurance that the value of the Securities will
increase.
Each Trust consists of such of the Securities listed under "Portfolio" in Part
One as may continue to be held from time to time in such Trust and any
additional Securities acquired and held by a Trust pursuant to the Indenture
and Agreement together with cash held in the Income and Capital Accounts. Each
Trust's investment objectives and policies have been developed to take
advantage of the characteristics and historical performance of securities of
companies in the public utilities industry. Many of these companies have
established a reputation for paying regular quarterly dividends and for
increasing their common stock dividends over time. In selecting particular
Securities for each Trust, the Sponsor considered a number of factors,
including historical growth rates and rates of return on capital, financial
condition and resources, management skills and such utilities industry factors
as regulatory environment and energy sources. The Sponsor also considered the
prospective growth in earnings and dividends in relation to price/earnings
ratios, yield and risk. The Sponsor believes that above-average dividend
returns and below-average price/earnings ratios are factors that not only
provide current income but also generally tend to moderate risk and to afford
opportunity for appreciation of the Securities deposited in each Trust.
Because Utility Series 27 holds ADRs representing proof of ownership of
foreign securities on deposit with foreign custodians and there is a
possibility that at some future date an ADR will be terminated causing such
Trust to hold the foreign securities represented by such an ADR, the Units may
not be an appropriate investment for a pension plan subject to Title I of the
Employee Retirement Income Security Act of 1974 ("ERISA"). Prospective
investors subject to ERISA should consult their tax advisors in determining
the appropriateness of an investment in such Trust.
Each Trust is organized as a unit investment trust and not as a management
investment company. Therefore, neither the Trustee nor the Sponsor has the
authority to manage a Trust's assets fully in an attempt to take advantage of
various market conditions to improve such Trust's market value. The Sponsor
may instruct the Trustee to dispose of Securities under limited circumstances.
(See "Administration of the Trusts -- Administration of the Portfolio"
herein.)
PUBLIC OFFERING
General
Units of each Trust are offered for sale at the Public Offering Price which in
the secondary market is based on the Evaluator's evaluation of the aggregate
market value of the Securities in each Trust plus the amount of cash, if any,
in the Income Account and the Capital Account of each Trust (other than
amounts required to be distributed by the Trustee pursuant to the Indenture
and Agreement), and includes a sales charge as described in "Public Offering
- -- Public Market" below.
Public Offering Price
The Public Offering Price on any particular date will vary from the amounts
set forth on the "Summary of Essential Information" in Part One of this
Prospectus in accordance with fluctuations in the aggregate market value of
the Securities, the amount of available cash on hand in a Trust and the amount
of certain accrued fees and expenses.
The Trustee has no cash for distribution to Unitholders until it receives
dividend payments on the Securities in a Trust. The Trustee is authorized to
provide its own funds, at times, in order to advance income distributions. The
Trustee will recover these advancements when such dividend income is received.
In the event that the income actually received by the Trustee differs from
that estimated by the Trustee in calculating its distributions, the Trustee
will make an appropriate adjustment to future distributions from the Income
Account to account for such difference.
As more fully described in the Indenture and Agreement the aggregate market
value of the Securities is determined on each Business Day by the Trustee
based on the last closing sale prices, the bid price or other bases on the day
the valuation is made. (See "Rights of Unitholders -- Redemption of Units"
herein.) Determinations are effective for transactions effected subsequent to
the last preceding determination.
Although payment is normally made three business days following an order for
the purchase of Units, payment may be made prior thereto. However, evidence of
ownership of the Units so ordered will be made three business days following
such order or shortly thereafter. A person will become the owner of Units on
the date of settlement provided payment has been received. Cash, if any, made
available to the Underwriter prior to the date of settlement for the purchase
of Units may be used in the Underwriter's businesses and may be deemed to be a
benefit to the Underwriter, subject to the limitations of the Securities
Exchange Act of 1934.
Unit Distribution
Units purchased by the Underwriter in the secondary market, if any, may be
offered by this Prospectus at the secondary Public Offering Price in the
manner described.
The Sponsor intends to qualify Units in states selected by the sponsor for
sale by the Underwriter and from time to time may offer Units for sale through
dealers who are members of the National Association of Securities Dealers,
Inc. Such dealers, if any, may be allowed a concession or agency commission by
the Underwriter.
The Underwriter reserves the right to reject, in whole or in part, any order
for the purchase of Units and to change the amount of the concessions to
dealers from time to time.
Sponsor's and Underwriter's Profits
As stated in "Public Offering -- Public Market" below, the Underwriter intends
to maintain a secondary market for the Units of each Trust. In so maintaining
a market, the Underwriter will also realize profits or sustain losses in the
amount of any difference between the price at which such Units were purchased
and the price at which such Units were resold (such prices include a sales
charge) or the prices at which such Units were redeemed, as the case may be.
Public Market
While not obligated to do so, the Underwriter intends to maintain, at its
expense, a secondary market for Units of each Trust and to continuously offer
to repurchase Units from Unitholders at the Redemption Price calculated by the
Trustee. (See "Right of Unitholders -- Redemption of Units" herein.) Any Units
repurchased by the Underwriter at the Redemption Price may be reoffered to the
public by the Underwriter at the then current Public Offering Price, which
price includes a sales charge. Effective on each July 1, such sales charge
will be reduced as set forth under "Summary of Essential Financial
Information" in Part One. Any profit or loss resulting from the resale of such
Units will belong to the Underwriter.
If the supply of Units exceeds the demand (or for any other business reason),
the Underwriter may, at any time, from time to time, or permanently,
discontinue the repurchase of Units of this series at the Redemption Price.
Alternatively, Unitholders may redeem their Units through the Trustee,
although the Sponsor shall have the right to purchase such tendered Units at a
price not less than the price the Unitholder would receive from the Trustee
upon tender. Unitholders of any Series, other than Series 1 or 2, may be able,
upon request, to receive an "in kind" distribution of the Securities evidenced
by their Units. (See "Rights of Unitholders -- Redemption of Units" herein.) A
Unitholder who wishes to dispose of his Units should inquire of his broker as
to current market prices in order to determine whether there is in existence
any price in excess of the Redemption Price and, if so, the amount thereof.
FEDERAL TAXATION
The following is a general discussion of certain of the federal income tax
consequences of the purchase, ownership and disposition of the Units. The
summary limited to investors who hold the Units as "capital assets"
(generally, property held for investment) within the meaning of Section 1221
of the Internal Revenue Code of 1986 ("the Code" ). Unitholders should
consult their tax advisers in determining the federal, state, local and any
other tax consequences of the purchase, ownership and disposition of Units in
the Trust. For purposes of the following discussion and opinion, it is assumed
that each Equity Security is equity for federal income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. The Trust is not an association taxable as a corporation for federal income
tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of
the Trust will be treated as income of the Unitholders thereof under the Code.
Each Unitholder will be considered to have received his pro rata share of
income derived from each Trust asset when such income is considered to be
received by the Trust.
2. Each Unitholder will have a taxable event when the Trust disposes of an
Equity Security (whether by sale, exchange, liquidation, redemption, or
otherwise) or upon the sale or redemption of Units by such Unitholder (except
to the extent an in kind distribution of stock is available and received by
such Unitholder from the Trust, as described below). The price a Unitholder
pays for his Units, generally including sales charges, is allocated among his
pro rata portion of each Equity Security held by the Trust (in proportion to
the fair market values thereof on the valuation date closest to the date the
Unitholder purchase his Units) in order to determine his initial tax basis for
his pro rata portion of each Equity Security held by the trust. It should be
noted that certain legislative proposals have been made which could affect the
calculation of basis for Unitholders holding securities that are substantially
identical to the Equity Securities. Unitholders should consult their own tax
advisors with regard to calculation of basis.
A Unitholder will be considered to have received all of the dividends paid on
his pro rata portion of each Equity Security when such dividends are received
by the Trust. Unitholders will be taxed in this manner regardless of whether
distributions from the Trust are actually received by the Unitholder or are
automatically reinvested. For federal income tax purposes, a Unitholder's pro
rata portion of dividends as defined by Section 316 of the Code paid with
respect to an Equity Security held by the trust are taxable as ordinary income
to the extent of such corporation's current and accumulated "earnings and
profits" . A Unitholder's pro rata portion of dividends paid on such Equity
Security which exceed such current and accumulated earnings and profits will
first reduce a Unitholder's tax basis in such Equity Security, and to the
extent that such dividends exceed a Unitholder's tax basis in such Equity
Security shall generally be treated as capital gain. In general, any such
capital gain will be short-term unless a Unitholder has held his Units for
more than one year.
3. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Equity Securities held by the trust will generally
be considered a capital gain (except in the case of a dealer or a financial
institution) and, in general, will be long-term if the Unitholder has held his
Units for more than one year (the date on which the Units are acquired (i.e.,
the "trade date" ) is excluded for purposes of determining whether the
Units have been held for more than one year). A Unitholder's portion of loss,
if any, upon the sale or redemption of Units or the disposition of Equity
Securities held by the trust will generally be considered a capital loss
(except in the case of a dealer or a financial institution) and, in general,
will be long-term if the Unitholder has held his Units for more than one year.
Unitholders should consult their tax advisers regarding the recognition of
such capital gains and losses for federal income tax purposes.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion of dividends received by the trust (to the
extent such dividends are taxable as ordinary income, as discussed above and
are attributable to domestic corporations) in the same manner as if such
corporation directly owned the Equity Securities paying such dividends (other
than corporate Unitholders, such as "S" corporations, which are not
eligible for the deduction because of their special characteristics and other
than for purposes of special taxes such as the accumulated earnings tax and
the personal holding corporation tax). However, a corporation owning Units
should be aware that Sections 246 and 246A of the Code impose additional
limitations on the eligibility of dividends for the 70% dividends received
deduction. The limitations include a requirement that stock (and therefore
Units) must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have been issued which address special
rules that must be considered in determining whether the 46 day holding period
requirement is met. Moreover, the allowable percentage of the deduction will
be reduced from 70% if a corporate Unitholder owns certain stock (or Units)
the financing of which is directly attributable to indebtedness incurred by
such corporation. It should be noted that various legislative proposals that
would affect the dividends received deduction have been introduced.
Unitholders should consult with their tax advisers with respect to the
limitations on and possible modifications to the dividends received deduction.
To the extent dividends received by the Trust are attributable to foreign
corporations, a corporation that own Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as through the expense had been paid
directly by him. It should be noted that as a result of the Tax Reform Act of
1986, certain miscellaneous itemized deductions, such as investment expenses,
tax return preparation fees and employee business expenses will be deductible
by an individual only to the extend they exceed 2% of such individual's
adjusted gross income. Unitholders may be required to treat some or all of the
expenses of the Trust as miscellaneous itemized deductions subject to this
limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Equity Securities by
the Trust or Disposition of Units. As discussed above, a Unitholder may
recognize taxable gain (or loss) when an Equity Security is disposed of by the
Trust or if the Unitholder disposes of a Unit. For taxpayers other than
corporations, net capital gains (which are defined as net long-term capital
gain over net short-term capital loss for a taxable year) are subject to a
maximum marginal stated tax rate of 28%. However, it should be noted that
legislative proposals are introduced from time to time that could affect tax
rates and could affect relative differences at which ordinary income and
capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Act" ) raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated
rate for taxpayers other than corporations Because some or all capital gains
are taxed at a comparatively lower rate under the Act, the Act includes a
provision that recharacterizes capital gains as ordinary income in the case of
certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993. Unitholders and
prospective investors should consult with their tax advisers regarding the
potential effect of this provision on their investment in Units.
If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the trust involved including his
pro rata portion of all the Equity Securities represented by the Unit.
Legislative proposals have been made that would treat certain transactions
designed to reduce or eliminate risk of loss and opportunities for gain as
constructive sales for purposes of recognition of gain (but not loss).
Unitholders should consult their own tax advisors with regard to any such
constructive sale rules.
Special Tax Consequences of In Kind Distributions Upon Redemption or
Termination of the Trust. Under certain circumstances a Unitholder tendering
Units for redemption may be able to request an In Kind Distribution. A
Unitholder may also under certain circumstances be able to request an In Kind
Distribution upon the termination of the Trust. See "Rights of
Unitholders--Redemption of Units." As previously discussed, prior to the
redemption of Units or the termination of the Trust, a Unitholder is
considered as owning a pro rata portion of each of the Trust assets for
federal income tax purposes. The receipt of an In Kind Distribution will
result in a Unitholder receiving an undivided interest in whole shares of
stock plus, possibly, cash.
The potential tax consequences that may occur under an In Kind Distribution
will depend on whether or not a Unitholder receives cash in addition to Equity
Securities. An "Equity Security" for this purpose is a particular
class of stock issued by a particular corporation. A Unitholder will not
recognize gain or loss if a Unitholder only receives Equity Securities in
exchange for his or her pro rata portion in the Equity Securities held by the
trust. However, if a Unitholder also receives cash in exchange for a
fractional share of an Equity Security held by the trust, such Unitholder will
generally recognize gain or loss based upon the difference between the amount
of cash received by the Unitholder and his tax basis in such fractional share
of an Equity Security held by the Trust.
Because the Trust will own many Equity Securities, a Unitholder who requests
an In Kind Distribution will have to analyze the tax consequences with respect
to each Equity Security owned by the Trust. The amount of taxable gain (or
loss) recognized upon such exchange will generally equal the sum of the gain
(or loss) recognized under the rules described above by such Unitholder with
respect to each Equity Security owned by the Trust. Unitholders who request
and In Kind Distribution are advised to consult their tax advisers in this
regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. the cost of the Units is allocated among the Equity Securities held in
the Trust in accordance with the proportion of the fair market values of such
Equity Securities on the valuation date closest to the date the Units are
purchased in order to determine such Unitholder's tax basis for his pro rata
portion of each Equity Security.
A Unitholder's tax basis in his Units and his pro rata portion of an Equity
Security held by the trust will be reduced to the extent dividends paid with
respect to such Equity Security are received by the Trust which are not
taxable as ordinary income as described above.
General. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number nd
appropriate certification are not provided when requested, distributions by
the trust to such Unitholder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions by the Trust
(other than those that are not treated as United States source income, if any)
will generally be subject to United States income taxation and withholding in
the case of Units held by non-resident alien individuals, foreign corporations
or other non-United States person. Such persons should consult their tax
advisers.
In general, income that is not effectively connected to the conduct of a trade
or business within the United States that is earned by non-U.S. Unitholders
and derived from dividends of foreign corporations will not be subject to U.S.
withholding tax provided that less than 25 percent of the gross income of the
foreign corporation for a three-year period ending with the close of its
taxable year preceding payment was not effectively connected to the conduct of
a trade or business within the United States. In addition, such earnings may
be exempt from U.S. withholding pursuant to a specific treaty between the
United States and a foreign country. Non-U.S. Unitholders should consult their
own tax advisers regarding the imposition of U.S. withholding on distributions
from the Trust.
It should be noted that payments to the Trust of dividends on Equity
Securities that are attributable to foreign corporations may be subject to
foreign withholding taxes and Unitholders should consult their tax advisers
regarding the potential tax consequences relating to the payment of any such
withholding taxes by the Trust. Any dividends withheld as a result thereof
will nevertheless be treated as income to the Unitholders. Because, under the
grantor trust rules, an investor is deemed to have paid directly his share of
foreign taxes that have been paid or accrued, if any, an investor may be
entitled to a foreign tax credit or deduction for United States tax purposes
with respect to such taxes. Investors should consult their tax advisers with
respect to foreign withholding taxes and foreign tax credits.
At the termination of the Trust, the Trustee will furnish to each Unitholder
of such Trust a statement containing information relating to the dividends
received by the Trust on the Equity Securities, the gross proceeds received by
the Trust from the disposition of any Equity Security (resulting from
redemption or the sale of any Equity Security), and the fees and expenses paid
by the Trust. The Trustee will also furnish annual information returns to
Unitholders and to the Internal Revenue Service.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of special counsel to the Trust for New York tax matters, the
Trust is not an association taxable as a corporation and the income of the
trust will be treated as the income of the Unitholders under the existing come
tax laws of the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S. Unitholders
("U.S. Unitholders" ) with regard to federal and certain aspects of New
York State and City income taxes. Unitholders may be subject to taxation in
New York or in other jurisdictions and should consult their own tax advisers
in this regard. As used herein, the term "U.S. Unitholder" means an
owner of a Unit in the Trust that (a) is (i) for United States federal income
tax purposes a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or of any political subdivision thereof, or (iii) an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source or (b) does not qualify as a U.S. Unitholder in
paragraph (a) but whose income from a Unit is effectively connected with such
Unitholder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States whose income and gain on
the Units will be taxable.
RIGHTS OF UNITHOLDERS
Units
A certificate representing 100% of the fractional undivided interest in and
ownership of the Units was registered in the name or to the order of the
Underwriter on the books of the depository, The Depository Trust Company
("DTC" or the "Depository"). Accordingly, the Underwriter is the holder of
record of the Units.
The Units will be issued in book-entry form only and the Unitholders will not
be entitled to receive physical certificates representing their Units. A
Unitholder's ownership of Units will be recorded on or through the records of
the Underwriter or any other brokerage firm that maintains such Unitholder's
account for such purpose. In turn, the brokerage firm's record ownership of
such Units will be recorded on the records of the Depository (or of a DTC
participating firm that acts as agent for the brokerage firm if a Unitholder's
brokerage firm is not a DTC participant). Therefore, a Unitholder must rely
upon the foregoing procedures to evidence such Unitholder's beneficial
ownership of a Unit. Beneficial ownership of a Unit may only be transferred by
compliance with the procedures of such brokerage firms and DTC participants.
Neither the Trustee nor the Sponsor will have any responsibility or liability
for any aspect of the records relating to or payments made by such brokerage
firms or DTC participants on account of beneficial ownership interests in the
Units or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
DTC, which is a New York-chartered limited purpose trust company, performs
services for its participants, some of whom (and/or whose representatives) own
DTC. In accordance with its normal procedures, DTC is expected to record
separately the positions held by each DTC participant in the Units, whether
held for its own account or as a nominee for another person. The Underwriter
is a DTC participant.
Each distribution from the Income Account and payment upon redemption of a
Unit will be paid to the Depository for the benefit of the record holder of
the Units as shown on the books of the Depository. The Depository will be
responsible for crediting the amount of such payments to the accounts of the
applicable DTC participants in accordance with the Depository's normal
procedures, which currently provide for payments in next-day funds settled
through the New York Clearing House. Each DTC participant will be responsible
for disbursing such payments to the beneficial owners of the Units that it
represents and to each brokerage firm for which it acts as agent. Each such
brokerage firm will be responsible for disbursing funds to the beneficial
owners of the Units that it represents.
If the foregoing book-entry procedures are terminated by the Depository for
any reason, definitive Certificates will be issued in appropriate amounts as
requested by the DTC participants holding the Units.
The Trustee is authorized to treat as the record owner of Units that person
who is registered as such owner on the books of the Trustee. Units are
transferable by presentation of transfer instructions to the Trustee
accompanied by such documents executed by the Unitholder or his authorized
attorney and such Unitholder's brokerage firm as the Trustee deems necessary
to establish the authority of the person making such transfer. In certain
instances, the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as executor
or administrator or certificates of corporate authority.
Although no such charge is now made or contemplated, the Trustee may require a
Unitholder to pay a reasonable fee for each Unit transferred and to pay any
governmental charge that may be imposed in connection with each such transfer.
Certain Limitations
No Unitholder shall have the right to vote except in certain circumstances
relating to the amendment and termination of a Trust. (See "Administration of
the Trusts -- Amendment or Termination" herein.) Unitholders shall have no
right to control the operation or administration of a Trust in any manner,
except upon the vote of 51% of the Unitholders outstanding at any time for
purposes of amendment or termination of a Trust, all as provided in the
Agreement. Unitholders will be unable to dispose of any of the Securities, as
such, and will not be able to vote the Securities. No Unitholder shall ever be
under any liability to any third party for any action taken by the Trustee or
Sponsor.
Redemption of Units
Requests for redemption of a Unit at the option of a Unitholder must first be
presented to the Unitholder's brokerage firm. Such brokerage firm (if such
firm is a DTC participant and, if not, through the DTC participant acting on
behalf of such firm) will present such redemption request to DTC and DTC, in
turn, will present such request to the Trustee for processing in accordance
with the applicable redemption provisions of the Agreement. The Trustee may
require a Unitholder and such Unitholder's brokerage firm to submit additional
information or certifications to the Trustee to evidence compliance with the
applicable redemption provisions of the Agreement. Units will be deemed to be
"tendered" to the Trustee when the Trustee is in physical possession of
transfer instructions and such other documentation as may be required by the
Trustee to effect the redemption of the Units. Compliance with the foregoing
procedures may result in delays in the processing of redemption requests by
Unitholders. No redemption fee will be charged by the Trustee.
On the third business day following such tender the Unitholder will be
entitled to receive in cash an amount for each Unit equal to the Redemption
Price per Unit (unless the redeeming Unitholder is receiving an In Kind
Distribution pursuant to the Indenture and Agreement as described herein) next
computed as of the Evaluation Time set forth in the "Summary of Essential
Financial Information" in Part One on the date of tender. The "date of tender"
is deemed to be the date on which the Units are received by the Trustee,
except that as regards Units received after the Evaluation Time, the date of
tender is the next day on which the exchange is open for trading and such
Units will be deemed to have been tendered at the Redemption Price computed on
that day.
Any amounts paid on redemption representing income received will be withdrawn
from the Income Account to the extent funds are available. All other amounts
will be withdrawn from the Capital Account. The Trustee is empowered to sell
Securities in order to make funds available for redemption.
Unitholders owning and tendering 1,200 Units or more of a Series other than
Series 1 or 2 for redemption may request from the Trustee in lieu of a cash
redemption a distribution in kind ("In Kind Distributions") of an amount and
value of Securities per Unit equal to the Redemption Price per Unit as
determined as of the evaluation next following the tender. Such Unitholder
must elect to have its Units redeemed either entirely in kind plus cash for
fractional shares or entirely in cash. An In Kind Distribution of such Units
will be made by the Trustee through the distribution of each of the Securities
in book-entry form to the account of the Unitholder's bank or broker-dealer at
Depository Trust Company. The tendering Unitholder will receive his pro rata
number of whole shares of each of the Securities comprising the Portfolio and
cash from the Capital Account equal to the fractional shares to which the
tendering Unitholder is entitled. In implementing these redemption procedures,
the Trustee shall make any adjustments necessary to reflect differences
between the Redemption Price of the Securities distributed in kind as of the
date of tender. If funds in the Capital Account are insufficient to cover the
required cash distribution to the tendering Unitholder, the Trustee may sell
Securities according to the criteria discussed above.
To the extent that Securities are distributed in kind or sold, the size of the
relevant Trust will be reduced, and the diversity of such Trust may be
altered. Sales may be required at a time when Securities would not otherwise
be sold and may result in lower prices than might otherwise be realized. The
price received upon redemption may be more or less than the amount paid by the
Unitholder depending on the value of the Securities in the Portfolio at the
time of redemption. Special federal income tax consequences will result if a
Unitholder requests and receives an In Kind Distribution. (See "Federal
Taxation" herein.)
The Redemption Price per Unit of a Trust is determined by the Evaluator as of
the Evaluation Time on the date any such determination is made. The Redemption
Price per Unit is each Unit's pro rata share, determined by the Trustee, of:
(1) the aggregate market value of the Securities in such Trust, (2) cash on
hand in such Trust including dividends receivable on stocks trading
ex-dividend as of the date of computation, and (3) any other assets of such
Trust, less (a) amounts representing taxes or governmental charges payable out
of such Trust, (b) the accrued expenses of such Trust, and (c) cash held for
distribution to Unitholders of record as of a date prior to the evaluation.
The aggregate market value of the Securities is determined in good faith by
the Evaluator in the following manner. If the Securities are listed on a
national securities exchange, the evaluation will be based on the last closing
sale price as of the Evaluation Time on that exchange (unless the Trustee
determines such price is an inappropriate basis for evaluation) or, if there
is no closing sale price on that exchange, at the closing bid prices. If the
Securities are not so listed or, if so listed and the principal market
therefore is other than on the exchange, the evaluation will be based on the
current bid prices (unless the Trustee determines these prices are an
inappropriate basis for evaluation). If current bid or closing prices are
unavailable, the evaluation will be determined on the basis of any of the
following methods the Trustee deems appropriate (1) on the basis of the
current bid prices of such Securities as obtained from investment dealers or
brokers who customarily deal in securities comparable to those held by the
Trust (which may include the Underwriter), (2) on the basis of comparable bid
prices for comparable securities, (3) by appraising the value of the
Securities at the mean between the bid and offer side of the market or by such
other appraisal deemed appropriate by the Trustee or (4) by any combination of
the above, each as of the Evaluation Time.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or during which trading on that Exchange is
restricted, or an emergency exists, as a result of which emergency disposal or
evaluation of the Securities is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order, permit or
require.
The Indenture requires that the Trustee notify the Sponsor of any tender of
Units for redemption. The Sponsor may, and so long as the Underwriter is
maintaining a secondary market for Units, the Underwriter may, prior to the
close of business on the day of tender, purchase any Units tendered to the
Trustee for redemption by making payment therefor to the Unitholder in an
amount not less than that which would have been paid by the Trustee had the
Units been redeemed by the Trustee. (See "Public Offering -- Public Market".)
Units held by the Sponsor or the Underwriter may be tendered to the Trustee
for redemption in the same manner as any other Units.
The offering price of any Units resold by the Underwriter will be the Public
Offering Price determined in the manner provided in this Prospectus. (See
"Public Offering -- Public Offering Price" herein.) Any profit resulting from
the resale of such Units will belong to the Underwriter which likewise will
bear any loss resulting from a lower offering or redemption price subsequent
to its acquisition of such Units. (See "Public Offering -- Sponsor's and
Underwriter's Profit" herein.)
TRUST OPERATING EXPENSES
Initial Costs
All costs and expenses incurred in creating and establishing the Trusts,
including the cost of the initial preparation, printing and execution of the
Indenture and Agreement, legal and auditing expenses, advertising and selling
expenses, expenses of the Trustee and other out-of-pocket expenses were borne
by the Sponsor at no cost to the Trusts. Other than the Sponsor's Supervisory
Fees described below, the Sponsor will not receive any fees in connection with
its activities relating to the Trusts. However, the Underwriter, an affiliate
of the Sponsor, will receive sales commissions and may realize other profits
(or losses) in connection with the sale of Units as described under "Public
Offering -- Sponsor's and Underwriter's Profits" above and will be indemnified
by the respective Trusts as described under "Miscellaneous Expenses" below.
Fees
The Sponsor's supervisory fee, if any, earned for supervising a Portfolio is
based upon the largest number of Units for such Trust outstanding at any time
during the calendar year and will be payable annually on or before the January
Distribution Date. The Sponsor's current fee per 100 Units is set forth under
"Summary of Essential Information" in Part One of this Prospectus and may
exceed the actual costs of providing these supervisory services, but at no
time will the total amount the Sponsor receives for these supervisory
services, when combined with all compensation received with respect to any
other series of trusts in any calendar year, exceed the aggregate cost to it
of supplying such services in such year.
Under the Indenture and Agreement, for its services as trustee and evaluator
the Trustee will receive fees in the amount set forth in "Summary of Essential
Information -- Trustee's Fee and Estimated Expenses" in Part One, computed and
paid monthly on the basis of the largest number of Units outstanding for such
Trust at any time during the calendar year. The Trustee is entitled to receive
a minimum fee of $2,500 per year for services performed and expenses incurred
on behalf of a Trust. Certain regular and recurring expenses of a Trust,
including certain mailing and printing expenses, are borne by such Trust.
The Sponsor's fee, if any, accrues monthly but is paid annually. The Trustee's
fees are payable monthly on or before each Distribution Date from the Income
Account, to the extent funds are available and thereafter from the Capital
Account. Any such fees may be increased without approval of the Unitholders in
proportion to increases under the classification "All Services Less Rent" in
the Consumer Price Index published by the United States Department of Labor.
The Trustee also receives benefits to the extent that it holds funds on
deposit in various non-interest bearing accounts created under the Indenture
and Agreement. For a discussion of the services rendered by the Trustee
pursuant to its obligations under the Indenture and Agreement, see
"Administration of the Trusts" herein.
Miscellaneous Expenses
The following additional charges are or may be incurred by each of the Trusts:
(a) fees of the Trustee for extraordinary services, (b) expenses of the
Trustee (including legal and auditing expenses) and of counsel designated by
the Sponsor, (c) various governmental charges, (d) expenses and costs of any
action taken by the Trustee to protect the Trusts and the rights and interests
of Unitholders, (e) indemnification of the Trustee for any loss, liability or
expenses incurred in the administration of the Trusts without negligence, bad
faith or willful misconduct on its part and (f) expenditures incurred in
contacting Unitholders upon termination of the Trusts.
The fees and expenses set forth herein are payable out of the respective
Trusts. When such fees and expenses are paid by or owing to the Trustee, they
are secured by a lien on the Securities of the relevant Trust. Since the
income stream produced by dividend payments on the Securities is
unpredictable, the Sponsor cannot provide any assurance that dividends will be
sufficient to meet any or all expenses of a particular Trust. If the balances
in the Income and Capital Accounts are insufficient to provide for amounts
payable by such Trust, the Trustee has the power to sell Securities to pay
such amounts. These sales may result in capital gains or losses to
Unitholders. (See "Federal Taxation" herein.)
ADMINISTRATION OF THE TRUSTS
Records and Accounts
The Trustee will keep records and accounts of all transactions of each Trust
at its Unit Investment Trust Division offices at 101 Barclay Street, New York,
New York 10286. These records and accounts will be available for inspection by
Unitholders at reasonable times during normal business hours. The Trustee will
keep on file for inspection by Unitholders an executed copy of the Indenture
and Agreement together with a current list of the Securities then held in each
Trust. In connection with the storage and handling of certain Securities
deposited in a Trust, the Trustee is authorized to use the services of
Depository Trust Company. These services would include safekeeping of the
Securities, coupon-clipping, computer book-entry transfer and institutional
delivery services.
Distributions of Income and Capital
The Trustee will credit to the Income Account all cash dividends received by
and payable to the relevant Trust. Other receipts are credited to the Capital
Account. Amounts in the Income Account received by a Trust will be distributed
on or shortly after the fifteenth day of the month of the applicable Record
Date on a pro rata basis to Unitholders of such Trust as of record as of that
date. Amounts in the Capital Account will be distributed on or shortly after
the fifteenth day of each June and December except that the Trustee shall not
be required to make a distribution from the Capital Account unless the cash
balance on deposit therein available for distribution shall be sufficient to
distribute at least $1.00 per 100 Units. If the amounts in the Capital Account
are sufficient to distribute at least $10.00 per 100 Units, such amounts shall
be distributed on or shortly after the fifteenth day of the next succeeding
month after such amounts are accumulated. The Trustee is not required to pay
interest on funds held in the Capital or Income Accounts (but may itself earn
interest thereon and therefore benefits from the use of such funds).
The distribution to the Unitholders as of each Record Date will be made on the
following Distribution Date or shortly thereafter and shall consist of an
amount substantially equal to such portion of the Unitholders' pro rata share
of the estimated annual dividend distributions in the Income Account after
deducting estimated expenses. Because dividends are not received by a Trust at
a constant rate throughout the year, such distributions to Unitholders may be
more or less than the amount credited to the Income Account as of the Record
Date. For the purpose of minimizing fluctuation in the distributions from the
Income Account, the Trustee is authorized to advance such amounts as may be
necessary to provide income distributions of approximately equal amounts. The
Trustee shall be reimbursed, without interest, for any such advances from
funds in the Income Account on the ensuing Record Date. A person who purchases
Units will commence receiving distributions only after such person becomes a
record owner. Notification to the Trustee of the transfer of Units is the
responsibility of the purchaser, but in the normal course of business such
notice is provided by the selling broker-dealer.
As of the tenth day of each month, the Trustee will deduct from the Income
Account and, to the extent funds are not sufficient therein, from the Capital
Account, amounts necessary to pay the expenses of the relevant Trust (as
determined on the basis set forth under "Trust Operating Expenses" herein).
The Trustee may also withdraw from the Income and Capital Accounts such
amounts, if any, as it deems necessary to establish a reserve for any
applicable taxes or other governmental charges payable out of such Trust.
Amounts so withdrawn shall not be considered a part of such Trust's assets
until such time as the Trustee shall return all or any part of such amounts to
the appropriate accounts. In addition, the Trustee may withdraw from the
Income and Capital Accounts such amounts as may be necessary to cover
redemptions of Units.
Administration of the Portfolio
The trusts are not "managed" by the sponsor or the Trustee; their
activities described below are governed solely by the provisions of the
Indenture and Agreement. The original proportionate relationship between the
number of shares of each security in a Trust will be adjusted to reflect the
occurrence of a stock dividend, stock split, merger, reorganization or a
similar event which affects the capital structure of the issuer of a Security
in such Trust but which does not affect such Trust's percentage ownership of
the common stock of such issuer at the time of such event. The Trust, however,
will not be managed. The Trust Agreement, however, provides that the Sponsor
may (but need not) direct the Trustee to dispose of an Equity Security in
certain events such as the issuer having defaulted on the payment of any of
its outstanding obligations or the price of an Equity Security has declined to
such an extent or other such credit factors exist so that in the opinion of
the Sponsor, the retention of such Securities would be detrimental to the
Trust. The proceeds of any such disposition of the Securities will be
deposited in the Capital Account of the relevant Trust and distributed to
related Unitholders in accordance with the Indenture and Agreement. If a
failure to pay declared cash dividends on any of the Securities occurs and if
the Sponsor does not, within 30 days after notification, instruct the Trustee
to sell or hold such Securities, the indenture provides that the Trustee may
in its discretion sell such Securities. As the holder of the Securities, the
Trustee will have the right to vote all of the voting stocks in the Trusts and
will vote such stocks in accordance with the instructions of the Sponsor or,
in the absence of such instructions, according to the recommendations, if any,
of the issuer's management.
Reports to Unitholders
In connection with each distribution, the Trustee shall furnish Unitholders a
statement of the amount of income and the amount of other receipts (received
since the preceding distribution), if any, being distributed, expressed in
each case as a dollar amount representing the pro rata share for each 100
Units outstanding. Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each person who at any time during
the calendar year was a registered Unitholder, a statement (i) as to the
Income Account: dividends received, deductions for applicable taxes, fees and
expenses of the relevant Trust, cash amounts paid for purchases of Securities
to replace Failed Contract Securities and for redemptions of Units, if any,
and the balance remaining after such distributions and deductions, expressed
in each case both as a total dollar amount and as a dollar amount representing
the pro rata share per 100 Units outstanding on the last Business Day of such
calendar year; (ii) as to the Capital Account: the dates of disposition of any
Securities and the net proceeds received therefrom, cash amounts paid for
purchases of Securities to replace Failed Contract Securities and for
redemption of Units, deductions for payment of applicable taxes and fees and
expenses of the relevant Trust and the balance remaining after such
distributions and deductions expressed both as a total dollar amount and as a
dollar amount representing the pro rata share per 100 Units outstanding on the
last Business Day of such calendar year; (iii) a list of the Securities held
and the number of Units outstanding on the last Business Day of such calendar
year; (iv) the Redemption Price per Unit based upon the last Trustee
evaluation thereof made during such calendar year; and (v) amounts actually
distributed during such calendar year from the Income and Capital Accounts,
separately stated, expressed both as total dollar amounts and as dollar
amounts representing the pro rata share per 100 Units outstanding.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, with evaluations
of the Securities in the relevant Trust.
Amendment or Termination
The Indenture and Agreement may be amended by the Trustee and the Sponsor
without the consent of any of the Unitholders (i) to cure any ambiguity or to
correct or supplement any provision thereof which may be defective or
inconsistent with any other provision, or (ii) to make such other provisions
as shall not adversely affect the Unitholders, provided, however, that the
Indenture and Agreement may not be amended to (a) increase the number of
Units, except as the result of the deposit of additional Securities pursuant
to the Indenture and Agreement, (b) permit the acquisition of additional or
substitute securities except as expressly provided therein or (c) permit a
Trust to engage in any kind of business. The Indenture and Agreement may also
be amended in any respect by the Trustee and Sponsor, or any of the provisions
thereof may be waived, with the consent of the holders of 51% of the Units
then outstanding, provided that no such amendment or waiver will reduce the
interest in each Trust of any Unitholder without the consent of such
Unitholder or reduce the percentage of Units required to consent to any such
amendment or waiver without the consent of all Unitholders. The Trustee shall
advise the Unitholders of any amendment promptly after execution thereof.
A Trust may be liquidated at any time by consent of Unitholders representing
51% of the Units then outstanding or by the Trustee when the value of such
Trust, as shown by any evaluation, is less than the Minimum Termination Value
indicated under "Summary of Essential Financial Information" in Part One. The
Indenture and Agreement will terminate upon the sale or other disposition of
the last Security held thereunder, but in no event will it continue beyond the
Mandatory Termination Date stated under "Summary of Essential Information" in
Part One.
Written notice of any termination of a Trust shall be given by the Trustee to
each relevant Unitholder at his address appearing on the registration books of
the applicable Trust maintained by the Trustee. If a Trust terminates on the
Mandatory Termination Date, the Trustee will provide written notice thereof to
all Unitholders at least 30 days before such Mandatory Termination Date. The
notice will include a form enabling Unitholders of a Series other than Series
1 or 2 to request an In Kind Distribution rather than payment in cash upon
termination of a Trust. Such request must be returned to the Trustee at least
three business days prior to the Mandatory Termination Date. Within a
reasonable period of time after termination, the Trustee will sell any
Securities remaining in a Trust. The Trustee will deduct from the funds of a
Trust any accrued costs, expenses, advances or indemnities provided by the
Indenture and Agreement, including estimated compensation of the Trustee and
costs of liquidation and any amounts required as a reserve to provide for
payment of any applicable taxes or other governmental charges. The Trustee
will then distribute to each Unitholder who does not request an In Kind
Distribution his pro rata share of the balance of the Income and Capital
Accounts. For this reason, among others, the amount realized by a Unitholder
upon termination may be less than the amount paid by such Unitholder for
Units. Any sale of Securities in a Trust upon termination may result in a
lower amount than might otherwise be realized if such sale were not required
at such time.
With such distribution to the Unitholders the Trustee will furnish a final
distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the
Trustee in its sole discretion determines that any amounts held in reserve are
no longer necessary, it will make distributions thereof to Unitholders in the
same manner.
Limitations on Liabilities
The Sponsor and the Trustee shall be under no liability to Unitholders for
taking any action or for refraining from taking any action in good faith
pursuant to the Indenture and Agreement, or for errors in judgment or, in the
case of the Sponsor, for errors in judgment in directing or failing to direct
the Trustee, but shall be liable only for their own willful misfeasance, bad
faith or negligence (gross negligence in the case of the Sponsor) in the
performance of their duties or by reason of their reckless disregard of their
obligations and duties hereunder. The Trustee shall not be liable for
depreciation or loss incurred by reason of the sale by the Trustee of any of
the Securities. In the event of the failure of the Sponsor to act under the
Indenture and Agreement, the Trustee may act thereunder and shall not be
liable for any action taken by it in good faith under the Indenture and
Agreement. The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the interest
thereon or upon it as Trustee under the Indenture and Agreement or upon or in
respect of a Trust which the Trustee may be required to pay under any present
or future law of the United States of America or of any other taxing authority
having jurisdiction. In addition, the Indenture and Agreement contain other
customary provisions limiting the liability of the Trustee.
The Sponsor and Unitholders may rely on any evaluation furnished by the
Evaluator and shall have no responsibility for the accuracy thereof.
Determinations by the Evaluator under the Indenture and Agreement shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the
Sponsor or Unitholders for errors in judgment. This provision shall not
protect the Evaluator in any case of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.
MISCELLANEOUS
The Sponsor
Unison Investment Trusts L.P., d/b/a Unison Investment Trusts Ltd., a Missouri
limited partnership formed on March 24, 1987 ("Unison"), is the Sponsor of the
Trusts. The Jones Financial Companies, A Limited Partnership, a Missouri
limited partnership ("JFC"), which owns Edward D. Jones & Co., a Missouri
limited partnership ("EDJ"), is the limited partner in Unison, and Unison
Capital Corp., Inc. ("UCC"), a Missouri corporation, is the general partner of
Unison. UCC is a wholly-owned subsidiary of LHC, Inc. ("LHC"), which is a
wholly-owned subsidiary of JFC. The principal offices of Unison, JFC, EDJ, UCC
and LHC are located at 201 Progress Parkway, Maryland Heights, Missouri 63043.
The Sponsor has also acted as the sponsor of Insured Tax-Free Income Trust
("ITFIT"), a unit investment trust consisting of a portfolio of state,
municipal and public authority debt obligations.
The Sponsor is liable for the performance of its obligations under the
Indenture and Agreement. If the Sponsor shall fail to perform any of its
duties under the Indenture and Agreement or become incapable of acting or
become bankrupt or its affairs are taken over by public authorities, then the
Sponsor shall be discharged. In such event, the Trustee shall: (i) appoint a
successor Sponsor or Sponsors or (ii) terminate the Indenture and Agreement
and liquidate a Trust in accordance with the provisions thereof. The Sponsor
may also resign if the Sponsor and Trustee together appoint a new Sponsor by
written instrument executed among the Sponsor, the Trustee and the new
sponsor. The Indenture and Agreement provide for the appointment of a new
Sponsor with a net worth of at least $1,000,000 to replace a resigning Sponsor
prior to such resignation. However, it is not an ongoing obligation of the
Sponsor to maintain this level of net worth. The Indenture and Agreement also
provide that the Trustee shall mail to each Unitholder notice of the discharge
or resignation of the Sponsor and of any appointment of a new Sponsor.
The Trustee
The Trustee is The Bank of New York, a banking corporation organized under the
laws of the State of New York, with its Unit Investment Trust Division offices
at 101 Barclay Street, New York, New York 10286, (800) 221-7668.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trusts.
Under the Indenture and Agreement, the Trustee or any successor trustee may
resign and be discharged from the Trusts created by the Indenture and
Agreement by executing an instrument in writing and filing the same with the
Sponsor. The Trustee or successor trustee must mail a copy of the notice of
resignation to all Unitholders then of record, not less than 60 days before
the date specified in such notice of resignation is to take effect. The
Sponsor upon receiving notice of such resignation is obligated to appoint a
successor trustee promptly. If, upon such resignation, no successor trustee
has been appointed and has accepted the appointment within 30 days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. In case the Trustee becomes
incapable of acting, is adjudged to be bankrupt or is taken over by public
authorities or under certain changes in control of the Trustee, the Sponsor
may remove the Trustee and appoint a successor trustee as provided in the
Indenture and Agreement. Notice of such removal and appointment shall be
mailed to each Unitholder by the Sponsor. Upon execution of a written
acceptance of such appointment by such successor trustee, all the rights,
powers, duties and obligations of the original Trustee shall vest in the
successor. The resignation or removal of a Trustee becomes effective only when
the successor trustee accepts its appointment as such or when a court of
competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a corporation which is authorized to exercise trust powers, is
organized under the laws of the United States or any State and having at all
times an aggregate capital, surplus and undivided profits of not less than
$5,000,000.
Effective June 19, 1995, United States Trust Company of New York resigned as
Trustee and The Bank of New York was appointed successor trustee.
The Evaluator
The Evaluator is Van Kampen American Capital Investment Advisory Corp., a
Delaware corporation, with main offices located at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181. Van Kampen American Capital Investment
Advisory Corp. is a wholly owned subsidiary of Van Kampen American Capital
Inc., which itself is a sponsor of a substantial number of unit investment
trusts.
The duty of the Evaluator is to accurately determine the Market Value of the
Securities (1) at any time upon the request of the Trustee and/or Sponsor, (2)
during the initial offering period, (3) after the initial offering and (4) at
any time to determine Redemption Price.
Under the Indenture and Agreement, the Evaluator or any successor evaluator
may resign and be discharged from the Trusts created by the Indenture and
Agreement by executing an instrument in writing and filing the same with the
Sponsor and the Trustee. The Evaluator or successor evaluator must mail a copy
of the notice of resignation to the Sponsor and the Trustee, not less than 60
days before the date such notice of resignation is to take effect. The Sponsor
and the Trustee upon receiving notice of such resignation are obligated to
appoint a successor evaluator promptly. If, upon such resignation, no
successor evaluator has been appointed and has accepted the appointment within
30 days after notification, the retiring Evaluator may apply to a court of
competent jurisdiction for the appointment of a successor. Upon execution of a
written acceptance of such appointment by such successor evaluator, all the
rights, powers, duties and obligations of the original Evaluator shall vest in
the successor. The resignation or removal of an Evaluator becomes effective
only when the successor evaluator accepts its appointment as such or when a
court of competent jurisdiction appoints a successor evaluator.
Any corporation into which an Evaluator may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which an Evaluator shall be a party, shall be the successor evaluator.
Effective June 19, 1995, United States Trust Company of New York resigned as
Evaluator and Van Kampen American Capital Investment Advisory Corp. was
appointed successor evaluator.
Legal Opinions
The legality of the Units offered hereby has been passed upon by Chapman and
Cutler, 111 West Monroe, Chicago, Illinois 60603.
Auditors
The financial statements and schedule of Trust Securities included in this
Prospectus have been audited by Grant Thornton LLP, independent public
accountants, as indicated in their report with respect thereto in Part One of
this Prospectus, and are included herein in reliance upon the authority of
said firm as experts in giving said reports.
CENTRAL EQUITY TRUST
Sponsor: Unison Investment Trusts Ltd.
12555 Manchester Road
St. Louis, Missouri 63131
Trustee: The Bank of New York
101 Barclay Street
New York, New York 10286
Evaluator: Van Kampen American Capital Investment Advisory Corp.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Legal Counsel: Chapman and Cutler
101 West Monroe
Chicago, Illinois 60603
Independent Grant Thornton LLP
Public 130 East Randolph Drive
Accountants: Chicago, Illinois 60601
Except as to statements made herein furnished by the Trustee or the Evaluator,
neither the Trustee nor the Evaluator has assumed any responsibility for the
accuracy, adequacy and completeness of the information contained in this
Prospectus.
This Prospectus does not contain all the information set forth in the
registration statements and exhibits relating thereto, filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933, as amended, and the Investment Company Act of 1940, as amended, and
to which reference is hereby made.
No person is authorized to give any information or to make representations not
contained in this Prospectus or in supplementary sales literature prepared by
the Sponsor, and any information or representations not contained therein must
not be relied upon as having been authorized by either the Trusts, the Trustee
or the Sponsor. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, Units in any State to any person to whom it
is not lawful to make such offer in such State. Each Trust is registered as a
Unit Investment Trust, under the Investment Company Act of 1940, as amended.
Such registration does not imply that the Trusts or any the Units have been
guaranteed, sponsored, recommended or approved by the United States or any
State or agency or officer thereof.
<TABLE>
<CAPTION>
Title Page
- ---------------------------------------- -------
<S> <C>
INTRODUCTION............................ 3
THE TRUSTS.............................. 3
Summary Description of the Portfolio... 3
Utility Series 27...................... 4
Risk Factors........................... 5
Objective and Securities Selection..... 7
PUBLIC OFFERING......................... 7
General................................ 7
Public Offering Price.................. 7
Unit Distribution...................... 8
Sponsor's and Underwriter's Profits.... 8
Public Market.......................... 8
FEDERAL TAXATION........................ 8
RIGHTS OF UNITHOLDERS................... 12
Units.................................. 12
Certain Limitations.................... 12
Redemption of Units.................... 12
TRUST OPERATING EXPENSES................ 14
Initial Costs.......................... 14
Fees................................... 14
Miscellaneous Expenses................. 14
ADMINISTRATION OF THE TRUSTS............ 15
Records and Accounts................... 15
Distributions of Income and Capital.... 15
Administration of the Portfolio........ 15
Reports to Unitholders................. 15
Amendment or Termination............... 16
Limitations on Liabilities............. 16
MISCELLANEOUS........................... 17
The Sponsor............................ 17
The Trustee............................ 17
The Evaluator.......................... 18
Legal Opinions......................... 18
Auditors............................... 18
</TABLE>
PROSPECTUS
PART TWO
Contents of Post-Effective Amendment
to Registration Statement
This Post-Effective Amendment to the Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Central Equity Trust, Series 17, certifies that it meets all
of the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment to its Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized, and
its seal to be hereunto affixed and attested, all in the City of Chicago
and State of Illinois on the 24th day of April, 1997.
Central Equity Trust, Series 17
(Registrant)
By Van Kampen American Capital Distributors,
Inc.
(Administrator)
By: Sandra A. Waterworth
Vice President
(Seal)
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on
April 24, 1997 by the following persons who constitute a majority of the
Board of Directors of Van Kampen American Capital Distributors, Inc.:
Signature Title
Don G. Powell Chairman and Chief )
Executive Officer )
William R. Molinari President and Chief Operating )
Officer )
Ronald A. Nyberg Executive Vice President and )
General Counsel )
William R. Rybak Senior Vice President and )
Chief Financial Officer )
Sandra A. Waterworth
) (Attorney in Fact)*
____________________
* An executed copy of each of the related powers of attorney was filed
with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Insured Municipals Income
Trust and Investors' Quality Tax-Exempt Trust, Multi-Series 203
(File No. 33-65744) and with the Registration Statement on Form S-6
of Insured Municipals Income Trust, 170th Insured Multi-Series (File
No. 33-55891) and the same are hereby incorporated herein by this
reference.
Consent of Independent Certified Public Accountants
We have issued our report dated March 21, 1997 accompanying the
financial statements of Central Equity Trust, Series 17 as of
December 31, 1996, and for the period then ended, contained in this Post-
Effective Amendment No. 4 to Form S-6.
We consent to the use of the aforementioned report in the Post-
Effective Amendment and to the use of our name as it appears under the
caption "Auditors".
Grant Thornton LLP
Chicago, Illinois
April 24, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 17
<NAME> CET
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 8757358
<INVESTMENTS-AT-VALUE> 11299873
<RECEIVABLES> 0
<ASSETS-OTHER> 46838
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 11346711
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 788
<TOTAL-LIABILITIES> 788
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11345923
<SHARES-COMMON-STOCK> 455519
<SHARES-COMMON-PRIOR> 493919
<ACCUMULATED-NII-CURRENT> 46303
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 166607
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2542515
<NET-ASSETS> 11345923
<DIVIDEND-INCOME> 350682
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 6416
<NET-INVESTMENT-INCOME> 344266
<REALIZED-GAINS-CURRENT> 132628
<APPREC-INCREASE-CURRENT> 339355
<NET-CHANGE-FROM-OPS> 816249
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (340831)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 38400
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (497947)
<ACCUMULATED-NII-PRIOR> 42868
<ACCUMULATED-GAINS-PRIOR> 33979
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1834
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6416
<AVERAGE-NET-ASSETS> 11594897
<PER-SHARE-NAV-BEGIN> 23.98
<PER-SHARE-NII> 0.756
<PER-SHARE-GAIN-APPREC> 1.036
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 24.908
<EXPENSE-RATIO> 0.001
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
